Print money, insists Norman

By Laurel Stowell


The Government should be printing money to lower the value of the New Zealand dollar and save the economy - because that is what other nations are doing, Greens co-leader Russel Norman says.

"It's very unorthodox, but nevertheless that's the world we live in. You can't be a pacifist in a currency war."

He outlined his party's economic ideas to a handful of people at a lunchtime meeting in Wanganui yesterday.

The Government could use money it printed to pay for the Christchurch rebuild and replenish the country's natural disaster fund - both of which would be non-inflationary.

Dr Norman did not expect the current Government to take notice of Greens' economic ideas but said the party could not sit by while the current account deficit worsened.

New Zealand's current account deficit was the second worst in the OECD and worse than that of Greece. Collectively, Kiwis were spending $1.05 for every $1 they earned. Under old free market ideology that was okay, but times changed after the global financial crisis, Dr Norman said.

The high value of the New Zealand dollar was hurting exporters and encouraging people to splurge on cheap imports, such as flat-screen TVs.

Other countries were manipulating their exchange rates to achieve lower-valued currencies and prevent this. They did it by printing money.

The United Kingdom had worked a 20 per cent change, the United States 10 per cent, and Japan had done about six rounds of money printing.

Switzerland, with a healthy current account surplus, was printing money to lend to New Zealand, and New Zealand was paying it back with interest.

A small, open economy like New Zealand's had to manage the exchange rate as well as managing inflation, Dr Norman said. Not to do so was "suicide".

Lowering the value of the dollar would reduce the standard of living, but Dr Norman said with an ongoing current account deficit that was bound to happen when other countries stopped lending to New Zealand.

"We are arguing that we should manage it."

The other side of Green economic policy was to address the sustainability challenge by reducing resource use and reducing pollution. The party's "green jobs" platform at the last election advocated selling New Zealand renewable energy expertise overseas, rather than selling energy companies. It wanted the environment protected because a safe, clean, green brand was good for marketing New Zealand agricultural products. There was little enthusiasm for that in the National-led Government at present.

Bill English and John Key were not radical right wingers, Dr Norman said.

But the Government had changed in its second term with the rise of MP Steven Joyce, now responsible for economic development, science and innovation, and tertiary education.

"He is the antithesis of sustainability. There are still heaps of people doing great, interesting, green stuff all over New Zealand but without any support from the Government."

Asked his view about UCOL cuts to arts tuition in Wanganui, he agreed with the Government's emphasis on science and innovation nationwide but said the arts were a critical part of the Wanganui economy.

"Even from a pure economic point of view, I don't think it makes sense. Successful cities and economies have successful creative sectors."

And the answer for the "stagnant or shrinking local provincial economy"?

Dr Norman said agriculture was important in Wanganui, and the environment that underpinned it needed protection.

- Wanganui Chronicle

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