Rolling coverage: Whitlam dead at 98Martyr for a moment, hero for a lifetimeFull coverage
No Australian government of recent times was more memorable.
No Australian government sought to change the country so much in such a short time. And no Australian government, for good and ill, has had such an impact.
The Whitlam government was a watershed in Australia’s history.
Before, Australia in the post-war era was a land of white people, where men were fully employed in farms and factories, and women fully employed raising kids. It was a prosperous land that, despite having more than non-British migrants, saw itself as British, followed the wishes of its “great and powerful friends”, took its culture from others, and expected the poor to get a job.
After Whitlam, Australia became another country, an adolescent nation that had left home to find its own identity. It no longer had full employment, rapid economic growth or low inflation. Women were no longer necessarily at home, mothers no longer necessarily married. Governments were big, deficit-prone and supported millions of people. Yet the country had a new independence and pride in itself.
Not all these changes began with the Whitlam government, or were caused by it. It was a government of change in a world that was changing more rapidly than ever.
In the three years Whitlam was in power, the Vietnam War ended, and with it the military phase of the Cold War. Throughout the Western World, the long economic boom came to a close, oil became expensive and mass unemployment arrived. Families broke up and sexual and social taboos broke down.
It was a time when men wore sideburns and wide lapels, and women wore short hair, jeans and platform shoes. The Kingswood was in the driveway, and the first colour televisions in the lounge. Skyhooks were our favourite band, Abigail was getting hot and bothered at Number 96, Peter Weir was shooting Picnic at Hanging Rock, and Patrick White won the Nobel Prize for Literature.
The Whitlam government was as much a manifestation of social change as an instigator of it. But while the fashions of the time have gone, the legacy of that government’s policy changes on Australia has been enduring.
An astonishing number of Australia’s institutions and policies were created by the Whitlam government. And our economic problems also largely date from that time.
To those who lived through that era, the amazing thing is that so many of the reforms that provoked such controversy at the time have become accepted on both sides of politics.
They include Aboriginal land rights; the replacement of royal honours and knighthoods by the Order of Australia (although Tony Abbott reinstituted knights and dames to the Australian honours system this year); the abolition of the gerrymander favouring rural voters; Medibank; and the expanded federal role in schools, universities, roads, the arts and the environment.
Yet that stunning first fortnight of leadership in which Gough Whitlam and his deputy, Lance Barnard, abolished conscription, recalled Australia’s troops from Vietnam, recognised China, set up the Schools Commission, opened the equal pay case and announced 35 other decisions, created an environment of unpredictable radicalism that was to turn malign as the government and the economy began to fall apart.
What is that legacy? Let’s look at some of the main areas:
For a decade to December 1972, the main political battleground was foreign policy. Yet after that decisive fortnight when Whitlam rewrote Australia’s policies, it retreated to become an area of broad bipartisan agreement.
Whitlam’s main thrust was to develop Australia’s relations with Asia, communist and non- communist countries alike. He and the Indonesian leader, President Suharto, became the first leaders of their two countries to develop a close relationship.
Oddly, given Whitlam’s passion for foreign affairs and institution-building, he left no regional institutions, but Australian foreign policy now basically is as he left it.
At the time, the most controversial element of its foreign policy was Labor’s independent stance towards the United States, exemplified by open criticism of the US by ministers, and government demands for joint control over US defence bases in Australia. Forty years later, both positions are accepted without fuss.
Whitlam’s other main foreign policy problem and legacy, however, was East Timor. In 1974, the Portuguese dictatorship was overthrown, and its colonies prepared for independence.
In April 1975, Suharto and Whitlam agreed in Townsville that East Timor should be peacefully integrated into Indonesia.
The Indonesians took this as a green light from Australia to invade the colony. Australia’s silence as their preparations advanced confirmed their view that the one country able to stop the invasion would not do so. A dispute in 1975 was avoided by an outcome that damaged the relationship for years.
The Whitlam government removed race as a criterion for immigration, introducing a new test based on qualifications and family ties that saw Asia become the main source of new migrants. Al Grassby, the flamboyant immigration minister, introduced Australia to multiculturalism.
The reforms met bitter opposition, as did the laws granting Aboriginal land rights in the Northern Territory (passed under the Fraser government) and overriding Queensland’s paternalistic legislation governing Aboriginal communities. Yet, 40 years later, Aboriginal land rights, Asian immigration, and multiculturalism are accepted by both sides of politics.
Health and education
The greatest expansion of the Federal government’s role in Australian life took place here. Labor set up Medibank to provide universal health insurance and took over tertiary education from the states, pumping huge sums into government schools. In three years, its spending on health and education quadrupled from $1.2 billion to $4.7 billion.
That legacy has endured, and with it the balance of federal and state powers has permanently shifted. The Fraser government dismantled Medibank, but the Hawke government restored it as Medicare, which now seems beyond challenge.
This divided Australians bitterly in the Whitlam years. As Attorney-General, Lionel Murphy introduced the Family Law Act to make divorce easier. Single mothers were allowed to claim welfare benefits. Unemployment benefits, just $10 a week in 1972, were lifted to the pension level, which itself was raised substantially. Women were guaranteed equal pay for equal work, and the government actively took up a feminist agenda.
The House of Representatives voted that homosexuality should no longer be a crime. The government built the National Gallery, and spent $1.1 million buying Jackson Pollock’s Blue Poles for it. The Australia Council was established to fund artists and the Australian Film Commission to finance the film industry.
In 1995, it seems hard to believe the antagonism these changes met with at the time. In the bush, the Whitlam Government became identified with dole bludgers, single mothers, radical lesbians and arty wankers. But, equally, in 1975, it was hard to believe that the number of sole parents supported by taxpayers would rise nearly tenfold from 36,000 to 325,000 in two decades.
Cities this was the one area where the Whitlam government’s reforms did not last. From 1947 to 1972, Australia’s population grew from 7.5 million to 13.5 million, often housed in unsewered, poorly serviced suburbs. As Minister for Urban and Regional Development, Tom Uren set up programs to sewer the cities, buy up urban land, and build new housing.
But the states blocked his goal of developing Townsville and Coffs Harbor into growth centres, diverting funds to inland cities where Australians did not want to go. As population growth shrank, the Fraser government scrapped the cities agenda.
In the end it was the collapse of the economy and ministerial disunity that brought down the Whitlam government.
In the decade to 1972, the Australian economy had grown by almost 6 per cent a year. Australians believed that they would always have full employment, rapid growth, low inflation and sound government finances; Gough Whitlam himself assumed it.
Yet by 1975 inflation had soared to 17.6 per cent. Unemployment had risen from 2.1 to 5.4 per cent. Growth was halted by recession, and despite taxes doubling in three years, the deficit hit $2.5 billion.
Why? Too much stimulus and strain came too fast. In that heady atmosphere, wages shot up 48 per cent during 1973 and 1974. Government spending increased by 75 per cent in two years (by 46 per cent in 1974-75 alone). Yet tariffs were cut 25 per cent overnight, and taxes and interest rates hiked just as world oil prices doubled, and the West crashed into recession.
The new thinking behind Whitlam’s reforms, many of them long overdue, went hand in hand with a chaotic, dysfunctional style of government, a centralist approach to relations with the states, and a blithe indifference to economic constraints.
For all his towering dominance, Whitlam was bound by his caucus in ways that past and future prime ministers were not. Sometimes his announcement of a new government policy was overturned by his party room within days.
The veteran Minister for Minerals and Energy, Rex Connor, followed his own agenda without reference to cabinet, secretly commissioning a Pakistani trader, Tirath Khemlani, to negotiate a $4 billion loan from Arab governments so Connor could nationalise the mines of foreign-owned companies and ‘buy back the farm’.
Labour Minister Clyde Cameron, a former secretary of the Australian Workers’ Union, encouraged the Arbitration Commission to grant double-digit pay rises, regardless of the impact on a spiralling rate of inflation.
Whitlam had no interest in economic policy, and no appetite for managing his team of wild horses, who consequently went their own way.
To contain inflation, his government in July 1973 made a reckless decision to cut import tariffs immediately by 25 per cent: it certainly made imports cheaper, but also shut down hundreds of Australian factories.
Manufacturing output plunged by 10 per cent in a year, and over the next five years almost 200,000 manufacturing workers were laid off. The share of GDP going to wages, which averaged 55.3 per cent in the 1950s and 60s, soared to 63.5 per cent in 1974-75.
The combination of wage-price inflation at home, poor policy decisions, and soaring oil prices and recessions abroad sent Australia into its worst recession for 40 years.
The long boom had ended. Unemployment did not drop below 4.5 per cent for the next 30 years. Inflation took a decade to fall below 10 per cent. This was not just Australia’s experience: OECD growth rates collapsed from 4.8 per cent over 1964-73 to 2.2 per cent in 1974-83. But the Whitlam government contributed, and an angry electorate made it take the blame.
Looking back, we may have been unfair. In retrospect, the government’s errors on economic policy probably did less damage than we thought. Its reforms have proved more durable and substantial than they seemed. No government would want to imitate Whitlam’s in style, but none has left such a lasting impact.
Tim Colebatch is The Age’s former economics editor. This is a revised version of a piece originally published in 1995.
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