After studying commerce at the University of Southern Queensland, instead of working as an accountant, Robbie joined the CEC, now Citizens Party, as a full-time staffer in its new HQ in Melbourne.
In the 30 years since, he has worked as a researcher, media liaison, campaigns director and research director, with a focus on Australian political history and especially the history of the Commonwealth Bank.
Robbie has been an active campaigner and has been at the forefront of many over the last decade, including:
- a national bank
- a Glass-Steagall separation of Australia’s bank
- stopping the bail-in of Australian bank deposits, in which he worked closely with my office
- reforming Australia Post and a post office “people’s bank”
- justice for the hundreds of thousands of victims of Australia’s banks and financial institutions and reforming the financial regulators
Transcript
Speaker 1:
You’re with Senator Malcolm Roberts on Today’s News Talk Radio, TNT.
Malcolm Roberts:
Welcome back to Today’s News Talk Radio, tntradio.live. I want to welcome my second guest now, Robbie Barwick. I’m very proud to have worked with Robbie and his organisation, the Citizens Electoral Council. Welcome, Robbie.
Robbie Barwick:
Hi, Malcolm.
Malcolm Roberts:
I hope you’re listening to the first hour.
Robbie Barwick:
I was. I loved every bit of it. That was excellent.
Malcolm Roberts:
I’ve got a question for you before we take off, but first, I want to give you a proper introduction. So, Robbie studied commerce at the University of Southern Queensland. Instead of working as an accountant, Robbie joined the Citizens Electoral Council, now, the Citizens Party, as a full-time staffer in its new headquarters in Melbourne. In 30 years since then, he has worked as a researcher, media liaison, campaigns director, and research director with a focus on Australian political history and especially the history of the Commonwealth Bank. He knows government. He knows banking. He knows economics, and he’s a first rate individual. If he says something, it can be trusted. Robbie’s been an active campaigner.
Malcolm Roberts:
When I say campaigner, not electoral campaign, although he was a Senate candidate at the last election a couple of weeks ago. Robbie’s been an active campaigner working on many campaigns and it’s been at the forefront of the last decade, including a national bank, Glass-Steagall separation of Australia’s banks, stopping the bail-in of Australian bank deposits in which Robbie worked very closely with my office and with me, reforming Australia posts in a post office people’s bank, justice for the hundreds of thousands of victims of Australia’s banks and financial institutions, and reforming the financial regulations. So, welcome, Robbie. You’ve just done a marvellous job. You continue to do a marvellous job.
Robbie Barwick:
Oh, thanks, Malcolm. That’s very kind, coming from you.
Malcolm Roberts:
What do you mean coming from me?
Robbie Barwick:
You do marvellous work too, mate.
Malcolm Roberts:
All right. Thank you. Well, the key is I’d say that we share, that we both look upon ourselves as serving the people and that’s what I could see coming out of Ellen’s work. Before we get into questions about banking and currency and money, what’s something you appreciate, Robbie?
Robbie Barwick:
A good sleeping. No, I’ll add to that, outspoken senators like yourself and a few others, but I reckon, in my work, I always value meeting ordinary people around Australia who can feedback to me their direct experience of the economy of the world, their life, how it works. I never cease to be amazed, Malcolm, at how much Australia relies on ordinary people who are prepared to go that extra mile to keep the system going keep in their own little way. The nurse who’s worked a double shift and she’ll stay on another 15, 20 minutes because there’s not enough people there. And this is all unfunded stuff, right?
Robbie Barwick:
The people in industry who make sure that machine works, et cetera, because without them, we don’t have an economic system that actually goes the extra mile for them, that makes sure those things happen. So much of our essential services are held together with the equivalent of elastic bands and sticky tape, which is the efforts of the people who provide them. And the most recent one I discovered, which we worked together on as well, was how licenced post officers provide our postal services. And these are all small businesses working very, very hard for peanuts, right around Australia, very tough business conditions and they provide an essential service for Australians. So, that’s what I appreciate more than anything.
Malcolm Roberts:
Well, yes. And the only thing I would disagree with you on that and I do want to acknowledge the licence post office and especially Angela Cramp. The only thing I disagree with you is the term ordinary. I would call them and I do call people everyday Australians, because there’s nothing ordinary about any one of them.
Robbie Barwick:
That’s true.
Malcolm Roberts:
I know what you mean by ordinary. You mean average, typical, or every day. I know what you mean.
Robbie Barwick:
They’re not ordinary that’s for sure.
Malcolm Roberts:
No. And the whole economy based on them and what I think it boils down to, Robbie… Correct me if I’m wrong, you’ve been around a lot as well. … is that it boils down to a four letter word starting with C. They care. When you put a human in a position, most humans, almost every human, almost that they matter, then they show that care. The other thing about humans is that we know there are some fraudsters. We know there’s some crooks. There’s some dictators.
Malcolm Roberts:
We’ve had our Hitlers. We’ve had our Joe Bidens. We’ve had our globalist predators. We understand that, but the majority of people are honest and that the two words, care and honest, leave us vulnerable because most of us are caring. Most of us are honest and we think everyone else is like us. And so, when we are caring and honest, we can become vulnerable to the used car salesman, to the tyrannical global bankster, the global predator who wants to control us. And we become victims in a sense.
Robbie Barwick:
Yeah, that’s true.
Malcolm Roberts:
Yeah. So, our strength is also our vulnerability. Now, listen for our listeners, they won’t know this name that I’m about to use, Craig Isherwood. He’s a Citizen Electoral Council National Secretary when he wrote an astounding paper, very simple, but for very, very powerful paper called, “The Australian Precedents for a Hamiltonian Credit System”.
Malcolm Roberts:
Now, Robbie gave me that paper when we were starting to discuss this show, Robbie gave me that paper and I read it on my way to Darwin for holiday. And I read it again on the way back. And the second time I read it, I got so much more out of it. Now, Ellen hit exactly the first question. If you don’t mind, Robbie, this is the question I had. If you don’t mind, we’ll park our earlier discussions and just go through this paper and see where we go.
Robbie Barwick:
Sure.
Malcolm Roberts:
Okay.
Robbie Barwick:
Let’s do that.
Malcolm Roberts:
I knew you’d be up for it. Okay. So, the very first point that I wrote as a key point is that Reserve Bank of Australia admitted to me in Senate estimates hearings that money is created in electronic journal entries, Ellen Hodson Brown reiterated that. She confirmed it. The question that I said was, “Who creates money?” It’s not whether it should be created or not. Clearly, for the system of credit, it needs to be created. Otherwise, people can’t invest. So, it needs to be created. The key question then is, “Who should create it?” And that’s exactly where Ellen got with her comment as well. That’s the key question. Is that the key question? Who creates credit?
Robbie Barwick:
Who controls the creation of credit? One thing to understand the financial system is so fluid and there’s so many clever people out there, Malcolm, always looking for an angle. You can forbid private banks from creating credit and they’ll find a way to create it anyway. So, your local store creates credit when they give you credit by selling you stuff something on credit. Credit is a pretty basic concept, actually. So, it’s more about who controls that. And that’s where the best form of control. Apart from having certain well-regulated banking system, the best form of control is to have a public banking presence that defines the terms for the whole system.
Robbie Barwick:
And so, the private banks have to work within those terms, because if they stray too far away from that, they won’t be competitive with the public bank, right? And so, the public bank can make sure that the creation of credit is fair, it’s productive, et cetera. And the private banks know that well, okay, they need customers. If they don’t have depositors, they’re not going to be banks. There’s a standard that they have to live up to. That’s served Australia very well for a long time, but it really does come down to the control. Who controls it? And my favourite quote, which isn’t in that Craig Isherwood article, although it might be, but the Labour Party once, upon a time in Australia, fought very hard on these issues.
Robbie Barwick:
We call it the old Labour position was about. Who controls money? And they called it the money power. Who controls the money power? And this became a name for the private banks. They called them the money power. They had this chokehold over Australia and they said the money power has to be brought under the control of the people. And by the people, it means the democratically elected government.
Robbie Barwick:
And John Curtin said in 1937, when he launched labor’s election campaign that year, which was seven years after the beginning of The Great Depression and this period of intense upheaval where the role of money was central, he demanded labour will legislate until the Commonwealth Bank would be able to control credit of the nation, rates of interest, direction of general investment, and currency relations with external markets. And he concluded, he said, “If the government of the Commonwealth deliberately excludes itself from all participation in the making or changing of monetary policy, it cannot govern except in a secondary degree.”
Robbie Barwick:
Meaning someone else is in charge of the economy, not us, not the people through their government. And so, what he was saying, it’s not just a good idea. It’s a question of sovereignty. A nation can’t be sovereign if the people through their elected government doesn’t control the credit of the nation.
Malcolm Roberts:
Okay. So, is it fair to summarise it by saying whoever controls the money creation controls the country?
Robbie Barwick:
100%.
Malcolm Roberts:
That’s what I thought you’d say.
Robbie Barwick:
There is no more definitive power in a nation than that.
Malcolm Roberts:
And as you pointed out, it’s all about sovereignty as well as economics. And to me, it seems that my job as an elected representative is to serve the people. If you’re a grocer at a corner store, your job is to serve the people. If you’re a policeman, your job is to serve the people. Now, policeman’s job becomes a little bit more difficult because at times he has to apprehend someone and bring justice or at least arrest them to try them before the courts to ensure justice is conducted. But that service that’s the critical thing. At the moment, correct me if I’m wrong, I’m looking for your view, the people serve the banks rather than the banks serving the people. Is that a fair statement?
Robbie Barwick:
That is a fair statement. You can read a version of the explanation or the description of this in Adele Ferguson’s book that she wrote just towards the end of the Banking Royal Commission in 2018. And you’d be familiar with Adele Ferguson, Malcolm, the investigative journalist in Australia.
Malcolm Roberts:
Yes. Yup.
Robbie Barwick:
She had a lot to do with highlighting bank issues that led to the Royal Commission, but what she documents in that book, Banking Bad, I think it’s called, a play on the show Breaking Bad, is how from the time of the privatisation of the Commonwealth Bank onwards, so the mid-1990s, the model of banking in Australia changed from one in which… Don’t get me wrong. I don’t want to overstate it. The private banks were never perfect, but there was a general understanding that the private banks made their profits from the credit that helped their customers make their profits, right? They rightly got a cut from helping their customers get wealthy and preserving their deposits.
Robbie Barwick:
The model changed in the mid-90s to one in which the public, the customers became cows to be milked by the banks. Everything was about fleecing them, death by a thousand cuts. What can we sell these customers? What can we saddle them with so that through charges and interest rates, et cetera, we can just keep bleeding them for our profits? And that led to the abuses, that led to the Royal Commission.
Robbie Barwick:
And now, this became a standard model across the board from the mid-90s on, where the public absolutely served the banks, but a variation of that has always existed with private banks and banking. It’s always come up periodically in the rural debt crisis that erupt periodically around droughts and things, where it becomes a debt problem. And suddenly, instead of the banks being flexible, they’ll come in and mass foreclose. And you conducted an inquiry into that back in… Was it 2016, something like that?
Malcolm Roberts:
2017.
Robbie Barwick:
20 17. What’s happened in Australia with agriculture is we’ve gone from having something like 200,000 farmers in 1969, who between them had a billion dollars in debt to probably less than 30,000 farmers today who have $70 billion in debt. And now, the farmers do not get to accrue wealth. They’re so heavily indebted that all they’re waiting for is the next crop to be able to pay off or pay down their last lot of debt right before they incur more for the next crop. And they really have become debt slaves. And there’s a variation of that across the board in the way the economy where it’s unfortunately.
Malcolm Roberts:
So, I can recall reading a very short simple book. It was called End the Fed, the Federal Reserve Bank, End the Fed by former Senator Ron Paul in the United States, who was the only one really to hold the government accountable, held the Federal Reserve Bank accountable, wanted an audit of the gold reserves, et cetera.
Robbie Barwick:
Audit the fed. Yup.
Malcolm Roberts:
Yup. He said that every major recession since 1913 is directly attributable to the US Fed. Every major war since 1913 is directly attributable to the US Fed. Boom and bust cycles help the banks because they flood the joint with credit. Everyone goes hog, wild, and credit and overcommit themselves, and then they tighten it up. And next thing, people have to foreclose on their asset. The banks foreclose on their assets. So, private banking has failed repeatedly. Yet the banks continue to spread the bullshit that they make their money on the difference between what they charge for interest and for loans versus what they pay for deposits. Complete rubbish.
Malcolm Roberts:
The banks make their money by creating money, giving credit. And credit is essential, but they seem to have powers such that there’s no accountability. What I’m reading in Craig Isherwood’s article is something that I concluded as well, that if you have a public bank, it keeps the private banks honest. You’re not saying get rid of private banks. You’re saying let’s have both and then we’ll have accountability. Is that basically it?
Robbie Barwick:
Yeah, 100%, in any sector. I think this applies to insurance as well. Queensland for a hundred years had a state government insurance office, which was incredibly important at providing insurance that the private insurers wouldn’t provide, but also setting a standard that the private insurers had to meet if they wanted to have customers. That was called SGIO. But for banking, it’s absolutely essential. There’s this enormous power to do with money, right? Where you get to create credit and then charge interest on it and direct where that credit goes and have people come to you cap in hand begging for that credit, because it is, as Ellen pointed out, even if you had a gold currency, that there’s never enough of the actual currency for the economy to work, right?
Robbie Barwick:
The credit is the lifeblood of the economy. So, these private banks, they get to determine all that. If there’s no public alternative that says, “Okay, we are going to make decisions slightly differently for the private banks,” the private banks naturally are accountable to shareholders and they want them to maximise their profits. So, they’re going to pour their credit into things that maximise their profits. They’ll enjoy the boom. They’ll monopolise the boom. And when it goes bad, then they will cut off that credit, foreclose on everybody, call in all those loans. So, they never lose. It’s the poor mug customer that loses and that’s how the private banks work, because their solvency and their profits come first.
Robbie Barwick:
Let us use the power of this credit as a public entity to do the things that actually benefit the economy, benefit the people. Let’s make low interest loans to build infrastructure, to keep important industries solvent and productive, not just solvent but productive. So, agriculture, manufacturing, et cetera. Every loan that public bank makes, Malcolm, will also be profitable, but you don’t have to have quite as much profit. You don’t have to have charge quite as much interest, right? This makes a world of difference. And in fact, because I’d hoped you read Craig Isherwood’s article, I was just brushing up on it before. And they pointed out there that one of the first things that Commonwealth Bank did when it started was the Melbourne Board of Works wanted a loan.
Robbie Barwick:
And in those days, 1913, the only place a government entity like the Melbourne Board of Works could get a loan was from London, the private banks in London. In addition to stiff underwriting charges, the best they could do, the private banks in London, was 1 million pounds at 4.5% interest. So, instead, they turned to Denison Miller, the Governor of the Commonwealth Bank and he offered them 3 million pounds at 4% interest, a lower interest rate. And when asked where the very new bank got all this money from, Denison Miller replied, “On the credit of the nation, it is unlimited.” And under Denison Miller, you’ve read the article, the first decade under Dennison Miller, this bank was spectacular.
Robbie Barwick:
And all it did was use its power as a bank, but for the public benefit. Everything was profitable. It just didn’t have to make a massive profit and Australia benefited from that. And that’s why this is, well, as King O’Malley said, the key pin or the master key to the financial system. This should be the master key. This is what solves all those various problems in the financial system.
Malcolm Roberts:
Well, I’m glad you raised that, Robbie, because there were so many things in Craig’s article. The first publicly owned-
Robbie Barwick:
Shipping line.
Malcolm Roberts:
… shipping line in Australia was created through funding and support from the Commonwealth Bank. The Light Horse Brigade was funded by the Commonwealth Bank. There were so many other infrastructure at a local government level, state government level funded by the Commonwealth Bank. It got us on our feet. It basically built us, and it did that by enabling credit. And it took that control out of the hands of the private banks that screw us and keep us under their control, rather than making money out of making us wealthy as a country.
Robbie Barwick:
And importantly, in those examples you’ve given, the private banks, including most importantly, the foreign private banks, the London banks that controlled us, the way the Commonwealth Bank functioned under Denison Miller showed this claim that you would’ve heard in parliament a thousand times, Australia depends on foreign investment. No, we do not.
Malcolm Roberts:
Thank you.
Robbie Barwick:
We do not. There’s no excuse for $1 of foreign debt.
Malcolm Roberts:
Another example was the second World War and we were poor in terms of having ability to make machine tools. Next thing that grew out of nowhere, because Australians are very resourceful. We’re very clever, very capable, very innovative. We punch above our weight. We’ve been held back by privately owned banks. And when people were given the free rein, look what we did.
Robbie Barwick:
Yeah, exactly. So, the thing with wars, it’s interesting. People like to discount the way a war economy works because of those are special circumstances. That’s what the banks say, right? The only thing that’s special about a war is in the emergency of a war conditions, the governments turn to a public banking option like Australia did in both World Wars, because a war is on the private banks aren’t game to say anything, right? They have to be seen to be supporting the effort. After the war, they go back to attacking the government. No, no, no, you cannot do that. The power of credit has to be back in our hands. So, during the war, when you see what the banks was able to do in both wars, it was extraordinary and it’s also an example.
Malcolm Roberts:
Can you hold that thought and we’ll discuss that very issue after the ad break?
Robbie Barwick:
Sure.
Malcolm Roberts:
Stay tuned. We’ll be right back with Robbie to discuss some really fundamental stuff.
Malcolm Roberts:
Right. Robbie, over to you again, because you’re going to explain how the availability of credit during the war solved The Great Depression. Is that correct?
Robbie Barwick:
Well, no, no. The Great Depression impression was the exception. They didn’t do it in The Great Depression. They did it in the wars.
Malcolm Roberts:
That’s right.
Robbie Barwick:
So, the first one was World War I and you gave some of those examples there, but it was things like the Commonwealth Bank didn’t fund the war per se. It funded part of it that you gave the example of the Light Horseman. And the story of the shipping line was quite extraordinary because we were stranded as a country. All the ships were controlled from the British as well and the Prime Minister Billy Hughes said, “We need ships.” And he said to treasury, “Give me £2 million.” There’s 15 ships available here in London, but he wanted to keep it secret because if it became public, that the Prime Minister of Australia was in the market for 15 ships for Australia, the British privately controlled shipping lines would’ve blocked the sale.
Robbie Barwick:
They didn’t want that. They didn’t want a government shipping line in Australia, right? So, he called back to the treasury in Australia and said, “I need £2 million.” They called Denison Miller and the money was there. He just made the money available. They bought the ships. And that was the beginning of the shipping line that eventually became Australian National Line. So, there were some things they directly did, but what they otherwise did was look after the economy in those war years. And one of the more extraordinary things was the commodities pools that they set up, Malcolm, for things like wheat and other agricultural products that we were producing that in those days we produced… You had a small population.
Robbie Barwick:
We produced for the British market, et cetera, but that was all disrupted. So, they created a pool and the Commonwealth Bank funded that. So, the farmers, when they brought their wheat crop in, they got paid straight away anyway, even though the wheat hadn’t been sold yet, because they’re putting in a pool and then the Commonwealth Bank managed the sale of that wheat over time, but the important thing was to keep the farmers going. So, they all were still productive because there was a war and that’s the thing that it could do. It funded 60 local governments around Australia. And you would’ve noticed that a lot of that funding was in things like very early electricity infrastructure, basic electricity infrastructure, small hydropower plants, this thing.
Robbie Barwick:
This was the early industrialization of Australia. The private banks weren’t going to fund that. These councils could turn to the Commonwealth Bank and the Commonwealth Bank funded it for them, important investments. Malcolm, because in the old days, things were built better than they are today. If you go to some of these places in the list, a lot of this information comes from a great book that was written on the 10th anniversary of the Commonwealth Bank to document all these amazing things it did.
Robbie Barwick:
And if you go to those places that it lists what the Commonwealth Bank invested in this infrastructure, you’d probably find a lot of that infrastructure is still there and still working order to this day, essentially later. This was the early economic development of Australia. World War II, even more spectacular and it was because of the Commonwealth Bank. Until John Curtin and Ben Chifley took over the government in 1942, the Commonwealth Bank had sat there idle as it had done all through the ’30s.
Malcolm Roberts:
Would it be fair to say that the private banks from Wall Street, London, the City of London were actively working with the Labour Party and its so-called conservative opposition to destabilise and undermine the Commonwealth Bank? Rather than just sitting there and used, it was being undermined.
Robbie Barwick:
No, 100%, but this is where a specific understanding in history is important. I know why you say that because of what you know about the Labour Party today. The Labour Party back then was a very different animal. It was the Labour Party that was fighting for the bank to be used properly. It was the Menzies’ liberals who were completely in the pockets of the private banks in London who made sure it wasn’t. And in the early ’30s, when they needed it the most, we had 25% male unemployment in Australia, Malcolm.
Malcolm Roberts:
Geez.
Robbie Barwick:
We were being crushed in The Depression and there was a proposal to get The Commonwealth Bank to issue £18 million. Six million pounds was to go to farmers. Twelve million pounds was to go to public works. That was the proposal of the labour government then in 1931 and the former Queensland premier, who was a treasurer named Ted Theodore. The Head of the Commonwealth Bank, so Robert Gibson said, “You are asking me to inflate the money supply. I tell you, I bloody well won’t.” Now, forget what he said about inflation, because that’s a longer story. It was quite overstated. The issue there was a public servant defied the order of the government that owned his bank. He was just the manager of it, right?
Robbie Barwick:
And this led to the 1937 Royal Commission on Banking. And that Royal Commission ruled that that public servant was wrong. He should have followed the orders, but why did he defy it? Because in those years, the bank was run by a board that he was the chairman of and all those boards were representative of the private sector. And they were very much in the pockets of the private banks who didn’t want the Commonwealth Bank to function like it had function under Miller. As soon as Miller died in 1922, I think it was or 1923, Malcolm, there had been a single governor up to that point. They replaced him with the board.
Robbie Barwick:
So, you would never have someone of that noise again, because they had the right person in the right place at the right time, who could show what the bank would do. And they had a board which was a representative of private banks and private industry and they made sure in the next 28 years, it didn’t do anything. So, you’re right. They were actively suppressing it. And it was the Labour Party that fought very, very hard over this and people like John Curtin was at the centre of those fights. So, when he came to power in 1942, he knew he had a tool at his disposal, which was the Commonwealth Bank. And in those years from 1942 to 1949, when Labour lost office, those seven years are the high watermark of the Commonwealth Bank.
Robbie Barwick:
They showed what the Commonwealth Bank is capable of, even more extraordinary than World War I, because it also had the powers of a central bank by then. It got to tell the private banks directly what to do, not just compete with them. And the combination led to the greatest economic transformation in a short period of time probably the world had ever seen. We were an agrarian backwater economy and that’s why that machine tool example is such a good one. In three years, we went from an economy that relied on imports for everything. We mainly provided raw materials to the British, et cetera. We went from that to an economy that could literally produce anything. And machine tools are very complicated.
Robbie Barwick:
They are the machines that make the machines. They represent how really productive an economy is. We went from importing them all to making our own. There was nothing that was beyond the capabilities of Australians and it’s instructed the way the Labour Government did it because they weren’t ideological, Malcolm. They knew they had the Commonwealth Bank to fund it, but who did they turn to run the actual wartime mobilisation? They turned to a blue blood to them, someone that is socialist. The Labour Party was socialist, et cetera. They turned to a captain of industry Essington Lewis from BHP.
Malcolm Roberts:
Oh, yes.
Robbie Barwick:
And in those days, BHP was not a mining company, right? It was a mining company, but it was a steel maker. That’s what BHP was. And Lewis ran it and he had developed a really good relationship with Ben Chifley, but nothing would’ve happened without the funding and the Commonwealth Bank provided that. And it was extraordinary. We could produce ships, we could produce planes, we could produce machine tools. We could do anything. By the end of the war, we were approaching something like the high 20s as a percentage of our economy of manufacturing.
Robbie Barwick:
And by the late ’50s, it peaked at the mid-30s. About 33% or 35% of our economy was manufacturing. Today, it’s less than 5%. It’s tiny. It’s pathetic. It’s been smashed completely, right? But it was a transformation that was powered by the Commonwealth Bank because the long term investments that it required, the Commonwealth Bank was able to do that. And in this article, we show the charts of government spending and how the money issued by the Commonwealth Bank fueled that government spending.
Malcolm Roberts:
Let me just repeat the title of that article. It’s called, The Australian Precedents, E-N-T-S, for a Hamiltonian Credit System. The author’s name is Craig Isherwood, I-S-H-E-R-W-O-O-D. At the time, he was the Citizens Electoral Council National Secretary. Where can they get that article? Where can people get that article?
Robbie Barwick:
That’s on our website, www.citizensparty.org.au. If it’s hard to find, they can call out tollfree number 1800-636-432 and ask for a copy of it.
Malcolm Roberts:
Okay. Just a quick little snippet, I’ve just had this realisation that Menzies has given the credit for opening up Australia, but what I think had happened now is… Some lights dawned on the wood heap in my brain. … Labour as a result of the second World War built the capacity, our productive capacity for manufacturing. After the second World War, Europe was devastated. Japan and China were devastated.
Malcolm Roberts:
The only large manufacturing facility available was in America, which had not been attacked apart from Pearl Harbour, and good old Australia where we had the raw materials as well. So, we actually then put that productive capacity to work. And it wasn’t Menzies at all who deserves the credit. It was really the Labour Party under Curtin and Chifley. Is that right?
Robbie Barwick:
I’m firmly of that view. Now that said, I will give Menzies the credit for not stuffing it up as such, though I’ve got some specific criticism.
Malcolm Roberts:
Well, hang on, hang on. He bought in the double taxation legislation in 1953, which enabled foreign and Maldives nationals to completely avoid paying company tax in this country, which has really hurt us long term.
Robbie Barwick:
No, no, no. There’s a lot of those things that he does. Don’t worry, you got to hold me back not to blast Robert Menzies, but what I mean by not stuffing it up is by the time Curtin and Chifley, the government, left office in 1949, the zeitgeist had changed. The public expectations had changed. In fact, it’s known as the post-war settlement. This was universal around the world.
Robbie Barwick:
The kind of economic policy represented by what Roosevelt had done in America in the 1930s that Ellen Brown described with the reconstruction finance corporation using a public bank to invest in infrastructure and industry. We did it in World War II. You know the first thing the Labour Government in Britain did after World War II when they replaced Churchill was nationalise the Bank of England. Up until then, the Bank of England had been a privately owned bank for 150 years.
Malcolm Roberts:
From 1694 when it was formed, it had been a private bank.
Robbie Barwick:
Exactly. The first thing they did was nationalised it because they were copying Australia’s success, right? We set the tone and the expectations changed. So, when Menzies took office, he knew that he couldn’t buck that system now. People expected that there would be this public presence in the economy, but I’ll give you an example of why Menzies doesn’t deserve very much credit at all. The great Snowy Mountains Scheme, the defining infrastructure project of our history. Robert Menzies boycotted the opening of that in 1949. He opposed it. And only when it was immensely popular while he was prime minister, because it was Chifley who started it, he then went to the opening of the first stage, the second stage, et cetera, to capitalise.
Robbie Barwick:
But the fact he boycotted it was an ideological position he had and he even tried to sabotage it. He didn’t succeed, but that project was supposed to be funded by the Commonwealth Bank, Malcolm. And when he took office in 1949, he scrapped all that and he would only fund it out of revenue, the annual budget. And even then, he made the project, the Snowy Mountains Authority pay 5% interest to the government on the money that it gave them to fund the project, right? Whereas that could have all been done off the annual budget through the Commonwealth Bank, which is what the original plan had been.
Malcolm Roberts:
As I understand it, Robbie, Menzies tried to undermine the Snowy Mountains Scheme and McKell stood up to him and gave him hell and read the right act to him. Menzies pulled back his horns, but didn’t help it too much.
Robbie Barwick:
No. That would make sense, because I was going to say, the other man in the Menzies era who deserves credit for keeping him in line was Black Jack McEwen. Because Curtin and Chifley created the productive capacity of Australia. Black Jack McEwen did everything in his power to protect it, to make sure it survived, it lasted, right? In this era that we are in, the neoliberal era, all those policies that these guys stood for, they’re criticised for. I mean these liberals are so extreme now. These neoliberal liberals that you’ve been dealing with in parliament are so extreme now that by their standards, they would call Menzies a socialist. And of course, Menzies is the last thing. Menzies was a socialist.
Robbie Barwick:
It’s just that Menzies had to accept and everyone accepted in those days that you needed to have a public presence, including a public bank. The existence of the public bank, even when Menzies neutralised it a bit in 1959, he split the reserve bank function off from the Commonwealth Bank to weaken its power. Even when that happened, though, just the existence of the Commonwealth Bank and the Commonwealth Development Bank, as something the private banks had to compete with and the Commonwealth Development Bank was able to issue long term credit. It was able to provide flexible lending for farmers and all those things. It still performed a very useful function in the economy that helped stabilise the economy until Keating finally scrapped it in the mid-90s.
Malcolm Roberts:
Something for you to think about, we may or may not discuss it after, I’d like to continue with the priorities on the banking. But to me, the Labour Party is the party in the history. Even though I disagree with this ideology, the Labour Party in the era of Curtin and Chifley and some of the early Labour Party prime ministers were dinky-di. They were fair dinkum Australians. They were doing what they thought was the best for the country. Now whether you agree with them or not, that’s another thing.
Malcolm Roberts:
But what I’m saying is they were genuine. I do not see that in today’s Labour Party. They do not look after the worker. Their policies are selling out to the globalists. They’re completely enemy of the worker. Same with the liberal, the modern liberals are really socialists in many ways, because what I see, Robbie, is both Labour Party and the Liberal Nationals cow towering to the major banks and doing the bidding of the banks and the globalist predators through the UN, the World Economic Forum. That’s where we’ve gone. So, Menzies was far, far better than today’s liberals. Curtin and Chifley were immensely better than today’s Labour Party.
Robbie Barwick:
They were patriots.
Malcolm Roberts:
Thank you.
Robbie Barwick:
They fought for sovereignty. And yeah, in terms of modern labour, they’ll be outraged at me saying this, they hate our party for saying it, but they bear no resemblance at all to the old Labour Party. And even the last hurrah of old labour and it was slightly messier, even the Whitlam government, there was an economic component to the Whitlam government where they tried to do things that if they had to succeeded would’ve been incredibly useful now, but because it involved this issue of taking on the private sector and the private banks and the private resources companies was a big one, a really big one. They wanted to buy back the farm. What’s his name?
Malcolm Roberts:
Connor.
Robbie Barwick:
Rex Connor was the real soul of old labour in the old Labour Party and so was the treasurer, Jim Cairns who was quite a lefty, but a very, very decent person. I got to know Jim in his final years and he told me something. He had been the treasurer under Whitlam. And you know what he told me? He knew that Labour did not have to… Those loans that eventually brought them down, those foreign-
Malcolm Roberts:
King O’Malley loans.
Robbie Barwick:
… King O’Malley loans, the attempt to borrow those loans, that was not their first preference. He knew they didn’t have to borrow at all. They could have used the reserve bank as a national bank again, but unfortunately, the politics had changed and he and Connor could not persuade their colleagues to do so. And so, then they went to London and Wall Street, which is where they usually went. But those banks wouldn’t lend for the programme that Connor and Whitlam and Cairns wanted, which was to encourage Australian ownership of Australian resources. That’s what they wanted to do. Those banks wouldn’t lend that.
Malcolm Roberts:
We have to go to an ad break now, Robbie. So, everyone will be back straight after the ad break with Robbie Barwick. And let’s talk first of all about King O’Malley coming from a family of bankers and then maybe talk about whatever you want to talk about, Robbie. You take the show home for the last 10 minutes or so.
Robbie Barwick:
I’ll go with Wayne.
Malcolm Roberts:
Welcome back and people all over the world will be very interested in the figures I’m about to give before I ask Robbie to take the show home. This is from Craig Ishwood’s article, a paper presented to the federal cabinet calculated the value difference in exporting bauxite, which is raw material for aluminium versus processed aluminium in $19.70. One million tonnes of bauxite exported as the raw material, bauxite, earned 5 million back then. Processed one step into alumina, it earned $27 million, five times as much. Processed again into aluminium, it earned $125 million. That’s 25 times as much, but wait for it. When processed finally into aluminium products, it would earn $600 million.
Malcolm Roberts:
Robbie, we have become a quarry and we are letting people overseas get the value added. And it comes back to what King O’Malley did. King O’Malley was a banker, came from a banking family. He was a yank and he came out of here and he represented Australia and Federal Parliament and became a member of the Fisher government that enacted the Commonwealth Bank legislation. He knew how currency is issued and he knew that it should be in government hands.
Robbie Barwick:
This was the gospel he preached. He gave the speech in parliament in 1909 and it went for five hours, Malcolm, this speech. They didn’t have limits like you have to deal with in those days. And in that speech where he laid out exactly how the Commonwealth Bank should work, because it was legislated a few years later, he said, “I am the Alexander Hamilton of Australia.” He was the greatest financial genius to ever walk the earth and his ideas have never been improved upon. And that was a reflection of the fact that he was an American. He grew up in the American system.
Robbie Barwick:
In his lifetime, he’d seen the effects of what Abraham Lincoln did during the Civil War using greenbacks to help fund the transcontinental railway line, which opened up the United States. The boom of productivity in the United States from the Civil War onwards around that investment has only been matched by what we’ve seen in China in the last 30 years. This was incredible in the United States in those years. And it was done using these American Hamiltonian methods and that’s what he was saying. He knew Australia’s potential, right? This is what we need.
Robbie Barwick:
And from the time he landed here in the late 1880s until he got that bank, he just did nothing but preached the gospel of national banking from one end of the country to the other, until he got it, until he persuaded them to set it up. And then the rest was history. I got something to read to you. A few years ago, we did some archive work in the National Library up there in Canberra. And we stumbled across this letter that O’Malley in 1937 when he was very old wrote to Franklin Roosevelt then the president. In the letter, he was introducing to Roosevelt, an economics writer, Dr. LC Jauncey, who was a friend of his. Then he gave a little bit of this history and it’s worth reading.
Robbie Barwick:
He said, “I had the honour of forcing the Commonwealth Bank onto the Australian statute book after 10 years of fighting in parliament while I was Minister for Home Affairs. Nobody would second it. We gave the late Denison Miller $50,000 to start the bank. And at the end of six months, he returned it and that is all the capital we ever put into the bank. Since its foundation, it has made $200 million net profit for the Australian taxpayers and now has a capital of over $50 million in reserves.”
Robbie Barwick:
And then he said, “I do hope Mr. President that before you retire, you will transform all the reserve regional banks or the federal reserve into government banks so that the American people will have the profits for themselves as we have here.” So, he kept his American patriotism as well and he’d succeeded in doing it here. And he wanted the Americans to reign in the fed and turned the fed into a proper national bank, which of course, it’s not, because it’s privately controlled.
Malcolm Roberts:
Robbie, we have three minutes until we have to start winding up.
Robbie Barwick:
Here’s the solution. Here’s what I want people to think about in terms of a solution that is immediately available to Australians, Malcolm. We can bring back a national bank. We can bring back the Commonwealth Bank through a stepwise process. And the first step is to start a type of bank that’s actually quite common around the world, but quite effective. And it’s a postal bank and that’s how the Commonwealth Bank started anyway. When they set it up in 1912, there were no bank branches and they used the post officers as bank branches. And what we propose is let’s get a public bank again, a public bank that the public can use. Not just own, but use it, but you can put your deposits in there.
Robbie Barwick:
They’ll be safe from financial speculation. They’ll be safe from things like bail-in, because it’s 100% government guaranteed. Your branch won’t shut down because we have this network of post officers right around Australia, right? There’s 1,500 towns in Australia that don’t have any banks, but they have post officers, right? So, your branch won’t shut down. It will always be there for face-to-face banking services. It will lend loans into local communities, because that’s what a lot of private banks, most of them don’t care about that. They’ve got one obsession, which is mortgages in the big markets. You can do that. And most important, it’ll break their monopoly. The big four are effectively… They’re an oligopoly, but they’re effectively a cartel.
Robbie Barwick:
So, you might as well call them a monopoly. If they have to go back to competing with a public option like they did for 80 years in Australia, that breaks that monopoly, they will have to compete again. They’ll have to compete on services. They’ll have to compete on the way they provide credit, right? They will see that if they don’t lift their standards, they will lose their customers to this public bank. The public bank’s going to get a lot of customers anyway. And I’ve found in talking to a lot of people across the board in parliament, I talked to all the parties, Malcolm, as you know, there is broad support for this. Even in the major parties, there’s support for this idea. But see, what happens is that every party has specific agendas, et cetera.
Robbie Barwick:
The big two major parties, they don’t have institutional support at the top, but they have individual MPs who support it. That has to be galvanised, right? If the public realise how important this solution is to the number one control over our economy and how it works and get behind this campaign, this is something we can force through into the political agenda in Australia and actually get it passed. We need to use a policy like this to get the Labour Party to go back to its roots. We talked about Labour being different to the old Labour. That’s in terms of parliamentarians. What you find at the grassroots of the Labour Party, Malcolm, the union guy, who’s still the union guy and in the Labour Party, et cetera, they think their party’s a sellout.
Malcolm Roberts:
Yeah. Yeah.
Robbie Barwick:
Let’s get them rallying around these policies that used to be fine. We’ve got a Labour government now. Let’s force this Labour government to go back to its own tradition.
Malcolm Roberts:
Amen, amen to that. This is why a public bank is one-nation policy. The key area that we have to win though, is the narrative because the media has denigrated it, but it will bring back accountability. And I want to thank you so much, Robbie, for coming on, just being your normal frank, blunt self. Thank you so much and your informed self. You come with the facts and the data.
Robbie Barwick:
Thanks for the invitation.
Malcolm Roberts:
We’d like to have you back again, because we can also talk about-
Robbie Barwick:
No worries.
Malcolm Roberts:
… peace being a very, very formative time, not just war, for currency creation in government hands.
Robbie Barwick:
Yes. Yes. Hear, hear.
Malcolm Roberts:
Thank you, Robbie.
