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Govt needs to step up for Plunket and St Johns Ambulance

30 August 2022

by Chris Leitch, Leader

Government funding for essential services like Plunket, St Johns Ambulance, and the Salvation Army needs to increase by at least 15 percent.

Those services were already underfunded due to massive immigration over the last ten years prior to inflation taking off and they are now in a desperate situation.

They are providing services the government would have to run and pay for itself fully if they were to close down.

The government is paying around $5 billion every year in interest to commercial banks on its borrowing when it could access much of its funding needs from its own bank, the Reserve Bank - at zero interest - as set out in the aide memoir written by the Treasury and Reserve Bank to Grant Robertson in May 2020.

“Monetary Financing involves financing a fiscal deficit not by the issue of interest-bearing debt, but by an increase in the monetary base.”

“It can meet the specific funding needs of the government at lower initial cost and with greater certainty than Quantitative Easing.”

If it took that advice it would free up massive amounts of taxpayer money for those organisations and still leave billions to go into hospitals, schools, and poverty reduction.

The government borrows by issuing bonds.

The purchase of those bonds by the banks is not made using funds people have deposited with them. Nor is it made with shareholders capital.

It is made with money created out of thin air, in the same way as the Reserve Bank created $60 billion over the last two years.

The government is therefore paying $5 billion every year of taxpayer money for fairy dust.

Clearly Grant Robertson favours the interests of wealthy commercial bank shareholders over those of kiwis needing the services that Plunket, St Johns, the Salvation Army, doctors, nurses, and teachers provide.

That situation would be just as bad under National which is wedded to the same economic philosophy.

A new economic approach is required that puts kiwis first.

Read the aide memoir written by the Treasury and the Reserve Bank in May 2020