N.Z. going bankrupt, says Mr Palmer

Press, 13 April 1984, Page 23

N.Z. going bankrupt, says Mr Palmer

PA Ashburton New Zealand was rapidly moving into a state of bankruptcy, the Deputy Leader of the Opposition, Mr Palmer, has said. He said in Mid-Canter-bury that the point had now been reached where one dollar in every five of tax went to servicing New Zealand’s debt. “In the last Budget the interest bill went up 37 per cent. It increased $552 million. The total bill is more than $2OOO million,” he said. “In last year’s Budget there was a huge increase in New Zealand’s total public debt. It has increased $4351 million in one year, a 30 per cent increase.

“The increase alone is greater than the total amount of New Zealand’s debt in 1975. This year the public debt will increase even more than this,” Mr Palmer said.

“The overseas public debt has increased rapdliy too. It went up $2125 million in one year. It now stands at $7764 million. That means it increased 40 per cent in one year.”

Again the increase alone was greater than New Zealand’s total overseas public debt in 1975, he said. “Overseas, we owe $2500 for every man, woman, and child in New Zealand. Add private overseas debt, and the figure is $4710.”

Mr Palmer said the Government deficit in the last Budget was $3169 million,

the highest deficit on record. and amounted to 9 per cent of gross domestic product. “That is, 9 per cent of the value of all the goods and services produced in New Zealand," he said. “One feature of the borrowing required by this deficit is that it is clearly not being used to finance only capital expenditure. It is actually being used to finance current Government expenditure — in other words to pay the grocer. No family could live like that for long. Neither can New Zealand,” Mr Palmer said. In simple terms, he said.

the cost ot servicing New Zealand’s overseas public debt in 1975 took 7.2 million lambs, or 283,000 bales of wool. In 1982, the cost of servicing this debt was 18.6 million lambs, or 960.000 bales of wool. For 1984 it would cost 31.8 million lambs, or 1.6 million bales of wool. “Extensive borrowing is being practised as a substitute for taxation. Labour’s policy pledges that continuous monitoring and scrutiny of Government borrowing will be carried out by the public expenditure committee of Parliament,” Mr Palmer said.