THE DESTRUCTION OF CONSTITUTIONAL MONARCHY AND THE RETREAT FROM FREEDOM

by Eric D. Butler
The declared intention of the Blair Government in the United Kingdom, to destroy the hereditary principle in the election of the House of Lords, is in effect another step towards ultimately destroying the institution of Constitutional Monarchy. The erosion of the power and influence of the House of Lords started last century under the philosophy of liberalism created by the French Revolution. That philosophy reflected a revolt against the traditional Christian philosophy, which stressed the government, existed to serve the individual and that because of its nature must always be subject to checks and balances.

As pointed out by the author of Social Credit, C.H. Douglas, in an address on "Realistic Constitutionalism", British Constitutional developments, including Magna Carta, were rooted in the Christian concept of the nature and purpose of Man. English Common Law was based on the Christian view that every individual was unique, not equal. In the famous words of the English mystic poet William Blake, one law for the lion and the lamb must end with tyranny. Different situations required different answers to problems, a reality brought out so clearly by Shakespeare in his play, The Merchant of Venice, a play strongly disliked by supporters of the Judaic religion, who often charge that the play is "anti-Semitic". The truth is that the play, with its stress on mercy and forgiveness, reflects the traditional Christian view of law.
As pointed out in the New Testament, strict adherence to the letter of the law can result in the death of the spirit of the law.

Centralisation of power is contrary to the spirit of British Constitutional and political development, which governed the development of government in Australia, first in the Colony and later the Australian Federation. The development of British Constitutionalism was organic and accepted that the nature of reality was Trinitarian. Harmony in government requires that it consist of three parts: A House of Commons reflecting the general will of the electorate.

But the House of Commons might grow into a tyranny unless subjected to the right of veto by the House of Lords. The members of the House of Lords were both the Lords Temporal and Spiritual, who because of their backgrounds reflected the permanent features of the nation's history. Such a view realistically accepted the view that tradition was essential for the preservation and extension of the wisdom of the past. One of the few current members of the House of Lords is expressing his reservations about the Blair Government's legislation to abolish the hereditary Members of the House of Lords, stressing that he and his forbears had served the Crown over a number of generations and had made a distinctive contribution to the life of the nation. All this would be lost if hereditary peers were to be eliminated.

The tragedy is that relatively few understand the long-term significance of what is happening, primarily because of a defective educational system. The question of the Senate and its future is related to what is happening. John Howard indicates that he has little enthusiasm for a Senate, which produces a traditionalist like Harradine. Although he pays lip service to the beneficial effects of the Constitutional Monarchy, he maintains what is basically a neutral stance. In his famous poem, Dante says that those who maintain a neutral attitude in the times of great crisis are doomed to take their place in the hottest place in hell.

A traditionalist who believes that the future of Australian families is more important than financial statistics has effectively brought John Howard's career to a stop. Brian Harradine will be remembered long after John Howard has passed from the Australian political stage.

THE BUDGET

by Jeremy Lee
Interviewed in the aftermath of his Budget Speech, Treasurer Costello was asked whether he now qualified as "Treasurer of the Year". In a becoming show of modesty the Treasurer simpered like a debutante at her coming-out party. He missed the irony in the question. Australia's previous "World's Best Treasurer" - Paul Keating - delivered Australia into a disaster of deregulation and industrial destruction. Costello is merely continuing the process.

By and large, forecasters and economists have lauded the Budget. It is both economically and politically correct from the globalist point of view. The figures tell a different story. Total income tax will increase by 5.7 percent, from $104 billion to $110 billion. Indirect taxes will increase by 3.5 percent, from $31 billion to $32 billion. Overall, direct and indirect taxation will increase by 4.9 percent, from $141 billion to $148 billion. Averaged out across a population of 18 million, Commonwealth taxation (direct and indirect) now takes over $8,000 for every man, woman and child. For the average family of four, this totals the incredible figure of $32,000! (Total government revenue now exceeds $9,000 per head.) And remember - State taxes and Local Government rates come on top of these mammoth totals!

Most areas of government expenditure have increased; the biggest cut in expenditure being in agriculture, forestry and fisheries, with a 15.7 percent drop. C.H. Douglas, in his masterly "Dictatorship By Taxation", made the point that all taxation is inflationary, and must ultimately be costed into the price of goods and services. Treasurer Costello budgeted for a surplus of $5.4 billion. Immediately following the Budget, $1.5 billion of the surplus was pledged to further "sweeteners" aimed at enticing Independent Senator Brian Harradine to vote for the Goods and Services Tax. The surplus, of course, is the extra taxation taken over projected expenditure. Running a "surplus budget" is regarded by the International Monetary Fund as the height of responsible management.

Veteran economists, on the other hand, who see some connection between Budgets and the prosperity or otherwise of ordinary people, have long argued that a surplus at a time of unemployment and unused capacity in industry is exactly the wrong policy. A number of commentators suggested there had been a "turnaround" in Asia, and that Australia's exports to the region could be expected to grow in the months ahead. The evidence says otherwise.

The Australian Financial Review (5/5/99) gave this more realistic picture: "...Consider the following anomalies. Hong Kong's economy experienced a 5 percent contraction in 1998 and is expected to contract by another 3.5 percent in 1999 while unemployment rates rise with each passing day. Nonetheless, the Hang Seng Index rose by 85 percent over the last three months of 1998.
"Thailand's economy shrank by about 11 percent in 1998 and is likely to shrink another 4 percent in 1999. Yet its stock market gained about 70 percent. All banks in Thailand reported negative net interest income in the third quarter of 1998 while their shares rose by a factor of four over the values of the previous quarter.
"South Korea's economy recorded a decline of 65 percent this year and may see a further fall of 2 percent in the coming year. But stock prices on Seoul's exchange rose by 85 percent.
Even Indonesia's stock market gained over 50 percent in the last quarter of 1998 despite the dire straits that its domestic economy faces.

"If domestic conditions do not warrant these increases in stock market valuation, what is behind them all? The interest rate cuts by the US Federal Reserve and the European Central Bank, its most recent in April 1999 from 3.0 to 2.5 percent, created the additional liquidity for investors to play the markets in the developing and developed world…"

CRACKS IN THE DAM WALLS OF CENTRAL BANKING

Two Professors at Princeton University in the US - Sheri Berman and Kathleen McNamara - in a three page article in The Australian Financial Review (14/5/99) have challenged the totalitarian nature of Central Banking, with particular reference to the European Central Bank established under the Maastricht Treaty.

"In January, a new leading actor strode onto the world stage. More powerful than most national governments and responsible for helping to set the economic and political course for 280 million people and almost a quarter of the global economy, the European Central Bank is notable for something more sinister as well - its almost complete freedom from democratic oversight and control"...In a secular version of Lent that is now the rage from Europe to Latin America to the post-Soviet bloc, democratic governments are proving their faith and virtue by giving up something dear - the ability to control their countries economic destinies... "By turning over monetary policy to unelected and often unaccountable technocrats, countries surrender much control over their economic fates... "In both developed and developing countries, more and more people see globalisation as a threat and believe they are paying too high a price to satisfy the demands of international capital and finance... "European integration has so far been primarily driven by elites. European publics have been sceptical about losing sovereignty and about the generally undemocratic nature of European institutions…

The authors of this rarely publicised point of view gave plenty of examples of the inefficiency and incompetency of Central Banking in the scheme of things. The Australian Financial Review should be congratulated in presenting an all-too-rare alternative viewpoint. The Australian people have never agreed to alter the Constitution in order to sanction the move by politicians such as Prime Minister Howard to surrender financial control to international bodies.

SUPPORT FOR HARRADINE, CALL UPON THE DEMOCRATS

Although Senator Harradine is not known as a drinker, it is doubtful that he could buy himself a drink in any Australian pub this week, and be allowed to pay for it. If he is not swamped with congratulations and expressions of support for his decision to vote against the GST last week, we will be amazed. Not only did Harradine perform Australians a singular service in making such a decision, but he also demonstrated the value of the Australian Senate as a vital House of Review, and vindicated the League's long-held claim that the Senate is essential to representative government in Australia.

As we pointed out last week, Harradine is not the only Senator who could ensure that the GST legislation would be rejected. There are 37 others who could have done as he did last Thursday, but lack either the courage or good judgment to do so. In our view, every Australian owes a vote of thanks to Senator Harradine, and should consider sending him a message of support to that effect.

But what now? As Prime Minister Howard surveys the wreckage of his taxation dreams, he faces the prospect of trying to tempt the Democrats to support the legislation in some 'satisfactory' form. But it should be stressed in the strongest possible terms that Mr. Howard has no "mandate" for the GST. Although both he and Treasurer Costello claim it, the "mandate" argument is a mirage that does not withstand close scrutiny. The fact is that the Coalition lost significant support at the last election, and lost significant seats in the Parliament. The GST and the sale of Telstra were weighty electoral baggage, and Mr. Howard can thank the ghost of Paul Keating that voters were not tempted to flee the Coalition, and risk a term of dodgy government under Beazley, although the ALP were clearly not fit to govern.

FOCUS ON THE DEMOCRATS

The Australian Democrats can just as legitimately claim that they have a "mandate" to block the GST in the Senate. Indeed, at the last election, the Democrats increased their Senate presence from 7 to 9 seats, running on a platform of not selling Telstra, and against the GST. Thus, their Senate presence rose from 9% to 12%, and when the new Senators take their seats on July 1st, it is the Democrats to whom Mr. Howard will need to appeal for his GST.
One of his other options is to go to a new election - dissolving both Houses of Parliament - and putting the GST question to the people directly. Surely even Mr. Howard would not dare to do this?

In our view, the GST campaign should now focus on the Democrats. They object to a GST on food. But as Harradine asked in February, "why are we concentrating on food? Housing costs, transport, fuel, power, and clothing represent 40% (of household budgets for the poor). None of those at the moment are subjected to wholesale sales tax, or any other sort of tax, but they will be subject to a 10% GST". (23/2/99)

The Democrat Senators presently in the Parliament are: Meg Lees (leader, South Australia), Natasha Stott Despoja (SA) Vicki Bourne (NSW); John Woodley (QLD); Andrew Bartlett (QLD); Lyn Allison (VIC); and Andrew Murray (WA).

The Harradine question should be put to all these Senators - why are we concentrating on food...? This is a pernicious tax, so please follow the Harradine example; just say NO!

RURAL PAPER GIVES THE FACTS

Those who know something about money, and how fractional reserve banking works, are resigned to the distortions and omissions in the national media on this important but misunderstood issue. It is unusual to find an editor who considers the matter important enough to write about - but that's what the closure of another bank branch has stimulated in The Wimmera Mail-Times (12/5/99).

After pointing out the huge inconvenience to the citizens of Natimuk when the Commonwealth closed the last bank in town, the Editorial went on: "... Too few people are aware of how our banking system works with many believing the quaint notion that banks lend out money deposited by other customers. In fact banks operate on what is called a fractional reserve system, which means that a bank can lend out far more than it actually possesses. Generally speaking they only need to actually have about 10 to 15 percent of their total loan liability.
"Thus, when a bank advances a loan of say $100,000 most of that amount doesn't actually physically exist - it has been created. But the money the customer will use to repay the loan most definitely will have to be real. A further complication is that when a bank 'creates' a loan it never 'creates' the additional sums needed for interest payments.
"There is thus never enough 'real' money circulating in the system for everybody to be able to service their debts - it is mathematically and physically inevitable that there will be losers as well as winners. It is the basic fatal flaw of the financial system underpinning global capitalism."