Bill’s recipe rewarded by rating revision

Did Bill English get the Budget recpie right?

If you judge it by the reaction of Standard and Poors, he did.

RadioNZ reports:

International credit ratings agency Standard and Poor’s has revised its outlook on New Zealand from negative to stable and affirmed its AA+ rating, after what termed a “sound” Budget.

Does it matter?

A down grade would have resulted in higher interest rates which would have at best slowed the recovery.

3 Responses to Bill’s recipe rewarded by rating revision

  1. Adolf Fiinkensein says:

    And what would they have done ‘at worst?’


  2. homepaddock says:

    Adolf -good point, how about made the recession worse?


  3. JC says:

    With the US, UK and other EU countries on negative watch I would have thought it was valuable right now to have a an up to the minute stable rating as better savers than us look for “stable” places to put their money.

    The other obvious advantage is stable interest costs for businesses would be essential in deciding whether to hang on to, or shed staff.

    The effect on Govt is well known.. a saving of $600 million, but Govt can always sting the tax payer or borrow off the future to cover that.. so its the private sector, homeowners and potential lenders who score the advantage here.

    Another thing.. one of the US states decided to put on a “rich” tax last year. This year 1000 of the state’s 3000 millionaires did not file a tax return in that state .. being boring, equitable and stable in NZ might not be a bad thing at the moment.



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