Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Treasury Advice To Government Lacks Courage

A Treasury paper, released under the Official Information Act, shows our Finance Minister asked for advice on whether the Bank should be allowed to buy up billions of dollars of Government debt on the primary market.

Currently the Reserve Bank buys up bonds on the secondary market with Treasury bonds sold first to selected banks, who on-sell to investors, and the Reserve Bank buys the bonds from the investors. The investors make a tidy profit, at the Governments expense.

According to Don Richards, National Spokesperson for Positive Money NZ, "Buying up bonds on the primary market would cut out the middlemen. The Reserve Bank would buy the bonds directly from Treasury with no mark-up and no debt to burden future generations."

"According to the OIA release," he states, "Treasury thought this was a bad idea, warning the move would risk long term damage to the reputation of New Zealand’s public finances. According to Treasury, this bad reputation might make it difficult for the Government to borrow in the future."

"This is disappointing," Richards continues, "because the Japanese Central Bank has been buying up Japan's treasury bonds for the last ten years and they have no trouble borrowing from international banks. The Chinese Government has been directly funding its economy for over a decade, and their economy is booming."

"In our view," he says, "the real issue is that international banks are scared New Zealand will cease to borrow from them so heavily. Surely we can't allow Treasury's fear of upsetting the banks to consign future generations to exorbitant debt levels while allowing essential infrastructure and services to go unfunded."

"The first Labour Government," Richards concludes, "showed immense courage during the Great Depression by using the Reserve Bank balance sheet (which Treasury objects to) to fund infrastructure projects and build tens of thousands of State Houses. This got us out of the depression sooner than most other countries and enabled New Zealand to set up a Welfare State that became the envy of the world."

Our Labour government needs to show a similar amount of courage as the thinking that got us into trouble is not the thinking that will get us out.

About Positive Money

Positive Money NZ is an independent, non-profit group advocating for monetary reform in New Zealand. Our patron is Bryan Gould and we are part of a global movement of organisations, the International Movement for Monetary Reform, campaigning to change the way money is created so that money serves society.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Rivals For The Covid Saliva Testing Dollar

If you want a good insight into what the limits of tiny, barely discernible steps to reduce poverty actually look like, delve into the latest Statistics Department figures on poverty in New Zealand Most of the nine measures utilised reveal little or no progress in combatting poverty over the 21 months to March 2020... More>>


Government: Reserve Bank To Take Account Of Housing In Decision Making

The Reserve Bank is now required to consider the impact on housing when making monetary and financial policy decisions, Grant Robertson announced today. Changes have been made to the Bank’s Monetary Policy Committee’s remit requiring it to take into ... More>>


RNZ: Alert Levels Remain

There are no new community cases of Covid-19 today, the Ministry of Health has confirmed.
Covid-19 Response Minister Chris Hipkins says at least half of the Papatoetoe High School community have been tested and the results that have come through so far have all been negative... More>>


Stats NZ: Latest Release Of Child Poverty Statistics

All measures of child poverty were trending downwards, prior to the COVID-19 lockdown, across the two years since year ended June 2018, Stats NZ said today. The COVID-19 lockdown in late March 2020 affected Stats NZ’s ability to collect data from households ... More>>


NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

Parliament: Kiwi MPs Among The “Most Educated In The World”

New analysis of MP qualifications reveals New Zealand’s Parliament is one of the most educated and highest qualified in the world, and significantly more educated than Australia’s. The research, by Mark Blackham of BlacklandPR and Geoffrey Miller ... More>>

The Dig: An Illogical Ideological Struggle

Dig beneath all the trade wars and the arguments to the effect that the USA should not permit China to achieve economic and technological superiority, or even parity, and you find the real reason behind the conflict... More>>

Travel: Government Eases Visa Restrictions For Visitors In New Zealand

Visitor visa holders will be able to stay in New Zealand a little longer as the Government eases restrictions for those still here, the Minister of Immigration has announced. More>>




InfoPages News Channels