In November last year, our National Spokesperson Don Richards sent a letter to his local MP, Justice Minister Kiri Allan. In it, he outlined issues with our current monetary system and asked for her support to raise awareness:

What we have seen is first, excessive money creation – whether indirectly from years of banks issuing too much credit, or directly via the $55 billion LSAP programme where the Reserve Bank itself created new money for the banking system. And secondly, that this extra money flows into unproductive parts of the economy.

The vast majority of the excess liquidity was pumped into the housing market, pushing up prices … It does not need to be this way. Our solution would have the Reserve Bank, rather than commercial banks, issue the new electronic money which would be spent directly into the economy by the Government for infrastructure projects. …

We urge you to take action and raise awareness of the unworkability of the current system and the benefits of having the Reserve Bank issue all of our currency.

Excerpt: Letter from Positive Money national spokesperson Don Richards to the Hon Kiri Allan, Minister of Justice, 29 November 2022

The response came on 27 February 2023 from Finance Minister Grant Robertson. Here is a link (PDF) to the Finance Minister’s letter in full.

We find the Minister’s response unsatisfactory. It’s good to see the Minister acknowledging that most of our money is created by commercial banks in the course of making loans. But it’s disappointing that he ignores its problems and sensible opportunities for change.

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