Tuesday 13 July 2010

Dear Breakfast on One

Recently I wrote to our Minister of Finance to suggest a solution to funding infrastructure projects without using interest bearing debt.

Basically it involved a mechanism established through the legislative process to create a virtual overdraft facility with a zero interest rate for specified expenditure. Similar to the mechanism sanctioned by parliament and used every day by banks to create the interest bearing debt that now constitutes around 98 percent of our money supply.

I attach a letter received from Bill English in response where he makes the astonishing claim that NZ governments have not borrowed overseas for some years. That is in direct conflict with the remarks made on your program this morning and his recent statements on the subject of debt in Parliament,

The truth of the matter is that if our NZ Parliament cannot set up a mechanism that injects interest free capital into the economy and must use interest bearing debt created through a mechanism owned and operated by the banking sector to fund public good expenditure, then it is the banks mechanism which controls our national economic activity and direction rather than our democratically elected representatives

Trevor Crosbie

Hamilton