NEW ZEALAND SOCIAL CREDIT ASSOCIATION (INC)
Established 1934

14 December 2008

The Minister of Finance & Infrastructure
Hon. Bill English
Parliament Buildings
Wellington

Dear Mr English

Congratulations on your assumption of office . Our nation is too well aware of the current financial repercussions of our debt based financial system . We believe a nation’s credit is a natural resource like air or water . We have seen the folly of relying on private banking to finance consumption & capital formation.

We place for your consideration a new way of creating credit without the associated debt , which exposes the whole economy to pain whenever there is a correction in the credit markets. This is because, under the present system, unless credit continually expands, money must be diverted from consumption to paying of interest . As a nation , we need a body charged with continual monitoring of the mass of the economy & its credit requirements in order for the economy to function . This body – the New Zealand Credit Authority - would also issue & retract credit through the existing trading banks . The banks’ customer relationships centred on trust & creditworthiness would remain undisturbed . Rates charged by banks would be Administration Cost + Profit ( with incentives for lender efficiency ) + borrower risk margin ( varying with a borrower’s credit & governance scores .

The principle is not new . In 1936 , debt free money was used by the Reserve Bank to fund part of the State Housing Programme . In addition , low interest Reserve Bank credit was used for decades to fund local government infrastructure & working capital for our Dairy industry, allowing it to become the mainstay of the NZ economy .. Australia used this system to finance its World War 1 efforts & Canada also employed much debt free money prior to 1960 .

Economic efficiency would be enhanced by having a common origin for New Zealand credit . as the cost of credit would vary much more with its use than which bank issued it . Currently , lending rates between various banks for the same products vary about 0.5% & sometimes more . This makes for sub-optimal lending decisions .

Your government has announced an intention to bring forward Infrastructure projects , partly to use resources which will be unemployed due to the international recession . This is a laudable objective but why add ( directly or otherwise ) to national & private debt or interest obligations in order to do so ? The Reserve Bank Act Section 1 (1A) (1) (b) requires the bank to “promote the maintenance of a sound & efficient financial system”. We have suggested how this objective may be accomplished .

Dan Colgan
President

Gordon Campbell:
The Waihopai Three Acquittal (and East Jerusalem)

The acquittal of the Waihopai Three for their attack on the Waihopai spy base is as welcome as it is surprising. To succeed in court, one would have thought they would need to have proved a direct connection between the base near Blenheim and the war atrocities inside Iraq and/or the renditions occurring elsewhere – possible, but no simple matter – and moreover, that the property damage done was more than a symbolic act i.e. that the actions taken by the protesters went some way towards preventing, or mitigating the evil being committed.

While no one knows what goes on in the hearts of jurors, the motive behind the decision to acquit is likely to have been based on social grounds, as much as on points of law... More>>