Money from Abroad: selling our land and water
It has been argued that Australia must welcome the sale of Australian land, such as the sale of Cubbie Station to China, because it brings in overseas investment money. Similarly, the reason that our governments regard our mineral deposits as a bonanza to be exploited and got rid of as quickly as possible, instead of regarding them as a store of real wealth to be drawn on only as needed for our own use, is because this policy brings in overseas money.
Allan Asher, ex-Commonwealth Ombudsman, recently said, “Australia simply wouldn’t exist if it couldn’t export to other countries, and import from other countries.”
While thinking about his statement, I have been trying to picture what would happen if, through some imaginary catastrophe affecting the rest of the world, Australia was cut off, and we had to manage without any overseas money.
Would we need to starve? No, we have enough land, and enough skill to provide ourselves with all the food we need.
Would we need to go without homes? No, we can find all the materials and skills required to build houses.
Would we need to go without clothing and household articles? No, we produce the raw materials and skills to manufacture them.
Would we be incapable of producing cars, trucks and farm vehicles? No, we have the materials and skills to produce them.
So, in this imaginary situation, with no money coming in from overseas, would it mean that we should resign ourselves to doing without the things we are capable of producing? Or should our Government do the obvious thing? Couldn’t it, through a Government Bank, issue a similar amount of money instead? It would enable goods and services to be distributed just as they are now. If this suggestion seems shocking, I pose a question. If money coming in from overseas is a GOOD thing, why would a similar amount of money, created here, be a BAD thing? The bulk of money today is only computer figures, so it is not difficult to issue, and, obviously, someone, somewhere, is in charge of deciding how much should be issued. Equally obviously, it is governments and banking institutions, with the advice of their economists, who decide what that quantity should be. The amount of inequality in the world shows that they do not always get it right.
In our imaginary scenario, clever accountants and economists, with the help of present-day statistic-gathering aids, should be able to estimate and advise the correct amount of money to be allowed into circulation in Australia; so that it would not be too much, causing inflation of prices, but enough to allow development of the things that need to be developed, and not so little that it would deny some people the right to take part in making use of the goods we need in order to have a good life.
There was a time when such a scenario was not entirely imaginary. In the early history of the Commonwealth bank (1912-1924) under the Governorship of Sir Denison Miller, it did function to a certain extent in this way, and its money-creating ability was used to help finance, at a very low interest rate, the 1914-18 war effort, the building of the Commonwealth railway across the Nullarbor, and to render assistance to primary producers, without leaving a large debt for the populace to pay. (See Peter Lock – “The Saga of the Commonwealth Bank”).
It is a shame that our politicians allow the sale of Australian land (and water!) and other intrinsically valuable natural resources, because they have been educated to believe that computer figures, transferred from overseas, are more valuable than those created here.
Doris Phelps is a member of ERA living in SA