I have managed to obtain from a helpful staffer the full collection of quotes from Helen Clark and Michael Cullen on debt. Now remember they have been saying that going from gross debt being 20% of GDP to 22% of GDP is absolute lunacy and madness. So how does this measure up with their past statements. First Dr Cullen:
“The previous government had established a 30 percent of GDP target when the Fiscal Responsibility Act was passed in 1994, and had reduced it to 25 percent in 1999. When we came into office that year we made the judgement that the Crown finances and the state of the economy could not sustain that lower target, so we restored it to 30 percent of GDP.” – Michael Cullen 18 May, 2004, Speech to Chen Palmer & Partners Business and Government Seminar
So National had a target of 25%, and Labour increased it to 30%. yet now they are saying 22% is lunacy and madness.
And now Miss Clark:
All these quotes are from 1994, when debt was in excess of 50% of GDP!!”
“I am pleased that economic growth has produced enough tax revenue to declare a surplus and repay debt. But I am appalled at the rate at which debt repayment is occurring at the expense of families, and schools and other essential social and public services.” – Helen Clark (July 1994) Speech Auckland Labour Regional Conference
“The Government is putting an undue emphasis on debt repayment at the expense of our failing services and infrastructure in New Zealand,” – Helen Clark (June 1994) Opening address to the Massey University Winter Lecture Series.
“We agree that we should be aiming to ensure that the ratio of debt to GDP in New Zealand is not out of line with other smaller industrialised countries. But Labour does not accept that having the smallest debt to GDP ratio in the OECD is an important goal. Nor do we believe that reducing our debt quickly should take precedence over improving the living standard,” – Helen Clark (July 1994) Speech to Northern South Island Labour Regional Conference.
“At Budget time our net public debt was equivalent to 42 per cent of GDP – down from 48 per cent a year earlier… Given those figures, it is hard to believe that the international credit rating agencies with which the Government is so besotted can have any real concern at our current level of debt,” – Helen Clark (June 1994) Waikato Labour Regional Conference.
“The Government is obsessed with debt reduction over all other needs for spending,” – Helen Clark (July 1994) Speech to Wellington Labour Regional Conference.
So when gross debt was over 50% of GDP, Clark time and time again attacked reducing that level of debt, and specifically advocated investing money into infrastructure instead.
I trust we will hear no more hysteria from Helen or Michael on a gross debt setting of 22% of GDP!