NRC’s 20% rate rise a kick in the wallet
I am disappointed to read that the Regional Council have decided to raise their rates by near 20 per cent. And Chair Penny Sharp has also decided to not take any notice of the 19,000 plus Northland signatures asking for a referendum on the change to our democratic electoral system. No public consultation and I wonder whether honouring the pledge signed when sworn in as a councillor to respect the community and their wishes, shown to be substantial, has been ignored.
A rate increase of that magnitude will be an added hardship to the lowest income earners and with the probability of more unemployment after Government subsidies are either removed or reduced, 20 per cent is a kick in the wallet. All this is a sad indictment on this council.
John Bain Whanga¯rei
Real trickledown
With the advent of the Coronavirus crisis, it amazes me how Grant Robertson can say nonchalantly that there are “no free lunches”. We have a financial system running 40 per cent of the economy with paper promises going back and forth across trading desks all day making society less productive whilst politicians, bureaucrats and welfare recipients draw incomes (the free lunch) from the taxes paid by productive enterprise.
NZ society could have a free lunch Covid recovery if Government stopped selling Treasury bonds to bankers and investors who then sell them to the Reserve Bank at a profit. Instead Government should sell its bonds directly to the Reserve Bank so it can direct funds to infrastructure and economic recovery and away from speculative share and housing bubbles. If the planned $100 billion in new money created by the Reserve Bank was spent into the economy we would witness real trickledown economics that wouldn’t burden our children with debt. Excessive quantitative easing used to buffer bank reserves has lowered interest rates to record lows, forcing savings to leave the banks to speculate in housing markets. If interest rates were to go up by 1 per cent now, bank profits would soar on loans created by fraction reserve lending.
A 2 to 3 per cent rise in interest rates would remove 6 to 15 per cent of disposable incomes from the economy making many mortgages sub-prime and delinquent.
It’s time Government ceased the practice of selling bonds for credit that is never repaid. The social contract is dependent on “the free lunch” but not created as debt.
Steve Laurence
New Plymouth