Monday 22 January 2018

Vision And Creation – Or Fiscal Restraint?

Fatal Obsession: It was Gough Whitlams' Minister for Minerals and Energy, Rex Connor, whose lifelong dream of "buying back the farm" (nationalising Australia's mineral and energy resources) led him into the coils of an American-inspired conspiracy featuring the shady Pakistani banker, Tirath Khemlani, that precipitated the infamous dismissal of his Labor government on 11 November 1975. Every reforming Labour government should have Connor's name tattooed over its heart - as a warning.

THERE’S ONE NAME that should be tattooed over the heart of every Labour Party politician: Rex Connor. It was Connor’s determination to “buy back the farm” – i.e. deliver Australia’s mineral wealth into public ownership – that set in motion the sequence of events which persuaded the Australian Governor-General, Sir John Kerr, to dismiss Gough Whitlam’s Labor government on 11 November 1975. The lesson for all subsequent Labor (and Labour) governments was clear: never let the policy commitments of a single minister deepen to the point where they drag an entire government down to defeat.

Connor was an old-time Labour socialist and economic nationalist who was fond of quoting the American poet, Sam Walter Foss:

Give me men to match my mountains,
Give me men to match my plains,
Men with freedom in their visions
And creation in their veins.

When the Australian Treasury persuaded Connor’s Labor colleagues that his plans to borrow $4 billion (a colossal sum in 1974!) were economically and legally reckless, the bluff old socialist went behind their backs and attempted to borrow the money from Middle Eastern potentates, who, following the dramatic oil price-hikes precipitated by the 1973 Yom Kippur War between Israel and its Arab neighbours, were awash with “petro-dollars”.

With the benefit of hindsight, it is clear that the United States government, alerted to Connor’s intentions, laid a trap for him. A shadowy Pakistani banker by the name of Tirath Khemlani was able to ensnare Connor by promising to arrange a loan large enough to make all of the Minister for Minerals and Energy’s dreams come true. It was the Liberal Opposition’s exposure (undoubtedly with American assistance) of the “Loans Affair” which sparked the political crisis culminating in Whitlam’s dismissal.

Why are political events which occurred in Australia more than 40 years ago being rehearsed in New Zealand in 2018?

The memory trigger, in this case, was pulled by the National Party Opposition’s Transport spokesperson, Judith Collins. In a media release issued on Tuesday, 16 January, Collins castigates the Minister of Transport, Phil Twyford, for raising the possibility of diverting motorist-derived revenues from the National Land Transport Fund for the purposes of developing Auckland’s light-rail network.

“This desperate grab for more taxes is the result of this free-spending Government realising how much it’s going to cost to build its pet rail line from Auckland’s CBD to the Airport”, argued Collins, “so it’s looking to divert funding from regional roads as a result.”

Collin’s criticisms were echoed in a release from the right-wing lobby group, The Taxpayers’ Union, which enjoined Twyford to keep his “hands off motorists’ piggy bank”.

Now, this is a very long way from Khemlani’s false promise to provide Rex Connor with the wherewithal to “buy back the farm”, but every doomed journey begins with a single step.

Phil Twyford has staked his own reputation – and that of the Labour-NZF-Green Government – on fulfilling not only their commitment to end Auckland’s traffic gridlock, but also, and more importantly, to have Labour’s “KiwiBuild” affordable housing initiative well underway by the 2020 election.

The $4 billion question is: are there sufficient financial resources available to permit the government to meet these (and many other) policy commitments? The answer, of course, is yes. All governments have the power to beg, borrow or steal whatever resources are needed to implement their plans. In the case of this government, however, the matter is more complicated.

Jacinda Ardern’s Cabinet contains many men and women with “freedom in their visions” and “creation in their veins” but, unfortunately, on his performance to date, her Minister of Finance isn’t one of them. Grant Robertson’s determination to keep his government within its self-imposed “Budget Responsibility Rules” is presently on a collision course with ministers’ determination to keep their promises.

If the Prime Minister allows that collision to occur, then the chances of someone doing a Rex Connor will increase spectacularly. Whitlam’s fatal error was to refuse to make a choice between vision and creation, and the budgetary restraint necessary to keep the confidence of the Australian people. Ardern’s challenge is to decide what sort of government she intends to lead. Will it be a government of vision and creativity? Or, a government which refuses to abandon its commitment to fiscal rectitude.

If it’s the latter, then Jacinda needs to sack her Rex Connors – now.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 19 January 2018.


Guerilla Surgeon said...

"Free spending government." You gotta laugh, they haven't had a chance to spend anything yet. But then conservatives are always good with the catchphrase, less so with substance.

Jens Meder said...

Who is Jacinda's impatient "Rex Connors" ?

Jayson said...

Chris, one of the promises was not to increase taxes. Does this promise not matter to you? I thought you were more honest and decent than that.
Certainly you know as well as I do that Labour would never have got in without having made that promise. So where is their mandate to do what you suggest?

Anonymous said...

In a nutshell, what I guess you're saying here Chris, is that to create and fulfill the vision, the committment to financial rectitude needs to be thrown aside. But didn't Labour and the Greens (though outside the table now) agree post their MOA to have a financial responsibility understanding to present to the voting public that would appear to provide stability in spending? Sure the government can beg, borrow or steal. Begging - asking the populace to consent to more taxation (there's only so much taxation in any form people will take but before casting their eye afar - offshore). Borrow - all has to paid back one day - unless it's productive borrowing, how will it be paid back? Steal - divert existing funds from one area to another - which minister's pet project is going to miss out. And where does the fulfillment of the vision end? - ah, utopia - which in my understanding is a long desired state of existing where everything is provided with no worries. And that's why it's utopia - something dreamed of but can never really happen (unless I have my understanding wrong and I should have looked it up in a dictionary). And let's face it, while we think we live in a first world country, we don't really - we're a second world country reliant on our existence by the graciousness of other countries accepting our trade which they could easily get from elsewhere if they wanted.

greywarbler said...

I don't know how pleased with themselves Anonymous and Jayson and Jens are, but it all smacks of I'm sitting comfortably and I want this let to run the country to suit mw. The list of downward affordability of everything and it really impacting on everyone who hasn't got a nice buffer to avoid feeling the punches, distresses those with real human brains but leaves the cold, analytical mind in beware mode. National can break any promise but they're 'Our Promise Breakers'. 'Labour's in but they had better do things our way and make no changes, and we can put up with them for a term we suppose'.

Labour needs to be careful to see that it spends its money wisely. Despite the muttering of the Belongers, Emulators or Achievers percentages amounting to 68% . This from my 1989 Marketing book costing $77.70 of Husted, Varble and Lowry. They present their version of the useful VALS segmentation of consumers and attitudes based on Maslow's hierarchy or drives; (Values and Lifestyle program developed at Stanford Researdh Institute).

It gives valuable insights into society leading to marketers understanding more about us than we do ourselves (not many people are buying $77 books with this type of information).

In the 1980s they had gathered the population into three bands, the Need-driven consumers (11%), Outer-directed consumers (68%) and Inner-directed consumers (21%). I think you will be from the Outer-directed incorporating Belongers who are conforming, Emulators who are Status conscious and Achievers who are materialistic, their thoughts likely on Leadership, Efficiency and Comfort.

The Survivors and Sustainers need help to join the 38% Belongers. Perhaps you the Comfortably Off can spare a thought for these people growing in number but being compressed into tent cities outside gated communities either literally or figuratively, in the interests of efficiency. Some politys have loaded them into cattle trucks and railed them away to a distant destination.

Real practical and ethical NZs would like to discuss and participate in workshops where ideas were put forward and not smothered by Right Wingers with their dead hands, but sharp minds and cutting tongues. And there would be immediate attention paid to a new system that arises from such discussions and is generally agreed as being okay. It couldn't be too much dearer, but would spend to invest now to have saving effects later, and must offer opportunities for all people to be regarded as valuable citizens with a basic income that provides enough for them to enjoy helping our society work better with rewards of acknowledgment that give pleasure.

Polly. said...

Jacinda has the title of Prime Minister, but that's it.
Grant Robertson and Winnie the poo are the two most prominent politicians in New Zealand.
All questions of significance should be posed to those two sly and dodgy operators.
Grant Robertson is smart and will keep winnie out of the country most of the time so winnie can do what he like to do, that's to pretend play to other and real leaders.

Anonymous said...

Labour and the Greens have been thoroughly infiltrated by the an elite student politics and union class that is ideologically possessed an only concerned to win symbolic victories as though they were tangible ones. That their rhetoric is happily used by everyone from the Ministry of Health to Pepsi should have people wondering whether they speaking truth to power at all or simply flexing their collective power to bend truth.

sumsuch said...

I quite like Rex Connor as you outline him, cruddy means and good ends, as opposed to the zombie tumble of left-wing politicians post-Whitlam for the contrary. 1935 was based on the loans Walter Nash made in London.

I, in no way, see Rex Connor in Grant Robertson. A good Irisher in the boots of a coin-counting member of my own clan.

'Jayson', to break a promise not to increase taxes is obligatory in a plutocracy if you wish to bring about democracy. 'Honest and decent' can only be in the equality of democracy.

Labour would have got in without the tax promises in my view. Humans are often timid and shambling. Their mandate is demo-cracy in a country founded on it. Unlike the worst of us in the U.S.

'Anonymous', you don't think a strong govt wouldn't do better for miniscule us in a muscular world? You realise we come from heroes? But of course you don't.

sumsuch said...

'Bend truth'. Who does it more? Are you on the side that gives you money for your brilliance or... the truth that keeps you hungry for 60 years after your death?

peteswriteplace said...

ASk the same questions in a few months.

Simon Cohen said...

"With the benefit of hindsight, it is clear that the United States government, alerted to Connor’s intentions, laid a trap for him. A shadowy Pakistani banker by the name of Tirath Khemlani was able to ensnare Connor by promising to arrange a loan large enough to make all of the Minister for Minerals and Energy’s dreams come true. It was the Liberal Opposition’s exposure (undoubtedly with American assistance) of the “Loans Affair” which sparked the political crisis culminating in Whitlam’s dismissal."
I am intrigued about your "benefit of hindsight" as I know of no reputable history which makes this claim.You must have sources unavailable to other historians.
Rex Conner lied to Whitlam about his activities with Khemlani which led Whitlam to mislead the House of Representatives.When the lies were exposed Whitlam had no choice but to dismiss Conner.
Then Cairns [the deputy Prime Minister and Treasurer]also lied to the house concerning his subsequent authorizations to Khemlani for further loans and when his lies were exposed he also was dismissed by Whitlam.
The United States Government must be far more accomplished than most people would suspect if it can persuade or contrive for a senior Cabinet Minister to lie to his Prime Minister and a Deputy Prime Minister and Treasurer to lie to the House of Representatives.
I can't help thinking they were the authors of their own demise.

greywarbler said...

Anonymous 20.44
Labour and Greens have tended to come from those with higher education which will take us into the 21st century which we are only now entering, previously held back by the millstone of National and its fellow travellers. National et al are people who can talk about truth, but can't handle the reality! That way lies their power, and that's more important to them than truth. Can you handle that Anonymous?

Whether we can cut ourselves loose from this bodyweight, and lose the fat-heads who only exist in their reflections in the eyes of fellow Nationals and RWs, we don't know. Labour and Greens will try, but I fear find the weight drags them down, and will have to watch that if the tug-of-war collapses suddenly all might fall down. Strength, determination, good intelligence and smart planning is needed. Kia kaha Labour and Greens (and Maori alongside).

Chris Trotter said...

To: Simon Cohen.

I fear we are looking at the same series of events - but from radically different perspectives.

Yes, Connor and Cairns erred when it came to the conventions of Westminster-style parliamentary democracy - and both of them, their boss, and the whole Labor Government paid the price.

But (there's always a but) both of these democratic socialist politicians understood that Westminster-style parliamentary democracy is inherently hostile to anyone foolhardy enough to try and "buy back the farm".

That has not, however, prevented the Australian Labor Party from periodically giving it a go. Which is precisely what Connor and Cairns were doing: having a go at reclaiming Australia for Australians.

It is this propensity of the ALP to "go rogue" that has alarmed the USA ever since the days of Ben Chifley. That the Americans saw Gough Whitlam as a political leader in the Chifley tradition is not now disputed, nor is it controversial to say that the CIA took an unhealthy interest in Australian affairs from the moment it became clear that Australia was being led by a man who was willing to put Canberra's interests ahead of Washington's expectations.

That conservative Australian (and NZ?) historians have proved reluctant to view Australia's recent political history from this perspective is as unsurprising as it is regrettable.

Simon Cohen said...

I am intrigued to know how we are looking at these events from radically different perspectives.At the time I was [and remain]vehemently opposed to the actions of Fraser and the Liberal Party and Kerr's subsequent dissolution of Parliament and was heavily involved with the subsequent protests in Sydney.
But your "buy back the farm theory'is in this instance seriously flawed.Both Conners and Cairns were operating without Cabinet or Caucus consent which is why both were dismissed by Whitlam with the agreement of Caucus.
Perhaps you are suggesting they were suborned by the USA to do so.
No they were the authors of their own demise.
Perhaps you are suggesting that Cabinet Ministers can act on their own authority to borrow many billions of dollars[in today's money] without the authority of Cabinet or the Parliament.
It was not the Australian Labor Party that went rogue but two of its senior members.
And as a left wing historian I resent the slur that we are all conservative if we do not agree with your point of view which I confess I find very often based on what you believe rather than documented facts,

greywarbler said...

That's a bit black and white Simon Cohen.
How do you deal with facts that aren't documented? Things done, or said but carefully never written down or recorded. Can they be referred to as conjecture?

Some leaders are not leaving any paper trail; no sensitive material, letters, documents, memos, or emails available to be taken as evidence in a police case of some sort. How are you as a historian going to cope with that? Are we not to know anything about it?

Are you going to be in an uncomfortable position of knowing a lot of information from behind the scenes, and well-kept secrets, and be part of an in-group with information that the public should and would like to know, but there is no record of it to relate to.

And what about documented facts that some people know are half-truths, or said contingent to something that didn't go ahead, or were plain lies that couldn't be uncovered because of a secrecy act?

Charles E said...

Forget about history for a moment and reflect on the clear evidence today that the current government is not going to change much at all, and wisely so. They want to get re-elected.

It was only put together to 'improve' the current direction, not reverse it. So it has no mandate to head off into the blue.
So your suggestion Labour should break election promises is rash indeed. Is that not what you have spent the last 30 years lamenting about the Lange government?
No JA is basically conservative, like her mentors and Parker (I like him) and the current finance minister. Then there is Peters..
Evidence? The TPP is about to be signed with only cosmetic changes.
Indeed 'cosmetic' perfectly describes this government. All show, symbolisms, platitudes, talk fests and 'serious enquiries'. They are essentially fake progressives.
The previous government was the progressive one, in the true sense of the word, and this one will merely cruise on with the momentum of the last 9 years. Actually 18...