Moody’s has placed New Zealand’s credit rating on a negative outlook, underscoring growing concern about the Government’s worsening fiscal position.

Responding, Taxpayers’ Union spokesperson Tory Relf said:

“Minister Willis is right to say this is another warning that New Zealand can’t afford to simply spend more and borrow more. The problem is that is exactly what she is still doing.”

“Minister Willis got her first warning on 21 March this year when Fitch moved New Zealand to a negative outlook. Since then, government debt has grown by almost $2 billion and the National Debt Clock is forecast to hit $300 billion before the election. Where is the fiscal discipline Minister Willis talks about?

“Blaming global uncertainty is a convenient distraction for Minister Willis. Moody’s is pointing at Wellington. Despite the rhetoric, Government spending remains higher than under Grant Robertson, borrowing continues to climb, and there is no sign of a surplus this decade.”

“Credit rating agencies do not act on vibes. They follow the numbers. Being placed on negative watch is a signal to investors that New Zealand is becoming a riskier place to lend to, which ultimately means higher interest costs for taxpayers.”

“Clinging to the AAA rating while being put on negative watch is like celebrating while the warning lights are flashing. If this is what fiscal discipline looks like, it is no wonder Moody’s is losing confidence.”

“This must be a wake-up call ahead of Budget 2026. Until the Government matches its rhetoric with real spending restraint, more warnings, and eventually a downgrade, are inevitable.”

The Taxpayers’ Union is welcoming Prime Minister Christopher Luxon’s commitment that today’s fuel support package must not drive government debt higher.

“At a time when the books are already under strain, this is a welcome sign of discipline,” Taxpayers’ Union spokesperson Tory Relf said. “It shows the Government now understands that every extra dollar of debt is tomorrow’s tax bill.”

"The PM's comments indicate tomorrow's announcement is fiscally neutral. That means that at least equal reductions in spending will be specified to go along with the support package."

“Helping Kiwis with targeted and temporary measures during this crisis is sensible, but only if it’s paid for. Government debt is already at $140,000 for every Kiwi household, as tracked by the National Debt Clock. Shifting the cost onto future taxpayers would just kick the can down the road."

"Any increase in debt is counterproductive. It will drive up inflation and the costs of borrowing."

"As Friday's warning from Fitch shows, New Zealand enters this crisis in a vulnerable state. Despite political rhetoric about 'saving money' the Government's running a larger structural deficit now, than when it assumed office."

"Borrowing more right now would be to adopt a Grant Robertson-style response. Even if on a smaller scale, that would be a grave mistake. We welcome Mr. Luxon's approach."

“Fiscal neutrality means real trade-offs and tough choices. But there is no longer the option to borrow and hope.”

The New Zealand Taxpayers’ Union has today updated its online Debt Clock to reflect Total Crown Borrowings, replacing the previously used measure of Net Core Crown Debt.

The change comes after concerns that Net Core Crown Debt understates the true burden of government borrowing by excluding the ballooning liabilities of Crown entities and State-Owned Enterprises (SOEs).

Tory Relf, a spokeswoman for the Taxpayers’ Union, says:

“The Debt Clock needs to tell taxpayers the truth. The Net Core Crown Debt figure the Government likes to use conveniently leaves out tens of billions borrowed by Kāinga Ora, KiwiRail, and other Crown agencies. But whether it's borrowed by a Minister or one of their appointees to a Board, the taxpayer is still ultimately responsible.”

“Total Crown Borrowings is the most honest, transparent number. It reflects the full mortgage on the country – and the interest taxpayers are actually paying.”

According to Budget 2025 forecasts, Total Crown Borrowings are set to rise from $250.9 billion this year to $354.2 billion by 2029 – a blowout of more than $100 billion, or $49,160 per household.

“This Government has promised restraint but is still on track to add nearly $50,000 of debt for every household in the country over just five years. That’s not fiscal responsibility – it’s economic vandalism,” says Relf.

The Union says the updated Debt Clock – now updated with the figures released with last week’s Budget – gives taxpayers a more accurate understanding of New Zealand’s worsening fiscal position, and the real cost of government overspending.

“Politicians can play games with accounting tricks. But our Debt Clock won’t.” says Relf. 

“Tick tock.”

The updated clock is now live at www.DebtClock.nz.

A review of the pros and cons of using Net Core Crown Debt (the old measure): Core Crown Borrowings (a cleaner gross measure); and Total Crown Borrowings (the new measure) is available at www.taxpayers.org.nz/debt_clock_update_2025

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.

Tick Tock, Tock Tock…

Commenting on Budget 2025’s failure to restrain New Zealand’s runaway Government debt, Taxpayers’ Union Spokesman James Ross said:

“Debt is increasing every single year over the forecast period in Budget 2025, reaching $108,700 per household by 2029. That’s $2,000 more than the last forecasts issued just five months ago.”

“Grant Robertson’s last Budget had debt peak at 39.3 percent of the economy – Nicola Willis will now see it reach 46.0 percent. This is in the danger zone for a small trade-exposed country like New Zealand.”

“A Government preaching responsibility is lumbering each household with $5,776 per year in interest costs by 2027. That’s more than the budgets for primary schools, secondary schools, and the police combined.”

“Nicola Willis was elected with the promise of fixing the country’s finances, but what she’s delivered today is a promise to keep robbing our kids and grandkids.”

The Taxpayers’ Union is slamming Labour Leader Chris Hipkins for refusing to commit to the Government’s 50 percent debt ceiling on RNZ's Morning Report — a reckless move that could spook credit rating agencies and raise borrowing costs across the board.

Taxpayers' Union Executive Director Jordan Williams said:

“Even Grant Robertson had the sense to maintain a firm debt anchor. Chris Hipkins now seems to be throwing that away, sending the message that a future Labour Government would be open to borrowing beyond what’s prudent, affordable, or sustainable.”

“Markets take this kind of talk seriously. If Labour won't commit to a debt limit, credit agencies may well react by downgrading New Zealand’s rating. That means higher interest costs not just for Government, but for every Kiwi household and business trying to borrow.”

According to the New Zealand Debt Clock (www.debtclock.nz), Government debt currently sits at $190.9 billion, or $93,811 per household, and is growing every second.

“Every household in the country is already carrying nearly $94,000 in Government debt on its back. The very last thing New Zealand needs is a Prime Minister-in-waiting signalling he’s ready to make that burden even heavier.”

The Taxpayers’ Union is calling on Labour to clarify its fiscal policy and immediately recommit to the 50% debt ceiling.

“Lifting the cap isn’t a ‘mature conversation’. It’s a dangerous flirtation with economic irresponsibility and the costs will fall on taxpayers.”