Finance Minister Grant Robertson’s budget later this month could have contained an additional $6 billion in spending without costing taxpayers a single cent more, Social Credit Party Leader, Chris Leitch told the party’s Canterbury Regional conference yesterday.
But it won’t, Mr Leitch said, because the Finance Minister doesn’t understand that he could save that amount every year on interest payments on the government’s borrowing.
Finance Ministers in Japan and China access funding from their central bank at no interest and use the money saved on interest payments to benefit their citizens.
! challenge him to explain why he would rather pay $6,000,000,000 dollars every year to overseas bank shareholders and PPP scheme financiers, rather than New Zealand’s teachers, doctors, mental health patients. Environmental projects, building roads, rail, and other infrastructure are all desperately in need of funding.
Mr Robertson’s understanding of how the money system works is patently paper thin, and he’s relying on what advisers in Treasury, who have been sourced from the private banking industry, are telling him.
Commercial banks create money every time they grant a loan – to individuals to buy houses or to the government.
This has been confirmed by leading figures in the banking industry like Mervyn King, former governor of the Bank of England, and Graham Towers, former governor of the Bank of Canada, as well as local commentators like Bernard Hickey, Bryan Gaynor, Raf Manji, Shamubeel Equab, and Bryan Gould.
The country’s central bank, the Reserve Bank, also has that power, so Mr Robertson could, and should, be accessing funding from that source.
That would give him an additional $6 billion dollars every single year to spend on New Zealanders.
The people of Canterbury and Kaikoura would have recovered for the natural disasters much faster had National also used the Reserve Bank to fund their recovery programmes.
The conference was held in Christchurch yesterday.