Monetary Reform

Reforming our monetary system to eliminate the ability of commercial banks to create new money every year will unlock a new source of revenue for government. By replacing the commercial banking sector with a government-run Kiwibank which exists solely as a deposit-taker and funds transferrer, this would create a more efficient and secure platform for financial transactions in our economy. More importantly however, the 7% of the money supply that was added each year by commercial banks can now be spent into the economy by the government in the place of taxation revenues. This amount would have totalled roughly 13billion in 2008 which is enough to cover defence, infrastructure and other core government services (Health, Welfare and Education are afforded by citizens though their redistributed 10% Land tax).

Putting government in control of the money supply means that it can be steadily increased to keep inflation at a steady, low rate and financial services such as lending can be provided by finance companies who raise their funds from credit markets. This is a much more transparent way o running the economy than mixing it all up within the murky world of commercial banking as has been done in the USA recently.