The total amount of money in Australia is $1,200 Billion dollars. In the previous 12 months the money supply increased by 12% by banks loaning more money than they had on deposit. The system is called fractional reserve banking and requires banks to have 10% of their money on deposit with the Reserve Bank to guarantee the safety of deposits. This reserve is no longer necessary as the government now guarantees bank deposits. This means that the banks can lend the 10% they have with the Reserve Bank but this will mean the banks can only lend money they have on deposit.
As the banks are no longer able to create money the government has to take responsibility for increasing the money supply. An increase of 5% or $60 billion dollars per year would seem a reasonable figure. Let the government create this money and lend it at zero interest to members of the community who consume few resources – but with the proviso that they invest the money in infrastructure projects. $30 billion invested each year in renewable energy will reduce greenhouse emissions to zero within 10 years. $10 billion in urban transport infrastructure will fix the cities transport problems. $10 billion per year will get the Murray/Darling flowing and $10 billion in health and child care facilities will do much to relieve social problems. The government still has its regular taxes to pay for social welfare and other government services. It can keep inflation under control by not spending all the taxes it collects and increase its surplus – and it can all start tomorrow.