The Whitlam government attempted to borrow money without federal consent from Middle Eastern countries and bypassing standard procedures as dictated by the Australian Treasury. The loan was intended to fund a number of natural resources and energy projects that included a uranium enrichment plant, the electrification of interstate railways and the construction of a natural gas pipeline.
Pakistani finance broker Tirath Khemlani was commissioned by Connor to secure the loan. Ultimately, no loan was actually obtained, no commissions paid but the government was made to look reckless and foolish.
Wracked by self-inflicted economic difficulties, the political and social impact of the loans affair scandal, the Whitlam Government was particularity vulnerable throughout 1975. Whitlam, forced to sack Cairns saw a massive swing against the government and the election of a Liberal Party candidate that had been held by the ALP for 60 years.
Although Connor’s authority to raise loans was withdrawn in early 1975, he continued to liaise with Khemlani until Herald newspaper published documents supplied by Khemlani. Connor directly denied Khemlani's version of events, Khemlani then flew to Australia and provided the Sydney Morning Herald with copies of the documents refuting Connor's denial. Connor was then forced to resign from the Cabinet and replaced by an aspiring Paul Keating.
The resignation of Connor forced Opposition Leader Malcolm Fraser to act; Fraser announced that the Senate would defer passage of the supply bills until Whitlam called a House of Representatives dissolution election. With a fair degree of arrogance and some trepidation, Whitlam refused to call an election after the Cairn's sacking saw sweeping swings against Whitlam's faltering government. Instead, Whitlam arrogantly attempted to desperately hold onto power knowing full well that his government beset by corruption would be decimated now that the Australian people were now aware of his government's improper dealings.
Weeks of constitutional crisis ensured as the parties confronted each other in parliament embarrassing the Whitlam government's proven acts of impropriety. Fraser used its majority in the Senate to block government budget legislation citing the loans affair as extraordinary and reprehensible circumstances. Whitlam was paralysed, his refusal to call a lower house election forced Governor General Sir John Kerr to act, he sacked incumbent Prime Minister Gough Whitlam installing Opposition Leader Malcolm Fraser as interim Prime Minister on the proviso that Fraser passes supply through the senate and calls an immediate election leading to the constitutional crisis of 1975.
The Whitlam Goverment is to be starved of funds due to Liberal blocking supply bills,it would not have been hard to foresee that they would seek funding elsewhere .So lead them up the garden path and then expose their failure in the papers make a mockery of them ,plus the Governal General is a Lib at heart and is also ex-intel agent with strong US ties .Whitlam has previously voiced that US bases on Australian soil should go .These factors and an oil crisis I think Gough was arrogant and overconfident seriously misjudging the situation.
ReplyDeleteActually, it was the Khemlani loans affair that caused the Fraser opposition to block supply, not supply was blocked so Gough & Co sought other funding methods.
ReplyDeleteThe Opposition, displaying all the characteristics of a sore loser, announced in April 1974 that it would vote against the Supply bills in the Senate. Whitlam sought a double dissolution and was returned to government. Again, in October 1975, the Opposition announced that it would not pass the Budget bills in the Senate.
ReplyDeleteThe attempted raising of funds bypassing the Treasury Department was so secretitive that only select party members were informed. Even when found out, Rex Connor losing his authority to pursue the loans continued to do so and the subsequent blocking of supply in the senate began. The big joke was that Khemlani himself was the one who supplied the documents to the Sydney Morning Herald breaking the story forcing Fraser to act. Different set of circumstances to 1974 - all self inflicted.
ReplyDeleteI do not hear much of a whisper from outraged ALP supporters when the Bill Shorten opposition blocked the budget savings bills in 2014 though.
The loans affair was the catalyst for the Dismissal of 1975.Whitlam himself personally signed the authority giving Khemlani authority to seek the loan which was unconstitutional bypassing Parliament and the Treasury department protocols.This document was attached to Khemlani"s affidavit prepared by me as his attorney and delivered by me personally to Reg Withers(then speaker of the Upper House) to table in Parliament which he did. With this evidence Kerr had no choice but to sack Whitlam and his Government for their unconstitutional conduct.Furthermore the CIA were concerned about the Labour Government wanting the USA to vacate its bases in Australia including Pine Gap and the CIA knowing that the Australian Labour Party were seeking and needing funds to guarantee supply set up Khemlani as an "operative " and were therefore thus successful in getting rid of the Australian Labour Government.
ReplyDeleteThe CIA were also well aware that #2 on the labour Party Platform at that time was"...the Nationalisation of all industry within Australia".
This item was later withdrawn on the labour Party Platform but is evident if anyone researches it.I personally obtained a copy of this platform in the early 1970,s .."Nationalism is another "nice word" for Socialism. Heaven forbid if that was allowed to continue and a definite factor for CIA Interference.the obtaining of a loan of this amount was the "Thin edge " needed to implement their platform and this was seen as a definite threat by the CIA. These facts are known to me as i was Khemlani's lawyer when he was seeking commission from the Australian government and the documentation in relation to this was clearly evident(telex's /letters etc).