I wrote recently of a Social Credit discussion on the importance of defining words such as ‘credit’, ‘creditor’ and ‘crediter’ (“A Just Relationship Between the Mind and Things”).  Well that thread is still active but the discussion has gone nowhere.  
There are those who have a sound knowledge of the proposals and principles of Social Credit and a newcomer (claiming to be a former journalist) who says he ‘likes the idea’ (of Social Credit proposals). The problem is he will neither get down to the ‘nitty gritty’ of research leading on to an indepth understanding of the subject, nor will he discuss in-depth the proposals without a ready-made answer as to how the proposals will be implemented - accompanied by the latest financial facts and figures.

Douglas did warn his followers it was the People who must insist on the Policy of what they wanted and it was the responsibility of the experts to find the best ways to implement the Policy.

As Douglas noted:
 it would be fatal for second rate ‘experts’ to tell first rate experts how to do it.  Those selfsame experts would then be able to blame others for the failures that would or could occur.  

The latest ‘sticking point’ is the National Dividend. How it would be implemented and just how much each citizen was to initially receive.  

Whilst the newcomer in the discussion group has been supplied with certain documents that would give an example of how the Dividend could be calculated, he ignores these documents and then moves on to another aspect of the discussion.  
Truly, to me he is like a cat playing with a mouse.  The cat lets the mouse go in order to ‘catch it’ again. (Not sure I have presented the right image here, but I think the reader will ‘get the picture’).   

I could be wrong, but I think the discussion group has been ‘had’ by this fellow.  He is either a student with nothing better to do than ‘bait’ the honest fellows of the discussion group (they accepted his original claims on face value) or he really is a journalist looking to ‘trip the group up’ with an ulterior motive - maybe intending to ‘expose’ the group in bad publicity. Time will tell.

In the meantime I want to refer to earlier real-history examples of the effects produced by injections of  financial subsidies into the Australian economy during wartime.

World War II and Consumer Price Subsidies

In On Target “Brief Comments”

 “Melbourne "Age" political columnist, (who urged support for a Labor government) comments on March 7th, (1983)
"It is a measure of Mr. Bob Hawke's sublime arrogance that he sees himself quite unashamedly as the spiritual successor to Australia's greatest Prime Minister the late John Curtin." 

Like John Curtin, Bob Hawke is a reformed alcoholic.  But can he bring himself to consider one of the Curtin wartime Government's most constructive achievements. The introduction of consumer price subsidies to end inflation?

Although he tried to play it down later, John Curtin in his early days had close association with the Social Credit movement. As did several other members of the Curtin government.

As Mr. Bob Hawke faces up to the task of solving Australia's major problems it is an appropriate time to remind Mr. Hawke of the occasion some years ago when he appeared on a Melbourne platform as guest of the group known as "Women Against Inflation". Mr. Hawke remarked later, on the quality of the questioning from the audience. Well he might. As the overwhelming majority of them were League of Rights supporters. 

Perhaps Mr. Hawke recalls his agreement with the questioner who suggested that as the technological revolution increasingly meant that machines were doing the work of men, but received no wages. Some new way would have to be considered of how to distribute incomes to displaced workers. If Mr. Hawke could tackle this question successfully, he might well replace John Curtin as Australia's greatest Prime Minister.”

"WAGES AND PRICES": "Sales Tax, Consumer Subsidies, Production Incentives."

Queensland document submitted to the Premier's Conference in June 1974


When Queensland Premier J. Bjelke-Petersen put forward his three-point anti-inflationary policy in June of last year he not only alarmed Prime Minister Whitlam and his Socialist colleagues, but also caused consternation inside the Federal Liberal and Country parties. Since then a number of stories have been circulated claiming that the Queensland Premier had been "quoted out of context", and that he has modified his approach to consumer discounts.

While it is understandable that Prime Minister Whitlam should sneer at the Queensland Premier's "strange economic theories", and that the Marxists should be worried by a policy which would strip them of power, the anti-Petersen attitude inside the Liberal and Country parties is indicative of the deep rot afflicting so many who would have the electors believe that they are strongly anti-Socialist.

One Victorian Country Party Member of Parliament has claimed that the Queensland Premier did not advocate the use of consumer discounts, only that they should be considered. We have before us the Queensland document submitted to the Premier's Conference in June 1974. It is headed "WAGES AND PRICES", with the sub-heading "Sales Tax, Consumer Subsidies, Production Incentives."

After explaining the effect of taxation on the "wages-prices gap", the document states on page 2:

"If the Commonwealth Government had any genuine intent to combat inflation, it should surely be looking in the direction of tax reduction, consumer subsidies and production incentives rather than in its encouragement of higher wages, higher prices and higher taxation."

The following is a further comment on consumer subsidies: 

"During the Second World War, and after consumer support subsidies played a very important part in stabilising the economy and created a favourable situation when it could have been expected that there would be a period of serious inflation which would cause great hardship to many people. These forms of assistance have proved to be a stabilising factor."

The document summarised the Queensland Premier's three-point anti-inflation proposal as follows:

1. The freezing of the aggregate collections of income tax at the existing level.

2. The reduction or elimination of sales tax in items in the Consumer Price Index groups.

3. The payment of producer incentives or consumer subsidies on the foodstuffs components in the Consumer Price Index."

The Australian of June 7th, 1974, quoted Mr. Bjelke-Petersen as follows:

"Consumer support - which has now been called subsidies - of food would make potatoes, bread and butter, etc., cheaper. These moves would particularly help the lower-income earner. I don't know how the man on the basic wage can survive now."

The Queensland Premier returned to his anti-inflation plan during his policy speech before the Queensland State elections, and in a personal column in the Sunday Sun of December 1, wrote: 

"My plan.. .called for the reduction and freezing of income tax, the reduction or elimination of Sales Tax on essential goods making up the consumer price index, and for the re-introduction of consumer support on essential food and clothing."

The financing of even a moderate version of the "Petersen Plan" would be simple. Any politician asking the stupid question, "But where would the money come from?" should be asked where does the money come from to finance huge Government deficits. It is, of course, created in the form of financial credit by the simple process of writing figures, as is all money with the minor exception of notes and coins. (See The Creation and Control of Money, and also

Deficit spending is further stimulating inflation. If the deficit finance were allocated to sales tax reductions and consumer discounts, prices would fall and the basis of big wage increases removed.

Liberal and Country Party critics of the "Petersen Plan" should be asked, where necessary, to stop misrepresenting it, and firmly told that unless they adopt its basic principles they are doomed to preside over a revolutionary situation if and when they are re-elected to office at Canberra.


 April 4 1975:

Income tax cuts on overtime earnings, and Government subsidies on retail prices, would help revive the Australian economy, a leading economist said today. - The Herald (Melbourne) March 21st -1975

Mr. Gordon Bruns is Chief Economist for the A.N.Z. Banking Group. He was speaking at a Seminar, the theme of which was - "The Challenges of 1975-6". Mr. Bruns called for the usual increased productivity; which we expect from the orthodox economist. None of these economists seem to be aware that productivity since the dawn of the Industrial Revolution has increased many, many thousands percent at least - yet, inflation is higher than ever. In fact, it is a comparatively recent finance-economic phenomenon. Along with inflation, industrial and social unrest have been greater than ever.

Subsidies on Retail Prices of some Major Items in the Consumer Price Index

Clearly there is a close relationship between inflation and industrial and social unrest. And productivity, even if it soars to the stars, will not reduce inflation. In point of fact, productivity indirectly aggravates inflation. As a general sort of rule we assert that the higher the level of productivity, the greater will become the race of inflation. However, Mr. Bruns did have some worthy contributions to make. He called for lower taxation AND (here it is) - "subsidies on the retail prices of some major items in the Consumer Price Index". These are two key planks of the Petersen Plan.

Along with the elimination of Sales Tax, Mr. Bruns also called for special taxation incentive allowances for companies, especially for development, research and investment. Mr. Bruns is not the only "straight" economist who has called for the price subsidy (consumer discount); there have been others. Very, very slowly, the light does seem to be getting through to orthodox economic circles that all taxation is inflationary, and that the reduction of this, with the consumer discount is the only way to stop and reverse inflation.


1 May 1987:


In an attempt to minimise the political fallout from the coming Premiers' Conference and Loan Council meeting on May 25th, Prime Minister Hawke invited the four State Labor Premiers for a preliminary talk at the Lodge last Friday. Mr. Hawke seeks the cooperation of the Labor Premiers in advancing the Hawke-Keating strategy of "economic restraint". Judging from their reported comments the Labor premiers left Canberra far from happy. They warn that the proposed financial restrictions will result in a slowing of economic activity and higher unemployment.
But Treasurer Paul Keating insists that the States must share the burden of "restraint" which the Hawke Government is now preparing public opinion to accept.

Australians are now being told that they have "lived beyond their means", and that the time for "restraint" is upon the nation. All this will have a familiar ring to older Australians who recall the same theme being preached in the beginning of the Great Depression in the early 'thirties, when the infamous Premiers Plan was imposed, making the Depression conditions worse. The basic situation 50 years ago was the same as today; there was nothing wrong with the production system, which was easily capable of producing all the requirements for civilised living for all the Australian people.

The Reality - The Truth - is that in spite of an enormous amount of economic sabotage, the growth of an enormous army of parasitic bureaucracy, Australia is not threatened with any actual or potential shortage, of essential production. Australia's primary producers in particular have - mainly under the whip of rising financial costs inflation - increased all forms of production enormously, and, whether measured in terms of production per acre, per animal or man hours worked, have become highly efficient.
Surely it is a manifestation of some type of insanity to suggest, as many do, that still greater efficiency will solve the problems of Australia's primary producers.

Families Forced to Restrict Consumption:  Inadequate Purchasing Power

A large and growing percentage of Australian families are being forced to restrict consumption - they have inadequate purchasing power. Recently released figures show Australian home building at perhaps the lowest level since the end of the Second World War. The housing shortage is a major factor contributing to Australia's growing social problems. There are no physical problems associated with the adequate housing of the Australian people - once again the problem is finance, especially astronomical interest rates and rising building costs.

The Anzac spirit, dramatically demonstrated in two World Wars, in the generally forgotten wars against Communist insurgents in Malaya, Korea and Vietnam, was a manifestation of the resourcefulness and initiative of the Australian people.

The establishment of the original Commonwealth Bank, by the Fisher Labor Government, a genuinely patriotic government free of the alien taint of Marxism, enabled the Bank to be used to finance Australia's primary producers during the First World War at less than one percent. 

Australia's Second World War Prime Minister John Curtin, had been an early supporter of Social Credit - a fact which Mr. Hawke and the new breed of "Labor" politicians never mention - and knew enough about finance to stress that the only limiting factor to Australia's war effort should be productive capacity, not finance.

The Curtin Government did not go as far as many, including some of its own members, had hoped. But the Central Bank of the nation was used to make available hundreds of millions of pounds, new money, which enabled typical Australian resourcefulness to find expression.

Australia Enjoyed Price Stability Under Curtain Government

Australians produced things they had never produced before. Those Australians who served in the early stages of the New Guinea campaign will recall their great relief when a submachine gun became available which was reliable in the mud and slush. The Owen was an all-Australian invention by an Australian and was soon being manufactured in thousands in Australian factories.

The creation of hundreds of millions of new financial credits to finance a nation at war, created a rising price level, in spite of strict government controls. Wages had to rise to offset the price rises. The Curtin Government solved this problem by introducing a wide range of consumer price subsidies - on all the basic items used to adjust wages. Australia enjoyed complete price stability for the next five years until the Chifley Government, advised by Fabian Socialist Dr. Coombs, started to abolish the system of Consumer Price subsidies.

Australia's growing crisis is only going to be solved by the Anzac spirit - by daring to be different, to try something new, to "have a go."
The "Opposition" parties offer little more than a variant of what Labor is implementing. The common cry is for more "restraint", which is akin to urging a man dying of thirst to restrict his water consumption while boating on a huge fresh water lake.

It is only in a state of military war that the financial dictatorship has to be eased to meet realities. Australia is today faced with a greater danger than during the darkest days of the Pacific War. Survival depends upon breaking a treacherous financial dictatorship, worse now than during the Great Depression of the thirties, because it has been highly internationalised.

Financial Credit to be Made Available

Australians can solve their own problems in Australia by restoring the spirit, which developed the nation. This requires a major change in financial policy, permitting TOTAL taxation to be reduced dramatically, interest rates cut, and financial credit to be made available to make financially possible what is physically possible and desirable.

Even the Anzacs, for all their alleged rejection of authority and discipline, did have basic training. Those who would emulate the Anzac spirit in the war to save Australia must undertake some basic training concerning finance. 

Armed with the knowledge provided in these books, the reader is equipped to start entering the Battle for Australia, which will be fought, not on some distant shores, but right here in Australia For our many younger as well as older readers, we can make no better recommendation than the following, to be read as listed: 

A Licence to Live, by Doris Phelps. Written by a farmer's daughter and a farmer's wife, and with the simple commonsense of a woman, this is an excellent introduction to the money factor $4.00.

A Small Farmer Replies, also by Doris Phelps. This book had a tremendous impact during the Rural Crisis of the early seventies, and has just been brought back into print. A brilliant answer to a Former Federal Treasurer, which is even more relevant today, $4.00.

The Money Trick, an Institute of Economic Democracy publication. An authoritative book on how the debt system works, with all the necessary and irrefutable documentation $6.00.

We can offer these three basic books at a packet price of $15.00 posted.


I think that this discussion is verging toward the puerile.  The Dividend and Compensated Price are both dependent upon the ratio of consumer incomes distributed to the total price of goods generated, as recorded in the previous costing cycle.  These are basic data which are readily available to professional statisticians.  It would be nonsense and disingenuous to predict any specific amount to them because the economy is not static but dynamic.  If the differential between total consumer incomes and  total prices expands, the Dividend will increase and vice versa.  The amount of new direct consumer credits issued would depend upon statistical determination. Statistics are an approximation and although target oriented they have a varying degree of both plus and minus variation subject to subsequent adjustment. They are in the nature of a dividend conferred by inheritance due to all citizens and are not “politically” determined as to amount nor differential amongst citizens of the nation.  They are dependent upon the performance of the economy.   We have both actual and potential in this regard.  The actual can be measured and the potential estimated.  Money must be merely reflective of these and in no way restrictive of the economy’s performance—in other words it is mere accountancy and should simply reflect reality of our chosen functional economic activity.

Incidentally, the reserve ratio requirement for banks was discontinued in Canada and other Commonwealth nations (also, I believe, Sweden) many years ago.  The restriction on bank loans is limited to the “good judgement” of the bank in assessing the likely performance of a loan, although certain capital qualifications apply. The United States is an exception and has, for whatever reasons, retained the reserve requirement.  Social Credit relates to a realistic belief in the ability of society to achieve desired ends.  The real credit of a nation is the ability to achieve.  We do not sit around conjecturing and fretting until the end of time about every last possible consequence of our actions but proceed with faith and our best good judgement that our desired actions can be executed successfully.  If adverse effects or failures are encountered we endeavour to make appropriate adjustments as we move ahead.  Faith can move mountains; a lack of faith is sterile.

It should also be pointed out that the “social credit” is not an idea but exists in the ability of nation to produce goods and services “as, when and where required or desired”.  So long as a nation exists and functions there is always an element of genuine “social credit” by definition.  Social Credit as a body of thought has brought attention to the fact that this social credit is seriously impaired and restricted by the existing defective price-system.

Faith is Fragile by Senator Cori Bernardi