MEDIA RELEASE

Thursday 6 November 2014

Bill English resorts to gobbledegook over DHB loans

Finance minister Bill English has again rejected the strategy of Reserve Bank loans to reduce DHB debt and has stated that he, "will not enter into further correspondence on this matter". This is in response to the series of letters put to him by Democrats for Social Credit health spokesman David Tranter who describes Mr. English's latest letter as meaningless twaddle.

In it Mr. English claims that it is not the role of the Reserve Bank to issue low interest loans "to particular entities" - this despite the fact that the Finance Act specifically permits Ministers to borrow from any organisation. Mr. English's failure to respond to my repeated references to this matter clearly indicates that he has no answer to the Finance Act provision, this being further emphasised by his stating he will not correspond further, Mr. Tranter said.

Mr. English's gobbledegook is typified by his statement, "Government spending requires appropriating real resources from the private sector. The most efficient and transparent way to appropriate such resources is through taxation and borrowing from the private sector, rather than through monetisation and inflation".

In effect Mr. English is simply confirming what has been put to him several times - that financing DHB projects through the private sector means higher costs which have to be borne by the DHBs and ultimately by the taxpayers. His reference to "inflation" is the same old chestnut whereby politicians claim that using the Reserve Bank would be inflationary but using the private finance sector is not - something which the advocates of private sector financing have never been able to explain, Mr. Tranter said.

Quite what Mr. English means by "monetisation" is anyone's guess since according to the Concise Oxford dictionary, to "monetise" is to "put (a metal) into circulation as money; give fixed value as currency". What this has to do in Mr. English's mind with Reserve Bank lending to DHBs must remain a mystery since he has closed the correspondence.

Mr. English also stated that using the Reserve Bank to provide low-interest loans "would amount to political interference.....". Yet what is it but political interference to unnecessarily keep DHBs in a perpetual state of financial strife whereby their operational deficits continue to put the pressure on them to reduce health services in order to try to balance their budgets?

As always the simple question is, why would any government wish to do this - unless they have an ultimate agenda of pushing DHBs to the financial wall and then announcing that the only answer is to privatise public health services, Mr. Tranter concluded.

ENDS

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