Media Release

Friday 12 April 2013

Finance Minister challenged to explain comments

Democrats for Social Credit Leader Stephnie de Ruyter today challenged Finance Minister Bill English to explain why the money printing that takes place every day by the privately owned commercial banks is ok, but money printing by the publicly owned Reserve Bank is not.

This follows comments by Mr English in a speech given to business leaders in Wellington, where he scoffed at the idea of printing money, saying countries who did it would suffer the consequences.

Privately owned commercial banks currently print money and lend it to the government to spend, incurring massive ongoing interest costs for taxpayers.

Mr English should explain why getting the Reserve Bank to print money for the Government to spend instead, without the added interest cost, was a worse option.

Saving taxpayers from millions in interest every year should surely be applauded, not ridiculed.

A recent report by the International Monetary Fund (IMF) recommends that just such action is taken by governments to reduce indebtedness and hold down inflation.

An added bonus would be the profits of the Reserve Bank returning to the Government by way of dividends.

Given the Government’s massive ongoing borrowing to fund such things as the Christchurch earthquake recovery, and its hurry to sell off power company assets to raise cash, Bill English should instead authorise the Reserve Bank to take back some of the credit creation currently undertaken solely by the overseas owned commercial banks.

Credit creation by the Reserve Bank was what got New Zealand out of the last great depression and built many of the state owned assets the government is now putting on the block.

Perhaps the Minister of Finance does not understand how new money is created by the commercial banks. If he does, then let him explain why, if it is good enough for central banks to create credit to prop up privately owned commercial banks in Europe and the USA, and bail out failing European economies, he does not consider is it good enough for New Zealand’s central bank to support the re-building of Christchurch.

ENDS

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