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Home / Politics

Standard & Poor's to get Budget peek

Audrey Young
By Audrey Young
Senior Political Correspondent·NZ Herald·
22 May, 2009 04:00 PM2 mins to read

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A delegation from the powerful credit rating agency Standard and Poor's will receive an advance briefing on the Budget in Wellington on Tuesday.

Finance Minister Bill English is due to deliver his Budget on Thursday afternoon.

The Standard and Poor's delegation will be headed by David Beers, the London-based managing
director of sovereign and international public finance ratings.

New Zealand's AA+ rating was revised from stable to negative watch by Standard and Poor's in January and it said the future rating would hinge on the Budget.

Yesterday, Britain was put on negative watch by Standard and Poor's because of its rising debt levels - the British Budget on April 22 set out a debt programme that will see debt doubling to 80 per cent of GDP by 2013.

Standard and Poor's will receive Budget briefings from Mr English and the Treasury.

It is also expected to talk to Reserve Bank Governor Alan Bollard.

Treasury Deputy Secretary Peter Bushnell said normally three rating agencies - Standard and Poor's, Moody's and Fitch - would be given a phone briefing before the Budget so they were informed enough to give answers after it was delivered.

But because Mr Beers was visiting New Zealand and Australia on a marketing trip to corporate clients, S&P was getting a personal briefing.

"We talk them through the whole Budget."

They would be looking at the resilience of the economy and the fiscal resilience of the Government.

Fitch staff will visit New Zealand the week after the Budget.

Moody's visited in February.

A credit rating downgrade could increase the cost of debt for the country concerned.

Secretary Treasury John Whitehead said last week that based on Ireland's recent downgrade from AAA to AA, a downgrade for New Zealand would result in a 1.5 per cent rise in interest rates.

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