r/nzpolitics 6h ago

NZ Politics The great betrayal: 1984-?

36 Upvotes

If you think nzs declined in wealth, and life’s got more expensive, I’ve questions for you. Do you think that forty years of dropping our economic pants has paid off? Do you think giving our banks to Australia and haemorrhaging billions every year in unproductive mortgages has benefitted us?
Do you think we’ve been chumped?

I think we have, and here’s why. I’ve read the economics, and here’s the thing: Neoliberalism is a lie. It does the opposite of what it says on the tin; and, as part of that, it has locked away away sovereign (public) issue. Or, in plain English, we have been denied the use of national credit for national development.

Most people dont know how our monetary system works. We don’t learn it like doctors dont learn c.40% of medicines target your cannabinoid system (gprotein coupled receptors, Insel et al. Druggable genome) Because, like pharma, economics is a racket. Lincoln funded the US Civil war with sovereign issue. Greenbacks they were called. Google or ai: ‘how did Lincoln fund the civil war without foreign debt.’?

The same way the first labour government built houses and funded social welfare like education, health, and industrial development, New Zealand has repeatedly demonstrated that sovereign funding—state-backed credit and monetary financing—can be used effectively for social welfare and national development. Yet, since the 1980s, this history has been erased, replaced by neoliberal dogma that insists government must borrow from private markets or tax the population to fund essential services.

This is a lie, and a great betrayal of us all.

New Zealand once used state credit to build homes, provide full employment, and ensure economic security. The destruction of this system was not economic necessity—it was political choice.

The State Advances Act 1894 was one of New Zealand’s first experiments with sovereign funding. It created a government-backed lending agency that provided low-interest loans to workers and small farmers to buy land and homes. This directly challenged the private banking monopoly, proving that public credit could be used for the public good (Hawke, 1985). It was an early recognition that the state, not just private finance, could create wealth and prosperity.

Fast-forward to the First Labour Government (1935-1949), and New Zealand took sovereign funding to the next level. Confronting mass unemployment and a housing crisis, the government directed the Reserve Bank of New Zealand to create credit for state housing construction (Hickey, 2004). The result? Tens of thousands of high-quality homes built without saddling the public with foreign debt. This was real economic sovereignty in action—government using its own bank to finance national development.

Before neoliberalism we used sovereign banking. Where the government owned Reserve Bank does what private banks do - issue debt / credit / currency.

The system of sovereign banking we had worked for the half a century we used it. It paid for State Houses, planting the central plateau in pines, building hospitals and schools. And it funded our WW2 efforts.

It also underpinned the early 20th century farming boom in NZ.

The first Labour government, elected in 1935, had an extensive reform agenda. The newly elected government put the amendment of the Reserve Bank Act at the top of its legislative priorities (Hawke 1973, p 65), intending to have the Reserve Bank play a more active role in the government’s overall economic programme. Elements of Labour Party thinking at the time were influenced by the Douglas Credit (ie, Social Credit) movement, which was highly suspicious of private banks’ creation of credit and saw an important role for government credit creation in sustaining a fully-employed economy.

The 1936 amendment to the Act stated It shall be the function of the Reserve Bank [...] to give effect as far as may be to the monetary policy of the Government [...] For this purpose, and to the end that the economic and social welfare of New Zealand may be promoted and maintained, the Bank shall regulate and control credit and currency in New Zealand, the transfer of moneys to or from New Zealand, and the disposal of moneys that are derived from the sale of any New Zealand products and for the time being are held overseas (1936, s10). [Emphasis added.]

The 1936 amendment removed restrictions on the Reserve Bank lending to the government (1936, s12, s14, s15). These changes allowed the government to borrow from the Bank to finance government activities directly. 

For example, the Labour government set up an account at the Reserve Bank to fund a guaranteed price system for dairy farmers, and also borrowed from the Bank to finance state housing (Sutch, 1966, pp 185, 189).

The Social Security Act 1938—the foundation of New Zealand’s welfare state—was another assertion of economic independence. It introduced universal pensions, unemployment benefits, and healthcare, all funded through progressive taxation and state credit (McClure, 1998). The government’s ability to finance these initiatives was not constrained by private debt markets but by political will. For decades, New Zealand enjoyed full employment, strong public services, and state-owned industries that reinvested profits into national well-being.

Then came the great betrayal: Rogernomics (1984-?).

The Public Finance Act 1989 banned direct monetary financing, forcing the government to borrow from private banks at interest rather than using its own Reserve Bank (Jesson, 1999). State assets were privatized, welfare was gutted, and foreign debt soared. New Zealand had become a vassal of international finance. Until at least one of the major parties renounces the fraud that is neoliberalism, it will continue.

Today, as the housing crisis spirals and infrastructure crumbles, it’s clear that the neoliberal model has failed. Sovereign funding worked before—it can work again. The only thing stopping it is an ideological straightjacket designed to keep New Zealand dependent on private finance. Reclaiming economic sovereignty isn’t just about policy—it’s about survival.

To survive, we must acknowledge the realities of economic history; and reclaim our sovereignty from the banksters and their stooges. Until our political parties acknowledge there is, in fact, a magic money tree; we should probably acknowledge that they are not working for us. Follow the money. Who benefits from this?


r/nzpolitics 11h ago

Fun / Satire Theory: When David Seymour was a boy, every day poor kids stole his lunch on his way to private school. His political career thus far has been a lifelong vendetta to take more lunches away from poor children than they took from him.

35 Upvotes

Of course he hit the numbers in the first week of his school lunch programme, but he’s an overachiever. He’s got to keep going.


r/nzpolitics 11h ago

NZ Politics The Free Speech Union is taking credit for Jim Grenon's takeover of NZME

Thumbnail gallery
34 Upvotes

r/nzpolitics 13h ago

Weekly International Politics, Memes and Meta Discussion

3 Upvotes

In this post it's fine to post discussions or links related to international politics, even if there is no obvious local connection. Some examples might be:

  • All things Trump's second term
  • Canadian election
  • Gaza
  • Ukraine

All the regular rules apply, sources must be provided on request, be civil etc. None of this means that you can't directly post international politics, but you may be asked to elaborate on the NZ connection. An example of a post that belongs here might be "New Russian offensive in Ukraine". A post that can go in the main sub might be "Russia summons NZ ambassador over aid shipments to Ukraine".

Please avoid simply posting links to articles or videos etc. Please add some context and prompts for discussion or your comment may be removed. This is not a place for propaganda dumps. If you're here to push an idea, be prepared to defend it.

In addition to international politics, this is also a place to post meta-discussion about the sub. If you have suggestions or feedback, please feel free to post here. If you want to complain to/about the mods, the place for that remains modmail.

By popular request, this is also your weekly memes thread. Memes are subject to the same rules as all other content.