Social Credit has always been ahead of its time
All governments need to borrow to supplement the income they raise, through a plethora of taxes, duties, and user charges, from the public and businesses.
Most, including our own, choose to borrow, by way of selling bonds, from mostly overseas owned private banks, pension funds, and other financial institutions, and just like you and I, pays interest on that borrowing.
In New Zealand's case, that interest bill amounts to $5 billion every year. Or to put it
another way, taxpayers pay $5,000,000,000 annually - roughly $12 million every day, 365 days per year - in interest on the money the government borrows. The majority of that interest goes overseas.
If that taxpayer money wasn't spent on interest, it would be enough to increase spending on health by 25 percent, or on education by nearly a third, every single year.
In contrast, the Japanese government gets 46% of the additional funding it needs at no
interest from its central bank, the Bank of Japan, and that figure is growing. To put it
another way, Japan, the third largest economy in the world, has cut its interest bill by 46% - and is spending that money on things that benefit the Japanese people.
Does that seem sensible to you? It sure does to me.
In Japan they call it Abenomics, after the Japanese Prime Minster Shinzo Abe, who
introduced the policy in 2012.
My party calls it Social Credit, or commonsense economics, and we've been promoting it since 1954, the year the party was formed.
The monetary reform movement that became the Social Credit Party has been around in New Zealand since the 1920's and at one time had over 20,000 members.
It was instrumental in getting the first Labour government into power in 1935.
Michael Joseph Savage, who became Prime Minister, ran an election campaign focussed primarily on a platform of monetary reform, aimed at harnessing the power of the country's central bank, the Reserve Bank.
In 1936 they passed the Reserve Bank Amendment Act, and started implementing those monetary reform promises.
They built 30,000 state houses, using funds from the Reserve Bank, and provided the Dairy Board (the forerunner of Fonterra) and the other co-operative producer boards, with an overdraft at the bank at just 1% interest.
That facility was a significant factor in the strength of our primary products sector, and it lasted until the early 1980's when it was canned by Rob Muldoon.
The Social Credit Party has been a leader in proposing policies way ahead of their time.
In 1973, way before the green movement became fashionable, it published a 28 page book entitled ‘You and Your Environment’, which laid out a comprehensive environmental policy, most of which would be as relevant today as it was futuristic back then.
A year later it produced a similar booklet ‘Industry and People’ dealing with the advance of computer and robotic technology, proposing concepts for the way in which workers, displaced by that technology, would be able to maintain a secure income. Those displaced workers will include accountants, lawyers, doctors, truck and cab drivers and numerous other professionals, not just factory or warehouse workers.
No other political party in New Zealand has even considered those issues.
Years before protestors sailed to Muroroa Atoll, or walked city streets waving placards,
Social Credit was proposing New Zealand become a nuclear free nation, and adopt an
"armed neutrality" defence policy similar to that of Switzerland.
The occupation of Parliament's room 216 in 1988, which forced the Labour government's hand on a referendum, was a key part of a Social Credit campaign for a proportional voting system, a policy that had been in the party's manifestos of the 1960's and which finally came about in 1996.
I could give you more examples.
As an aside, Social Credit always wanted the Single Transferable Vote system, which is
today used for all hospital board elections, rather than MMP.
MMP and its list system confers way too much power on party heirarchies and not enough
on voters, and it provides parliament with MPs unwilling to stand up for the wishes of their electorate in case they lose the support of party bosses at the next election.
New Zealand First's Waka Jumping bill, passed in parliament last year, is another move to increase the power of party bosses and diminish the wishes of voters.
Let me give you an example.
New Zealand First ran a vociferous campaign against the TPPA before the election, even extending to a bill in parliament designed to Fight Foreign Corporate Control.
Despite this, and after having gained the support of thousands of voters opposed to the TPPA, since gaining power not a single NZ First MP has dared to raise a protest against the party's support for the supposedly "new improved" version of the TPPA which is now in the process of becoming law.
Not a single one has had the guts to stand up for principle!
Social Credit has long had in its policy a process called recall - essentially the right for
voters in an electorate to call their MP to account for breaking promises made in an election campaign, and which allows them to force a by-election if sufficient votes in a referendum
held in an electorate favour that option.
That's another policy way before its time, but which voters may well find attractive in the not too distant future if more "about faces" on election promises continue.
Let me come back to the TPPA for a moment. It was projected to deliver trade benefits to this country of around $4.7 billion in ten years - and that was with the inclusion of the United States, who are no longer part of it.
Compare that to the immediate benefit of $5 billion the country would gain by funding
government from the Reserve Bank the way Japan is doing. That gain would be $50 billion over ten years, without the threat of ISDS claims, medicines costing more, our inability to stop more land going to overseas buyers, and increased loss of sovereignty.
We're not opposed to overseas trade, but you'll gather that we are opposed to the TPPA.
Social Credit has had four MPs elected to parliament. Vern Cracknell won the Hobson seat in Northland in 1966, Bruce Beetham won Rangitikei in 1977, Garry Knapp won East Coast Bays in 1980 defeating the National candidate by the name of Don Brash, and Neil Morrison won Pakuranga in 1984.
In 1981 the party gained 21% of the nationwide vote, the largest vote for any third party in modern history, and would have got around 25 MPs into parliament had MMP been in operation. Compare that to the Greens or NZ First in recent elections.
It has never wavered from its message that the country's central bank can, indeed should, provide the necessary funds for improving our health services, building houses and infrastructure, supporting better education, and improving our environment.
Such a funding mechanism has been supported and promoted in recent times by a range of academics and financial commentators, and an International Monetary Fund report published in 2012 titled ‘The Chicago Plan Revisited’. Let me give you a selection.
There's professor Richard Werner, a Marie Curie Fellow at the Institute for Economics and Statistics at Oxford, and currently an economist and professor at the University of
Southampton. Professor Steve Keen, Head of the School of Economics, History and Politics at Kingston University in London. Adair Turner, former Chairman of Britain's Financial Services Authority, and former Director-General of the Confederation of British Industry. Martin Wolf, Associate Editor and Chief Economics commentator at the Financial Times in London. Anatole Kaletsky, an award winning journalist and financial economist for the Times of London and Reuters. New Zealand's Bernard Hickey, senior contributing editor for interest.co.nz and Newsroom Pro.
Bryan Gould, a Rhodes Scholar, former Vice-Chancellor of the University of Waikato, and Companion of the New Zealand Order of Merit. Ganesh Nana, chief economist at BERL and an advisor to government. Shamubeel Eqaub, economist and frequent media commentator. Dr Geoff Bertram, former Senior Lecturer in Economics at Victoria University.
Less than two and a half percent of our money supply is created by the government. That's the value of the notes and coins you keep in your wallets and under the bed.
The rest is digital money created by private banks.
There is clear proof that central banks can create money too, and inject it into the economy without creating inflation. Our Reserve Bank is currently creating $100 billion.
The quantitative easing programme carried out by the European Central Bank, currently at around 35 billion Euros per month before the Covid crisis, by the Bank of England at 435 billion pounds since 2009, and the Federal Reserve at 4.5 trillion dollars are just a few.
I've already discussed Japan, and of course China and recently Russia are using a similar mechanism.
Meanwhile, New Zealand is behind the eight ball. The previous National government
borrowed around $80 billion, and the Labour led government is already accumulating $120 billion more - committing more taxpayer's money to wasted interest payments.
This country desperately needs money for hospitals and more medical staff.
Our future leaders, inventors, scholars, and business entrepreneurs, currently still at school need more teachers and support staff.
Our police are being asked to do the impossible with insufficient officers and a drastic
shortage of resources.
We face a housing shortage as dire as that which faced the government of the 1930's, with hundreds living in the streets, in cars, in sheds, and in substandard houses.
Roads, rail, and other infrastructure are in need of major work, and our environment, our rivers and our lakes are at a critical point.
These are the results of a neo-liberal economic experiment unleashed by Labour and
Roger Douglas in 1985 and continued by both National and Labour governments to the present day.
That experiment with the lives of New Zealanders is an abject failure.
Social Credit's policy of harnessing the power of the Reserve Bank to benefit Kiwis was
way ahead of its time when it was first proposed.
It's now a policy whose time has come.
Like many Social credit policies, it's a policy that New Zealand needs now.