11 Oct 2011

Standard and Poor's rejects PM's claim

6:06 am on 11 October 2011

International ratings agency Standard Poor's has rejected the Prime Minister's claim that it said a credit rating downgrade was more likely under a Labour Government.

John Key, the leader of the National-led Government, made the comment in Parliament last week.

In a statement, Standard Poor's says at no stage has it said that a rating downgrade was more likely if there were a change of government.

It says New Zealand has strong bipartisan political backing for conservative public finances and expects that is unlikely to change whichever major party leads the Government.

Labour Party leader Phil Goff says Mr Key lied to Parliament when he claimed the agency said a change of government would increase the chances of a downgrade and Labour will take the matter to Parliament's Privileges Committee.

But Mr Key says his comments were based an email and a follow-up call from someone who attended a recent Standard Poor's meeting and that person has provided him accurate information in the past.

Mr Key says the person told him that Standard Poor's said that if there was a change of Government, there would be a two-thirds chance of a downgrade.

On 30 September, Fitch lowered New Zealand's credit rating by one notch to AA, citing the country's rising debt and persistent and widening current account deficits. Standard Poor's downgraded the country's rating one notch from AA+ to AA in the afternoon.