Campaigns
The financial system and the rules affecting how money functions affects almost all social and economic aspects of our lives.
We want to draw attention to how the current rules governing the creation and use of money have a direct impact on our social and economic well-being.
Free access to physical and digital cash
Retail banks have a licence that enables them to create credit money unlike other financial institutions. This is a powerful licence and like utilities who have licences to provide monopoly goods such as water, electricity, gas and communications it should come with social obligations. Access to physical cash should be assured at no cost, ATM’s bank counters and businesses (except some small businesses) should be required to accept physical cash.
Retail Central Bank Digital Cash should be introduced enabling people to have access to digital cash and not just use retail bank digital cash. The access to digital cash should enable free digital cash transactions, retail banks would be expected to facilitate this as part of their banking licence.
Read the Public Money Australia press release explaining the importance of a cash mandate that ensures people can use cash in the majority of face to face transactions and that cash services should be available through banks or post offices in all areas
Read the Public Money Australia press release explaining the urgent need to eliminate card surcharges and ensure that merchants no longer have to pay excessive fees to use card payment services.
Tackling the housing crisis
The housing crisis is partly due to the use of housing as an investment asset and the mortgage lending behaviour of the retail banks. This is due to the Australian banks having almost no risk when lending in the housing market (see earlier sections).
It is necessary for bank lending to be limited through macro prudential rules that maintain the fundamental link between peoples long-term ability to pay for housing and the pricing mechanism. The key changes are the link between income, equity and loan value. Incentives that distort the housing market should be removed such as capital gains relief and negative gearing.
Read the Public Money Australia press release/analysis that describes how the UK stopped the boom in house prices and made housing more affordable.
Sustainable government expenditure
The approach to government funding where expenses exceed tax revenues is called deficit funding. These “deficits” are commonly “funded” by the issuance of bonds that provide interest to the bond holders, effectively representing a transfer of money from government to private banks and other bond holders.
It is however just as possible to carry out direct monetary financing (DMF) that will avoid the need to issue interest bearing bonds. DMF could be gradually introduced for infrastructure spending and the volume of government bonds could be progressively reduced as they reach maturity and are paid back to the holder.
The basis for the government to manage public financing is not dictated by any natural law since money is entirely a creation of the state. It is however up to government to establish rules for effective management of the financial system with a focus on the public good
The video below is by Richard Murphy of Funding the Future. He is from the UK but his message applies equally to Australia as we also have a fiat currency.
To comment on, or to assist us with these campaigns please contact us.