WHY DO WE NEED THE GST?

by David Thompson
Last year the Australian Democrats fell into one of the most basic traps set for Members of Parliament, which resulted in the "debate" about a goods and services tax concentrating upon whether or not food should be within the GST tax net. C.H. Douglas once pointed out that politicians can successfully divide and conquer opponents by tempting them to argue administrative details, instead of concentrating exclusively on matters of policy. This results in amateurs arguing their case on the grounds of "experts", where the "experts" will always prevail.

Ironically, it was an academic, regarded as an "expert" on tax detail that pointed the Democrats back to their true role last week. In order to establish an authoritative ruling on their case that food could be successfully excluded from the GST, the Democrats had asked Professor Peter Dixon of Monash University to give evidence to the Senate Committee inquiring into the Howard/Costello tax package. Professor Dixon, in his evidence, took the view that excluding food would do more harm than good. Thus the amateurs are confounded by the expert. However, Dixon then offered the Democrats a political lifeline by charging that Prime Minister Howard and his Ministers had yet to prove why the nation needed the GST at all!

He savaged the Government's GST package, and accused them of "light-weight rhetoric". If this effectively forces the Democrats back to their true role - making decisions on matters of policy rather than on technicalities of administration, he will have done them - and the rest of Australia - an invaluable service.

All parties to the Senate inquiry on the GST agreed that Professor Dixon is a world leader in the field of "economic modelling", so they are obliged to take his evidence seriously. The fact that he is also of the view that the GST will not assist the unemployment problem, and nor will it help those who already have jobs, is of political significance for the Democrats. What is required from the Democrats now is a change of tactics. They need to return to the central policy question: do we need a GST at all? And does Mr. Howard really have a "mandate" for it?

They have already rejected the view that Mr. Howard was given an overwhelming mandate by winning the election last October. He did not win a Senate majority at all. At this stage, however, it is not the Democrats who appear to be the key to the passage of the GST through the Senate. The key votes, if the vote is held before June 30th, are those of Independent Senators Harradine (Tasmania) and Colston (Queensland). Who said Independents don't count?

It is of the greatest significance that Senator Harradine last week warned that he may not he prepared to vote on the legislation before June 30th, because the Senate was being asked to rule on the GST before the Government had completed its review of the business tax system. Whether Australians support or oppose the GST, it is essential that one central question is properly answered by Mr. Howard and his Ministers: Why do we need it? Is it because it is a sure-fire way of collecting ever-greater revenues in an underhanded, unaccountable way? Is it because the International Monetary Fund is strongly urging Australia to adopt the GST?

It should be remembered that Treasurer Costello is presently bragging about the size of the Government's tax surplus; a GST is not essential to fund (outrageous) government spending. How is it that the United States, which also has embarrassing budget surpluses, does not have a GST, and is not considering a GST? As Professor Dixon has so ably pointed out, Mr. Howard and Mr. Costello have yet to prove their case.

MOMENT OF TRUTH APPROACHES

by Jeremy Lee
Last week we reported the conclusions of economist Terry McCrann that a financial meltdown was probable this year, although it was impossible to say when and where it would start. While Government spokesmen are gloating over the current recovery of the Australian dollar, and the strong performance of the Stock Exchange, we agree with McCrann's forecast. In fact, the current roller-coaster ride of stocks and shares is an integral prelude to a moment of truth.

In the intervening period the World Economic Forum has been held in Davos, Switzerland. Reports show those attending not nearly so sanguine as our own spokesmen, and with no answers. In her assessment of the Davos Conference, Sheryle Bagwell included these remarks, in The Australian Financial Review (4/2/99):
"…Since Mexico, economic and financial meltdown has hit Asia (1997), Russia (1998) and now Brazil. And still the world's business and political elite are talking about how crises might be prevented or at least contained when they occur. A deadline has now been set: the wealthy Group of Seven nations say they must have some answers by the time of their next summit in Cologne, Germany, in June. But after spending a week in Davos listening to radically divergent opinions from high-ranking US, Japanese and European officials on what kinds of financial and economic reforms are needed, that deadline looks difficult to meet… Why? Because no one can agree on the root cause of the crises in emerging markets. Opinion is divided between the mismanagement school of thought - that the crises in Asia, Russia and Brazil were caused by poorly supervised banking systems in those countries, crony capitalism and a lack of transparency - and those who blame speculative short-term capital movements such as those by hedge funds, and general over-lending by foreign institutions…

UK's Finance Minister, Gordon Brown, urged leaders at Davos to quickly set up a 'new global standing committee of international and national regulators to conduct the regular and systematic surveillance of our world's financial system'. This committee could act as an 'early warning system' of crises ahead… But the idea of a surveillance committee got short shrift from the US Secretary of the Treasury, Robert Rabin, at least as a means of predicting problems in the global economy 'It might be appealing… to develop an early warning system ... Nothing in my 26 years on Wall Street or my six years in Government suggests that there is any predictive capability even remotely reliable enough for such a system. In addition, the early warning itself could create precisely the instability and even panic that such a system is designed to prevent…"

This is Mad-Hatter-Tea-Party stuff! The root-cause of the world financial crisis IS known, and has been for almost a century. It stems from the creation of all existing money as a debt, which loads into each and every community more costs than can be met with available purchasing power. C.H. Douglas analysed it precisely, together with the consequences of failing to rectify it. For his pains, he was relegated to the oblivion, which meets all those who dare to enunciate uncomfortable truths.

COSTELLO AND THE REPUBLIC

Although Treasurer Peter Costello declared himself a republican at the February 1998 Constitutional Convention, he abstained from voting for the Malcolm Turnbull model. Nevertheless, it is clear that Costello saw a major role for himself in subsequent events.

Laurie Oakes, writing in The Bulletin (24/2/98), commented: "Peter Costello is now the hope of the republican side. If next year's referendum is to have any chance of getting through, the republicans need the Federal Treasurer and Deputy Liberal leader spearheading the campaign ... Malcolm Turnbull's Australian Republican Movement knows it. That is why ARM representatives are planning an approach to Costello to try to get him on side. . . Fortunately for those who want the referendum passed, Costello is clearly very interested in getting on board.... When Parliament begins the task of drafting legislation for the proposed constitutional amendment, he is prepared to take a leading role in whipping the convention's blueprint into what he regards as a more satisfactory shape... He was asked: 'Are you going to do that work yourself? Are you going to try to turn it into a model that you can campaign for at a referendum?' The answer was unequivocal:' Yes, I am.'

Laurie Oakes added later in his article: "…If Costello is to get the kind of changes he wants to the republican model. he will have to use the cabinet and committee processes to shape the legislation to his liking, and he will have to play a major role in pushing the bill through Parliament. He will also have to persuade the ARM to go along with the changes he wants. But the fact that they have little chance of succeeding without him will be a powerful incentive for them to accept a redrawing of the model...."

That was a year ago, written as the Convention closed. Now, a year later, the pace is quickening. On January 24th a new body, "Conservatives for an Australian Head of State" was launched by former Liberal Federal Director Andrew Robb. Four days later Treasurer Costello told a CEDA function in Melbourne that he would play a "constructive role" in the work ahead for republicans this year. At the same time, Liberal Premier in South Australia John Olsen announced his republicanism. He was followed almost immediately by fellow Cabinet Minister Peter Reith joining the republican push.

On February 25th one of the Toorak parties of the year will be held at the home of Alex and Heloise Waislitz to launch the Australian republican Movement's "Referendum Countdown". About 300 people are expected to attend, with a cost of $250 a head. The Australian Financial Review (4/2/99) listed some of those expected to attend: "Definite starters include Sydney's Malcolm Turnbull... Janet Holmes a Court from Perth, writer Thomas Keneally, former PMs Whitlam and Fraser, as well as prominent Melbourne persons Steve Vizard, Eddie McGuire, Lindsay Fox, and Rupert Hamer..." Peter Costello? It didn't actually say. He'll probably be too busy drafting the question he wants put to the Australian people.

Monarchists should be on their guard. It probably won't be the question decided on by last year's Constitutional Convention - the Turnbull model. The Australian (29/1/99) said: "Coalition republicans have begun lobbying over the precise question to be put to the November referendum. In almost every case the question just repeats the long title of the Bill to implement the referendum question, without the kind of detailed explanation the monarchists are demanding for the November vote... The republicans know full well that the Turnbull model, where the Parliament makes the choice of President, would be overwhelmingly knocked on the head by the electorate. You can bet your bottom dollar they won't ask it in a way, which exposes this intention.

The job of all loyal Australians is to expose the duplicity of what is likely to transpire.

(The February edition of The New Times contains a leading article by Eric Butler on the socratic tactic of asking the right questions to expose the republican hypocrisy. Available from the Heritage Bookshop, GPO Box 1052J, Melbourne, 3001. Send a donation to cover expenses.)

WINDOW OF OPPORTUNITY ON THE GST

DEATH THROES OF ONE NATION?

It now begins to appear that the 'friends' of One Nation have been able to achieve what the party's ideological critics have been attempting in vain for three years: destroy Pauline Hanson and the party she built. The spectacle of One Nation tearing itself apart is a tragedy, but one of its own making. Perhaps the most tragic part of the unedifying implosion is that it could have been avoided. Many of Pauline Hanson's friendly critics, and many more of her own supporters, have urged her over the past two years to address herself to the internal organisation of her own movement. It is a feature of the "power game" that those supporters who are critical of the way things are organised are frequently rejected, along with their criticism. Thus, there have been waves of sackings within One Nation for several years. This is no way for those who claim to place the interests of the nation first to conduct themselves.

It is on the record that the League has strongly supported what Pauline Hanson has had to say concerning the state of the Australian nation, and also supported some of her proposals for correcting the malaise. But it is also on the record that the League did not support the formation of the Pauline Hanson One Nation Party, believing she could have just as well endorsed those in whom she had confidence to stand for office in association with her. It is also firmly on the record that we were deeply uneasy about some of the people with which Pauline Hanson became surrounded after the formation of the party. We expressed the view that their advice was frequently unsound, and their political strategy often disastrous. It is now clear that Ms. Hanson has lost her guiding influence with the political party. This became apparent when, after her defeat in the new seat of Blair at the last election, she vowed that she would reassert her control of the party, and shift the headquarters to Ipswich from Manly. When this did not occur, it signalled that others were setting the agenda, not Pauline Hanson.

In our view, it is still not too late for lost ground to be recovered. In terms of political policy, nothing has changed since the last election, except the faces in the Parliament. The policies remain the same; eliminate Australian sovereignty, and submit to global government. In this sense, time is still on the side of the nationalists. There is still a role for people like Pauline Hanson to play, but strategy and tactics need to be reviewed. It needs to be acknowledged that it is unimportant who sits in the Parliament. All that matters in the end is which policies are pursued. If Pauline Hanson and Graeme Campbell were unsuccessful in forcing policy changes while they were in the Parliament, then perhaps Pauline Hanson and Graeme Campbell can influence policy from outside the Parliament.

Support for policies that put the interests of the nation first must be generated, and deployed to wherever such pressure will have the greatest effect. It is essential to understand that such political action cannot be successful if motivated by the will-to-power. It can only be successful if it is motivated by service to fellow Australians. Whatever happens to One Nation, there is still a role for genuine nationalists like Pauline Hanson.

THE HONG KONG FACTOR IN THE NSW ELECTION

If it becomes clear that the NSW State election, scheduled for March 27th, will produce a close contest, it would not be surprising to see Premier Bob Carr on the hustings in Hong Kong. Why Hong Kong? Because it would appear that a large number of NSW voters, who could well decide the results in marginal Sydney electorates, actually live in Hong Kong. From press reports, we understand that the NSW Electoral Commission has been instructed to prepare to send 100,000 ballot papers to Hong Kong, and open special polling booths for overseas electors. Why are so many electors in Hong Kong? Because this is where many of Sydney's ethnic Chinese come from.

A number of years ago, the Commonwealth Department of Immigration floated a special "business" category for prospective migrants. If a migrant could demonstrate that he/she would bring substantial sums of cash to invest in the Australian economy, he/she would be accepted as an Australian citizen. At the time, this suited many of the Hong Kong Chinese, because the future of Hong Kong was extremely uncertain. It also suited the Keating Government, because it promised to provide a cash injection into the Australian economy in the form of "investment". Thus, Australia traded the security of Australian citizenship to edgy Chinese for a handful of cash. The Chinese themselves had no intention of living here unless conditions in Hong Kong became untenable when the Communists took control. But they are still eligible to vote. Thus, Chinese who have never lived in Australia could even decide which form of government Australians living in NSW must suffer.

RECOMMENDED READING

"Sons of the Yellow Emperor - the story of the overseas Chinese", by Lynn Pan. $20.00 or $22.00 posted from all League bookservices.

FIGURES WORSEN FOR AUSTRALIA

According to Personal Investment (12/98), the following picture emerges:
* In the 1997-98 financial year the total value of futures contracts traded in Australia was $9,700 billion ($9.7 trillion), which was:
* More than $500,000 per man, woman and child in Australia;
* Approximately 40 times stock market turnover;
* Twenty times Australia's Gross Domestic Product (GDP).

The same newsletter added: "Turnover in the currency markets in Australia is even more astonishing. Including options, swaps and forward-rate agreements, the currency turnover in Australia was more than $18,000 billion, or $1 million for every Australian resident. This is 30 times our Gross National product, and more than 75 times our combined imports and exports..."

In other words, the handle on the Australian poker machine is very long indeed!

FARMERS CARRY THE CAN

MILLENNIUM BUG CONCERNS

Official responses to increasing inquiries about the Y2K bug tend to dismiss fears as hysteria. An article by Mr. Richard Griffiths in The Australian Financial Review (1/2/99) expressed frustration at the concerns being expressed. A letter in the same paper on February 4th from a spokesman of a firm of chartered accountants in Sydney suggested there were justifiable reasons for concern: How could Bill Clinton, Tony Blair, the US Congress and Senate, the Pentagon, NASA, the European Union, federal, state and local governments round the world, corporate giants including IBM, British Telecom, Telstra, Ford, General Motors, BHP, DuPont, AMP, Lend Lease, every major university in the western world, every major bank on the planet, Pricewaterhouse Coopers, KPMG, Arthur Anderson, Ernst & Young, Anderson Consulting, Boston Consulting Group and the majority of the world's major airlines all get it so wrong? How indeed?

The Y2K Millennium Bug looks like being a very big issue. If it coincides with a financial crisis the future is not bright.

UN TREATY ON THE RIGHTS OF THE CHILD

Although Australia ratified the UN Treaty on the Rights of the Child in 1989, so far it has not been formalised in Australian law. Our "obligations" to the UN make it compulsory that we do so. The Law Reform Commission and the various Human Rights Commissions established in Australia have been pressing for legislation. Now, according to Frank Devine's column in The Australian (1/2/99):
"…The federal parliament's joint standing committee on treaties has recently recommended the creation of a federal Office of the Child, with a brand new bureaucracy supervising compliance with UNROC…"

Frank Devine's article was a sane and logical rebuttal of the whole psychology behind this UN-sponsored intrusion into family life. He especially recommended a new book "Children's Rights: Where the Law is Heading and What it Means for Families", by Barry Maley, and published by and obtainable from The Centre for Independent Studies, P0 Box 92, St. Leonards, NSW, 2065, $15.95.
We haven't seen this yet, but Devine's article was excellent.