Horizons between a rock and a hard place

politik.co.nz

Top OECD economist puts Willis between a rock and a hard place

The OECD’s chief economist yesterday laid it on the line for the new Government: bring the deficit under control or face higher Reserve Bank interest rates for longer. And to bring the deficit under control, she meant not borrowing for tax cuts. But there was more. Without policy changes—introducing a capital gains tax—New Zealand’s government debt would rise markedly from the mid-2030s to the mid-2040s when it would be 100 per cent of GDP. Clar…