Opposition Leader Simon Bridges is calling the Government out for its plans to increase debt by $17 billion but Jason Walls says the National leader is comparing apples with oranges

Opposition Leader Simon Bridges is calling the Government out for its plans to increase debt by $17 billion but Jason Walls says the National leader is comparing apples with oranges

“Debt growth equal to cost of Canterbury quakes,” heralded the headline of a press release from National leader Simon Bridges on Monday morning.

He claims the Government is planning on increasing its borrowing by $17 billion over the next four years - $11 billion of additional core Crown debt, and $6 billion of “hidden debt.”

Those are big numbers.

Together, it works out to be roughly a 6% increase of New Zealand’s entire annual GDP.

In fact, it would see the Government’s debt level, which according to Treasury is 20.1% of GDP at the moment, shoot up dramatically over that four-year period.

But hang on – in May’s Budget, the Treasury forecast net Core Crown debt to fall to 19.1% of GDP by 2022.

So, what’s going on here?

To find out, we need to dig into Bridges’ numbers – numbers he does not provide in his press release.

A National Party Spokesman tells Interest.co.nz Bridges is using estimates from the Pre-Election Economic and Fiscal Update (PREFU).

In other words, numbers from when National was in Government and factoring in its policies and spending plans.

Under National, total net Core Crown debt was expected to fall to $56 billion in 2022. That figure currently sits at $57.5 billion.

Budget documents show under this Government, that number will be $67 billion by the same year – an additional $11 billion compared to how the Government’s books would have looked under National.

But this is comparing apples with oranges.

The Government isn’t planning on increasing borrowing by $11 billion, that’s just the difference between National and Labour’s numbers.

And Finance Minister Grant Robertson has never been shy about the fact his Government would be taking on more debt to pay for additional infrastructure.

Budget documents, which take into account this Government’s policies, show as a dollar amount the increase will be closer to $7 billion which is still under 20% of GDP, meeting the Government’s own fiscal responsibility rules.

In fact, it is curious for Bridges to be using a dollar amount when it comes to debt as under National it used debt as a percentage of GDP throughout its entire term in office.

“New Zealand Government's net debt is tracking down to 20% of GDP,” then Finance Minister Bill English said in the House in November 2016.

“Hidden debt?”

Bridges says an additional $6 billion of that $17 billion number will come from “hidden off the balance sheet in Crown entity borrowing.”

Here, the Opposition Leader is talking about entities such as special purpose vehicles (SPV) – a subsidiary company created for a specific project.

These include public, private partnerships (PPPs).

They are used as a way of ring-fencing any liabilities associated with the project, meaning the debt does not sit on the Government’s balance sheet.

The Government is planning on rolling some of these out to help pay for infrastructure needs.

May’s Budget documents show that under National, borrowing in this area was 0.5% of GDP. This Government is notching that up to 2.2% by 2022.

The gap between the two figures amounts to Bridges’ $6 billion of “hidden” debt.

But what it does not say is that National was planning on spending billions on PPP and SPVs over the coming years.

“The National Party will turbocharge the Government’s $32.5 billion infrastructure investment by creating a new National Infrastructure Commission to lead more public-private partnership (PPP) projects and ensure Kiwis get faster access to new schools, hospitals and roading,” a National press release from September last year read.

It outlined its plans to spend billions of dollars on new projects and, as such, the amount of “hidden debt” would have increased under National as well.

None of this was captured by the 0.5% of GDP borrowed in 2017 under National.

This is not the first time National has attempted to paint Labour as irresponsible managers of the books, and it won’t be the last.

Take their debt claims with a grain of salt.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I saw a facebook post from Bridges claiming Labour were adding $20 per week to households in fuel costs. If 11.5c a litre costs you $20 a week, you must be buying 173 litres a week, or about $400 a week on fuel.
There should be some kind of rules about making stuff up like this - unfortunately reading the comments on facebook all agreeing with Bridges nonsense, the average NZer isn't capable of seeing such obvious BS.

@Jimbo.. Glad someone else did the maths and thought that looked stupid.. TM2 however (if you read his post below) is quite happy to regurgitate the figures of $20 worse off on fuel from Simple Simons' Facebook page.... I hope his maths was better when taking on all those mortgages? Perhaps or perhaps not?

How much would National have been forced to borrow to fund their proposed tax cuts?




They would of just cut some non-essential services like health or education.

Nil. By not doing a huge spend up on middle class welfare (Multi-billion student and winter fuel bribes, NZF billion dollar bribe fund) promoting growth instead of killing it with regressive industrial relations and other bad policies, and not destroying multi-billion dollar oil and gas industry to indulge the PM's desire for a bit of virtue-signalling they would not have had the massive funding shortfall that the CoL is staring down the barrel of. In fact the reduced taxes would likely have increased growth.

Labour are ideologues incapable of learning from history, they run the economy into the ground every time they are in power leaving a recession, structural deficits and overgrown central govt for National to repair again and again.


"Labour are ideologues", and National aren't? Look what has happened over the past nine years! They are just as bad as each other and equally delusional. We need well thought out, evidence based, policy that isn't only in the interests of select groups of the population.

Which is why minister of health and minister of corrections and minister of education are each busily eliminating past reporting measures and standards by which they (and public) might be able to assess the efficacy of their 'evidence based policy'. It would be comical if it wasn't so sad.

"Most open and transparent government ever." - Jacinda Ardern.


I presume that the Nats also included in the $20 increase the cost of goods that you buy on a weekly basis that will increase in price due to the fuel tax.

I think they had a separate category for increased food prices and I think that was randomly set at $20 per week as well. I haven't noticed a $20 increase (10% increase) in my grocery bill, have you?
Are we expecting the next CPI figures will reflect this massive amount of inflation? Does any of this occur when fuel prices naturally go up or down by 11.5c?


Mudslinging for the sake of mudslinging.

So we can all relax - the government isn't borrowing more to pay for its pet projects. What a relief. For a minute there I was worried that this government is planning to borrow more than the previous one.


Of course when you look at "pet projects" that actually seem to consist of much deferred spending by National now being forced on this Government. Things like new (4?) sea surveillance aircraft that are urgently needed to replace aging planes who's maintainance cost seems to have doubled or hospitals left in a terrible state, schools also.

So if Labour does borrow more? so what as long as its not insane and is needed on essentials the Govn borrowing cost is actually quite low.


The boy is well out of his depth but is a perfect fall guy for the Nats to throw under the bus after the next election defeat.

Perhaps he’ll save them the bother and toss himself under all on his own – and prior to the election.

and be replaced by whom? Crusher Collins? bound to be a winner that idea....

True – a bit of me thinks Crusher would have the Labour Party strategists slapping each other on the back and reaching for the drinks cabinet….

Whoever chose to step in after English was politically naive but someone had to do so. Bridges is really that fall guy, just as much as, working backwards, Little,Cunliffe,Shearer & Goff, the last of which probably knew it was a self sacrifice at the time. Will it take National 5 leaders as well? They need a series of real serious government stuff ups to get some traction but Bridges doesn’t appear to be able to get a grip on anything at all. Suspect that when Cullen imposes his great tax grab strategy for the government, there will be an opportunity to attack then, but who exactly have National got to lead such an attack? Beats me!

"Will it take National 5 leaders as well"
Probably, it took 4 last time Shipley, English, Brash ,Key.


No politician with a brain would want the National gig at the moment, thankfully the Nats have found a brainless patsy, whose ambitions were far greater than their political judgement, it'll be a short career punctuated with 'foot in mouth'.

Tough gig to take on, particularly now that the skeletons are waltzing out of John and Bills' closet. GDP was after all just housing debt disguised as a backstage party!

You could have ended your comment after the first 5 words and would have made a better point.


Thanks for the good investigation and reporting there of.

So looks a bit like "fake news" really its a bid sad when any political party sinks this low.


They still believe in telling a lie 100 times and will become a truth.

John key and his ministers were able to pull it off at time but does this current bunch of National leader have that power....................

You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time. Abraham Lincoln.


Check out the comments on stuff regarding political issues.
95% believers - it also highlights the age correlation, between National voters and those still accepting the MSM as their only source of news .

Anyone could lead Natiobal to victory at the next election.
It is this COL that will lose it rather than National needing to do much to win.
The COL supporters are starting to totally disbelieve the COL promises including KiwiMyth I mean Build!
Mr Twyford conveniently missed out the minor detail about having to meet any requirements for getting a loan.
Minor detail I suppose lol.
He says that the policy was for the middle income people to afford a home, wouldn’t say 120k is middle income in NZ!
What have this bunch done that has been beneficial to the country.
With petrol levy in Auckland it will cost everyone at least $20 extra a week with prices going up and then the increased wages.
I repeat the most despised Govt of all time!

I regard these 3 years as a much needed sabbatical for National. A period of reflection and reconnecting with the public before returning to power in 2020 to unfortunately rebuild the economy.

rebuild? LOL, they failed over 9 years....

'With petrol levy in Auckland it will cost everyone at least $20 extra a week with prices going up'

TM2 - why don't you read the first post on this article by Jimbo and then have a think.

Always go up, always go up, always go up.

Nic, it will cost everyone at least $20 extra each week due to the petrol levy!!!!!!!!

Is everyone driving tanks these days? I've noticed more SUVs on the road, but didn't realize we'd all nipped out and bought Hummers...

my household looks to have increased petrol costs of $1.12 a week. Where did you get $20 from?

Extra costs from all business due to increased petrol costs for their business costs!
Transport costs on everything

He's friends with 'Simple Simon' on facebook.


For the sake of your health,I think you should take a pill and go and lie in a dark room-for quite some time.Several years might be appropriate.
I can just picture you,purple faced,frothing at the mouth as you pound away at the keyboard. The phrase-He doth protest too much-comes to mind. Are you really a closet Socialist? only asking.

Great "sunlight" article on the Fake News, shock and dumb down talk from Simon. He's a smarter man than his shock-jock comments put across.

I've been reading politics and economics for over 30 years and the most lucid explanation for how the government spends, taxes and "borrows" is MMT.
A sovereign issuing with a floating exchange rate like NZ creates money for government spending via the RBNZ, from nothing, then taxes some of it back to alleviate inflation and as a form of redistribution by making spending space in chosen areas of the economy.
Likewise government bonds are issued after spending to mop up excess reserves so RBNZ can meet its interest rate targets. Bonds are bought and sold to facilitate this.
Neither taxes or bond sales are necessary to spend nor do they fund it. Think of government "debt" as term deposits for financial institutions and high net worth individuals. They are a liability that will be redeemed at some point, but as long as they are issued in NZD, as they have been since the currency was floated, they can always be paid back and the government can never become insolvent. Nor will they be a burden on future generations.
Too much government spending at once that outstrips the supply of human and physical resources can create inflation, but if the new spending is carefully targeted and there is spare capacity, that spending will not be inflationary. If the RBNZ Act was changed and inflation targeting via the OCR dropped, some other way found to mop up reserves, like paying interest on them direct, government wouldn't even have to issue bonds and drop the pretence of debt

Exactly. Our government can always afford to buy whatever is for sale in NZ dollars. Government spending creates money, taxation destroys it. We should fund what we need for a good society (infrastructure, health, education, etc.) and set appropriate tax policy to control inflation. Within the NZ economy, aggregate demand relative to material supply is what affects inflation; the government's operational balance is irrelevant.

I need to have something explained here.
Ok young Simon went perhaps overboard on his numbers but numbers can be read in many ways.

The difference between 56 and 67 is 11 but if you say compare today to 4 years away the difference is 9.5 if they indeed end up at 67, according to this article it will be closer to 7 extra, 7 on top of 57.5 or on 56?
If at the moment 57.5 is 20.1% of GDP, then GDP is at 286,
56 in 2022 is calculated as 19.2% of GDP making GDP 292,
Someone does not calculate for much GDP growth but let's stay with that, apples with apples.
Add 7 to 56 makes 63 and is 21.57% of 292
67 debt in 2022 is 22.9% of 292
Neither number appears to sit under the 20% debt level as claimed above.
Either of these numbers at 20% means a GDP of either 315 or 335 in 2022.
Leaving us with about 2.5% or 4% growth to achieve to stay on 20%.
But that would have the 56 at 17.8 or 16.7% respectively not 19.2

What am I missing?

Good luck getting an explanation. In the past, I have had serious issues with some of the basic budget numbers that have been presented as fact.

Burnt Bridges!

A 17 billion increase over the next 4 years, That's Chicken feed! It needs to be greater that that to support a growing economy. Look at the RBNZ C5! From 2013 to now private debt is growing at around 13 billion per year. That cant last. NZ households are becoming debt saturated and we have an unstable housing market with the highest housing prices in the world relative to incomes according to that economist article.

If the government runs a surplus they're sucking money out of the economy. For instance the recent 10% increase in tobacco price just removed ~$500 - $700 pa. of discretionary spending from lower income smokers. The whole narrative is wrong. The discussion should be yes we're going to run a deficit but what are we going to spend the money on.

National are testing whether you can win an election with absolutely no positive policies. Name one thing they are for as a future government.

National have had many policies over the last 9 years which included flooding the country with immigrants we didn't need, making housing unaffordable to many, overloading our infrastructure and many things that created a massive unequal society which most will be effected in the future!!

They don’t need any.
The COL efforts so far are abysmal that National will win in a landslide

Keep wishing

oh , he's still there then .

Yes, Simon is ambitious, and good luck to him. He's got a tough job ahead but the last time I looked he still had a party with 45% support. He just needs a couple of good relationships and he's in. Lots to play for. Back at the ranch, however, Mr Robertson has his sticky fingers just where he wants them, in the public purse, and he's having such a gay ol time. Enjoy your time Grantie.

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