Bagrie’s Solution An Own Goal
The suggestion by former ANZ bank chief economist Cameron Bagrie that the retirement age should be raised to help with the government's fiscal repair job seems like a massive own goal.
What Mr Bagrie is suggesting is that older people will be required to remain in jobs longer, meaning less jobs available for people who are now unemployed as a result of the Covid-19 crisis and costing the government more in ongoing unemployment benefits.
He seems to have missed the fact that economic orthodoxy has been swept away with the crisis facing the world’s economies and those tired worn out ideas not only never worked, but are not fit for purpose in the new environment.
We challenge him to join other leading economists as Ganesh Nana, Shamubeel Equaub, Raf Manji, and Dr Geoff Bertram who do understand the new environment, and call for the government not to get itself into the position of requiring 'one hell of a fiscal repair job' in the first place.
They've all proposed that the government use the Reserve Bank to direct fund its economic rescue package so that no debt is created for taxpayers to have to repay.
The $60 billion dollars the Reserve Bank is now going to create will cycle through an economic merry-go-round of buying and selling bonds that will see a massive transfer of wealth from taxpayers to the bond dealers and mainly overseas shareholders of the country’s banks and investment funds.
The result will be kiwis saddled with enormous additional debt and interest payments when it could have cost nothing – freeing up tax dollars to be spent on health, education, housing and infrastructure.
$5 billion dollars of taxpayers’ money already goes every year to pay interest on existing government debt – money that could be spent on solving the housing crisis by building rent to own homes, boosting benefits, or a multitude of other possibilities.
That $60 billion of Reserve Bank money for banks and bond dealers makes Social Credit’s just announced policy of $20 billion to be spent on doing things that really matter to kiwis, like a $30 maximum charge for visits to GP’s and dentists, free public transport, and no tax on the first $20,000 of income seem small change in comparison.