Questions and Answers from The Big Shift: why local currencies?


Q1. I am not sure about all these little local currencies. Are they all different?

A1. Well, they are all created on the same design and they are all on a par with the national currency. That is because they are all based on the market value of land. The only danger would be if one area had a local currency with a different rate of decay than other areas. So they should synchronise that. If bees and ants can communicate and synchronise, so can we.

Q2. You have spent new money into existence by buying land. Are there other ways of spending this new money into existence?

A2. Yes there are. You could issue a basic income. So a Community Board or a Council pays all the people in the district a basic income. Perhaps every two weeks. Say $800 for the two weeks to a population of 20,000 people in their district (Yes it is going to be a challenge to keep the registry up to date but it is not impossible). That is a total of 16,000,000 new dollars every two weeks.

Then people use this to pay their local taxes or rates (depending on where you live it will have a different name). So 26 times a year it issues $16m new dollars or 416 million new dollars a year. Depending on the rate of decay you have mandated, and the total amount already out in the community, the local Currency Board either cancels this money when it arrives or redates and reissues it.

Supposing there are 8,000 households paying an average rates or local taxes of $2000 a year, in a year the rate income will be 16,000,000 new dollars. With this they can certainly manage the infrastructure of a small area and have plenty left for buying land with an average value of 200,000 per lot or section. So land will gradually come back into community ownership.

b. You could, as they did in Wōrgl, issue new money as wages to Community Board Workers. Say, pay half the wages in new money and the rest in national currency. Design it as before to decay over time so it circulates fast. Once again there will be soon enough money in the local coffers to buy up land gradually and effectively take land out of the marketplace.

Q3. You have recommended that all land be owned by the community and that people have leasehold rights to live on that land. But in New Zealand, we have had a lot of issues with leasehold land and a lot of injustices.

A3. How true. This is because leasehold land tends to be that land which is owned by churches or by Harbour Boards and the term of the lease is 21 years. The trouble was that the rent stayed the same for all those years.

Thus people living in houses sited on Napier Harbour Board land suddenly found when their lease expired that their land rents tripled. That is not fair. Many couldn’t pay it, had to sell up for a song and move away in poverty.

Similarly, the Cornwall Park Trust owned 110 properties adjacent to the park and leased them out for a term of years and then in 2010 the lease ran out and the rent was raised by 900 percent. Many lessees abandoned their properties rather than pay the new rental. Some were paying $70,000 a year in rental. Some who abandoned their properties were taken to court for back rent.

The whole issue can be solved by ensuring rights of tenure to lessees, yet readjusting their land rents every year according to the Land Rental Index for the district. Thus if Auckland grows, the land rent grows. If Auckland shrinks, the rent goes down.