Leader’s Address to Conference 2019
The climate is changing. Things are hotting up. The ice is melting. Storms are predicted to get worse. A crisis is on the horizon. We may be too late.
Yes, the climate is changing. 50 years ago, when my father was a candidate and Vern Cracknell won the seat of Hobson for Social Credit, suggestions of using the Reserve Bank to fund the country’s needs were ridiculed as “Funny Money” and people proposing such weird ideas were labelled cranks.
Now, bank economists, respected economics commentators, the Treasury, and even the Reserve Bank itself advocating that our ideas be adopted.
“Reserve Bank Governor Adrian Orr confirmed that the Reserve Bank is actively investigating the possibility of turning to unconventional measures like quantitative easing (inventing money to buy Government bonds and other assets)”
Things are hotting up. Central banks have cut interest rates to near zero – in some cases below zero – to a point where people are paying the banks to hold their money. In New Zealand, shock and horror are being expressed as our Reserve Bank cut its rate to 1% and further cuts are predicted.
Now, bank economists, respected economics commentators, the Treasury, and even the Reserve Bank itself are suggesting that helicopter money – a type of National Dividend – might be necessary to stimulate the economy.
New Zealanders could be in line for a cash payout, alongside temporary tax cuts if the economy crashes, according to advice from Treasury.
The ice is melting. The government has a self imposed debt target under the Budget Responsibility rules but many see that a nonsense when so much needs to be done. We know that a lack of money is not a constraint on what is possible and it could find the money needed to fix lots of things. Austerity, cuts to government services like health, education, benefits, state sector wages, etc have been buried.
Now, bank economists, respected economics commentators, the Treasury, and even the Reserve Bank governor Adrian Orr are calling on the government to spend money it hasn’t got in order to assist with the “heavy lifting’ needed to get money circulating in the economy and stimulate activity.
On televisions Q&A last week, Adrian Orr sent a clear message to lawmakers: "We really need to see the Government spending."
Storms are predicted to get worse. The economy is slowing, businesses are predicting lower profits and job layoffs. Confidence in the economic system is being called for and infrastructure building on roads, rail, pipelines, etc. We know how to fund that without incurring interest costs for taxpayers.
Now, bank economists, respected economics commentators, the Treasury, the Reserve Bank, and business leaders are calling for infrastructure spending.
Infrastructure New Zealand chief executive Stephen Selwood said the country's roads and water pipes were in a dire state and something needed to be done. "All of the economic indicators are looking a bit sad at the moment so it's time for stimulus to the economy.
A crisis is on the horizon. Recession, and even depression, is being touted as just around the corner. Maybe a crash in the housing market.
Social Credit, an economic system that has as its very foundation a principle that states “What is physically possible and desirable for the happiness of humanity can always be financially possible”, has the means to avoid that outcome.
A media report on a Treasury paper issued earlier this year says –
Treasury doesn't give specific details of what it recommends, but says that "effective fiscal stimulus should be timely, targeted, and temporary".
It says the "best case" stimulus would focus on tax cuts and stimulus, alongside spending money on building infrastructure, which would also boost the economy.
It recommends giving money to households, particularly those in need, saying that tax changes or cash transfers (meaning a payment of some kind, possibly a benefit) meet its policy objectives of boosting the economy, but in a way that achieves equity.
Well, well, well, now we have Treasury, that bastion of neo-liberal economic thinking, that den of vipers that Roger Douglas and Co let loose in 1984 who caused most of the problems the country is facing – housing shortages, the decimation of our industry and skills base, the lowest wages amongst first world countries, the ever widening gap between rich and poor, the sale of most of the country’s strategic assets - those apologists for an economic system that sees 240,000 children living below the poverty line while banks make a cool $6 Billion profit every year - Yes, they’re responsible for all that and more, they’re now recommending that the government adopts ‘Funny Money’ to fix the very ills they caused.
How’s that for irony.
Finance Minister Grant Robertson however, is still firmly wedded to Treasury’s former extractive economic policy that puts profit for private finance ahead of the standard of living of most Kiwis.
In a media report on July 15th he says that the government are open to public-private partnerships for roading projects, and they are looking a variety of other options.
"Ones where between local, central government and the private sector we share the risks, and create things, for instance special purpose vehicles where we can take the projects off balance sheets of the councils and the government and get the private sector funding."
Those ‘special purpose vehicles’ of course won’t carry passengers on the roads he’s talking of building. Instead, these fancy financial entities will deliver gold plated profits to private sector funders.
My advice to Mr Robertson is catch up! You’re still living in the past. The climate is changing.
In the past we’ve been labeled “The Skoda Brigade”. Well I have to tell you ladies and gentlemen, Skodas are now a luxury vehicle, a fashion statement – if you’re young and successful, you drive a Skoda!
Many have tried to denigrate Social Credit with the label “Funny Money”. Well, it appears funny money has come of age, funny money has become fashionable too – even bank economists, respected economics commentators, the Treasury, and the Reserve Bank are talking about it.
And not just talking about it, they’re advocating its implementation.
They’re saying we’ve were right all along!!
We can’t claim victory just yet though. Funding all those things from the Reserve Bank is not yet seen as the best possible option despite recommendations that it should engage in quantitative easing.
So we’ve got work to do yet – not only to change the current mind set to recognize the ability of the Reserve Bank to fund the necessary spending, but also to gain credit for it being our idea first.
That work will be in direct contrast to the economists of the commercial banks who have jumped on the bandwagon because their employers see another massive jump in profits on the horizon. They want the recommended spending to be financed by their creation of money out of thin air and they want the interest income that will come out of taxpayers pockets. Apparently $6 billion dollars a year is not enough.
But there’s another thing that we need to work on, something that no other political party is prepared to do. That is to reclaim our sovereignty, control over our land, our production of food, and our strategic assets.
The Wellington Electricity Network supplies power to the New Zealand Parliament, Wellington Airport, all major government institutions including the Police and Security Intelligence Service, and network security-sensitive customers such as Datacom and the Department of Corrections.
It also supplies power for the critical infrastructure of the region's local authorities including water, waste water, street lights, the transport network, the port, hospitals, the telephone network and the head offices of the country’s banks and major businesses.
Its utter madness that the company that supplies that power to that critical infrastructure, is in the hands of an overseas owner, despite claiming on its website that it is a local company. It is in fact, wholly owned by C&K Infrastructure Holdings, a Chinese conglomerate registered in the tax haven of the Cayman Islands and part of the stable of China’s richest man Li Ka-Shing, who is also one of the world’s 15 richest.
This is especially critical given the international issues developing between China and the United States.
Should those escalate further in the future New Zealand's decision-making heart could be disabled by a flick of a switch.
Companies owned by the Government of China and with close ties to it are gobbling up stakes in critical infrastructure, significant tracts of farmland, food production and property. Ron Asher’s book, In the Jaws of the Dragon, is a compelling and scary read for those interested in finding out just how far that has extended.
Westland Milk Products is the latest and Fonterra is on the hit list.
Why is it that our government is happy to sit on its hands rather than acting to stop New Zealand's dairy processing industry from complete foreign takeover.
It's ludicrous that foreign capital is seen as an investment, yet local capital provided by the country's own bank is seen as socialism or subsidy.
One sees profits being exported overseas adding to our balance of payments problems, and the other sees profits staying in New Zealand, being spent in the communities in which they were generated.
We can, we must, make a stand against any more takeovers, and follow that up with a campaign against all foreign ownership in New Zealand.
We’ve started. We’re going to mount a high court challenge to the decision of the Overseas Investment Office to grant approval for the takeover of Westland Milk Products by Inner Mongolian Yili, a company 25% owned by the government of China.
That will be an interesting test to see whether we get public support to fund the challenge, and whether we get media coverage and attract new members.
Both National and Labour governments since 1984 have made an art-form out of smoothing the way for the sale of New Zealand's land, most productive companies, and critical infrastructure to overseas owners.
That ‘smoothing of the way’ has been recognised by large donations to the political campaigns of both parties.
International security and policy expert Peter Jennings warned Australian politicians last year they should not be dazzled by Chinese money, but our politicians have fallen into that trap.
That bedazzlement is helped along by large political donations to politicians from wealthy Chinese businessmen, and the promise of lucrative positions when they leave parliament.
For example, four of China’s six giant development banks have set up shop here in the last 5 years, the Bank Of China, the China Construction Bank and the Industrial and Commercial Bank of China.
All are majority-owned by the Chinese government, and all are here to extract money out of New Zealanders pockets.
The people chairing the boards of directors of those Chinese banks in New Zealand are none other than former National cabinet minister Chris Tremain (Bank of China), former National Party Leader and Reserve Bank Governor Don Brash (Industrial and Commercial Bank of China).
Former National Prime Minister, Dame Jenny Shipley was chairing the board of the China Construction Bank until she was forced to resign recently after Hawkins Construction went into receivership owing sub contractors million of dollars. The company had previously been taken over by a Chinese company that took all Hawkins’ capital and then used the
company to borrow large sums of money. Jenny Shipley resigned from the board just days before it collapsed.
Not just our politicians though. A host of former mayors and councillors and business leaders promote China’s interests here. I wonder how many of them, from central and local government, will look back on their legacy and regret that they paved the way for a foreign takeover of our country.
Compulsory re-purchase of critical infrastructure could be made without breaching the provisions of either the China Free Trade Agreement or others such as the Trans Pacific Partnership, which provide for security issues to be addressed, and those agreements must be renegotiated or repudiated to secure New Zealand’s ability to make its own decisions about what’s best for Kiwis.
We have National and Labour coalition governments who have to be dragged kicking and screaming by the public into doing something about cancer treatment rather than taking the initiative themselves.
Governments who think spending money on cycle paths and cycle lanes is more important than putting decent food on the table of hungry kids.
Governments who think sending prime ministers and politicians on jaunts to talk-fests over grand dinners and fine wine is more important than hip and knee operations or colonoscopies.
Who think that question time in parliament where MPs act like a 6 year olds is better use of taxpayer’s money than building low cost houses for people who live in cars.
Who think that paying $6 billion a year in interest to overseas owned financial institutions rather accessing funds from the bank they own at no interest is better use of taxpayers money than using it to build better roads, railways, and waste disposal plants.
Who think that spending money to big note it on the world stage to try to challenge internet companies is better than spending that money to visit Kaikohe, Kinleath, Karamea or Kennedy Bay and ask New Zealanders what they need for a better life.
Have voters had enough of governments that act like that yet? Experience overseas suggests that time is near.
In my address to our conference in 2015 as deputy leader I said this –
New Zealand’s political and economic commentators are so far behind the times, they’re starting to look like the dinosaurs of a forgotten age, and we all know what happened to the dinosaurs.
My advice to them was to get with it.
If they didn’t, the rising tide of monetary reform would leave them high and dry, on the rocks, all shreds of credibility stripped away.
Well they have got on with it. They’re talking about quantitative easing, helicopter money, and fiscal stimulus.
I went on to say -
There is a wave rolling in - one that we have been leading for over 60 years. Our challenge, your challenge, each and every one of us, is whether we will surf it to the beach, or get left behind in its wake.
George Bernard Shaw once wrote, "Some people see things as they are and say why? I dream things that never were and say, why not?"
We’ve been dreaming of things that never were and saying why not for over 60 years.
That ‘why not’ has arrived and that challenge is staring us in the face, right here, right now. We have a choice - to surf it to the beach, or get left behind in its wake.