KEY POINTS:
New Zealand is facing the most complex and challenging economic forces since the global stockmarket crash of 1987, Finance Minister Michael Cullen said today.
In notes for a speech to a superannuation fund conference in Auckland, Cullen said it was important that government policy look to reduce both national debt and Crown debt.
"New Zealand is facing a serious economic challenge generated by the global credit crunch and steep rises in global commodity prices," Dr Cullen said.
"These are the most complex and challenging set of economic forces we have confronted in at least two decades."
Cullen repeated his prediction that New Zealand had experienced a shrinking economy through the first half of 2008 and acknowledged many people were feeling pain due to high interest rates and rising prices.
The last serious recession in New Zealand was during the Asian crisis in the late 1990s, but Cullen now appears to believe the current situations is much worse.
National is promising a small rise in net debt to fund infrastructure if elected as government, but Cullen attacked that as unwise.
He said New Zealanders had a poor record in savings and only the Government's healthy balance sheet kept New Zealand's international credit rating positive.
A re-elected Labour government would commit to increasing savings levels and keep Crown debt low.
- NZPA