Government infrastructure plans rob poorest kiwis
28 Jan 2020
From Chris Leitch , Leader
New Zealanders waiting for hip and knee surgery and other medical procedures, families struggling to put food on the table, and the rural sector, will be funding increased profits for banks and corporate investors following the government’s $12 billion infrastructure announcement today.
Those banks and investors will be rubbing their hands with glee over the gold plated gift they've been delivered which will be funded by fancy borrowing structures like PPP’s and SPV’s.
They'll get massively increased profits from the taxpayer funded interest payments paid for by struggling kiwis.
That’s a direct transfer of wealth from those who have little to those who have lots.
Banks especially will be popping the champagne corks given that the money they lend is created out of fairy dust in the first place, a fact confirmed by the Bank of England, the German Bundesbank, and our own Reserve Bank.
Those sources confirm that banks don't lend their depositors money, they create new digital money when they lend - a sum amounting last year to about $32 billion.
The additional interest burden on taxpayers will add to the $6 billion of taxpayer funded interest already wasted by the government sector on its current borrowing.
The 1956 Royal Commission on money and banking declared that "the Government has itself adequate powers to create money through the Reserve Bank".
That means that the government sector could access all its funding from the Reserve Bank at zero interest.
Instead of a $12 billion one-off spend, the government sector could have more than $6 billion each and every year to invest in health, education, infrastructure etc, without increasing borrowing at all, if it simply drew on the funding capacity the Royal Commission confirmed it could use.
Just like National before it, this government has confirmed that it is more focused on boosting investor profits than it is in delivering a better quality of life for the majority of New Zealanders.