Monetary Justice

Tax cuts - no longer a monkey on Cullen’s shoulder. Budget 2008 has seen the tax cut monkey effectively removed from Michael Cullen’s shoulder. The removal, though, has exposed another – the high interest rate monkey. The high interest monkey was formally placed on Dr Cullen’s shoulder, not by the National Party or any of the other opposition parties in parliament, but by Michael Cullen himself. He placed it there when he said ‘More joy likely in falling interest rates than Budget relief.’ - NZ Herald 16 May 2008.” The DSC agrees with that but warns that the high interest monkey Dr Cullen now carries will cause more grief than the tax cut issue ever did. Another quote from Michael Cullen, in the same issue of the New Zealand Herald, actually says it all: ‘If you are sitting, say, in Auckland on a $400,000 mortgage, a 2 percent drop in interest rates is $150, $160 a week or more’. Tax cuts are fine but are of a miniscule benefit to us compared to the gain a low interest rate policy ...

The credit habits of Generation Y have been explicitly explored in todays New Zealand Herald following a report from Veda Advantage, New Zealand's largest supplier of credit information. Associated Budgeting Consultants Network chairman, Darryl Evans is quoted as saying "I believe living in debt is a learned behaviour.....at the moment I'm working with four generations of the same family. That says something". Darryl Evans said that he was'nt surprised at any of the report's findings. Well nor am I! Generation by generation our people have been getting further and further into debt. None of us can escape the burden of debt, it does not matter how financially literate we are. One way or another every New Zealander is servicing debt, whether it be their own debt or the debt loaded on the prices they pay for goods and services. And of course we pay tax to service the government's debt and we pay rates or rent which helps service local government debt...