Key relied on mate's email for S&P attack on Labour

Monday 10th October 2011 3 Comments

Prime Minister John Key today released an email from a political contact to support comments denied by Standard & Poor’s that the credit rating agency was more likely to downgrade New Zealand’s rating if there was a change of government.

Key made the allegation in Parliament last week, leading to a denial from S&P, and a furious attack from Labour Party leader Phil Goff who accused Key of telling “porkies” in Parliament.

The Prime Minister faced vigorous questioning from the Parliamentary Press Gallery on the issue at today’s post-Cabinet press conference, at which he released an email he received from a “trusted” source with whom he had dealt in the past.

The source’s name is deleted, but the person attended what they described as “a session with a range of economists” and S&P analysts, including “the guy who obviously has a lot to do with the NZ grading”.

The email noted the presence of “economists from Aus plus all the main NZ banks” at the briefing, understood to have been held in Auckland last month.

The contact identified “a key one-liner that I thought you could well use,” the email reads. “S&P said there was a one-third chance that NZ would get downgraded and a two-third chance it would not, and the inference was clear that it would be other way around if Labour were in power.”

The New Zealand Herald website reported S&P New Zealand analyst Kyran Curry as saying “I might have talked about the importance of the Government maintaining a strong fiscal position in the medium term but I would never have touched on individual parties.

"It is something we just don't do," Mr Curry said. "We don't rate political parties. We rate governments."

Key conceded the comments he used in Parliament were based on hearsay. “I’m relying on the person. They invited me to use it. I’m telling you it’s not a random comment I made up.”

He would not identify his source.

The decision to release the email comes after Goff accused Key of misleading Parliament with the comments, an offence which can lead to embarrassment through hearings and censure by Parliament’s powerful Privileges Committee.

BusinessDesk.co.nz

Comments from our readers

On 11 October 2011 at 9:47 am aw said:

Yep, John Key shooting off his mouth again. And the downgrade has happened on your watch, Mr Key, while you were too busy playing at being a radio jock to do your job and what on earth did Bill English do on his little jaunt overseas if he didn't pick up on the fact that they were going to down grade us? Another appalling showing for this National team - downgrade of NZ's credit rating and the two politicians who should have know it was coming being completely oblivious to it and then trying some smoke and mirrors afterwards. What a comical pair - but not a pair we want gambling with NZ's future.

On 11 October 2011 at 1:54 pm sw said:

Why try to deny the obvious? Any credit rating agency is more likely to downgrade New Zealand’s rating if there is to be a change of government.

On 11 October 2011 at 9:56 pm Ron Palmer said:

What a lot of tripe from Labour. Of course there would be a significant downgrade of NZ crfedit rating if there was a change of Government. Labour and it's tatty bunch make bigger fools of themselves by grasping at straws for publicity.