24 Dec 2009

Govt denies misleading public over borrowing

8:27 pm on 24 December 2009

The Government has batted away accusations it has misled the public about how much money it has to borrow over the next four years.

It has consistently said it's borrowing $240 million a week to meet the shortfall between what it earns and what it spends.

But the Council of Trade Unions says the Government has implied that figure is all new debt and secretary Peter Conway says new Treasury figures confirm that some of it will be used to repay existing debt.

"It paints a different picture from what ministers have been saying.

"Sure it is still $240 million a week being borrowed but they really should have said that $110 million of that is repaying debt.

"It's just simply misleading to keep talking about $240 million a week and create the impression that that is new borrowing."

Finance Minister Bill English says while some of the money is just being used to repay existing debt, the Government is adding to its net debt by about $200 million a week.

He says there are also other factors to take into account.

"The Government publishes two measures of debt. One is gross debt which is the total amount we go out and borrow in the market. It's just dropped to $240 million a week.

"Then there's another measure called net debt which takes into account that the Government owns particular types of assets," Mr English says. "And that's running at about $200 million per week of increased debt."

Mr English says the Government still has to borrow on average $240 million a week to meet all its obligations, including the repayment of existing debt.