“New Zealand’s financial system is approaching crisis point due to a crippling level of household debt at 96% of our GDP. Our total debt passed the half trillion-dollar mark last year,” according to Don Richards, National Spokesperson for Positive Money New Zealand.

“Our financial system is debt -based with nearly 95% being created by foreign private banks, at the click of a button, to finance loans and mortgages. Our Reserve Bank has been relegated to issuing 2% of our money in the form of notes and coins”.

“There is no way to reduce our debt without harming our economy because the only way to increase our money supply is to take on more debt, which is unsustainable. To make matters worse the government is committed to reducing public debt, but this only transfers the debt burden onto the shoulders of households and business.”

There is however an answer. Positive Money will present a petition to Parliament on the 12th September asking the House of Representatives to give the Reserve Bank of New Zealand the sole ability to issue all New Zealand money, whether notes, coins, or electronic. The petition has been signed by over 5,000 New Zealanders.

With the Reserve Bank issuing all of our money, new money would be introduced into the economy debt-free and used to fund infrastructure projects.

“This is not a new idea,” continues Richards. “In 1936, during the first Great Depression, our Reserve Bank injected millions of pounds into our economy for infrastructure projects enabling the building of thousands of state houses. In three short years we were able to finance a welfare system that became the envy of the world.

“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,” concludes Richards. “It’s an important first step to having an economy that works for the benefit of all Kiwis, not just a few.”

The petition will be accepted by the Chair of the Finance and Expenditure Committee Dr Deborah Russell at 12:15 this Thursday 12th on the steps of Parliament. There will be a media conference afterwards. A background paper provides detail on the proposed solution.

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