Citizens Electoral Council of Australia

Media Release Friday, 3 May 2013

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

The government guaranteed the banks, so guarantee WA’s wheat growers—NOW

If the “free market” is the reason the government is allowing the banks to force many hundreds of WA farmers off the land in the next few weeks, then why did the government rescue the banks when they were in crisis in 2008?

That’s right—Australia’s banks were about to collapse, and most Australians had no idea. At the height of the GFC, whilst the population were being assured Australia’s banks were “sound”, the banks were in fact insolvent. They were trapped by more than $800 billion in foreign debt, more than half on 90-day terms. They could never repay this debt anyway, but in October 2008 they suddenly found they could no longer borrow to roll over these 90-day obligations. The banks told the government that without its help, they would be “insolvent sooner rather than later”.

The government immediately guaranteed the banks’ new borrowings, so they could roll over their existing debt. This not only enabled them to borrow again, but to borrow at much cheaper interest, using the government’s AAA credit rating.

(Click here to read Why Australia Needs a Glass-Steagall Banking Separation, which is a full exposé of the presently bankrupt state of Australia’s banks, the deregulation policies that caused the bankruptcy, and the numerous times the government has intervened to prop up the banks since deregulation.)

So why do banks get rescued when they are in crisis, but farmers get shafted? What’s more important: banks that gamble in $20 trillion worth of derivatives, prey on pensioners (such as those they lured into Storm Financial and similar scams) and small businesses (which they slam with high fees, penalty interest rates and corrupt revaluations) to extract annual super profits of more than 20 per cent on their capital; or 1200 wheat growers who produce precious food to feed millions around the world at a time when more than a billion people are going hungry?

Morally, there’s no debate. The events of October 2008 proved what the government is capable of doing, and it must take the same decisive action now.

The CEC has clearly spelt out the solution to the crisis, in the form of a Glass-Steagall-style banking separation and a national bank; however, even before enacting those measures, the government can and must immediately intervene to save the hundreds of farmers facing ruin in the next few weeks.

It must immediately declare a moratorium on farm foreclosures. At the same time, the government must—because it can—create an agency, or utilise an existing agency, through which farmers are able to borrow to finance this year’s crop and restructure their debt, using the government’s AAA credit rating. This agency can commence on an emergency basis, but eventually be absorbed into a new national bank.

Enabling the farmers to cut out the banks and get direct access to loans at 3-4 per cent interest—compared to the 9-12 per cent many are paying now—would both keep them producing, and significantly alleviate their crushing debt burden, which is presently $12 billion borne by 4300 farmers.

Citizens Electoral Council WA Secretary Jean Robinson declared today, “There is no excuse for the government to not take this action NOW. It is not a question of whether the individual farmers are ‘viable’; it is a question of how long Australia as a nation will be viable if we keep destroying our productive industries, and especially the family farmers who produce our precious food supply. If the government fails to save the farmers, it will prove beyond doubt on whose behalf it is governing—not the people, but the banks.”

“Join the CEC to win this fight!”

Click here for a free copy of the latest New Citizen, “Do You Intend To Die For The Banks?”

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