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{{Use dmy dates|date=April 2014}}
{{Gough Whitlam sidebar}}
The '''Loans affair''', also called the '''Khemlani affair''', was a political scandal involving the [[Whitlam government]] of [[Australia]] in 1975 in which it was accused of attempting to borrow money from the [[Middle East]] by the agency of the [[Pakistan
Minerals and Energy Minister [[Rex Connor]] and Treasurer and Deputy Prime Minister [[Jim Cairns]] misled Parliament and were forced from the Whitlam Cabinet over the affair. This was a key precursor to the [[1975 Australian constitutional crisis]], which led to the dismissal of the government in 1975.<ref>Pilger, John, ''A Secret Country'', Vintage Books, London, 1992, {{ISBN|9780099152316}}, pp. 205, 207-08, 218.</ref>
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==Aftermath==
The affair embarrassed the Whitlam government and exposed it to claims of impropriety. [[Malcolm Fraser]] led the opposition, which used its majority in the [[Australian Senate|Senate]] to block the
Fraser told Parliament that the government was incompetent and the opposition [[Coalition (Australia)|Liberal-Country Party Coalition]] delayed passage of the government's money bills in the Senate with the intention of forcing the government to an election.<ref>{{cite web|url=http://primeministers.naa.gov.au/primeministers/whitlam/in-office.aspx#section12 |title=In office – Gough Whitlam – Australia's PMs – Australia's Prime Ministers |publisher=Primeministers.naa.gov.au |url-status=dead |archiveurl=https://web.archive.org/web/20130419124214/http://primeministers.naa.gov.au/primeministers/whitlam/in-office.aspx |archivedate=19 April 2013 }}</ref> Whitlam refused to call an election. The deadlock came to an end when Whitlam was [[1975 Australian constitutional crisis|dismissed by the Governor General]], [[John Kerr (governor-general)|Sir John Kerr]], on 11 November 1975 and Fraser was installed as caretaker prime minister pending an election. At the [[1975 Australian federal election|general election held in December 1975]], Fraser led the Coalition to a landslide victory.<ref name="autogenerated1">{{cite web|url=http://primeministers.naa.gov.au/primeministers/fraser/before-office.aspx |title=Before office – Malcolm Fraser – Australia's PMs – Australia's Prime Ministers |publisher=Primeministers.naa.gov.au |date=}}</ref>
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