Reserve Bank current Governor Adrian Orr has been criticised for creating too much money and not easing back soon enough. Photo / Mark Mitchell
Role of bank loans The question of how to deal with inflation was addressed last week by former RBNZ Governor Graeme Wheeler and Bryce Wilkinson of the New Zealand Initiative. They were critical of RBNZ actions under current Governor Adrian Orr for creating too much money, then not easing back quickly enough. They blame historically low interest rates since the GFC for fuelling the housing bubble. There is a divergence between mainstream economists, who don't believe that banks create money when they make loans, and others, like the Australian economist Professor Steve Keen, who believe that they do. (There are papers from the Bank of England and the Bundesbank backing Keen.) Given the extraordinary profits made by the four Australian-owned banks from the housing bubble in NZ in the last few years, surely now is the time to investigate whether the money created by these loans has contributed to inflation and whether there should be new restrictions on banks' ability to create money with loans. Michael Laurie, Green Bay.
Capital punishment Unabated commercial corporate greed is the major driver of inflation, not wages, oil prices or the war in Ukraine. Conventional economic theory pits labour in a battle against capital. Well, there's no longer a battle, the war is over - capital has won. The disparity of wealth between the uber-rich and everyone else; not just the poor, is abhorrent. The uber-rich disregard the lessons from history at their own peril. It is incumbent on the uber-rich and powerful to work towards social cohesion. For if they don't, when the poor eventually run out of things to eat, they will eat the rich. Boris Sokratov, Campbells Bay.
Drain the swamp Last week saw massive flooding from Kaitaia to Balclutha. It is clear massive infrastructure needs to be invested in to cope with endless heavier rain events. This means stormwater pipes, wetlands, water abatements, etc. Small councils don't have the money, do they? Although I am annoyed at having to help the rural sector deal with flooding, in the bigger picture I see that these huge projects have to be done to future-proof us from climate change consequences. Rates just won't cover it from many. This is what Three Waters is about and, to me, is just common sense to pitch in for the greater good. I suspect the anti-Three Waters brigade might be the first complaining about councils not doing enough. John Buchan, Torbay.
Business models Denys Oldham's "Skill set" letter (NZ Herald, July 29) expresses concern that chief executives of the four newly-minted Three Waters entities will not necessarily have any knowledge of water. Perhaps I can explain why: Those entities will have a governance model known as managerialism, which was imposed on the public service by the 1988 State Sector Act. This model promoted the nonsense that a government department is a "business", and that a generic set of management skills is all that is required to be a manager. A bloated bureaucracy is inherent to the model with many positions being essentially non-productive, in particular those hired in "communications" i.e. spin doctors. All of this will follow the establishment of the Three Waters entities. In fact, the spin doctors are already at work, trying to justify a scheme that is understandably seeing strong resistance. Bruce Anderson, Christchurch.
Expert overview A letter to the editor, headed "Skill set" (NZ Herald, July 29), made reference to the fact that there is no mention of hydraulic engineering in the application for chief executive positions at Three Waters. The current Government has many examples of this, i.e. Megan Woods with house building; Michael Wood with road building; Andrew Little with matters medical; and I can't think of any posts where the MP in charge has any expertise in their portfolio, including the Prime Minister. The results speak for themselves. Bob Summerell, Morrinsville.
Check it out A summary of one household's grocery spend: The seven years from 2011 to 2017 averaged $2907 per year. The four years from 2018 to 2021 averaged $3980 per year. The first seven months of 2021 totalled $2384 and the first seven months of 2022 totalled $2786. Rising costs are not imaginary. D. Hamilton, Glen Eden.
Truth will out I've observed in our world's current political and medical climate the words "disinformation and misinformation" are getting quite a hammering. Governments are nervous, more controlling, and quick to deny false information. But any information, right or wrong, can depend on one's perspective and what you personally notice. In this fast-paced world of instant communication, my opinions about certain topics and information have become quite fluid. Over time, I will become more certain. I can recall instances when corruption or lies have been exposed - conspiracy has become fact and conjecture has become truth. Human nature has its own checks and balances. If we purposely deceive, I have no doubt we will become accountable to someone. Chas Bennett, Beach Haven.
Oh Canada Regarding a letter from Julie Pearce (NZ Herald, July 29), I wish to offer my opinion on conditions in British Columbia, Canada. The population in B.C. is approximately 5 million, very close to ours. I was fortunate to spend the first three weeks of June on holiday in Vancouver and I agree that difficulties do exist and inflation is close to 8 per cent. A shop at the local Safeway (not Costco) supermarket would have been, I believe, 40-50 per cent cheaper that what I pay in Auckland. The price of a standard sheet of plasterboard ( 1/2" thick not 3/8" ) at Home Depot is half the price, and available. On June 18, premium petrol broke through the $2 barrier. Nurses are overworked and leaving for better conditions and pay overseas, true. Sadly a large number of the replacements are coming from New Zealand. On a day I checked the new Covid-19 cases in B.C. it was 1600, the same day in NZ it was over 8000. Governments in these times will always be unpopular but, in my observation, the large majority in B.C. believe and still trust their government. Peter Sauvary, Parnell.
Palm off I am with the Green Party all the way on the importing of palm kernel as feed for stock. It is destructive to forests, it runs the risk of foot and mouth and it destroys New Zealand's "clean, green, grass-fed" image. If a farmer has so many cows that there is not enough grass, hay or silage plus turnips and other natural winter feed, then the number should be culled. How much gas emission is attributed as well, to transporting the containers for importing 1.8 million tons of palm kernel? These container spaces could be used for goods that we are not able to produce in New Zealand. Farmers should grow banana palms on their dairy farms for extra cattle feed and bananas for pig food. Lucerne and lupin were traditionally planted after cropping to provide nitrogen for free in the soil instead of artificial fertilisers. Perhaps we could return to the "once-upon-a-time" New Zealand and help save the planet. Marie Kaire, Whangārei.
So advised Several weeks ago the leaders of both main Opposition parties made statements which were at odds with Government policy. Christopher Luxon claimed that the rest of the world had "moved on from Covid" and that we should too. David Seymour said we should move to a green light setting and that masks were unnecessary. There are many New Zealanders who will follow this advice without question. I certainly have no problem with them expressing their opinions but neither of them has indicated whose expert advice they have taken. I have tried to elicit from the National and Act parties who their expert advisers are but, to date, my many emails have been completely ignored. New Zealand deserves to know whose advice the Opposition is taking (if any). Greg Cave, Sunnyvale.
Sporting chance Regarding the "claim over Māori league" (NZ Herald, August 1), let's hope the NZRL starts listening. Māori have always been the backbone of rugby league and union in New Zealand. Think Maunga Emery, Waka Nathan, and many others. Think schoolboy weekends away in Huntly, the Waikato, Whangārei, etc, and the goodwill those billeted trips fostered and which instilled in the big city kids an appreciation of rural life. All power to Hone, Tony and John in talking some sense into the head honchos. Bob McGuigan, Devonport
On opposition Criticism of the Government without proposals for workable alternatives is not balanced opposition, it is crude politicking. Hugh Webb, Huntington.
On Government This Government's continued crusade to stifle progress (in all spheres of our lives) for the glorification of social ideology has to stop. Who said, "let's do it"? Ian Doube, Rotorua.
On payments Deserving Kiwis in NZ miss out, yet overseas residents receive the cost of living payment - yet another Government failure. Mike Baker, Tauranga.
If people are embarrassed about receiving undeserved cash, rather than complaining to Nicola Willis, they could forward it to a deserving entity such as the Salvation Army, Red Cross or City Mission. Alan Johnson, Papatoetoe.
On flooding With one in seven NZ homes in danger of inundation as a result of climate change, a building's flood risk should become a part of its LIM report. Ian Swney, Morrinsville.
On housing I would be curious to know Megan Woods' view on how cramming people like sardines into eight houses per property raises the quality of life for your average NZ family and whether she would raise a family in such claustrophobic circumstances. Gary Hollis, Mellons Bay.
Cost of living payments going to people overseas
Treasury is correct, this will add to inflation. Essentially, the Reserve Bank and the Government are now playing tug of war with inflation. Reserve Bank is trying to get it down by putting up interest rates while the Government is sending it in the other direction with massive borrowing and spending. Max R.
Hard to imagine why these people can't just tell Inland Revenue they do not live in NZ, this seems easier and more productive than telling Nicola Willis to tell the Herald. Fido J.
What about those that aren't as honest? Are you happy as a taxpayer (assuming you pay tax) for the Government to give away your tax money without checking to see if people are eligible to receive it? There is a theme with this Government, give large chunks of money away with no checks and balances and unintended consequences of making policy decisions on the fly. Glenn H.
So you would have all expat Kiwis, or indeed immigrants who have worked in NZ in the 2022 tax year, contact the IRD to tell them they no longer live in NZ? What sort of policy is that? This will impact thousands. Anyone overseas with a New Zealand bank account earning interest will get the payment. This is a mess. They are spraying our taxpayer dollars all over the world. Andy G.
What that tells us is that the system relying on people to report themselves as non-resident for tax purposes isn't completely foolproof. This also begs the question, why many have not told the IRD that they are non-residents. There are tax implications. Kirsty P.