Sixty-seven years after New South Wales premier Jack Lang stared down the Bank of England's bailiff, Sir Otto Neimeyer, during the Great Depression, and declared a debt moratorium against City of London banks, banks are once again determining NSW state government policy. The state Liberal/National Party coalition has embraced privatization of the state's electricity system as its key election campaign policy, as it looks to replace the Bob Carr Labor government at the March 27 state election. The sale of the electricity system is expected to raise $25 billion for the State, and was first mooted 2 years ago by Carr's own government, but proved so unpopular with the traditional elements within his own Labor Party—especially its trade union constituency—that Carr and his Treasurer Michael Egan was forced to drop the policy in October 1997. The Liberal/Nationals, though, under new leader Kerry Chikarovski and without the same trade union constituency, have resurrected the idea, but with a new element cynically calculated to make it a vote-getter—a $1000 bribe for every elector in the state, in the form of either cash or shares, to be paid from the proceeds of the sale.

If realised, the electricity sale will be the latest in a series of fire sales that have swept Australia in a privatisation frenzy in the past decade. Already, Australia's $66 billion in government asset sales in the 1990s is second only to Great Britain—a much bigger country in terms of population—in dollar terms, and second only to New Zealand—a much smaller country—in terms of per capita privatisations. Australia will undoubtedly leap to the top of the list in the event of the NSW privatisation, a planned South Australia electricity sale worth $4 billion, and the $40 billion sale of the remaining two thirds of Telstra, the nation's telecommunications carrier, going ahead.

Setting the pace has been the Liberal/National Party government of Victorian Premier Jeff Kennett, which has sold $27 billion worth of state assets since 1992. Kennett's privatisation program has been formulated and directed by Melbourne think tanks the Tasman Institute and the Institute of Public Affairs (IPA), two of the Australian subsidiaries of the British Crown's economic warfare unit, the Mont Pelerin Society. Interestingly, in NSW, the most powerful proponent of privatisation, in spite of his stated position opposing it, which was forced on him by his party's rank and file, is Premier Bob Carr, who is a "proud" member of the Sydney subsidiary of the Mont Pelerin Society, the Centre for Independent Studies (CIS).

The selling point for privatisation has always been "retiring public debt". In Victoria, Kennett put most of his $27 billion to lowering state debt from $31 billion, to less than $10 billion. In NSW, the stated aim, from both the Liberal/National's and Labor when it was their policy, is to retire $18 billion worth of state debt. Scandalously, an EIR/New Citizen investigation has revealed that the creditors of the state of NSW are anonymous. The only information publicly available for NSW is that, out of the total state sector debt in domestic and foreign borrowings of $25 billion, $24.7 billion is in bonds, about half of which are denominated in foreign currency. In the event of the currency fluctuations that have accompanied the world financial meltdown, that $12 billion in debt can blow out overnight. Former New Zealand Finance Minister Sir Roger Douglas, after pioneering his country's ruthless privatisation program under the direction of the Mont Pelerin Society, like Kennett and Carr, and which resulted in the highest per capita rate of asset sale in the world, once admitted, "I'm not sure we were right to use the argument that we should privatise to quit debt. We knew it was a poor argument, but we probably felt it was the easiest to use politically."

Further, the identity of these bondholders is, according to an officer of NSW loans facilitator Treasury Corp., "commercially in confidence, and exempt from freedom of information". This news was greeted with outrage by Ann Lawler, the NSW State Coordinator for the Citizens Electoral Council, the Australian political party allied with American economist Lyndon LaRouche's global fight for national sovereignty and a New Bretton Woods monetary system. "It is a scandal that the citizens of this state can't find out who the state's creditors are," Mrs Lawler blasted. "Who is the state indebted to, that is looking forward to this $18 billion windfall? In 1932, when the Bank of England sent the bailiff, Sir Otto Neimeyer to collect on NSW's debt, the bank demanded the imposition of austerity conditions calculated to make the state and its citizens poor, and the bank rich. Instead, Lang declared a debt moratorium, and was sacked by the then British King's representative, Governor Sir Philip Game, for his troubles. Lang's fate demonstrates the enormous power creditors wield over a state government, yet, in this day of transparency' and open government', the people of NSW can't find out who their creditors are."

Despite their anonymity, it is indisputable that big banks are the main beneficiaries of privatisations. International merchant bank CS First Boston, which was implicated in dirty money laundering schemes in the 1980s, has made $42 million from handling the Victorian privatisations alone, and was also involved in the sale of Telstra. New Zealand merchant bank Fay Richwhite, which made millions from its involvement in both selling and buying NZ's privatisations, won the appointment from Carr to handle the electricity sale when it was still Labor policy. Fay Richwhite principal David Richwhite was heavily involved in the NZ branch of Carr's beloved CIS.