It claims to be an important step to have an economy that works for all Kiwis
Campaign group Positive Money New Zealand has submitted a petition that promises to significantly improve the country’s economy.
The petition – signed by more than 5,000 Kiwis – has just been handed to Dr Deborah Russell, the MP for New Lynn.
Don Richards, national spokesperson for Positive Money NZ, said it aims to address “our crippling level of debt as well as funding infrastructure projects that will energise our economy.”
“New Zealand’s financial system is approaching crisis point with household debt at 96% of our GDP. Our total debt passed the half trillion-dollar mark last year,” Richards said.
“Our financial system is debt -based with our electronic money, which makes up 97% of our money supply being introduced into the economy by private banks, to finance loans and mortgages. Our Reserve Bank has been relegated to issuing 3% of our money in the form of notes and coins.”
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The petition asks the House of Representatives to give the Reserve Bank the sole ability to issue all NZ money so new money would be introduced into the economy debt-free and used to fund infrastructure projects.
“This is not a new idea. In 1936, during the first Great Depression, our Reserve Bank injected millions of pounds into our economy enabling the building of thousands of state houses and other worthwhile projects. In three short years we were able to get out of a bigger hole than the one we are currently in and finance systems that became the envy of the world,” Richards explained.
“While things have certainly changed since the 1930s, a 2014 IMF discussion paper titled The Chicago Plan Revisited endorsed a similar approach. According to their analysis, empowering the Central Bank (our Reserve Bank) to issue all money would smooth out the boom and bust cycles, eliminate the risk of bank runs and dramatically reduce both public and private debt. In addition, it would provide productivity gains of 10% and lower steady state inflation to zero.”
“Our petition promises to be a game changer. It’s an important first step to having an economy that works for the benefit of all Kiwis, not just a few,” Richards concluded.
