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Citizens Electoral Council of Australia

Media Release  Friday, 28 March 2014

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
 

We don’t need to sell off Australia to fund infrastructure, we need a national bank

Treasurer Joe Hockey is meeting with state treasurers today, to convince them that privatising their public assets is the only way to fund new infrastructure.

This is a lie.

The only guaranteed beneficiaries of privatisation are the parasitical investment banks who earn huge fees for brokering the sales—investment banks which are well represented in Hockey’s office.

(It’s no coincidence that many politicians who have championed privatisations in Australia have gone on to work for such investment banks: Paul Keating went on to chair former CS First Boston privatisation wizard John Wylie’s boutique investment bank Lazard Carnegie Wylie; Victorian Treasurer Alan Stockdale and NSW Premier Bob Carr both went to work for Macquarie Bank, etc.)

The public always lose, because privatisation lumps the public with extra costs, as the new private owners increase their charges in order to service any debt incurred to buy the asset, and make a fat profit.

The national bank solution

With a national bank, the government can use public credit to build the infrastructure Australia needs.

Australia had a national bank in the original Commonwealth Bank, until Menzies gutted it in 1959.

The Commonwealth Bank functioned at its peak during the war years 1942-1945, when it directly issued the credit to finance the massive increase in government expenditure required to fight the war.

Since the 2008 GFC the world’s major central banks—the U.S. Fed, the Bank of England, and the Bank of Japan—have created trillions of dollars, pounds and yen out of thin air and pumped them into the bankrupt banking system to keep it afloat. This money creation, called quantitative easing (QE), has fattened the recipient banks, but it hasn’t led to an economic recovery, because they haven’t on-lent it into the real economy. (In fact, bank lending has decreased—click here for a pdf article exposing QE, “Worse than Weimar”.)

If the central banks had instead issued this money to their governments to build and repair infrastructure, it would have created millions of jobs and significantly boosted productivity.

Unlike central banks, which are controlled by the private banking system, a true national bank is government-owned-and-controlled, and therefore can use this same power to create credit, but to benefit the people of the nation.

The control on this power is that it can only be used to finance investments that measurably increase national productivity, which is the development of physical infrastructure, and capital improvements to productive industries (i.e. low interest loans to farmers and manufacturers for new plant and equipment).

If Abbott and Hockey were genuine about infrastructure, and not just creating opportunities for private banks to profit, they would establish for Australia, once again, a national bank.

The CEC is pushing to introduce legislation into Parliament to establish a new national bank, to be called the Commonwealth National Credit Bank, which will issue credit for grand water, power and transportation infrastructure projects that will once again make Australia an agro-industrial powerhouse. The CEC’s infrastructure vision is contained in its New Citizen Special Report called The Infrastructure Road to Recovery.

If you are prepared to fight to stop Hockey’s mass-privatisation agenda, and bring back national banking in Australia, join the CEC.

Click here for a free copy of The Infrastructure Road to Recovery.

If you have already received a free offer, click here to purchase a copy ($10).

Click here to join the CEC as a member.

Click here to refer others to receive regular email updates from the Citizens Electoral Council of Australia.




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