The Opposition has taken an altogether unpleasant turn toward xenophobia this week.

Malcolm Turnbull yesterday asked the Prime Minister about whether he was considering an “infrastructure bank” — later a “Labor Government bank” — based on the premise that the Government’s deposit guarantee was preventing State Governments from borrowing money.

There was nothing new in Turnbull’s question. The idea has been kicking around for several weeks. What had happened since then was that State Labor Treasurers (what’s the collective noun for a group of State Labor Treasurers? Send your suggestions to boss@crikey.com.au — ed.) had discussed the idea.

Once teased out — as the Sydney Morning Herald did, it was obvious the idea had nothing to do with any “bank”, but related to State Governments wanting to take advantage of the Commonwealth’s stronger credit rating.

What was different was that the Opposition — using unnamed sources — then sought to link it to an otherwise unrelated possible investment delegation to the Middle East next year. Malcolm Farr reported:

The Opposition said Mr Rudd was asking chief executives of senior banks to travel with him to the Middle East early next year to help raise money for investment projects across Australia. The road show would visit the United Arab Emirates and Qatar in late January, sources said. It has been called the Kev-lani affair.

You can just imagine the roars of laughter in the Opposition Leader’s suite as they hit upon “Kevlani”.

As opposed to Farr, who kept it flat, at The Australian, they were happy to play along with the Opposition. “’Kevlani’ bankroll plan for state infrastructure” was the headline:

Kevin Rudd is considering creating a taxpayer-owned development bank to help states raise loans to build infrastructure such as roads, railways and ports. And the Prime Minister could also travel to oil-rich Middle Eastern states next year seeking petro-dollars to bankroll massive building programs designed to sustain flagging economic activity in the face of the global financial crisis.

It’s not the first and certainly won’t be the last time an Opposition has got a cheap headline linking otherwise unrelated actions. But there’s unpleasantly xenophobic edge to it. It’s not just the Whitlam comparison, it’s the whole idea that Australia might — heavens above — seek investment from the Middle East.

Everyone knows “petrodollars” — earned from exploiting hapless western motorists through the petrol bowser — aren’t REAL dollars.

“They have all the fiscal discipline in Treasury of Jim Cairns,” Warren Truss said yesterday. “And next thing we will have the Prime Minister going over to the Middle East to try and borrow some money from Khemlani to fund his new bank.”

You wouldn’t catch the Coalition ever seeking investment from the Middle East.

Well, that’s perhaps not quite true. Peter Costello went to meetings in Dubai in 2003 and en route met with the Palestinian Authority — yes, the Palestinian Authority — to discuss trade and investment opportunities. In 2005, Vaile of Arabia, a man with quite some interest in that part of the world, announced negotiations on a Free Trade Agreement covering trade and investment with the United Arab Emirates. And in late 2006, the FTA discussions with the UAE were replaced with negotiations for an FTA with the Gulf Cooperation Council — that’s Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

“I am committed to securing new trade and investment opportunities for Australian companies as a result of these negotiations,” declared the then-Trade Minister. Who happened to be Warren Truss.

Guess it’s okay for Coalition Governments to seek investment from Middle Eastern countries, but when a Labor Government does it, it’s Whitlamesque mendicancy to swarthy Arabs types.

All this follows a clear attempt — with Malcolm Turnbull’s full support — to revive fear-mongering over refugees. This time, the unrelated event that was dragged in and spuriously connected was the “stand down” of some naval vessels over the summer break. Bob Debus explained yesterday that exactly the same number of aircraft and naval vessel patrols would be occurring during that period. Sharman Stone earlier this week in Question Time had suggested the entire Navy was having a holiday over the break and that people smugglers would use the opportunity to send through an even-greater “surge” of illegal immigrants. Mike Steketee in The Australian today did a comprehensive demolition job on the Coalition. Petro Georgiou and Alan Eggleston, who this week spoke about expediting the processing asylum application for detainees, are among the few Coalition MPs to stand apart from this grubby effort.

Asylum seekers have been in the news around Parliament House. The Aminov family have been seeking permanent visas for a number of years and their son, Marat Aminov, has taken to disrupting Parliament. This week he jumped onto the floor during Question Time while a supporter tried to distract attendants by yelling from the opposite gallery. Yesterday Aminov doused himself in petrol outside the front of Parliament House and threatened to set himself alight.

As we all learnt subsequently, the Member for Dawson, Labor’s James Bidgood, took a picture and tried to sell it. Quite what he was thinking is anyone’s guess. He was called around to the Prime Minister’s Office for a deserved b-llocking.

The Opposition was outraged. In the House of Representatives, Joe Hockey piously rose and asked the Speaker to “investigate immediately all the circumstances surrounding the capture of the photo by the member for Dawson.”

Because, as we know, the Coalition would never seek to exploit the plight of asylum seekers.