top of page
  • rmacculloch

The PM says the gov't "don't have a money tree". Yes it does - the Reserve Bank calls it Tāne Mahuta

The PM has criticized teachers' pay demands with the jibe that the "Governments have to ultimately make the books balance, we don't have a great money tree in the backyard that means we can continue to indefinitely increase government spending, we have to pay for everything somehow". His line comes amidst strike action by the teachers' union that has led to school closures throughout the first half of this year.

If I was a teacher then this is how I would respond - the Kiwi government has actually formally stated that it does have a money tree. The Reserve Bank has given it a name, Tāne Mahuta, and identified the part of the tree with the money as being "Te Toto", or the sap. The RBNZ writes that "Te Toto represents money, cash and foreign reserves". I like this metaphor, by the way, even though the PM insists on denying the tree's existence and lampooning it.

The RBNZ shook the money tree so hard these past few years that its branches broke & over $50 billion of cash came pouring out. That $50 billion supported the government's $30 billion wage subsidy scheme by keeping interest rates low during 2020-21. Half of the wage subsidy was paid to medium and large corporations that never even needed the cash. That sum amounts to many multiples of what the teachers have been asking for.

When the Integrity Institute, which was founded by Grant and Marilyn Nelson in the South Island, tried to raise public awareness of the wage subsidy rort by placing an information ad in leading newspapers, the Ministry of Social Development (MSD) tried to silence them and threaten their right to free speech by making a complaint! The Department states on its website, "MSD has made a complaint about this misleading advertising campaign to the Advertising Standards Authority (ASA), which is investigating the matter".

Imagine that - private citizens shining a light on one of our biggest wastes of public money and civil servants try to shut down the publicity. Why publish a defamatory allegation that the ads were "misleading" when that has not been determined? What would the ASA know about the economics of the wage subsidy scheme? I concur with the Nelsons that it was a rort. I wrote an article a few years ago with a former Kiwi Finance Minister who also believed it was a rort. Aren't we allowed to hold opinions any more? The job of the MSD is to write cheques in the name of folks who are in poverty, not in the names of our richest accounting & law firms & biggest corporations, which is what happened. It was a shake-down on a scale of the bailout of the banks in the US and UK during the global financial crisis.

So my advice to the teachers is to reply to the PM by saying that they do want higher wages financed by giving another shake to Tāne Mahuta, the money tree, planted at Number 2 The Terrace, which Hipkins can even see from his window. But this time in the name of a good cause. When he answers back by saying that printing money is no way to pay for their wages since it will be inflationary & the government has to "make the books balance", then the teachers should say, "well, running a huge deficit supported by money printing was exactly how you funded the wage payments of the employees of big business in 2020 and 2021".

The point I am making, of course, is that Chris Hipkins has no economic credibility, either with the right, who don't trust him, nor the left, who he has abandoned.



bottom of page