* First, "very high external imbalances, accompanied by high household and agriculture sector debt" (S&P). These are mainly house and farm mortgages borrowed through the banks from foreign lenders to fuel our property obsession. That's not a new problem and it has levelled off a bit with the recession. But it is at historically high levels and makes New Zealand "an outlier among peers" according to Fitch.
* Second, "dependence on commodity income" says S&P. Despite record milk prices we are still not paying our way in the world. The current account deficit has been a long-term issue.
But it will worsen to 6.9 per cent of GDP while the Net International Investment Deficit will grow from 78 per cent to 85 per cent over the next five years.
* Third, "emerging fiscal pressures associated with [our] ageing population" (S&P), including health and superannuation. Suspending the NZ Super Fund pre-funding hasn't helped.
These unresolved structural issues are why those international credit referees have blown the whistle on our ratings. It's a yellow card.
But S&P also says "downward pressure ... could re-emerge if New Zealand's external position continues to deteriorate".
In other words, we need to fix this otherwise the red card is coming.
So what? Won't the Rugby World Cup tourism spend-up fix it? Why does it matter to Kiwis anyway? It matters because in the Prime Minister's own words "this would add 1 to 2 per cent to everyone's home mortgages". For an Auckland family servicing say a $300,000 mortgage, that is an extra $250 to $500 a month in borrowing costs.
Higher interest rates choke business growth and our faltering recovery. Sadly, more New Zealanders will join the 47,000 extra made unemployed since this Government came to office.
Key said avoiding a downgrade was his primary goal. However, the National Government's reaction on Friday and over the weekend has been to spin three main lines:
* "We have worked hard to control government spending and succeeded." The problem is that some $37 billion of debt has been added since the National Government took office - some $18 billion in this year alone. While nobody blames any government for earthquakes - and the ratings agencies recognise that both sides of the political spectrum are exercising fiscal restraint - this is not enough to avoid a downgrade. The agencies are not swayed by the prospect of liquidating $5 billion of SOE assets.
* "We are better placed than some other countries." Being "better placed" than Iceland, Greece or Portugal is cold comfort. Nor is it sufficient, in the face of paralysis in the US and chaos in Europe, to take refuge in Chinese and Australian expansion. The risks of a slowdown in both economies are significant, and the ratings agencies demand New Zealand takes responsibility for its own future.
* "We are still on track for surplus in 2014-15. So she'll be right." As if. Clutching at such irrelevant straws only highlights the absence of better ideas.
What is needed is the political courage to deal with fundamental policy settings - like a capital gains tax, strong savings policy, and saving New Zealand Superannuation.
I take no pleasure in setting out these issues for the public to consider, any more than I do hearing that our star first five-eighths has a tendon rupture. I want the All Blacks to win and I want New Zealand to win.
In confronting the truth that Carter won't be okay with just massage and magic water, we also need to confront the ruling from the international credit referees on this All Black Friday.
