This is why the Australian economy isn’t working…

By Andrew Mackinnon

The economy in Australia was going very badly last year before the bushfires started that the government lit to distract attention away from the failing economy and before the latest Coronavirus hysteria to provide a scapegoat onto which to project the blame for the failing economies all around the world.  In Australia, the banks create money when they lend and then charge interest on it. This is the same in most countries around the world. However, the citizenry is waking up to this scam and is therefore reluctant to borrow from the banks. This has caused the size of the money supply in Australia to decrease since money is created when the banks lend and since money is destroyed when principal lent by the banks is repaid. As a result, there is insufficient money in circulation to support economic activity in Australia.  This is why the economy is languishing.

In fact, Australian citizens were reluctant to borrow from the banks even back in the 1990s in the aftermath of the recession of 1989 to 1991.  The Australian government has always responded to this reluctance not by acknowledging that the interest charged on money lent by the banks that they create out of nothing is unconscionable and unjust, but by bringing new citizens into Australia via mass immigration in the hope that they would borrow from the banks to make up the shortfall in borrowing.  It has been doing this for the past thirty years.  We are now in a situation where the Chinese who have come into the country don’t want to be in debt; the Indians who have come into the country don’t want to be in debt and the existing Australian citizens certainly don’t want to be in debt either.  Nobody wants to be in debt and why would they?  People are not stupid, even if the Australian government and the Jewish-controlled media have deliberately made it very difficult to understand how the banking system in Australia actually works.

In Australia, when banks lend for any purpose, they create that money and the size of the money supply subsequently increases.  The banks debit their loans asset account for the amount lent to signify the debt owing to them and they credit their deposits liability account to provide their customers with the amount they have lent to them so that their customers can utilise those funds in the bank accounts that they hold with the banks.  When principal lent by the banks is repaid, the customer’s deposit account out of which the payment is made decreases by the amount of the principal repaid so that the money supply in Australia decreases by this same amount.  The customer also makes interest payments out of his or her deposit account in the course of repaying the money borrowed.  These payments are credited to the revenue account of the bank that lent the customer the money and are used to pay the salaries of bank employees, with the remainder constituting the bank’s profit, out of which dividends are paid to the shareholders of the bank so that they can share in this interest revenue also.

The Reserve Bank of Australia was established in 1959 via the Reserve Bank Act.  It commenced operation early the next year on 14th January, 1960, just over 60 years ago.  The purpose of the Reserve Bank of Australia has always been to maximize the interest revenue collected by the banks under its authority, which were first publicly owned then later privately owned by shareholders.

In 2015, in Australia, which had a population of about 24 million people at the time, about $30 billion dollars was paid to the staff who run the banks and another $30 billion was earned in profits for the shareholders of these privately-owned banks, all courtesy of the fraud of interest charged on money created out of nothing and lent to the citizenry.  That’s a total of $60 billion in one year paid in interest to the banks by Australian citizens on money that the banks created out of nothing and lent to them. It’s the equivalent of $3,185 paid in 2015 by every adult citizen of Australia aged 18 years and over to the banks in interest. Around 78.5% of the population of 24 million in 2015 was aged 18 years and over, being around 18,840,000 citizens.

97% of the money in circulation in Australia, constituting the money supply, is money created by the banks when they lend for any purpose.  The other 3% is physical notes and coins.  The majority of this 97% arises from mortgage lending.  The majority of the money that banks create is the result of mortgage lending.  Mortgage lending constitutes the majority of bank lending.  When a bank lends money to a customer as a mortgage with which to purchase real estate, the customer pays the overwhelming majority of the amount borrowed to the seller of the real estate that the customer chooses to purchase.  Apart from stamp duty paid on the real estate purchase by the customer to state governments, commissions paid to real estate agents on the sale of the real estate by the seller and perhaps renovations of the real estate purchased, carried out by the customer using part of the money they have borrowed from the bank to fund their purchase of the property, the only way that newly created money as a result of mortgage lending is going to make its way into the economy and into the hands of Australian citizens is if the seller whose house has been purchased as a result of that mortgage lending spends the money they receive as a result of selling their house.  If they predominantly invest the money in assets such as real estate or shares, then the majority of the money is not going to find its way into the economy involving the day to day transactions of the majority of Australian citizens.

This problem has been even further exacerbated by the inflation of house prices as a result of increased demand for housing via mass immigration and via concessions made to property ‘investors’ (who borrow from the banks so that they can ‘invest’) via negative gearing so that they will be able to afford the repayments on their mortgages for their ‘investment’ properties, which they otherwise wouldn’t be able to afford.  They wouldn’t otherwise have sufficient cash flow to afford the repayments.  As a result of the inflation of house prices, the proportion of money in circulation in Australia as a result of mortgage lending by the banks is even higher.

In Australia, we need a money supply in which a large proportion of the money supply didn’t come into existence as a result of lending.  There are activities that occur on a regular, consistent and ongoing basis in order to support the lives of Australia citizens, such as the growing and distribution of food, the production and distribution of electricity and the accumulation and distribution of water and gas, to name just a few.  These activities need to be supported by a large proportion of the money supply that didn’t come into existence as a result of bank lending but instead came into existence as a result of government spending over time, such as payment by the government of the salaries of citizens employed in the public service in Australia.

The problem that many Australian citizens are currently experiencing is that there is insufficient money in circulation as a result of a decline in borrowing by Australian citizens from the banks.  In addition, the supply of money that is in circulation does not offer stable support to their day-to-day economic activity.  Because 97% of the money in circulation is created via bank lending, the size of the money supply is in a constant state of change.  When principal is lent by the banks, the money supply increases in size.  When principal is repaid by borrowers, the money supply decreases in size.

In contrast, money that is in circulation as a result of government spending can only be taken out of circulation if the government decides to destroy money that it has collected via taxation because it believes that there is too much money in circulation which is causing excessive inflation of prices.

The way money is created in Australia needs to change.  The Australian government should be responsible for money creation, not the privately-owned banks.  The size of the money supply in Australia shouldn’t depend on citizens borrowing money.  The only entity that should have the authority to create money in Australia and control the size of the money supply in Australia is the Australian federal government which would create money via a publicly-owned Australian Federal Bank by spending it into circulation or lending it to Australian citizens or Australian businesses for any purpose, including mortgages.  The Australian Federal Bank would not charge interest when it lends, however it would need to charge a rate in the vicinity of 0.5% to 1% on all lending to cover the incidence of default on the loans by the borrowers.  This rate would be different for different types of lending, such as mortgages and business loans.  The sole purpose of this rate would be to cover the incidence of default on loans (ie. non-repayment of principal borrowed), not to profit from the lending.

There would have to be some mechanism for limiting government lending to the citizenry since the publicly-owned Australian Federal Bank would create all of the money that it lends so that the money supply increases when it lends. Unrestrained lending would lead to a rapidly increasing money supply and associated inflation of prices.

Citizens would be able to borrow in order to buy a house to live in and possibly a holiday house but they wouldn’t be allowed to borrow in order to buy a house as an investment to rent out in order to earn income. Investment would need to be funded out of savings, including houses and shares to name just two investments.

The amount that the Australian Federal Bank would lend to any given citizen for any given purpose, such as buying a house to live in, would be limited by factors such as the income of the citizen and the size of the deposit that the citizen has saved towards the purchase, with zero dollars obviously being the minimum possible size of the deposit saved. The Australian Federal Bank would decide upon the multiple of any given citizen’s income (such as three times) to lend to them for any given purpose, such as buying a house to live in or buying a motor vehicle.

If necessary, the Australian government could also create money and bring it into circulation in order to increase the money suppy by giving the money to the citizenry in proportion to the amount of net tax they’ve paid during their lives, defined as tax paid minus money received from the government in this manner as a result of money creation by the government.

The Australian Federal Bank would be run on a not-for-profit basis whereby the cost of running its operation would be covered by transaction fees and account keeping fees that reflect the true costs incurred by the bank to process transactions and maintain the accounts of Australian citizens, Australian businesses and other entities such as publicly-owned utilities, public service organisations and local government areas.

There would no longer be any need for the Australian government to borrow money by issuing government bonds to those from who it borrows, as is currently the case.  This borrowing needs to repaid with interest (ie. principal and interest) out of taxation revenue, paid by the citizenry, when the Australian government could easily create this money to fund its spending requirements without requiring the citizenry to repay it via taxation or pay interest on it via taxation.

Our current predicament in which privately-owned banks create money out of nothing when they lend and then charge interest on it is a Jewish fraud whose perpetrators are committed to protecting it at all costs.  The Coronavirus hoax has been instigated worldwide in order to provide a reason for the failing economies around the world which draws attention away from the real reason – insufficient money in circulation in countries all around the world as a result of insufficient borrowing from the privately-owned banks by citizens in countries all around the world who rightfully view the banks with distrust and disdain.

Providing a sound monetary system for the citizenry is one of the most important services that a sound government is obligated to provide.  There is absolutely no reason whatsoever why any money in circulation should obligate citizens to pay interest on it, whether interest to privately-owned banks or interest to bondholders.  When citizens pay interest to privately-owned banks as a result of money borrowed, they receive nothing of value in return, because the money lent to them was created out of nothing by the banks.  This is a cleverly-disguised system of slavery whereby the citizenry work to earn the money required to pay the interest without receiving anything of value in return for that money.  The recipients of the interest paid, being the bank employees and the shareholders of the banks, use the interest paid to buy the goods and services that the citizenry produce in the course of earning the money to pay the interest.  This is a massive transfer of wealth from those paying the interest to those receiving the interest.  Over the course of repaying a mortgage on a house, a borrower from a privately-owned bank under our current banking system pays in the vicinity of 80% of the principal amount borrowed in interest to the bank.  This borrower repays the principal amount borrowed and also pays an additional amount to the bank as interest equivalent to around 80% of the principal amount borrowed.

If the principal amount borrowed is $500,000, the total amount repaid to the bank over the life of the mortgage is around $900,000.  When the bank lent the $500,000 principal, a bank employee processed the paperwork and typed the $500,000 into a computer so that this money, created out of nothing with a few keystrokes, was available in the account of the borrower.  In return for this negligible amount of work to lend the $500,000, the bank is repaid $900,000, which includes $400,000 in interest.  About half of the interest of $400,000 is paid to bank employees as salaries and the remaining $200,000 is booked as profit, out of which dividends are paid to the bank’s shareholders.

We have been living under slave conditions for decades now.  The Coronavirus hysteria is intended to keep us in slave conditions by providing a reason for the failing economies around the world which distracts from the real reason – the Jewish fraud of interest charged by the banks on money created out of nothing when they lend.  The Jewish perpetrators of the Coronavirus hysteria intend to start new monetary systems in countries around the world in the aftermath of this hoax which similarly enshrine this Jewish fraud as their centerpieces.

Our fear of China is not loathing

Source: The Sydney Morning Herald

Author: Peter Hartcher

Date: 30th November, 2019

smh.com.au/politics/federal/our-fear-of-china-is-not-loathing-20191129-p53fiv.html

Comment from Andrew Mackinnon on this article:

The author of this article, Peter Hartcher, secretly has Jewish ancestry and secretly self-identifies as Jewish (like Scott Morrison and Ross Gittins, to name just two others) which is why, in spite of anything he writes pretending otherwise, he is absolutely committed to Australia being swamped as a result of mass immigration from China as a means of facilitating its inclusion in an Asia-Pacific Union, including China, India, Australia and all of the other Asian countries. An Asia-Pacific Union is required by the Rothschilds-led synagogue of Satan in order to establish world government ruling over the various intended unions of the world. (The synagogue of Satan also wants to establish a North American Union, including the United States of America, Canada and Mexico. It has already established a European Union, a South American Union and an African Union.)

Five years ago, there were Australian citizens complaining about mass immigration from China and about non-citizens being legally allowed by the Australian government to purchase and own real estate in Australia, such as citizens of China who are not citizens of Australia. They were unceremoniously ignored by the mainstream media in Australia, such as the Sydney Morning Herald, who took great delight in censoring the comments that these Australian citizens submitted for publication on their websites, by deleting them and refusing point-blank to publish them.

Five years later, now that a larger proportion of Australians have realised the manner in which their country has been trampled upon as a result of mass immigration from China and as a result of Chinese ownership of Australian assets, like real estate, ports and electricity infrastructure, the media sits up and takes notice. This article is Peter Hartcher’s attempt to pretend to care about the damage that Australia has sustained over the past three decades as a result of its entanglement with China – a communist country that ruthlessly dominates its citizenry and which habitually suppresses freedom of expression of Chinese citizens who adhere to the Christian faith.

Peter Hartcher asks, “What to do, exactly?”, in relation to China’s increasing domination of Australia economically through ownership of Australia’s real estate, ports and electricity infrastructure and culturally through mass immigration from China which has swamped Australia with Chinese and caused widespread congestion, as well as escalating house prices over the past two decades due to increased demand for housing from non-citizens of Australia, who have been legally allowed by the Australian government to own real estate in Australia, in spite of their lack of Australian citizenship.

“What to do, exactly?” It’s really very simple:

1. Prohibit non-citizens from owning real estate in Australia.

2. Deport non-citizens from Australia, including Chinese non-citizens.

3. Restrict immigration to people who can speak, read and write English and who aren’t of Chinese, Indian, otherwise Asian or African ethnicity and who aren’t Muslims. (Policy on refugees is separate and should include not participating in wars that create refugees, such as World War I, World War II, the Korean war, the Vietnam war, the Afghanistan war, the Iraq war and the Syria war, and helping refugees in their country of residence where possible.)

4. Stop all trade with China or limit trade with China to that which is in the best interests of Australia.

5. Buy back Chinese-owned assets in Australia, such as real estate, ports and electricity infrastructure.

The Goods & Services Tax in Australia (GST) is double taxation of income

By Andrew Mackinnon

The Goods & Services Tax in Australia (GST) is double taxation of income on which income tax has already been paid.  The government wasn’t satisfied with the income tax that citizens paid on their earnings.  It wanted more.  So, on 1st July, 2000, it introduced the GST to tax the income that the citizenry have left after they’ve already paid income tax.  This is an attack on the property rights of the citizenry over the income that they earn.  The citizenry earn income and are obligated to pay income tax to the government to fund their common needs.  One would hope that they have property rights over their remaining income, but no!  The government wants more and the citizenry are on the hook for 1/11 in GST of all of the goods and services they purchase with their after-tax income.

Life is too short for tawdry complexity, such as multiple taxes on the citizenry – income tax, GST, CGT (Capital Gains Tax), company tax and fuel tax.  There should just be one tax – income tax.

Capital gains tax is in direct opposition to property rights.  If somebody saves up some money and then invests it in shares (or anything for that matter), they quite obviously don’t have full property rights to it because if they later sell it for more than they paid for it, the government wants a cut of the gain via capital gains tax.  If they had full property rights to it, they could sell it and keep the full amount they receive for it without paying any capital gains tax.

Company tax should be abolished.  There should be no tax whatsoever on business profits (ie. sole traders, partnerships, companies, corporations et cetera).  Distributions made to owners of the business out of business profits (ie. proprietors, partners, shareholders et cetera) should be taxed as income of those owners of the business.

Fuel tax should be abolished, despite that it’s an effective means of funding road construction and maintenance.  Everybody in society benefits from roads and the transport of goods that they make possible, including those who don’t drive vehicles, so roads should be paid for out of income tax.  Just like the GST, fuel tax is double taxation of income since it’s paid for by the citizenry out of their after-tax income.

Who wants to work more than one day out of five to support the needs of the nation via income taxation?  It’s not necessary.  There should be a flat rate of income taxation of no more than 20% on all income earned above the tax-free threshold.  That’s even progressive.  With a tax-free threshold of $18,200 per year, somebody earning $40,000 per year pays 10.9% of their income in income tax, whereas somebody earning $90,000 per year pays 16.0% of their income in income tax.  As somebody else has well said, there should be no deductions allowed from income.

If anybody wonders how we could possibly fund our common needs with a flat rate of income tax of 20% on all income above the tax-free threshold, I’ll tell you.  Don’t provide the entities responsible for delivering government projects with super profits, such as the $50 billion that the federal government committed for a fleet of twelve submarines earlier this year.  Start looking at the largest amounts to find waste in government spending and work your way down – all the way down.  Government spending could easily be reduced by 60% with no reduction in the quality of government services provided.

Banking, water, electricity, gas, telecommunications and the postal service should all be publicly owned and charged to the end-user citizenry at cost so that no income tax would be required to fund the operating costs of these essential services.

In the case of banking, no interest would be charged on lending for any purpose, however a rate of less than 1% would be required on all lending to cover the incidence of defaulting loans.  The operating costs of what would be the “Australian Federal Bank” could be covered by transaction fees which would be restricted to the actual costs incurred by the bank to process the transactions of the citizenry.

Half of the funding for hospitals should come from income tax.  The other half should come from the end-users at cost – the patients.  Similarly, half of the funding for schools, TAFE (Technical and Further Education) and universities should come from income tax.  The other half should come from the end-users at cost – the parents of the students and the students themselves.  Other government services like the legal system, the police force and defence would be funded via income tax.  Following is the full list of government services, together with the sources of their funding that I propose.  It’s probably not exhaustive.

> Local Government – Local Government Rates

> Local Parks – Local Government Rates

> Local Waste & Recycling Collection – Local Government Rates

> Federal Airports (Currently privatised) – User Pays – ?

> Federal Banking System (Currently privatised) – User Pays – Transaction Fees

> Federal Buses – User Pays – Ticket Cost

> Federal Department of Maritime Vessels – User Pays – Maritime Vessel Registration

> Federal Department of Motor Vehicles – Federal – User Pays – Motor Vehicle Registration

> Federal Electricity (Currently privatised) – User Pays – Electricity Bill

> Federal National Parks – User Pays – Entry Cost

> Federal Ports (Currently privatised) – User Pays – ?

> Federal Postal System – User Pays – Postage Cost

> Federal Railways – User Pays – Ticket Cost

> Federal Telecommunications (Currently privatised) – User Pays – Telephone Bill

> Federal Water & Sewerage – User Pays – Water Bill

> Federal Hospitals – Half Income Tax, Half User Pays

> Federal Schools – Half Income Tax, Half User Pays

> Federal TAFE – Half Income Tax, Half User Pays

> Federal Universities – Half Income Tax, Half User Pays

> Federal Border Patrol – Income Tax

> Federal Customs – Income Tax

> Federal Defence – Income Tax

> Federal Department of Foreign Affairs – Income Tax

> Federal Parliament – Income Tax

> Federal Treasury – Income Tax

> Federal Fire Service – Income Tax

> Federal Legal System – Income Tax

> Federal Police – Income Tax

> Federal Prisons – Income Tax

> Federal Roads – Income Tax

> Federal Welfare – Pensions – Income Tax

> Federal Welfare – Unemployment Benefits – Income Tax

We don’t need state government.  We only need federal government and local government.  The Australian Capital Territory has already had its shot at hosting the federal government.  The results have been disheartening, to say the least.  The location of the federal government should be moved to somewhere more uplifting like the Sunshine Coast, provided the locals actually approve.  They should get a say.

The only way I can think of paying off the current gargantuan government debt to bondholders is “monetising the debt”, whereby the federal government simply creates the money needed to pay it off.  I believe that this enormous debt is a trap which has been deliberately set for the citizenry over the past three decades and longer.  Perhaps this monetisation could occur in many stages to stagger its inflationary effect due to the associated increase in the money supply.

Economic policy in Australia has been dysfunctional for decades – driven by opportunistic expediency instead of sound reasoning governed by a sound set of principles.  Nevertheless, it’s not too late to fix the desperate mess this country is in.