Labor BSHIT budget | Exclusive News

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Bank shareholders, speculators, investors and money cutters will be celebrating for days on the huge profits they will expect after Labour’s budget was revealed yesterday.

After a 48% rise in profits in 2021, banks in particular will see another massive boost in profits as they ramp up the printing presses to buy the bonds the government will issue to fund its massive $25 billion borrowing program dollars a year for the next one. three years.

These printing presses will also create, out of thin air, the money that other investors and speculators will borrow to finance their purchase of government bonds and the public-private partnerships and “private sector participation” in building of infrastructure.

More than $5 billion each year in interest payments on this government borrowing will come from money paid by taxpayers and funnel directly into the pockets of bank shareholders, speculators, investors and noteholders.

This tax money is being taken away from reducing child poverty, giving nurses, doctors and other health care workers the pay raises they deserve, building state houses to make moving thousands out of motels, sheds and garages into decent homes, and increasing Pharmac’s budget so Kiwis can access life-saving drugs.

Instead of letting the commercial banks create this money, the government could have accessed these funds from its own bank – the Reserve Bank.

As Social Credit has been at pains to point out, Reserve Bank funding could provide the funds the government needs for free, without burdening the Kiwis with massive additional debt and interest, freeing up the money taxpayers to spend on health, education, housing and poverty. reduction.

This would have provided the government with an additional $5 billion each year.

This view is supported by a report, jointly authored by the Treasury and the Reserve Bank, presented to Finance Minister Grant Robertson in May 2020.

The aide-mémoire, titled “Quantitative Easing and Monetary Financing Compared” outlines the advantages of monetary finance compared to quantitative easing or QE (the Reserve Bank buying bonds previously purchased by commercial banks).

The report says monetary financing could be used to “address specific government financing needs at lower cost and with greater certainty than QE.”

It is also obviously at a lower cost than borrowing “fairy dust” from commercial banks, as this “fairy dust” has to be repaid with interest.

The Treasury and the Reserve Bank have confirmed that it is perfectly possible for the Reserve Bank to fund the government directly saving taxpayers billions – something former BERL chief economist Ganesh Nana has claimed in 2020 – “Government can borrow from the Reserve Bank. To be technical is literally to borrow from itself”.

Former finance minister Michael Cullen (now deceased) agreed, as did economist Shamubeel Eaqub – “I don’t see why we won’t go straight to the RBNZ by buying treasury bonds directly.”

Former lecturer at the University of Victoria’s School of Economics and Finance, Dr Geoff Bertram, also joined the list of those calling for different funding, saying: “It’s not savage radicalism. It is a dominant, even conservative economy”.

That call was echoed by economic commentators Bernard Hickey and former University of Waikato vice-chancellor Bryan Gould.

Instead, Labor’s BSHIT budget again threw a few crumbs at those living in poverty, those homeless, those in desperate need of health care, those in most need in New Zealand, while supporting the wealthy.

© Scoop Media

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