NZ credit rating improves

By Phil Boeyen, ShareChat Business News Editor

Wednesday 7th March 2001

The Government is hailing an improvement in the country's credit rating although the Opposition says the current Finance Minister can't take the credit.

Ratings agency Standard and Poor's has put New Zealand back on a "stable" outlook for its AA+ rating, an improvement from the "negative" rating it has had since 1998.

Finance Minister Michael Cullen says the main reason for the improvement is that the ratings agency is confident the Government will maintain the budget in structural surplus.

"Other reasons are the independence of the Reserve Bank in the operation of monetary policy and the resilience of the economy with flexible labour and product markets."

However National's Finance spokesman, Bill English, says the Minister of Finance should calm down before claiming credit for the ratings' improvement.

"The negative credit watch went on as a result of the Asian economic crisis and two years of successive droughts. New Zealand's recovery from that has been driven by much more favourable meat and milk prices as well as better weather.

"Prompt action taken by the Government in 1998 laid the foundation for a quick recovery in the Government's accounts."

Mr English says Dr Cullen's complacent confidence is out of step with the cautious mood of business.

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