WHEN the scandal-ridden Whitlam Labor government hit the fiscal bricks in the mid-seventies it turned to Pakistani Tirath Khemlani to act as a conduit for a $4 billion petrodollar loan.
It was a disastrous experiment and became a major factor in Gough Whitlam’s dismissal as prime minister.
The Whitlam government attempted to avoid the usual fund-raising process of the Loans Council and illegally borrow from Middle Eastern sources bypassing Treasury.
The lies generated by the attempt and subsequent concocted cover-up cost Treasurer Jim Cairns and Minerals and Energy Minister Rex Connor their jobs.
Deputy Prime Minister Cairns, who was messily entangled with his private secretary, Junie Morosi, was sacked. Connor resigned in disgrace.
The Loans Affair contributed to a huge loss of confidence in Whitlam’s crippled government and was one of the principle reasons why the opposition blocked supply, assisting Governor-General Sir John Kerr in his decision to dump Gough as Prime Minister and consign his government to Labor’s hagiographers.
In essence, the Loans Affair was an extraordinary example of government arrogance and lack of transparency - a model for government maladministration and worst practice.
The Gillard government has avoided the pitfalls of seeking loans from shady Pakistanis by the simple act of lifting the government’s debt ceiling without debate, and with an appalling lack of transparency, as the need arises.
Over the past four years, the Labor government has lifted the debt ceiling four times, from $75 billion, to $200 billion, to $250 billion and now $300 billion. On each occasion Treasurer Wayne Swan has earnestly promised not to exceed the total debt limit.
But over the same period Labor has also produced the four biggest Budget deficits on record, totalling $174 billion.
Swan told the ABC’s AM program in May that lifting the debt ceiling was “no big deal” but Labor’s deficit this financial year has grown from the $22.6 billion projected in last year’s budget to $44.4 billion now - a doubling in just 12 months.
Once $200 billion was sufficient, then it was $250 billion, now it is $300 billion - but the catch is that the Gillard Labor-Green-independent minority government is spending around $100 billion a year more than in the last Howard-Costello budget.
In just the last 12 months, Labor’s net debt projection for this current financial year has blown out from $106.6 billion to $142.5billion, a deterioration of one third.
Net debt continues to rise next year and the year after to a new peak of $145 billion, the highest on record. This continues the record of Labor governments that have increased net debt every year since 1990. With every increase in debt as Labor raises the Commonwealth debt limit, so too does the cost of servicing the new debt level rise.
Net debt interest will rise to $8.2 billion a year and each day we will be paying $22 million in interest alone on Labor’s debt.
While only the most rusted-on Labor luvvies in the Canberra press claque could bring themselves to believe Swan’s forecast of a micro-surplus for 2012-13, which he promised in last May’s Budget, it is still worth noting that if it were to be believed, it would still take 113 years to pay off the $174 billion of cumulative deficits Labor has delivered in just four years.
But of course, Labor’s forecast surplus in 2012-13 is not real.
It’s a pea-and-thimble surplus obtained by artificially shuffling spending by a few weeks out of 2012-13 into this financial year, and by treating spending on the NBN as “off budget”.
Had just the spending on the $50billion NBN been treated as “on budget” then the $1.5 billion surplus forecast for next year would be a $4.3 billion deficit.
Add in the $8 billion of money that has been moved forward or pushed back out of 2012-13 and the deficit would be over $12 billion.
Gillard, Swan and a highly paid army of government consultants and spin doctors are spending hundreds of millions in a desperate attempt to make the public believe they have run a good government.
If the story of financial vandalism is not sufficient evidence to the contrary, there is also the global competitiveness index score card released this week by the World Economic Forum.
This group, which ranks 144 nations, found Australia slipped down the ladder in a number of crucial areas in the four years from 2007-08 to 2012-2013.
In terms of wastefulness of government spending, we went from 10th place to 48, in terms of the burden of government regulation, we dropped from 68 to 96. Transparency - from 12 to 29, government effectiveness - 5 to 18, government debt - 16 to 30, flexibility of wage determination - 87 to 125, labour market efficiency - 13 to 42, hiring and firing practices - 63 to 120, pay and productivity - 40 to 80.
This is the scorecard of a nation that is going backward, a nation in decline, not a nation that is harnessing its mineral wealth and implementing reforms.
This is a government that cannot live within a budget. It is expected to reach the $250 billion debt ceiling in four years, with current forecasts showing it will just squeeze under that target with $300 million to spare in barely four years.
Gillard and Swan, and the majority of the other ministers, are conning the Australians people.
Their legacy will be a lasting debt and a raft of ineffectual policies that will bleed the nation for generations.
