Figures released today reveal that for the first 7 months of the financial year, the Government operating deficit before gains and losses was $883 million smaller than expected, the operating deficit was $1.4 billion smaller than forecast and gross debt was $2.9 billion lower than forecast. Also ACC Investment income is up $222 million on forecast.

Peter Conway, CTU Secretary, says: "No-one would deny that we face fiscal challenges but the Government now has to face up to the fact that it has talked up the fiscal problems to a greater extent than was warranted."

New Zealand in 2009 had the third lowest gross debt in the OECD and the 5th lowest net debt.

Also, Treasury has indicated that $240 million gross issuance per week converts to $130 million net, and $110 million in repayments when it is averaged over four years from July 2009 to June 2013. While this still amounts to a significant borrowing programme, the Government should be more transparent about the fact that nearly half of the $240 million figure Ministers regularly quote is actually repayment of debt.