There is no need for banks in Australia to charge interest on the money they create when they lend.

By Andrew Mackinnon

Last updated: 24th February, 2024



When any bank in Australia lends for any purpose, it creates the money that it lends out of nothing and charges interest on it, which causes the size of the money supply in Australia to increase by the amount of principal loaned.

The bank debits its loans asset account for the amount lent to signify the debt owing to it and it credits its deposits liability account to provide its customer with the amount it has lent to them so that the customer can utilise those funds in the bank account that the customer holds with the bank.

When a customer of any bank in Australia repays principal of their loan and pays interest on their loan, the bank debits its deposits liability account for the amount of principal repaid and interest paid, which reduces the customer’s bank account by the same amount, credits its loans asset account for the amount of principal repaid and credits its revenue account for the amount of interest paid.

Out of this interest revenue that the bank receives, it pays a large proportion, such as two-thirds, to its account holders as interest on their deposits with the bank, in order to deliberately obscure the truth that it creates money out of nothing when it lends for any purpose and charges interest on that principal created and lent, which it receives as interest revenue.

The bank also uses the interest revenue that it receives to pay the salaries of bank employees and other operating expenses. (The bank has other revenue sources, including account-keeping fees and transaction fees, out of which it also pays for its bank employees and other operating expenses.) The remainder of this interest revenue constitutes the bank’s profit, out of which company tax is paid to the Australian federal government and dividends are paid to the shareholders of the bank so that they can share in this interest revenue also.


The Bank of England has admitted that commercial banks create money out of nothing when they lend at interest.


The Reserve Bank of Australia was established in 1959 via the Reserve Bank Act.  It commenced operation early the next year on 14th January, 1960, more than 60 years ago.  The purpose of the Reserve Bank of Australia has always been to maximise the interest revenue collected by the banks in Australia under its authority, which were first publicly owned then later privately owned by shareholders.


During the financial year from 2014 to 2015 in Australia, which had a population of around 24 million people at the time, the four major banks in Australia, being the Commonwealth Bank, Westpac, National Australia Bank (NAB) and the Australian and New Zealand Bank Banking Group (ANZ), earned about $120 billion in interest in Australia on the money they create out of nothing when they lend for any purpose.

Out of this $120 billion, they paid about $75 billion to their account holders as interest on the deposits of these account holders with these banks, in order to deliberately obscure the truth that they create money out of nothing when they lend for any purpose and charge interest on that principal created and lent, which they receive as interest revenue. They also paid about $5 billion dollars to their bank employees who run the banks, as well as for other operating expenses, leaving profits before company tax of about $40 billion. (These banks have other revenue sources, including account-keeping fees and transaction fees, out of which they also pay for their bank employees and other operating expenses.) These banks paid about $10 billion in company tax to the Australian federal government for the financial year from 2014 to 2015. Approximately $30 billion was earned by these banks in profits after company tax, out of which dividends are paid to the shareholders of these privately owned banks, all courtesy of the fraud of interest charged on money created out of nothing when these banks lend for any purpose.

That is a total of about $120 billion paid in one year in interest to these banks by Australian citizens, non-citizens of Australia, Australian businesses and Australian not-for-profit entities on money that these banks created out of nothing and lent to them. Conceptually, it is the equivalent of $6,383 paid during the financial year from 2014 to 2015 by every adult Australian citizen and adult non-citizen of Australia aged 18 years or over to the banks in interest, which is $122.75 per week. Around 78.3% of the population (i.e. 65.1/83.1, where 83.1 is the life expectancy in Australia) of around 24 million during the financial year from 2014 to 2015 was aged 18 years or over, being around 18,800,000 adult Australian citizens and adult non-citizens of Australia.


During the financial year from 2022 to 2023 in Australia, which had a population of around 27 million people at the time, the four major banks in Australia, being the Commonwealth Bank, Westpac, National Australia Bank (NAB) and the Australian and New Zealand Bank Banking Group (ANZ), earned about $170 billion in interest in Australia on the money they create out of nothing when they lend for any purpose.

Out of this $170 billion, they paid about $110 billion to their account holders as interest on the deposits of these account holders with these banks, in order to deliberately obscure the truth that they create money out of nothing when they lend for any purpose and charge interest on that principal created and lent, which they receive as interest revenue. They also paid about $15 billion dollars to their bank employees who run the banks, as well as for other operating expenses, leaving profits before company tax of about $45 billion. (These banks have other revenue sources, including account-keeping fees and transaction fees, out of which they also pay for their bank employees and other operating expenses.) These banks paid about $10 billion in company tax to the Australian federal government for the financial year from 2022 to 2023 (i.e. $11.1 billion in company tax in the financial year from 2022 to 2023 versus $9.4 billion in company tax in the financial year from 2014 to 2015). Approximately $35 billion was earned by these banks in profits after company tax, out of which dividends are paid to the shareholders of these privately owned banks, all courtesy of the fraud of interest charged on money created out of nothing when these banks lend for any purpose.

That is a total of about $170 billion paid in one year in interest to these banks by Australian citizens, non-citizens of Australia, Australian businesses and Australian not-for-profit entities on money that these banks created out of nothing and lent to them. Conceptually, it is the equivalent of $8,057 paid during the financial year from 2022 to 2023 by every adult Australian citizen and adult non-citizen of Australia aged 18 years or over to the banks in interest, which is $154.94 per week. Around 78.3% of the population (i.e. 65.1/83.1, where 83.1 is the life expectancy in Australia) of around 27 million during the financial year from 2022 to 2023 was aged 18 years or over, being around 21,100,000 adult Australian citizens and adult non-citizens of Australia.


All of the money in circulation in Australia, constituting the money supply, is money created by the banks when they lend for any purpose. Physical notes and coins are placeholders for money created by the banks when they lend. The majority of the money in circulation in Australia arises from mortgage lending.


The reason why the Reserve Bank of Australia is currently increasing interest rates is to discourage Australian citizens and Australian entities from borrowing in order to decrease the amount of money that is created as a result of banks lending to them and thereby decrease the size of the money supply in Australia in an effort to reduce inflation (which has been directly caused by non-white immigration into Australia).

(When the Reserve Bank of Australia thinks that there is not enough money in circulation in Australia, it decreases interest rates to encourage Australian citizens and Australian entities to borrow in order to increase the amount of money that is created as a result of banks lending to them and thereby increase the size of the money supply in Australia.)

However, there is no need for banks in Australia to charge interest on the money that they lend and there is no need for the Reserve Bank of Australia to increase and decrease interest rates in order to respectively decrease and increase the size of the money supply in Australia.


A publicly owned, federal entity named the “Australian Bank” should be established to operate on a not-for-profit basis and lend to Australian citizens, Australian businesses and Australian not-for-profit entities without charging interest.

However, it will be necessary for the Australian Bank to charge rates of less than 1% on its various types of lending, in order to cover the incidence of borrowers defaulting on loans.

The Australian Bank should cover its operating costs by charging account-keeping fees and transaction fees, paid by Australian citizens, Australian businesses and Australian not-for-profit entities, who and which use the Australian Bank, which account-keeping fees and transaction fees should be limited to cover the actual costs incurred by the Australian Bank to administer the accounts of Australian citizens, Australian businesses and Australian not-for-profit entities and to process the transactions of Australian citizens, Australian businesses and Australian not-for-profit entities.

The method that should be used to increase and decrease the size of the money supply in Australia is increasing and decreasing the amount of principal that the Australian Bank is allowed to lend to Australian citizens, Australian businesses (such as sole traders, partnerships and companies) and Australian not-for-profit entities (such as churches and charities) for different types of loans, expressed as a multiples of the incomes of Australian citizens, multiples of the profits of Australian businesses (such as sole traders, partnerships and companies) and multiples of the operating surpluses of Australian not-for-profit entities (such as churches and charities).

These multiples should be different for different types of lending, such as loans to Australian citizens (including mortgages and personal loans), loans to Australian businesses (including loans to sole traders, loans to partnerships and loans to companies) and loans to not-for-profit entities (including loans to churches and loans to charities).

There would have to be strong guidelines for limiting government lending to Australian citizens, Australian businesses and Australian not-for-profit entities, since the publicly owned Australian Bank would create all of the money that it lends so that the money supply increases when it lends. Unrestrained lending would lead to a rapidly increasing money supply and associated inflation of prices of goods (e.g. groceries), services (e.g. residential properties for rent) and assets (e.g. residential properties).

The analog of interest-only loans, being loans with no repayments whatsoever until repayment of the entire principal of the loan, would not be allowed by the Australian Bank under any circumstances.

Australian citizens would be able to borrow from the Australian Bank in order to buy a residential property in which to live but they would not be able to borrow from the Australian Bank in order to buy a residential property as an investment to rent out in order to earn income. Investment would need to be funded out of savings, including investment in residential properties and shares, to name just two investments.

The amount that the Australian Bank would lend to any given Australian citizen for any given purpose, such as buying a residential property in which to live, would be limited by factors such as the income of the Australian citizen and the size of the deposit that the Australian citizen has saved towards the purchase, with zero dollars obviously being the minimum possible size of the deposit saved. The Australian Bank would decide upon the multiple of the income of any given Australian citizen (such as 3.0 times) to lend to them for any given purpose, such as buying a residential property in which to live or buying a motor vehicle.


In due course, at the earliest opportunity, the licences of privately owned banks in Australia to trade should be revoked by the Australian federal government.

In due course, at the earliest opportunity, the Reserve Bank of Australia should be abolished by the Australian federal government.


If necessary, the Australian federal government could also direct the Australian Bank to create money and bring it into circulation in order to increase the size of the money supply by spending the money on one or more Australian federal government projects or giving the money to Australian citizens in proportion to the amount of net tax they have paid to the Australian federal government during their lives, defined as tax paid to the Australian federal government during their lives minus money received from the Australian federal government in this manner as a result of money creation by the Australian federal government during their lives.

However, it is best for the Australian federal government to avoid directing the Australian Bank to create money and bringing it into circulation in order to increase the size of the money supply by spending the money on one or more Australian federal government projects or giving the money to Australian citizens, because the only way for the Australian federal government to subsequently destroy this money, in order to decrease the size of the money supply as necessary, is to destroy money in the form of taxes collected from taxpayers in Australia.

Since I favour the lowest possible taxation in Australia, in the form of a flat rate of income tax of 25% on all income earned by Australian citizens aged 18 years or over, by abolishing the tax-free threshold, with income tax collected during any given financial year that is unspent at the end of the financial year repaid to taxpayers at the end of the financial year in proportion to the amount of income tax they have paid during the financial year, there is little opportunity for the Australian federal government to destroy income tax collected in order to decrease the size of the money supply as necessary.

(I previously believed that there should be a flat rate of income tax of 20% on all income earned. However, this is not a high enough rate of income tax to fund the Australian federal government and the services it provides to Australian citizens.)

Income tax collected by the Australian federal government is needed to fund the operation of the Australian federal government, to fund the services that the Australian federal government delivers to Australian citizens and to fund the projects that the Australian federal government embarks upon and completes, such as construction projects, in order to improve Australia for the benefit of Australian citizens.

It has taken me the best part of a decade to understand beyond any doubt that a publicly owned Australian Bank that is operated by the Australian federal government should ideally create all of the money in circulation via lending to Australian citizens, Australian businesses and Australian not-for-profit entities.

If the Australian federal government has a shortfall in income tax revenue, it should only direct the Australian Bank with caution to sparingly create money by crediting the relevant account of the Australian federal government on the liability side of the balance sheet of the Australia Bank with newly created-out-of-nothing money and debiting an account called “Currency” on the assets side of the balance sheet of the Australian Bank for the same amount, so that the Australian federal government can spend that money into circulation, such as by paying the salaries and wages of Australian federal government employees, since the only way for the Australian federal government to destroy money in circulation that has been created by the Australian Bank crediting the relevant account of the Australian federal government with money to spend into circulation, as opposed to money that has been created by the Australian Bank lending to Australian citizens, Australian businesses and Australian not-for-profit entities, is for the Australian Bank to destroy income tax that has been collected by the Australian federal government by debiting the relevant account of the Australian federal government for the amount of income tax to be destroyed and crediting an account called “Currency” on the assets side of the balance sheet of the Australian Bank for the same amount. Therefore, if the Australian federal government has a shortfall in income tax revenue, it is obviously best if the Australian federal government anticipates collecting sufficient income tax in the future, before directing the Australian Bank to create money by crediting the relevant account of the Australian federal government with the newly created-out-of-nothing money, so that the Australian Bank can destroy that money in the future by destroying income tax collected by the Australian federal government in the future.


Our current predicament in which privately owned banks in Australia create money out of nothing when they lend and then charge interest on it is a Jewish (i.e. Edomitish) fraud whose perpetrators are committed to protecting it at all costs.  The Coronavirus hoax was instigated worldwide in late 2019 by the Rothschilds-led synagogue of Satan (which controls the United Nations and its World Health Organization) in order to provide a reason for the failing economies in countries all around the world which draws attention away from the real reason – insufficient money in circulation in countries all around the world as a result of insufficient borrowing from privately owned banks by citizens in countries all around the world who rightfully view these banks with distrust and disdain because they charge interest on the money they create out of nothing when they lend.

Providing a sound monetary system for the citizenry is one of the most important services that a sound government is obligated to provide.  There is absolutely no reason whatsoever why any money in circulation should obligate citizens to pay interest on it.  When citizens pay interest to privately owned banks as a result of money borrowed, they receive nothing of value in return, because the money lent to them was created out of nothing by the banks. This is a cleverly disguised system of slavery whereby the citizenry work to earn the money required to pay the interest without receiving anything of value in return for that money earned and paid.  The recipients of the interest paid, being the bank employees and the shareholders of the banks, use the interest paid to buy the goods and services that the citizenry produces in the course of earning the money to pay the interest.  This is a massive transfer of wealth from those paying the interest, being the citizenry, to those receiving the interest, being the bank employees and the shareholders of the banks.  Over the course of repaying a mortgage on a house, a borrower from a privately owned bank under our current banking system pays in the vicinity of 80% of the principal amount borrowed in interest to the bank.  This borrower repays the principal amount borrowed and also pays an additional amount to the bank as interest equivalent to around 80% of the principal amount borrowed.

If the principal amount borrowed is $500,000, the total amount repaid to the bank over the life of the mortgage is around $900,000.  When the bank lent the $500,000 principal, a bank employee processed the paperwork and typed the $500,000 into a computer so that this money, created out of nothing with a few keystrokes, was available in the account of the borrower.  In return for this negligible amount of work to lend the $500,000, the bank is repaid $900,000, which includes $400,000 in interest.  About half of the interest of $400,000 is paid to bank employees as salaries and to cover other expenses. The remaining $200,000 is booked as profit, out of which dividends are paid to the bank’s shareholders.

We have been living under slave conditions for decades now.  The Coronavirus hysteria was intended to keep us in slave conditions by providing a reason for the failing economies around the world which distracts from the real reason – the Jewish (i.e. Edomitish) fraud of interest charged by the banks on money created out of nothing when they lend.  The Jewish (i.e. Edomitish) perpetrators of the Coronavirus hysteria, being the Rothschilds-led synagogue of Satan, intend to start new monetary systems in countries around the world in the aftermath of this hoax which similarly enshrine this Jewish (i.e. Edomitish) fraud as their centrepieces.