The Government is borrowing about $450 million a week, well up from the $250 million a week previously revealed, BNZ Capital economist Craig Ebert says.
Finance Minister Bill English has recently been telling New Zealand the Government was borrowing on average $250 million a week, every week, over the next four years to ensure it could provide public services and maintain welfare entitlements.
Mr English’s figures equate to funding for about nine Forsyth Barr Stadiums being borrowed by the Government each month.
Mr Ebert said that borrowing had risen to $450 million a week as the Government attempted to front-load its debt requirements in case of unforeseen circumstances overseas.
Those could include a further financial crisis or rising interest rates, he said.
The increased borrowing did not mean things were getting worse.
“There will be so much competition for money in the next five years, it won’t be funny,” Mr Ebert said.
“Governments which have been printing money will now be printing bond paper.”
The Government was getting enough money on board to take as much pressure off as it could.
“It was only a couple of years ago we were saying the New Zealand bond market was not big enough and there was not enough debt out there to keep it liquid,” Mr Ebert said.
At present, there was plenty of debt but as there was little demand from New Zealanders.
It basically became foreign debt as overseas investors took up the Government bond issues, he said.
Treasury figures out yesterday showed the Government operating deficit for the four months to October had grown to $3.3 billion, compared with a surplus of $898 million for the corresponding period last year.
Although finance costs had dropped slightly in the period, Crown expenses had risen by 3.6% to nearly $21 billion in the period.
