Nothing forbids interest-free

LETTER

Let us now praise sensible men! I refer to recent letter-writers who insist the rail-track is fixed before we get that literal log-jam from the forestry industry. My thanks to them.

In the Tuesday 25th Gisborne Herald, KiwiRail’s original cost estimate is quoted at $3.5 million. Later figures like $6m and even $10m were floated around, with Napier MP Stuart Nash calling restoration “a big ask”.

Yet, over just the past couple of years, KiwiRail has budgeted close on $15m for debt-servicing when it is legal and ethical for infrastructures which benefit the environment to be funded interest-free from our sovereign Reserve Bank. After all, this time a decade ago, our RBNZ was part way through funding the reserves of the Australian-owned banks with a $5 billion (yes-billion) dollar credit line to ease them through their liquidity crisis.

This was an unconventional move but, as an RBNZ Bulletin (Vol 81/No 4) of last May states, there is nothing in the Reserve Bank Act forbidding such an action. Our Ministers of Finance, Transport and State-Owned Enterprises need to do some homework.

Heather Marion Smith

Let us now praise sensible men! I refer to recent letter-writers who insist the rail-track is fixed before we get that literal log-jam from the forestry industry. My thanks to them.

In the Tuesday 25th Gisborne Herald, KiwiRail’s original cost estimate is quoted at $3.5 million. Later figures like $6m and even $10m were floated around, with Napier MP Stuart Nash calling restoration “a big ask”.

Yet, over just the past couple of years, KiwiRail has budgeted close on $15m for debt-servicing when it is legal and ethical for infrastructures which benefit the environment to be funded interest-free from our sovereign Reserve Bank. After all, this time a decade ago, our RBNZ was part way through funding the reserves of the Australian-owned banks with a $5 billion (yes-billion) dollar credit line to ease them through their liquidity crisis.

This was an unconventional move but, as an RBNZ Bulletin (Vol 81/No 4) of last May states, there is nothing in the Reserve Bank Act forbidding such an action. Our Ministers of Finance, Transport and State-Owned Enterprises need to do some homework.

Heather Marion Smith

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lloyd gretton - 19 days ago
Nothing in the Reserve Bank Act. Plenty in the banking ethos. Countries that issue interest-free loans have an immediate surge in general prosperity. My wife borrows money interest free or minimal in emergencies from a government-controlled Chinese bank. We do have reserve money but it is tied up in savings. In Western countries, that is not allowed. Lately, American banks have been advertising interest-free credit cards but that is because they are desperate for more borrowing by their debt-loaded customers. How many times have hearts ached, children gone hungry and people turned to loan sharks or crime for want of a few dollars?

Passenger Rail Richard - 18 days ago
An examination of KiwiRail's historic reporting of project costing across what remains of the national rail network reveals that they embrace rather too often the convenience of spurious accounting. It comes as no surprise therefore that the first KiwiRail quotation will not be their last, or indeed, their last to be the most authoritative; should it be independently audited.

And one wonders also about the "fit-for-purpose" of politicians whose evaluations of major engineering projects lead them to distil their conclusion to the inarticulate "it's a big ask". Their meretricious approach to the serious nature of the subject conceals their own essential worthlessness.

Unfortunately when holding office they (MPs and KR) and their notions do not come interest-free - more often than not they have cost the nation a great deal of lost time and monetary interest.

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