NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / New Zealand

Election 2020: Social Credit Party on its Reserve Bank plan and Covid-19 's 'sweeping away of taboos on economic management'

Nicholas Jones
By Nicholas Jones
Investigative Reporter·NZ Herald·
14 Oct, 2020 04:00 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Chris Leitch: 'There have been roughly 100 parties that have started up in New Zealand and have disappeared, and yet Social Credit is still there.' Photo / Tania Whyte

Chris Leitch: 'There have been roughly 100 parties that have started up in New Zealand and have disappeared, and yet Social Credit is still there.' Photo / Tania Whyte

Vote2020

A party that was once the country's third biggest but drew fewer than 1000 votes last election says Covid-19 means its radical monetary policy is needed more than ever.

The Social Credit Party got 21 per cent of the vote in 1981, and has contested every election since 1953, including 2017, when it won just 806 votes.

Undeterred, it's standing 23 candidates this election and has taken out full-page newspaper adverts, promoting its policies as a way to turbo-charge the country's recovery.

"You have economists now coming out and talking about the very stuff Social Credit has been talking about for so many years, and that we had been rubbished about for so many years," said the party's leader and Whangarei-based ballroom dancing teacher Chris Leitch.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

The NZ Democratic Party for Social Credit's platform centres around the Reserve Bank, which has recently increased quantitative easing (QE), a tool central banks use to inject cash into the economy when other measures - like cutting interest rates - reach their limit.

QE is now the Reserve Bank's primary tool for keeping rates down. The bank creates the funds to buy government bonds on the secondary (commercial) market. This puts cash into the financial system.

In August, the RBNZ expanded its QE programme to up to $100 billion. That money currently stays on the balance sheet as a debt to be repaid.

Social Credit wants the RBNZ to buy newly issued government bonds directly, rather than existing bonds from banks.

Advertisement
Advertise with NZME.

This would create $20b of debt-free money every year, it says, which can fund infrastructure, environmental and social investment, and its other policies including maximum payment of $20 for all doctor and dentist visits, free public transport and no tax on the first $20,000 of income, and 20 per cent tax on the next $20,000.

Many economists believe such an approach would have a dramatic and negative impact on financial markets, by pushing up interest rates and badly rattling investor confidence.

Social Credit argues that the Covid crisis means "the previous taboos on economic management have been swept away", and it would cut the creation of money by commercial banks to ensure inflation doesn't get out of hand.

The private banks' involvement in the current QE system will see them pocket an $11b profit over the next three years, said Leitch.

"Whereas, if the Reserve Bank was buying those government bonds directly, that would be $11b that would be able to go into a whole lot of other things that New Zealanders need."

Brad Olsen, a senior economist at Infometrics, said there was some divergence of opinion among economists about whether NZ could or should finance ballooning debt by having the RBNZ buy government bonds directly - but that debate was around a limited period of time.

"In the short term, there's an argument that can be made - I'm personally not convinced - but longer-term, I think you would be generating more inflation, people would be paying higher costs with less purchasing power, and that would be a road I don't think New Zealand wants to go down.

"There is a reason that we don't just make up money all the time, and that's because it generally does lead to inflation."

Covid-19 had led to more discussion about whether governments need to repay all debts, Olsen said, but he believed debt needed to be repaid, to allow markets to function.

It's extremely unlikely Social Credit will get into Parliament this election, but Leitch said membership had grown recently, and the party could still have influence through the discussion of its ideas.

Advertisement
Advertise with NZME.

Members and supporters provided the fundraising to keep that mission going.

"There's no war chest. The party over the years has simply had to go out there and graft to raise the money that's needed to operate," said Leitch, who has been leader for three years.

"There have been roughly 100 parties that have started up in New Zealand and have disappeared, and yet Social Credit is still there."

Save

    Share this article

Latest from New Zealand

New Zealand

National joins Labour to back bill protecting workers talking about pay

New Zealand

'It's on in the Tron': Robertson looking forward to final test

New Zealand

Wellington mayoral candidate ordered to pay former employee $28k


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from New Zealand

National joins Labour to back bill protecting workers talking about pay
New Zealand

National joins Labour to back bill protecting workers talking about pay

Camilla Belich's bill aims to end enforceable pay secrecy clauses in New Zealand.

17 Jul 05:23 AM
'It's on in the Tron': Robertson looking forward to final test
New Zealand

'It's on in the Tron': Robertson looking forward to final test

17 Jul 05:00 AM
Wellington mayoral candidate ordered to pay former employee $28k
New Zealand

Wellington mayoral candidate ordered to pay former employee $28k

17 Jul 04:13 AM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP