Published in the National Business Review of 30 November 2007

The pro growth lobby group, Foundation for Economic Growth, is pushing a sound currency as one of the basic elements of a national growth strategy.

The Foundation's Chief Executive Phil Scott says governments shouldn't be allowed to get away with just printing money.

"Currencies these days are just paper backed by government promises," he said.

The group (formerly called Parties for Growth) is promoting a pro growth message through advertisements in newspapers in Auckland and Wellington.

The ads show a graph of New Zealand's economic living standards declining from third in the world in 1950 to 38th spot currently. This is accompanied by the message of smaller government, lower taxes and more individual freedom.

"We are trying to get the population to think about the factors that cause growth and why we are not getting it at the moment. We provide cast iron examples of how growth can be obtained and these are on our website.

"What do other countries do? They have less government, lower taxes, regulatory reform and a sound currency," Mr Scott said.

While the group sees paper currencies as inherently risky, it is not seeking a return to metal backed currencies or the old "gold standard".

"The politicians print money because they can. The United States is in real strife because they have been doing that with a vengeance since Paul Volkner retired as head of the Federal Reserve Board (in August 1987).

"His successors, Alan Greenspan and Ben Bernacke, believe that the only way to stop recessions is to print more money, but that makes recession inevitable.

The Foundation for Economic Growth may be one of the first groups caught by the passage of the Electoral Finance Act.

To run its advertisements next year, it will need to register as a political group, and under the current version of the bill before Parliament, its allowable expenditure will be restricted to $120 000.