Loans affair: Difference between revisions

Minerals and Energy Minister [[Rex Connor]] wanted funds for a series of national development projects. He proposed that to finance his plans, the government should borrow US$4&nbsp;billion (equivalent to US${{inflation|US|4|1974}}&nbsp;billion in {{Inflation|US|4|2024}}). It was a requirement of the [[Australian Constitution]] for non-temporary government borrowings to be through the [[Loan Council]]. Although the development projects were long-term, Whitlam, Cairns, Murphy and Connor authorised Connor to seek the loan on 13 December 1974 without involving the Loan Council. Connor had already been investigating the loan. Through an Adelaide builder, he had been introduced to the Pakistani dealer Tirath Khemlani. According to Khemlani, Connor asked for a 20-year loan with interest at 7.7% and set a commission to Khemlani of 2.5%. Despite assurance that all was in order, Khemlani began to stall on the loan, notably after he was asked to go to [[Zürich]] with officials of the [[Reserve Bank of Australia]] to prove that the funds were in the [[Union Bank of Switzerland]], as he had claimed. The government revised its authority to Connor to $2 billion.<ref name="ReferenceA">Brian Carroll; From Barton to Fraser; Cassell Australia; 1978</ref>