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7 November 1980. Thought for the Week: "I do not call upon the state to compel everyone to accept my opinion, but, rather, not to force me to accept anyone else's opinion. There's a great difference between the one and the other; let us make no mistake about it."
Frederic Bastiac, 1801 - 1850
STORMS AHEAD FOR MALCOLM FRASER
Mr. Andrew Peacock's first bid for Liberal
Party leadership, which resulted in a strong vote, the manner
in which Mr. Fraser has been forced to re-arrange his Cabinet,
and loss of effective control of the Senate, further confirm
our view that there are major storms ahead for the Prime Minister.
A former senior Liberal Party official expresses the view
that the recent Federal elections revealed clear signs of
an anti-Fraser rot, which he believes is irreversible.
As all taxation must eventually keep forcing prices up, with increased interest rates further increasing costs, continuing high inflation with all its disastrous social as well as economic consequences, is a mathematical certainty. Tensions within the Federal Coalition with the National Party in the position to exercise a bigger political clout will be inevitable as the finance economic crisis continues. As we predicted, this crisis is seriously affecting every industrialised nation, including West Germany and Japan.
From time to time there are hopeful
reports that the American recession is nearly over, to be
followed by the news that in reality it is continuing. Latest
reports reveal a new upsurge in the American inflation rate.
The British Thatcher Government, grimly applying the harsh
Ayn Rand philosophy recommended by Prime Minister Fraser,
continues to force up the unemployment rate, bankrupting businesses,
with only a fractional decrease in the high inflation rate.
Revolution is inevitable unless there is a constructive policy of reducing financial costs. The first major step must be a reduction in total taxation. This step was advocated by Mrs. Florence Bjelke-Petersen in her Senate campaign and undoubtedly was one of the major factors in the massive vote for the Queensland Premier's wife. With Premier Joh Bjelke-Petersen also stressing the necessity for a reduction in taxation, the stage is being set for a possible national tax revolt, which would enable Australia to move off the disastrous course on which it is now travelling. Mrs. Florence Bjelke-Petersen will, of course, be in a much stronger position in the Senate next year if the Bjelke-Petersen Government survives in Queensland.
As we have already observed, the Fraser Government's parliamentary majority masks the big shift against it electorally. And that shift will continue. In the developing situation, increasing Government Members are going to be sensitive to electoral pressure. The storms threatening the Fraser Government are going to provide electors with the opportunity to take constructive action. Providing the League of Rights can continue to sustain itself, it is now ready to play its most decisive role in the battle for Australia.
AUSTRALIA'S WEALTH TAX
We notice that several commentators have echoed the comment we made in our issue of October 24th: "Generally overlooked is the fact that Australians already are experiencing a wealth tax in the form of escalating government rates; these rates, based on property values, are a reflection of the financial policies of the Federal Government."
Commenting on the impact of higher interest rates on Local Government, David Jefferson writes in the weekend finance section of The Herald, Melbourne, on November 1st, "We already have a wealth tax or capital gains tax in Australia - it is called rates." Mr. Jefferson provides a striking example of what an increase of l% in the interest rate does to rates, pointing out that the Melbourne Board of Works' total debt is $1,500 million and that it will require an extra $15 million in rates to meet the higher interest rates. This means still higher rates. Business organisations will have to attempt to recover these higher rates in higher prices. Inflation will be given a further impetus.
Most of the comment on the increase in interest rates fosters the hoary myth that higher interest rates are essential to attract finance capital. The false impression is created that money is a type of commodity, and that the interest rate is the price that must be paid for the commodity. Mr. John Howard has confirmed his frightening ignorance of even the most elementary knowledge of finance with his view that "the market" rather than government, should set interest rates. As pointed out by numerous authorities, including bankers (see "The Money Trick", $1.40 posted), the bulk of a nations money supply is created in the form of financial credit by the banking system. The true cost of creating this credit would be a fraction of present interest rates, some authorities stating that a rate of 2% would be adequate.
A big part of Local Government activity is on capital works. If these were financed by long-term credits at true cost, all rates could be substantially reduced. Unless there is a change, property owners are doomed to continue paying an increased "wealth tax". And eventually they will be dispossessed of real ownership of their own properties. Whatever description is used to describe this process, it leads towards Socialism. An Australia wide anti-wealth tax revolt is long overdue.
ERODING THE FEDERAL CONSTITUTION
Most media reports of last week concerning the High Court decision on the case involving the Australian Wheat Board, failed to highlight the far reaching implications of what has been described as "an open ended judgment". The approach of the majority of Judges on the High Court raises questions, which go far beyond the question of whether the Wheat Board can constitutionally operate a monopoly. The basic question is whether a Constitution, irrespective of legislation, can protect the individual's rights and freedoms.
If one did not know what takes place
in the Soviet Union, one could, having read the Soviet Constitution,
come to the conclusion that Soviet citizens were well protected
against arbitrary infringement of their freedoms.
In what must be rated a major historic statement, the Governor General, Sir Zelman Cowan, said some years back that it was almost impossible to persuade the Australian people to sanction Constitutional changes, and that these might have to be effected through High Court judgments. This type of development has taken place in the United States, where the Supreme Court has become a type of quasi-legislative body.
When Franklin Roosevelt's New Deal legislation was declared unconstitutional during the Great Depression, he proceeded to "stack" the Court with those who argued, in essence, that the seriousness of the depression required a more "flexible" and "realistic" approach to the written Constitution.
Sir Robert Menzies once observed, "There
is no question that what we call constitutional law is only
half law and half philosophy, political philosophy."
The essence of the Court's open-ended
judgment is that those wheat growers financing the challenge
to the Wheat Board's monopoly will now have to continue financing
an action which has already cost them tens of thousands of
dollars. The Wheat Board can use the wheat growers' funds
to continue the legal battle.
|© Published by the Australian League of Rights, P.O. Box 27 Happy Valley, SA 5159|