Outgoing Labour MP Grant Robertson says New Zealand can — and should — sustain more Government debt than current levels for the sake of future generations.
Speaking to Q+A ahead of his final address to Parliament, Robertson said increasing New Zealand's debt ceiling has allowed the previous Labour-led Government to invest in things Kiwis cared about, like transport, health, and education.
In 2017, Robertson said he and James Shaw — then a Green Party co-leader and Associate Finance Minister — devised the budget responsibility rules their respective parties wanted to limit themselves to.
At the time, the pair wanted to keep net debt at 20% of GDP, similar to levels set by previous Governments. In 2022, Robertson announced a new net public debt ceiling of 30% of GDP.
"New Zealand does need a lower level of public debt than some other countries around the world because we have natural disasters and we are a small country," Robertson said.
"But keeping slavishly to a percentage like that means we're not investing enough in our infrastructure. That's the bottom line.
"We should use our balance sheet more and better to invest in infrastructure."
The Government's general net debt to nominal GDP was 21% in the year up to June 2023, up from 19.7% the year before.
Finance Minister Nicola Willis has frequently criticised rising debt levels and the quality of spending under Labour.
ACT leader David Seymour also criticised Labour for leaving the next generation with a debt burden in the billions.
Meanwhile, other commentators called for an even higher debt ceiling given the country's enormous need for infrastructure.
New Zealand's infrastructure deficit is at about $210 billion, and growing, according to a 2021 report ordered by the Infrastructure Commission.
Robertson said investing in the likes of health and education are "the things we need to underpin the society and economy we want".
"I think it's really clear to me now that if we were to ever go back down to those sorts of percentages of debt, we would be denying future generations the things that they need."
Q+A with Jack Tame is made with the support of NZ On Air.
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