WORSHIP OF THE DEFICIT GOD

by Eric D. Butler
U.S.A. President Bill Clinton has, like Prime Minister Paul Keating in Australia, broken his pre-election promises concerning taxation. Clinton claims that his programme will cut the American deficit by $US496 billion over the next five years. There are massive spending cuts and increased taxes, including 4.3 cents per gallon in the price of petrol.

Enormous pressure had to be applied to Democrats in the House of Representatives and the Senate in order to get the Clinton programme passed - just. Every Republican in both Houses voted against the programme while six Democrats defied party intimidation. President Clinton says that he has laid "the foundation for the renewal of the American dream". He has, in fact, made it certain that there are further nightmares ahead for the American people. Massive unemployment and social disintegration must continue.

Those who are waiting for the U.S.A. to "kick-start" the depressed world economy will be left waiting in vain. Like all industrial economies, the U.S.A. economy has only been prevented from complete collapse by the progressive injection of debt. Thus the astronomical deficits. But, like a drug, debt has many disastrous side effects. And any serious attempt to cut down the rate of debt injections results in serious withdrawal symptoms.

As the governments of all developed nations are operating basically on the same financial rules, they are all grappling with the same type of problems. It is now over 70 years ago since the British engineer-economist, C.H. Douglas, demonstrated that the modern industrial system, operating under conventional financial rules, could only continue to operate by a programme of never ending expansion which made it mathematically certain there must be escalating debt burdens requiring higher taxes in an endeavour to meet the interest bills on the debts. Attempts to curb the inevitable inflation produce the worldwide depression conditions now afflicting hundreds of millions. The social implications are horrendous.

The State of Victoria under the Kennett Government provides a classic example of the devastating effects of meeting the demands of the debt merchants under present financial rules. Jeff Kennett's understanding of realities may be judged by his expressed surprise that his policy of higher taxation and expenditure cuts had not improved anything. Unemployment was higher than in other States. But his dour Treasurer Stockdale, who makes Charles Dickens's Scrooge look like a jolly spendthrift, keeps insisting that the Deficit must come down. So more country railways and schools are closed, with disruptive social effects. An extra tax is applied to diesel fuel, adding to the problems of many in the rural community.

Selling off the State's assets, euphemistically called "privatisation", enables foreign consortiums to gain even greater control in Victoria. No government can have any effect on the growing momentum towards more centralisation of power, and greater social friction, while the worship of Debt Finance continues. So far from "seizing control of our economic destiny", President Bill Clinton is making another major surrender to the Debt Merchants. Australians should take careful note and then decide on an alternative financial policy, one of social credit instead of social debt.

TIM FISCHER DEFIES THE THOUGHT-POLICE

by David Thompson
It seems quite clear that rising pressure for the National Party to amalgamate with their Liberal Party Coalition partner has produced a counter strategy from within the backrooms of the National Party. If the Nationals were to amalgamate, a significant proportion of the more conservative National Party vote would bleed away to groups like the Confederate Action Party, and others. And rural Australians would find themselves progressively disenfranchised until they were completely at the mercy of the Liberals in the metropolitan areas. In the end, the National Party would be committing political suicide, and welding its fortunes to a wounded and philosophically decaying Liberal Party that staggers from one crisis to the next.

The counter strategy of the National Party strategists seems to be to highlight the differences between the Nationals and the Liberals. By taking the initiative on issues, the National Party provides some genuine leadership on sensitive issues that the Liberals are not willing to confront. This is why Tim Fischer is speaking up so boldly.

LEGITIMATE PUBLIC DEBATE

Fischer has shown great courage on such issues as the Monarchy (at a time when the Liberals vacillated), the Mabo High Court decision (and took a hammering as a "redneck racist") and the problem of Israel in the Middle East ("anti-Semite"!). In each case his courage has been vindicated, and only days after he warned about Australia's uncritical attitude to Israel, the Israelis launched their latest and most murderous campaign in Lebanon. This resulted in some 300,000 refugees and whole districts reduced to rubble.

Fischer's stand possibly encouraged others to speak up, and subsequently, a group of four Jewish women placed an advertisement in The Sydney Morning Herald, deliberately dissociating themselves from the Israeli human rights abuses against the Palestinians. The shockwaves are still reverberating around Australia's Jewish community, as the four women urged other Jews to "break your silence".

Fischer said last weekend: "I'm prepared to stand up and not be cowed by anyone who would declare that there are areas of legitimate public debate which should be treated as taboo." He then proceeded to call for a reduction in immigrant numbers, and, a complete review of all facets of multiculturalism. The response was immediate, with Immigration Minister Bolkus calling Fischer a "social pyromaniac."

In another most significant statement, not widely reported, Fischer warned that Mabo disputes could eventually be heard by the United Nations Human Rights Committee, or the International Court, further eroding Australian sovereignty. Far from suggesting that the National Party can function as a type of national saviour, we nevertheless congratulate Fischer for offering a form of leadership on issues that his Coalition partners lack the courage to face. Fischer can show that such issues can restore the fortunes of the Nationals, rather than being an electoral liability.

BRIEF COMMENTS

A press report from Washington states that Russia plans to ask the major industrial nations and the international banks to write off a major part of the $US80 billion owing. A senior Russian official, Konstantin Kagalovsky, who is Russia's representative on the International Monetary Fund, says that Russia was unable to pay the debts and could be forced into eventual default if the debt burden was not reduced. He went on to say that the debts had been incurred by the Soviet Union. "This money was completely wasted. The communists used it to prolong their rule. Now it's a burden for democratic Russia."
He noted that Poland had obtained a 50 percent reduction in its debts. It should be recalled that the reconstruction of West Germany at the end of the Second World War was achieved through the Marshal Aid programme and the write off of all debts. The rehabilitation of Australia requires that large amounts of debt be written off, starting with the desperate rural communities. Debts are created with a stroke of the pen and can be eliminated with another stroke of the pen. Anyone doubting that this can be done without hurting one bank depositor should read and digest The Money Trick, price $8.00 posted.

As was to be expected, the media widely publicised the "historic talks" between some 400 Aboriginal and Islander leaders at Eva Valley in the Northern Territory, who made it clear that not even Paul Keating's view on Mabo is acceptable. We are not told how many genuine tribal Aborigines were present at what was a well-orchestrated event in an on going programme with international implications. But prominent among those present was Michael Mansell of Tasmania, along with Charles Perkins, neither of them even resembles a tribal Aborigine.
As pointed out by John English in his authoritative Land Rights, Birth Rights ($16.00 posted from all League book shops), Australians of all backgrounds should honestly face the question of "Who is an Aborigine?" Much has been said about land rights for Indians in the U.S.A. and Canada. The truth is that in both countries a Red Indian must be designated as such in accordance with a formula concerning racial background. Under this formula the Mansells would not qualify as Aborigines.

TAX OFFICERS FACE CONFLICT OF INTEREST

from The Australian, July 16th
I view with tremendous concern the proposal, the existence of which has been confirmed by the Commissioner of Taxation, that Australian taxation officers may enjoy so called productivity increases in their remuneration if they increase the amount of revenue they collect beyond a particular level. "Why should we view this proposal with abhorrence? For the simple reason that a conflict of interest between the officers' potential personal remuneration and their duty to do no more than discharge the law is an automatic consequence of such a scheme. "By giving officers a direct financial interest in increasing their exactions of revenue from taxpayers, a conflict of interest must be seen to arise for those officers between the increased desire, inherent in such a bonus scheme, to collect more revenue and their responsibility merely to discharge their proper collection duties.

"Whether this conflict actually results in the misapplication of tax laws in the determination of liabilities is not the point. Its very existence is disturbing and undesirable. In most commercial dealings conflicts of interest are seen as undesirable or forbidden outright. "Yet, the Commissioner of Taxation maintains, in his response to the outcry on this issue, that such a bonus system can not be abused and can not give rise to a conflict of interest because the A.T.O. would only be collecting revenue that is otherwise properly payable. One might ask that if it is properly payable, why is it not already being collected?

"It is undeniable that the A.T.O. officers can only make a judgment, or indeed merely speculate, as to whether certain revenue is payable under our tax laws. They are not so omniscient as to be sure that their assessments will always be entirely correct and will always be upheld if challenged. "If a taxpayer is to challenge an assessment, he or she must incur the costs and anxiety of going to court and face possible penalties if the assessment is upheld. It is not unreasonable to expect that many may choose to pay the full amount of the assessment notwithstanding that there may be doubt that the tax is properly payable. "Yet the Commissioner asserts that collecting more revenue is a proper basis for a productivity bonus because the A.T.O. only collects revenue that is properly payable. "However, the fact that more revenue has been collected than previously does not mean, by the fact of its collection, that it is indisputably properly payable. But this seemingly absurd proposition is the defence for the proposed bonus system.

"A further disturbing aspect to the proposal is the report that the bonuses will actually be constituted by part of the extra revenue collected. If, as the Commissioner argues, this extra revenue is revenue that is properly payable, it belongs in the consolidated revenue in its entirety, not as part of some contingency payment plan for A.T.O. officers. "It is unquestionable that this proposed basis for increased remuneration for A.T.O. officers will lead to the suspicion at the very least that A.T.O. officers will seek to collect revenue that is not properly payable." (Senator John Watson, Launceston, Tasmania)