Wednesday 7 July 2010

The Editor

Otago Daily Times

Dear Editor

Recent comments regarding New Zealand’s economic recovery and its debt deserve more investigation and answers. As long as New Zealand, along with most Western nations, keeps blindly following the “orthodox” ideological economics of “competitive free markets fix all” and does not make fundamental changes, no amount of playing with tax, GST, ACC levies or ETS will have any positive effect; in fact, the reverse will happen.

Even a simple example of using “carrot” instead of “stick” by using energy sector SOE profits to assist industry and households in energy efficiency using the latest technology implementations would be of greater benefit.

Major reforms in many areas are needed but the finance and banking sectors should be at the top, along with associated money and commodity short term trading. Only two years ago approximately, global credit was ten times global GDP, which is totally insane. I wonder what it is now.

This Government needs to consider using better instruments for economic stability and debt reduction. Interest on debt is a major problem. One such instrument is using Reserve Bank credit, instead of instead of interest-bearing loans from overseas banks. This option has already been promoted and has some overseas acceptance.

Hessel van Wieren

Cromwell