Don Richards, Independent candidate for Rongotai 2014

Don Richards About Don

Don lives in Newtown and has done so for 16 years. He is married to Sue Hamill and has two grown up daughters from a previous marriage.

Don has worked in a number of key industries during times of significant change in New Zealand's recent economic history. He was employed by BP Oil New Zealand, working in their Retail Strategy unit during the deregulation of the New Zealand oil industry in the late 1980's.

He also worked for Standards New Zealand in the late 1990's as it grappled with the transition from state funding to the user-pays model. In addition Don worked for the New Zealand Dairy Board, leading up to the formation of Fonterra and beyond. Don currently works for BRANZ (Building Research Association of New Zealand) as their Quality and Environmental Manager.

Don enjoys making a difference and is passionate about the environment. He has taken on a number of community based projects including organising clean-ups of Wellington harbour which started in 1997 and continues to this day. In 1999 he was the joint Wellington Regional Environmentalist of the Year, which recognised his effort.

In addition he organised street parties for his neighbours and ran a campaign to stop whaling in the southern ocean. He is currently co-founder of Positive Money New Zealand - a campaign to modernise the New Zealand banking system.

What Don is standing for

The pressing issue of today is the level of debt that we are burdened with. While things are tough at the moment for Don's generation, spare a thought for those coming out of university who have a large student loan, are hoping to save for a house, are asked to save for their retirement and raise their children.

Having children and a grandchild has brought the inequality of the current debt-based monetary system into sharp relief for Don and while it is barely tolerable for him - it is not something that he is willing to pass on to his children.

We all deserve a better future than the one we have in front of us and Don is standing for a better deal for all New Zealanders.

For more detail on the current situation click on the following links to a 30 minute Kim Hill interview with Raf Manji on National Radio on the 12th November 2011.

Don was also featured in a TV1 Seven Sharp item on money creation titled paying interest on a loan never existed.

What's the Answer?

Don believes that reforming the banking system will free us from the debt treadmill we find ourselves on. According to Don there are two items that need to be addressed

1. Where our money supply comes from and who benefits

Not many people are aware that over 95% of New Zealand's money supply is created by private Australian owned banks. Most people assume that the government issues our money - but it issues only the notes and coins which make up about 2% of our money. The rest is created as debt by private banks in the form of loans and mortgages.

Don proposes to transfer the privilege of creating our money supply to the New Zealand Government, for the benefit of us all, rather than the offshore investors who own the Australian Banks.

2. How money gets created and who benefits

Most people assume that banks already have the money that they lend out, and that they make their profit from the margin between the cost of borrowing from depositors and the interest rate they charge.

In reality, the banks do not need to have all the money that they lend out - they simply create the majority of the money out of thin air. Banks in New Zealand and around the world create money through a system called "Fractional Reserve Banking" where they hold only a fraction of the money they lend out - between 5% and 10% and they create the balance of their loans out of thin air. In this age of electronic banking this is easy to do. Banks simply enter the numbers on a spread-sheet and presto - money gets created.

The borrower then pays the bank compounding interest on the money the bank does not have, as well as the principal the bank never had, and then that money disappears overseas to the same offshore investors.

Don't take Don's word for it though - Martin Wolf, the Chief Economics Commentator for the Financial Times said on 9 November 2010:

In a historic move Bank of England document titled "Money creation in the modern economy" explains how the majority of money in the modern economy is created by commercial banks making loans. Whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. The bank says that this differs from the story found in some economics textbooks.

  • In addition John Kenneth Galbraith, former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975) said:

"The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”

  • No less an expert than Sir Mervyn King, Governor of the Bank of England, said in a speech he gave in New York on 25 October 2010:

“Of all the many ways of organising banking, the worst is the one we have today.”

Because the banks issue our money supply, our government must go to the private banks for the money they need - that they do not get from taxes - to keep the nation going. It makes no sense for us to allow the banks to create money out of thin air, lend it to the government and then require the government to pay the banks the principal plus interest on money that the banks did not even have in the first place.

Don proposes that we move from a Fractional Reserve Banking System to a Full Reserve System - where all new money is issued debt-free by the government. The government can then spend that money on infrastructure projects - or to rebuild Christchurch without the burden of interest. Local bodies could also draw on this money - debt free - to pay for the things they need that they do not get through rates.

The quantity of new money issued would be decided by an independent agency separate from politicians. The politicians would decide what they spend the money on - the same way they do with our taxes.

Over time the government will be able to pay off our national debt and reduce taxes. Our local body rates will also come down. New Zealanders and the New Zealand economy will thrive.

After the reform the banks will still lend money to those wanting to borrow - but the banks will need to have the money on deposit first.

Other benefits from government issued money

Don believes that while the repayment of the national debt, lower taxes and lower rates would be a great boon for the economy there are also other benefits. The imperative to continually grow the economy would diminish as the economy prospers through organic growth.

This organic growth would see an end to the boom and bust cycle that has plagued our lives, as the economy will grow at a sustainable rate. With organic growth businesses and families would be able to plan ahead with certainty.

There would also be no need to mine our national parks, engage in deep sea oil exploration or other risky short term revenue generating projects.

Our standard of living would rise and kiwis from abroad would return as our tax take diminished.

The next generation of kiwis would also have a future worthy of their lives and over time the need for student loans would disappear.

Sounds too good to be true?

This is not something that Don has come up with overnight. Wiser heads than his have grappled with the problem - and provided the solution. Don is co-founder - with his wife Sue - of the Positive Money New Zealand movement which is based on a larger campaign running in the UK called Positive Money UK.

The benefits put forward by Positive Money New Zealand are endorsed in the previously mentioned IMF working paper titled "The Chicago Plan Revisited". We suggest you read only the First 20 pages. The Abstract at the start of the paper makes very interesting reading.

The Positive Money New Zealand website contains detail on the issue of monetary reform - as well as providing a solution.

What is in it for me?

While all this may sound great for New Zealand Inc., Don also believes that there is something in it for the average kiwi.

Taxes will come down and with more discretionary income in your pocket - you will be able to pay off your personal debt sooner.

The infrastructure you use (roads, hospitals, schools, libraries) will be better maintained and the prospect of your retirement will be something to look forward to.

How can I learn more?

How can you help?

If you wish to help elect Don as your independent candidate for the Rongotai Electorate - send him an email with "I want to help" in the subject line.

If you live in the Wellington Central Electorate then support Laurence Boomert - an independent who is also standing on a platform of reforming the banking system - amongst other things.

Promoted by Don Richards, 15 Princess Terrace, Newtown, Wellington

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