MEDIA RELEASE

Date: Tuesday, 14 November 2006

Democrats Call for New Funding Mechanism

It is amazing in light of existing experience and knowledge that the Labour government remains in denial of a mechanism which injects money into the economy as interest bearing debt and when government borrows it does so through that mechanism.

Interest on that debt based ‘money’is paid out of our ever increasing burden of tax or in added charges such as fuel ‘levies’ or tolls.

Voters should note the NZ Herald front page item (13/11/06) as an example of the issue, whereby the added interest and administration burden on the primary cost of completing Auckland's western ring route amounts to 2.8 billion dollars.

If the Democrats proposed funding mechanism was in place to provide that funding free of interest there would be no need for the tolling infrastructure and the users/taxpayers/ratepayers would be 2.8 billion dollars better off.

Of course when anyone mentions changing the 300 year-old concept of building our economy on the back of interest bearing debt a few people, especially some politicians and economists, choose to close ranks and become extremely defensive.

Democrats say their concern should be on the huge burden our kids and grandkids will have to carry if the present system prevails.

The point is that if governments can (and do) sanction a privately owned interest bearing debt mechanism why not sanction one to create interest free funding for our nations infrastructure, as an alternative to the existing methodology or should that read mythology?

People (voters) need to question why our politicians are still failing to find solutions to the same issues that were extensively debated 22 years ago at the 1984 Lange/Labour Government Economic Summit.

The answer is that a new economic approach is needed and only the NZ Democrats are promoting it.

ENDS

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