Wednesday 8th October 2008

Petrol tax ignores alternatives

“The decision to impose a substantial petrol tax on Auckland motorists to pay for their roading projects is unjustifiable when alternative sources of funding are readily available” said DSC Leader Stephnie de Ruyter.

“Finding the money to pay for essential infrastructure development such as road building is easy. Provision exists in the Public Finance Act 1989 (clauses 46 & 54) for the Minister, on behalf of the Crown, to “borrow money….in the public interest” from “any person, organisation or government” and “on any terms and conditions that the Minister thinks fit”. So it follows that the Minister may utilise the publicly owned Reserve Bank of New Zealandto draw down interest free loans from the RBNZ to meet the development and maintenance costs of new roads as well as for the provision of public transport.

“Since the 1930s the Reserve Bank has been the source of funding on many occasions for the provision of capital works ranging from State housing, afforestation, and road & bridge building, in the public interest.

“The only hard part of finding the money to pay for infrastructure development is the need for the government to abandon its support for the private commercial banking sector, to relinquish its preference for interest bearing loans, and to genuinely act in the public interest by sourcing the necessary funding from the RBNZ.

“The DSC rejects the government’s fixation with the interest bearing debt mechanism employed by the private banking system to generate its profits as being unfair, unsustainable and contrary to the public interest.”

Ms de Ruyter noted that the DSC would not hesitate to utilise the credit facilities available from the Reserve Bank to fund the development and maintenance of transport infrastructure as a key aspect of establishing a social credit economy in New Zealand.

ENDS

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