There was a story in the Herald business section comparing the “rockstar” New Zealand economy to the “Celtic Tiger” economy of (pre-crash) Ireland. These couple of sentences interested me:

But ASB economist Chris Tennant-Brown said the aspects of the New Zealand economy that were doing well were not debt-funded. A key driver of growth this year was expected to be the Canterbury rebuild which was being funded by insurance payouts. “I don’t see a risk there from an Ireland-style debt crisis.”

The last time I checked, the rebuild was forecast to cost a good $40 billion – and almost half of that ($16 billion) is coming from the Government. I also recall that the Government steadfastly refused to introduce a quake levy, instead choosing to borrow to fund the rebuild (it was something like $200 million a week at one point, wasn’t it?) But it’s ok – a bank economist says that the rebuild isn’t debt-funded. We’ll be fine.

p.s. I’d also note that the other star performer in the NZ economy – the dairy sector – is on the back of farmers agribusiness companies who have leveraged themselves to the hilt to convert Canterbury sheep farms to wetlands for cows.