Private credit growth in New Zealand has been relatively flat in the past two years as households and businesses increase their savings, but as this graph shows Government debt is set to climb rapidly in the next few years - peaking at $73.4 billion in 2016/2017 and taking until 2025 to come down to current levels.

We want to lift our national savings – that’s households, businesses and the Government - because it reduces New Zealand’s vulnerability to foreign lenders, reduces pressure on inflation and interest rates and helps exporters by taking pressure off the Kiwi dollar.

However to achieve this the Government needs to reduce its own borrowing, which is forecast to drive up New Zealand’s national debt over the next few years.

The Prime Minister has already outlined moves to get the Government’s accounts back surplus faster and you’ll see more policies in Budget 2011 designed to increase our level of national savings.