Green candidate proposes local currency

Stuff reported on Saturday that Dunedin was on the comeback trail.

Dunedin: The return of New Zealand’s first city

Dunedin was New Zealand’s first city, but has since been overtaken in size by six other cities. But something is stirring in the Edinburgh of the South, and Dunedin is on the comeback trail.

This morning the ODT reports on the major planks of  Green candidate’s mayoral campaign – a ‘living wage’ city and a Dunedin currency. This is supported by Green co-leader Metiria Turei.

Living wage, Dunedin dollar his platform

Dunedin mayoral candidate Aaron Hawkins has announced his intentions to transform Dunedin into New Zealand’s first living wage city and establish a local currency if elected mayor.

Speaking at the Green Party’s Dunedin local body elections launch, the first-term councillor said he wanted to push for every resident to earn a living wage and to establish a local currency, the Dunedin dollar, modelled on the Bristol Pound.

My dream for Dunedin is to become New Zealand’s first living wage city. That is a city where every worker, regardless of where they work, makes a living wage.”

Dreams are free, but forcing up wages could be expensive for businesses, and could well cost jobs.

The creation of the Dunedin dollar would complement the city’s push for wider economic equity, he said.

“The Dunedin dollar sits alongside our existing currency, rather than trying to replace it,” he said.

“A living wage and a Dunedin dollar are both commitments to doing economics differently.

Commitments to setting up a Green experiment in Dunedin.

Some of the Green promoted cycleway experiment was botched and had to be redesigned, and some had to be scrapped because costs were going to be double what was estimated.

“They both work from the bottom up rather than waiting for the trickle down.”

The objective was to encourage people to spend their money with local, independent businesses in the city.

Based on the local multiplier effect, the currency was aimed at keeping more money within the local economy.

“If I were elected mayor, I would happily take 25% of my income for that elected position in the Dunedin dollar,” Mr Hawkins said.

Would wages be topped up to ‘living wage’ level with the Dunedin dollar?

The council would spend the next term designing “something that fits our local situation” to be launched by 2019, he said.

Only if the council – not just the mayor – supported the Green dream.

Green Party co-leader Metiria Turei described the proposals as “fantastic concepts for the city”.

“We need to be supporting the living wage and challenging council and challenging our business community leaders to step up,” she said.

“And the Dunedin dollar is all about supporting each other.”

So it sounds like Hawkins’ dream is a part of the Green local body strategy.

Hawkins is very much a Green formula campaigner, sticking to strategy and script.

A current contentious issue in Dunedin is the redesign of the main one way streets to include cycle lanes and remove hundreds of car parks.

This was already controversial in the last mayoral campaign, but is now closer to reality – and the opposition to it is also stronger, there’s a lot of people getting very annoyed at streets that are dominated by underutilised cycleways.

So Hawkins and the Greens will have a challenge selling their ‘living wage city’ and Dunedin dollar on top of this.

But there is quite a large Green vote in Dunedin. The city could become a green nirvana.

However current mayor Dave Cull is fairly Green leaning so Hawkins and Cull will compete and may split the Green vote.

However there is also likely to be a strategy to stack the council with Green votes even more.

Leave a comment

46 Comments

  1. Brown

     /  11th July 2016

    These things do work at some level if the public come to accept them as valid. I read about Ithaca in the US where they created a local unit of value which became acceptable as “money” locally. Believing it to be internet rubbish I emailed the city and the nice lady confirmed it was as reported and working well. Just keep the banks and federal politicians away from it.

    Reply
  2. Dunedin votes them in, Dunedin gets what it deserves. How much of the Green vote rises form the Uni Pete and how much is local Dunedites?

    The best thing that could happen for the Deep South is the discovery of Oil in one of the southern basins and to have the Oil business set up its support structures in Bluff and Invercargill. Southland having another string to its economic bow on top of farming generating a stronger local economy would be a nice contrast to a ever dwindling Dunedin…

    Reply
    • Blazer

       /  11th July 2016

      can’t see how discovering oil would be the best thing down there at all!Create a few jobs,and export more profits overseas.

      Reply
  3. Blazer

     /  11th July 2016

    Wonderful to see some creative initiatives discussed.The right wing solution to everything is borrow more money,pay more interest ,create debt….it keeps bankers happy.

    Reply
    • PDB

       /  12th July 2016

      Blazer: “Wonderful to see some creative initiatives discussed”

      Like regurgitating old ‘living wage’ arguments that will only serve to further destroy business & employment opportunities in Dunedin.

      Reply
      • Blazer

         /  12th July 2016

        so a living wage has no merit…?

        Reply
        • Impractical. There’s too many variables, like age, location, experience, living situation, family circumstances, dependants and so on.

          A ‘living wage’ for a teen-ager living with parents in Bluff is quite different than for a sole parent with 6 children in Auckland.

          Reply
  4. Brown

     /  11th July 2016

    Ithaca in the US has its own “money”that is acceptable within Ithaca. The locals accept it as a currency and the practice has been in place for many years without hiccups (except from the IRS). I’m not sure Greens would be the right people to run it (or anything) but the concept is valid.

    Reply
    • What are the practical advantages of this over something like Bartercard?

      And what is the tax position – Central Government won’t except “Dunedin” dollars for GST and Income tax.

      In addition how will the DCC cope with having its real world NZD cut back and replaced with “Dunedin” dollars for rates payments? Banks wouldn’t except them for transaction settlement on any type of payment… and I suspect rating organisations would take a look and do a downgrade on creditworthiness…

      I can see peopl ending up with nasty tax surprises and finding people happy to pay in “Dunedin” dollars but wanting only NZD when selling goods and services…

      Reply
      • Blazer

         /  11th July 2016

        Reform banks and banking is the answer.Cut them back to servicing communities instead of taxpayer guaranteed gambling vehicles for their private shareholders.

        Reply
  5. alloytoo

     /  11th July 2016

    Ok.

    So the council is going to issue DD’s in leau of Kiwi Dollars in respect of the difference between “Living wage” and the legal minimum wage.

    I hope they get a clever lawyer to amend their employment contracts, making the “Living Wage” bit some sort of fringe benefit or discount.

    However structured the PAYE would have to be paid in Kiwi $, so these poor bastards may end up with less “Real” money in their “Real” bank account to meet their “Real” expenses.

    One therefore assumes that the Dunedin council is underwriting DD’s and that they are in effect promisary notes on the council and that council intends for these to be transferable.

    No business or individual will be legally obligated to accept DD’s in respect of anything as they are not legal tender in NZ. (The exception is of course the council since they’re the one’s writing these IOU’s, and payment for council ‘services’ in this script would constitute a redemption.)

    No business is likely to accept the DD at face value since they cannot pay their suppliers or even their taxes with it.

    They can however pay their rates.

    A crafty trader could accept DD’s at 80% face value and use them to pay his rates.

    A sensible employee would make an iemediate payment against their rates bill.

    Nil sum game with the council paying for admin.

    This of course ignores the problems of banking,

    DC would have to get the DD’s printed, all payments of DD’s would have to be in cash (unless the council chose to setup it’s own separate electronic banking system.) and there would be a risk of counterfeiting which the police (and other goverment agencies) wouldn’t give a rat’s arse about.

    Like it or not the DD will compete with the Kiwi and so long as Dunedin is part of the NZ economy the Kiwi will win.

    The only organisation who will give dollar parity to the DD will be the council, one only has to wonder how sustainable that will be.

    Reply
  6. Blazer

     /  11th July 2016

    Nothing wrong with ‘printing’ your own money and spending it into the local economy.We are borrow ing and paying interest to foreigners who enjoy a rigged monopoly on credit.

    Reply
  7. Zedd

     /  11th July 2016

    maybe Aaron has been reading too much stuff about bitcoin.. but not a bad idea.. in reality 🙂

    Reply
  8. Kitty Catkin

     /  11th July 2016

    It’d be Monopoly money. I see no point in $D, if they can’t be used anywhere else-what a nuisance it would be to have to change them all the time (and pay to do so)

    Living wage is a would-be emotive cliche. People are living on what they earn now. If everyone’s wages went up x%, then the company that can afford y% for wages will simply adopt a sinking lid policy. If they employ 6 people at $1000 a year (yes, I know that nobody earns that in reality) and then have to give them $1200 each, they will probably reduce the staff to 5 so that the wages bill would be the same. If prices go up, the extra wages will become meaningless.

    Reply
  9. David

     /  11th July 2016

    “A living wage and a Dunedin dollar are both commitments to doing economics differently.”

    Venezuela is a commitment to doing economics differently too. Just because its different, that doesn’t make it any better.

    Reply
    • Kitty Catkin

       /  11th July 2016

      I don’t know much about Venezuela’s way of doing it, but what I’v heard doesn’t make me want to live there or emulate them.

      Reply
    • Blazer

       /  11th July 2016

      The Venezuela card …AGAIN!Sanctions bucko mean spirited sanctions after military intervention failed.

      Reply
      • PDB

         /  11th July 2016

        Blazer = Kelsey = Venezuela = economic ruin

        Reply
        • Blazer

           /  11th July 2016

          PDB=Military/Industrial ,neo liberalism=U.S.A=petro dollar/US hegemony.

          Reply
          • David

             /  11th July 2016

            Washington Consensus = All the places in the world people like to live.

            Reply
            • Blazer

               /  11th July 2016

              Too right…people don’t like to live where the bombs are raining down.They like to live where the’ winners’ live.

            • Gezza

               /  11th July 2016

              USA:
              * Race riots there on tv tonite.
              * Stuck in shit mess in Iraq.
              * Stymied in Syria by Putin & Assad, who’ve nobbled Turkey too.
              * Found out bombing for rebel General in Libya (supposed to be supporting the UN recognised Government)
              * Just extended troop deployments in Afghanistan – “considering its “precarious” situation and all the American blood and treasure invested in the country over the past 15 years”
              * Chilcott report indictment of Blair is indictment of USA & allies also – legal manouvere to suspend “agression” when setting up ICC in 1998 only reason not charged with War Crime for illegal invasion of Iraq which was not threatening them.
              * Islamic terrorist threat constant.
              * Guns, guns, guns – look at sniper Johnson

              The place is almost a police state these days -all of those things have made it that way

            • “Land of the Free” Gezza, “Home of the Brave” …

              “Oh say can you see, by the dawn’s early light …”

              Dimly … and the Sun never quite seems to rise …

  10. alloytoo

     /  11th July 2016

    @Blazer

    There’s everything wrong with just “‘printing’ your own money and spending it into the local economy.”

    Ultimately the value of the Kiwi Dollar is representative of the goods and services in the NZ economy (that’s how Fiat currencies are ultimately valued by the market.). Increase the money supply too much beyond beyond economic growth and you have inflation. increase it without recourse to the underlying economy and you have Zimbabwe or pre-Nazi Germany.

    The Dunedin’s council can’t just print D$ and spend them into the local economy because they would have no intrinsic value, D$ would be monopoly money. In order to give them value the Dunedin council would have to guarantee the value of each D$ and carry each and every D$ as a debt on it’s balance sheet.

    Even if they did so, no one, including council, staff would be legally abliged to accept them as legal tender in respect of goods, services (including wages) or settlement of debt.

    In order to top up people’s basic wage to “Living wage” using D$ that portion of their remuneration would have to be an allowance or fringe benefit, otherwise staff could (and should) legal refuse to accept it in that form. Even so, it would probably attract PAYE which would have to be paid in Kiwi $.

    Once that’s squared away, how do they pay D$? Banks in NZ won’t accept it. so it’s either cash or some other digtal mechanism which the council would have to distribute and roll out.

    So lets summarise shall we:

    Council doesn’t want to pay “Living wage” out of their stock of Kiwi dollars.
    In order to achieve the same feel good value they want to issue negotiable promisary notes to their staff in respect of “Living wage” difference.

    In order to do this they will lay in infrastructure to support the negotiability of these notes.

    Even so they cannot force anyone to actually accept them at face value.

    Result, most people will redeem them against council services and rates.

    Since council is paying for their goods and services (except living wage top up) with real money they will find themselves short and have to raise rates to cover “Living Wage” + admin costs of D$.

    In addition D$ in circulation will count towards councils debt levels and credit rating.

    Far simpler to give their staff rebates against rates and/or transport discounts to the value of the “Living wage” incriment.

    Reply
    • Blazer

       /  11th July 2016

      @alleytoo….all very well …but a quick dissertation on QE would be interesting given the argument you present!

      Reply
      • alloytoo

         /  11th July 2016

        Not sure how QE relates to Greenie voodoo economics.

        Dunny Dollars aren’t going to stimulate the local economy, and they’re going cost a packet to administrate.

        Some smart operators might make some money though.

        Reply
        • Blazer

           /  11th July 2016

          you know Nixon took the U.S/world off the gold standard..1 oz of gol=$US35…any idea why?QE is ‘printing money’…its what the world money supply is based on.It is merely a credit transfer construct amplified by fractional reserve banking.

          Reply
          • alloytoo

             /  12th July 2016

            Sigh.

            Having a currency disconnected from economic activity and linked to a fixed supply of dirty yellow metal is a stupid idea. One only has to look to Venezuela to see that linking your currency to an entity unrelated to your economy (US dollar) causes market destortions, reduces economic activity and leads to black markets (especially for currency).

            Modern fiat currency prices reflect the market’s valuation of a country’s economic activity. Central banks are mandated to expand money suppy slightly ahead of economic growth (hence low as apposed to zero percent inflation targets).

            Typically a central bank combats inflation with higher interest rates, reducing the supply of cash chasing goods in the market place and lowering interest rates in time of economic downturn to effectively increase the supply of cash to purchase goods. In the case of the GFC a number of large economies had historically low interest rates, leaving the central banks without that tool to stimulate the economy. This lead to quantitative easing a process whereby the central banks purchased medium term investment instruments, allowing them to reduce the return on them, and expanded money supply to get more money chasing goods in the market.

            This is of course irrelevant to the discussion at hand.

            Local councils cannot create currency in the same way that central banks are mandated to.

            That would be quite rightly be regarded as counterfeiting.

            They can issue script which they would be legally required to redeem at the issued value, but no one else would be obligated to accept as legal tender.

            Reply
            • Blazer

               /  12th July 2016

              *sigh*…when unsure always mention …’Venezuela’…as for peg to gold,it was a great idea for a long time ,but Bankers found the cost of funding the Vietnam War meant it could no longer work.Then as the U.S.dollar became default currency for world commerce,the leverage became too tempting and the course was set for huge inflation and expansion of money supply,and debt throughout the globe.

            • alloytoo

               /  12th July 2016

              Blazer,

              Pegging your currency to something unrelated to your economic performance is always a poor idea. The greater the gap between what the market feels is fair value for your currency and the official rate, the greater the chance that a black market will develop and more people and organisations outside the black market will struggle to acquire foreign funds.

              This by itself leads to shortages, couple it with price controls and you enable a shadow economy which usually isn’t even in the tax net.

              This isn’t a uniquely Venezuela phenomena, long before Venezuela the Soviet Bloc experienced these problems, as did Zimbabwe.

            • Blazer

               /  12th July 2016

              @ allytoo….you have so much faith in this ‘market’,which has proved to be an artificial construct ,the rules of which change at the whim of Wall St.Can you not see how money supply,inflationary and deflationary influences and interest rates directly affect economies.Gold was aquired with funds, the availability of which directly related to economic performance.Why do you think Gold prices have fluctuated and why do you think Gold is internationally recognised as a value storage commodity.Referring to Venezuela ,surely you see a correlation between oil prioces and their situation.

            • alloytoo

               /  12th July 2016

              @ Blazer

              How can you acquire the funds to buy gold to support your currency if you don’t have the gold to support said funds?

              Gold standard is a bit like religion, sure only has historical relevance, but
              shed of said historical relevance it’s hard to distinuish from the Easter Bunny.

              And of course trying to tie the acquisition of gold to an “original economic activity” smacks very much like a special pleading.

              The fundementals of economics have been known for millenia, even before Adam Smith’s invisible hand (1776) traders have known that to make money you buy cheap and sell dear.

              To do this you buy where the commodity is common and supply exceeds demand and transport the commodity to where it is it is rare and demand exceeds supply.

              This is called the market.

              Venezuela, like other communist and socialist, countries before them collapsed their local market by pricing their currency too high and reducing demand, and untimately investment. Oil, an international commodity priced in US dollars was nationalized and used to support the ailing economy. That is until the oil price collapsed.

              The collapsed oil price didn’t implode other oil producing nations economies (though it hurt some of them), however Venezuela’s sensitivity to the collapse shows us just how weak their local economy had become.

            • Blazer

               /  12th July 2016

              The Venezuelan Economy relied on oil at $100+ a barrel.The price collapse exposed this reliance bigtime,coupled with U.S sanctions =!Gold is mined around the world and nations like India and China have been stockpiling it.My understanding is the yuan is pegged to the U.S dollar,so is this related or unrelated to economic activity?Adam Smiths invisible hand has been show up as nonsense.ECONOMICS is not a science and your market’ has proved far from infallible.Have a look at the cause of the Great Depression and the GFC.There IS 700 TRILLION OF DERIVATIVES FLOATING AROUND…how is that justified by your criteria of these magic market forces.A magic show is all it is,and it looks set to implode.

  11. The basic ‘tools’ of a sustainable, resilient and collaborative community economy are:

    1) Cooperative ownership (especially of businesses supplying needs)
    2) Community banks and credit unions
    3) Local Currency (or currencies)
    4) Local Employment and Trading Systems (LETS)
    5) Consideration of the potential opportunities of the green economy and simple eco-tech solutions.

    – K R Ross

    Reply
    • Gezza

       /  12th July 2016

      I personally like those 1, 2, 4, & 5 of those principles PZ, but is any country running a successful economic model like this?

      How does it generate enough capital for development & purchase of things like Defence Armaments, Infrastructure, if the local economy is small and these things are horrendously expensive. Does it allow any place for capitalism & for those who innovate & take risks to get cash to develop & market new ideas and products?

      Just wondering?

      Reply
  12. Blazer

     /  12th July 2016

    Reply
    • Gezza

       /  12th July 2016

      Why do you say they are Zionist Jewish Bankers ? 😳
      https://yournz.org/2016/07/12/open-forum-tuesday-87/#comment-116329

      Reply
    • Grayson’s good all right … Great to see both of those clips together Blazer.

      Note the developing panic in the background among the Inspector General’s advisors …

      Reply
      • Gezza

         /  12th July 2016

        Yes. Still waiting for evidence the Bankers are Zionist Jewish Bankers.

        Diverting slightly for just a moment, seeing Zionists have been mentioned by my good friend Blazer, Al Jazeera featured a news item several times last week that nobody here picked up to my knowledge. Benyamin Netanyahu had flown to Uganda for the 40th anniversary celebrations of the raid on Entebbe, during which Israeli commandos freed hostages who had been taken by Palestinian and German terrorists from a flight from Tel Aviv.

        During his speech Netanyahu talked about how good it was for both countries to have such good relations because of the opportunities it gave both countries for trade. The commentator noted that he had been accompanied by 80 business representatives, the majority of who appeared to be arms manufacturers & dealers, and diamond traders. Israel is apparently a major centre for the International diamond trade. I can’t remember his exact words but he was suggesting Uganda is a place which trades in blood diamonds.
        https://www.theguardian.com/world/2016/jul/09/uganda-israel-entebbe-rescue
        https://yournz.org/2016/07/12/media-watch-tuesday-12/#comment-116302

        But if we want to discuss this Zionist thing any further, I’d suggest Open Forum.

        Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s