Finance Minister Grant Robertson reading his Wellbeing Budget 2021 in Parliament on May 20. Photo / Mark Mitchell
Finance Minister Grant Robertson reading his Wellbeing Budget 2021 in Parliament on May 20. Photo / Mark Mitchell
Government-owned entities have racked up almost $13 billion worth of debt, a figure that is expected to reach close to $21 billion by 2025, according to Budget documents.
But this borrowing is not included in the Government's more than $110b total net core Crown debt figures – the measure favouredby this, and successive Governments, as its overall level of debt.
Finance Minister Grant Robertson, however, said this type of borrowing was nothing new and is just a continuation of a process started under the previous National government.
He also defended the borrowing not being included in the Government's main debt figures as it does not meet the right definition.
But National's shadow finance spokesman Andrew Bayly said debt is debt, regardless of what column it falls under.
"Ultimately taxpayers will have to foot the bill," he said.
According to Budget documents, the total expected amount of debt taken on by Crown Entities – Government-owned bodies such as ACC, NZTA and Kāinga Ora – in 2021 is $12.8b.
This number is expected to continue rising over the coming years, hitting $20.77b by 2025.
In a statement to the Herald, Robertson said most of this borrowing is from NZTA, Public Trust and Kāinga Ora.
He would not provide a breakdown of how much each entity owed as that was not year "publically available".
But late last year, the Government doubled the amount of debt Kāinga Ora – the Government state house buying and building entity – could take on.
National Party shadow treasurer Andrew Bayly during their announcement on housing at Parliament on April 14. Photo / Mark Mitchell
Under the "borrowing protocol" its debt ceiling was raised from $3b to $7b.
Kāinga Ora's acting chief executive, Greg Groufsky, told Interest.co.nz at the time that its higher debt limit gave it room to "build more houses in addition to current targets if needed for the future".
Robertson pointed out that the increased amount of debt taken on by Crown Entities was signalled in December's Half Year Economic and Fiscal Update.
Nevertheless, he said that if the Crown Entity debt was added to the net core Crown debt figure, it would "only add a small amount to net debt which I am comfortable with".
Crown Entities debt is roughly one-tenth the size of the Government's total net core Crown debt level, which is expected to top $113b in 2021.
Robertson said allowing Crown Entities to borrow more money started under National and his Government had "continue with this approach".
Bayly said the then-National government did do this, but said it was only a "small amount".
"We have seen this skyrocket in the last few years."
This, he said, was a "worrying trend" for two major reasons.
"One, because [The Government] isn't being transparent about how much we are borrowing and two, because it's more expensive for Housing NZ [Kāinga Ora] to borrow than it is for Treasury."
