Divisions in the National Government have been exposed again, with John Key and Bill English at odds over whether borrowing $380 million a week instead of $300 million is affecting the exchange rate, says Labour Finance spokesperson David Cunliffe.
“Finance Minister Bill English conceded today that it was possible that the increased borrowing was putting pressure on the dollar,” David Cunliffe said.
“Prime Minister John Key said the opposite, however.
“He denied the strategy of borrowing more was putting pressure on the dollar because in determining the best time to borrow the Debt Management Office weighed up what’s best for the economy,” David Cunliffe said.
“Who should Kiwis believe?
“It can be accepted that there is good sense in borrowing at favourable market rates, but when the Leader and Deputy Leader have clearly not bothered to talk to each other about the potential impact, then we should be worried about the Government’s lack of direction,” David Cunliffe said.
“The Government has not been upfront about what it has been doing. It’s not surprising in those circumstances that there should be speculation about the Government’s motives.
“The Government has been painting the need to borrow as unsustainable, yet it’s been borrowing more than it needs to,” David Cunliffe said.
“That may suit its political purposes, but it’s not honest.”