The following was a submission made to the Australian Federal Treasury in response to an invitation from the minister for small business.

The Australian Debt Clock reports Australian debt at over $6,147 Billion dollars. At an average interest rate of 5%, this is a cost of $307 billion dollars. Australian GDP is $1401, and so the cost of interest is 22% of GDP.

We pay interest rate because the money we use is information poor. If we use Smart Money, we can eliminate the cost of interest. It will solve the government budget emergency, balance the books, and provide the Australian people with an increase in goods and services.

Smart Money is money that contains information. The money includes the following type of information:

  • who owns it,
  • where it came from,
  • what is the cost of borrowing it,
  • its history of use,
  • what it will buy,
  • its value,
  • what it purchased

In contrast everyday money only has value information

The cost of having dumb money is the cost of interest. Interest pays to make sure money retains its value. Money retains its value if we can trust the money symbols to represent value. If we have more information about the money, the cost of moving money covers the cost of having trust in the value of money.

Smart Money or Information Rich Money is a new concept. The implementation of transaction and investments to use Smart Money uses well-known techniques of distributed processing made possible by recent advances in information technologies.

Importantly Smart Money can be introduced incrementally without disrupting existing systems and for a low cost. ACT Water Rewards Co-op intends to implement Smart money for ACT Water payments and investment. It is expected to give the ACT government another $70 million dollars annually by replacing dumb debt of $1.5 Billion.

This submission recommends the government spend a small amount to investigate ACT Water Rewards Co-op with the aim of operating its own Smart Money Trials.

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