- Hon Nicola Willis
Moody's decision to revise New Zealand's Aaa outlook from stable to negative reinforces that the Government's response to the current fuel crisis and its wider economic plan is the right one, Finance Minister Nicola Willis says.
"Moody's choice to put New Zealand on negative watch is another warning that we can't afford to simply spend more and borrow more, or we risk higher interest rates, higher borrowing costs and more pressure on Kiwi families," Nicola Willis says.
"Global economic and geopolitical uncertainty and inflation pressures including fuel price increases have contributed to the revision. While these are outside our control, Moody's are clear that improving our rating requires disciplined spending, a clear path to balanced books and reducing debt.
"Moody's warns that if deficits remain and debt keeps rising, our outlook will worsen - increasing the costs of servicing the debt, squeezing businesses and leaving less funding for the public services New Zealanders rely on.
"Debt servicing is now the fourth-largest cost to taxpayers, exceeding the combined costs of the police and defence forces, corrections, customs and the justice system. With global interest rates rising, we must keep our books in order to ensure New Zealand remains strong in a more unstable world.
"The revision also confirms the need for any support delivered in response to the Middle East conflict to be temporary and targeted. If we were to start clocking up the credit card like the previous government, every New Zealander would pay the price - with more of every taxpayer dollar going on interest, instead of hospitals, schools and roads.
"Though our outlook has weakened, New Zealand retains our Aaa rating, the highest possible level, alongside 10 other countries. This recognises the resilient nature of our economy and strong commitment to fiscal discipline.
"Economic growth is essential to improving our outlook and building the future. By growing the economy, we create jobs, lift incomes, reduce our reliance on debt and most importantly, enable all kiwis to thrive."
