Why We’re Switching the Debt Clock to ‘Total Crown Borrowings’
Since its launch, the New Zealand Debt Clock has highlighted the burden of government debt in real time. We’ve always aimed to present this figure in a way that's meaningful, honest, and easy for taxpayers to understand.
In recent years, we’ve used Net Core Crown Debt – a figure often referenced in government fiscal targets. But we’re making a change. From today, the Debt Clock will display Total Crown Borrowings. We’ve just updated it to reflect the Treasury’s latest Econmic and Fiscal Update published with the Budget last week.
Why the Change?
There’s no single perfect measure of government debt. Like with any financial statement, different figures tell different parts of the story. But our job is to make sure taxpayers know the full picture – and Net Core Crown Debt has too many blind spots.
Let’s break down the options:
1. Net Core Crown Debt (the old measure)
Pros:
- Used in official Government fiscal targets.
- Gives a picture of the Government’s “net” position after liquid financial assets (like investments) are offset.
Cons:
- Opaque and prone to manipulation – depends on how the Government chooses to count "liquid assets".
- Doesn’t reflect the actual amount of money borrowed – or what interest taxpayers are paying.
- Excludes major government debt from Crown entities and SOEs like Kāinga Ora and KiwiRail — even though these debts are taxpayer-backed and directed by Ministers.
- Misleadingly low – paints a rosier picture than reality.
2. Core Crown Borrowings (a cleaner gross measure)
Pros:
- Represents the actual amount the core Government has borrowed.
- Ties directly to interest expenses – gives a more realistic picture of fiscal stress.
- Easier to compare to household debt (i.e., people don’t talk about their “net mortgage” – they talk about what they owe).
Cons:
- Still ignores massive Crown Entity and SOE borrowings (e.g. Kainga Ora, KiwiRail etc).
- Doesn’t reflect the full taxpayer liability across government.
3. Total Crown Borrowings (the new measure)
Pros:
- The most comprehensive measure of government debt – includes Crown entities, SOEs, and the lot.
- Can’t be gamed or disguised behind balance sheet footnotes.
- Reflects what taxpayers are ultimately on the hook for – whether debt is incurred by Ministers or their appointees to SOE boards.
- Aligns with international best practice for transparency.
Cons:
- Ministers have less direct day-to-day control over Crown entities and SOEs.
Why It Matters
Treasury’s Budget 2025 papers forecast Total Borrowings to rise from $250.9 billion in 2024 to $354.2 billion by 2029 – an increase of more than $100 billion – or $49,160 per household! – in just five years.
That’s real money, incurring real interest, to be paid by real taxpayers.
The bottom line is this: you can’t hide from interest payments. Whether it’s the core Crown or Kainga Ora borrowing the money, it’s the New Zealand taxpayer left footing the bill. And our Debt Clock should reflect that.
Conclusion
We’re switching to Total Borrowings because it gives the clearest, most honest picture of the Government’s debt. It includes everything – the full mortgage on the country.
We want a number that can’t be gamed. A number that is anchored in reality – tied to actual interest payments. And a number that reflects the total risk to taxpayers.
Politicians may try to hide behind accounting tricks. But our Debt Clock won’t.
Showing 1 reaction