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Money Talk At Victoria University

Money Talk At Victoria University

Victoria University was the venue for a debate on money supply between the Reserve Bank’s chief manager financial markets Michael Reddell and visiting British economist and author Michael Rowbotham on Monday September 27.

The 300 people who turned up for the debate were a mixture of students, pensioners, bankers, church groups and included people with views from both sides of the economic spectrum.

NZ Democrat and Alliance Party MP Grant Gillon chaired the debate and introduced the speakers saying it was a good time to consider new opportunities.

“These new opportunities focus more on government issues and the global economy in a neutral background. Content of commercial policy moves worry people who are concerned that they are losing control of policy,” he said.

In his address opening the debate Mr Rowbotham stated that monopolies extract value from poor nations and that free trade is an ethic that should have had the impact it has.

“The first world is worried about the debt dilemma of the poor nations, and there are many myths that surround third world debt.

“Why should the poor nations go down the same tried and failed path? We cannot sustain the developing nations following the same pattern. I am saying this theory goes back centuries the idea that governments should be the providers of a debt free medium of exchange for an economy.”

For the Reserve Bank Michael Reddell said that thanks to a deregulated financial environment the NZ consumer now has the freedom to borrow most of the purchase price of a house.

“Is debt voluntary? Yes, it is. If I chose not to pay off more mortgage to go on a holiday for example.

“People consumed more in the 1990’s than they could afford, there was too much demand for goods and interest rates had to be high to compensate . Consumers can put that car and overseas holiday on the house borrowing now.

“We are one of the most indebted countries in the world now, and at some point the overseas lenders may call in the debt. There is a team thinking about this at the bank. So far it has not been an issue, but that does not mean the bank is complacent about it,” Mr Reddell said.

After the debate Chairman Gillon said he had enjoyed hearing the two speakers from different sides of the economic spectrum.

“It was good because New Zealand has followed a particular path economically since 1984, we need to get the debate going in New Zealand again,” he said.

- Alison Jones is a Massey University journalism student.

ENDS

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