Lang Hancock, National Miner, March 29, 1976, p. 2.

Western Australia is separated from the rest of Australia by Federation, by vast deserts, by wide mental attitudes, and a totally different economy from that of the Eastern seaboard.

Perth is the most isolated capital in the world.

Australian governments are determined without a single vote being counted from WA (WA’s 7.5 per cent of the population produces approximately 25% of Australia’s exports).

These gaps and many more can never be closed from Canberra; no matter how well intentioned Malcolm Fraser may be in his efforts to reduce centralism.

No Australian Minister has ever assumed office facing more difficult tasks than Malcolm Fraser.

No Prime Minister has ever had less chance of succeeding — not because of shortcomings on Fraser’s part; but because the forces working against him are too great, too entrenched and motivated (not by healthy competitive profits) but by a lust for power.

Australia is stagnant. Bjelke-Petersen says it is flat broke and after a seven hour discussion with Malcolm Fraser is reported as saying: “We can forget all about development projects for a long time to come. That applies to all States.”

If Australia’s major development projects do not get going, and get going very quickly, then our foreign exchange earnings will drop off dramatically. It is essential that these earnings must increase in order to maintain the international exchange standing of the Australian dollar; otherwise the Treasury will be forced to devalue.

If devaluation takes place without a corresponding tariff reduction plus the elimination of sales tax, we can expect the inflationary flames to be fanned still higher. This will continue until our currency eventually breaks down.

Faced with such a gloomy but inevitable prospect, Mr Fraser can gain no solace from the awful truth staring him in the face, which is stated clearly by Lenin, that any country whose banking system is centrally controlled by the government is already 90% of the way to communism.

Governments create inflation and governments can and should cure inflation, but in this regard, Mr Fraser finds himself face to face with strong pressure groups headed by the Canberra bureaucracy who are too powerful for him to overcome.

This sorry picture emphasises only too clearly that the only way out for Western Australia and eventually Australia, is for WA to secede economically from Canberra under a constitution which limits the power of government, so that these central bureaucratic empires can never be repeated in WA.

If this were done, WA could cure inflation.

If this were done, Western Australia could develop its enormous raw resources.

If this were done, the State could provide Australia with defence (it has none at the moment) through a resources policy, which would prevent the Indian Ocean from becoming a Russian Lake.

With a central government having a monopoly over the creation of Australia’s internal legal tender, Gresham’s Law comes into its own.

Alternatively, we could have a currency based on gold (a product of WA) freely tradeable by all WA citizens internationally and in exchange for any currency that they desire.

As for the development of our resources, a seceded Western Australia could make the kind of dramatic move that the Federal Government should have made years ago.

That is to declare north of the 26th parallel a frontier area and make it income tax free for a trial period of 20 years with a re-investment clause of 40% applicable to such capital (from anywhere) as wished to take advantage of this 100% tax-free holiday.

This 40% qualifying clause would not be applicable to wage and salary earners, so that they would derive the benefit of income tax freedom in their first pay envelope. Such a far-sighted move would cost the government nothing because the income tax on dormant minerals is nothing, but once activated the return in indirect taxation would snowball as development snowballed.

On the question of defence, our resources would be developed at such a rate that we would make ourselves indispensable to several of the great nuclear powers of the world who would then, in turn, see that no predator came to invade our shores to obtain this wealth for himself.

At the moment, Australia is entirely dependent on Japan for its economic existence, even more so than it ever was dependent on Britain and — horror of horrors — for those Australians game enough to face reality, is the horrific thought that we are not only dependent on Japan for our economic well-being, but also for our military safety; of all the nations, Japan is the one that cannot afford to see Australia go under without going under themselves — so dependent are they on our raw resources.

While I have been saying so for years, it may be timely to repeat these observations about internationalising our legal tender as a means of fighting inflation, because of free-marketeer Hayek’s impending visit.

He has some strong arguments in support of this belief and the international standing to make his beliefs carry weight.