MEDIA RELEASE

Monday, 18 August 2003

Cullen to blame for rates row

Minister of Finance Michael Cullen is to blame for Auckland’s rates revolt, according to newly elected NZ Democratic Party president John Pemberton.

“The Minister of Finance has the power to extend overdraft type finance from the Reserve Bank to fix Auckland’s traffic problems, at an interest rate as low as 1%” says Mr. Pemberton.

“It is interest-bearing debt that is crippling the Auckland Regional Council, along with most other local bodies around the country.”

“Compounding interest payments force councils to hike rates in order to service debt, paying for completed capital projects many times over. Our ageing infrastructure is then left last in the queue for the rates dollar.”

“When every other Western country was cranking up their war industry, Michael Joseph Savage pulled New Zealand out of the Great Depression by extending low and no interest loans for capital works such as housing and infrastructure. It worked then and it can work now,” Mr. Pemberton says.

“I challenge Dr. Cullen and Prime Minister Clark to have New Zealand once more set an example to the world by regaining sovereignty of our money supply and using it to provide Reserve Bank loans so desperately needed by local bodies.”

ENDS