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Ryan Bridge: We can't afford a credit downgrade · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: You know how we Kiwis love it when foreign countries
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  Speaker 1: or media outlets or even tourists talk about us? We
• 0:05
  Speaker 1: gush and we blush. Always the most read stories on
• 0:09
  Speaker 1: news websites. It's like a national pastime. Oh, look, Brad
• 0:12
  Speaker 1: Pitt says New Zealand's beautiful. Oh, look, Jason Momoa did
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  Speaker 1: a bungee in Queenstown, says it's beautiful. Oh my gosh,
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  Speaker 1: did he? It's like a weird national pastime we have. Well,
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  Speaker 1: I have got news for you, New Zealand. S & P,
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  Speaker 1: the global ratings agency, emphasis on global. has just done
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  Speaker 1: a bungee on our country's finances. It's mostly good news,
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  Speaker 1: low net debt, growth of 2.5% a year, tick tick,
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  Speaker 1: good government, safe, sound, stable outlook, the equivalent of a
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  Speaker 1: four-star TripAdvisor review. But there's one number that should be
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  Speaker 1: making headlines but won't. It's on page four. 10%. Our
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  Speaker 1: country's been borrowing more money to fund stuff, including everyday
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  Speaker 1: spending and election promises include potholes. They issue bonds or
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  Speaker 1: debt to investors and then they pay them interest for
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  Speaker 1: the pleasure of that money. Now, those interest costs are
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  Speaker 1: going up because of the bond market sell-off that we've
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  Speaker 1: been talking about on this show. S & P says
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  Speaker 1: the amount we're paying in interest will reach 9% of
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  Speaker 1: government revenue, i.e. tax, in 2029. That means for every
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  Speaker 1: million bucks the government earns in tax, it pays 100k
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  Speaker 1: just on interest on its debt. More than we spend
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  Speaker 1: on schooling our kids through primary and secondary, S &
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  Speaker 1: P says interest costs of more than 10% of revenue
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  Speaker 1: could result in, quote, weaker debt metrics. That's not a
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  Speaker 1: good thing. It means we're stretching ourselves. We could get
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  Speaker 1: a credit downgrade. People start looking at us sideways asking,
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  Speaker 1: can those guys pay back what they owe us or
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  Speaker 1: are they taking the mickey? And that is not the
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  Speaker 1: sort of reputation this country can afford. For more from
• 1:45
  Speaker 1: Early Edition with Ryan Bridge, listen live to News Talk
• 1:48
  Speaker 1: ZB from 5 a.m. weekdays or follow the podcast on iHeartRadio.