Chapter 14
Australia Unlimited
In This Chapter
Developing ideas to build Australia up at a fantastic rate
Borrowing and promising too much
Suffering trauma and division after the war
Watching Labor turn hard left and the unions become more militant
World War I shattered the previous consensus that had prevailed in Australian life. In the 1920s, warring elements that had previously rumbled beneath the surface came much more to the forefront.
On the one hand, Australia came out of the war with a greater sense of national self-confidence and pride than it had ever experienced before. For the first time in its history it had played a significant part in global affairs, both on the battlefield and around the peace table in Versailles (refer to Chapter 13). Huge optimism also sprang from the greater level of material prosperity that the 1920s ushered in, and a period of great economic development began according to the new slogan ‘Australia Unlimited’.
Many returned soldiers led the spread out to suburban blocks of land, helped by a relatively new invention — the automobile — which was being taken up in large numbers by new suburban dwellers. The 1920s saw the beginnings of radio and cinema, the further spread of telephones and the growth of dance halls throughout Australia. The nation was becoming recognisably modern, prosperous and confident in itself.
However, the prosperity was brittle. High standards of living were dependent on material resources being developed and social progress being maintained — and on continued high prices for Australia’s main exports, such as wheat, wool and minerals.
At the same time the nation was afraid, and beset by divisions and animosity that hadn’t been seen in the pre-war Federation era. The Australian ‘social laboratory’ could no longer remain so insulated from troubles in the world, as the continuing civil war in Ireland and the instalment of communism in Russia made for ongoing strife in Australia. Labor turned to the political left and industrial disputes became increasingly acrimonious.
In this chapter, I cover the highs and lows of the 1920s in Australia.
Expanding Australia
In the 1920s, a shift took place in national outlook. Before World War I, the national vision had been the social laboratory — a new country organising and governing itself in order to eliminate the divisions and endemic problems of the rest of the world. After World War I, the emphasis shifted from progressive legislation to material expansion, modern development and resource exploitation. The desire for cutting-edge dynamism was still there, but it had started looking in new directions.
The ‘Australia Unlimited’ slogan captured the public’s imagination, as did Prime Minister Stanley Bruce’s ‘Men, Money and Markets’ campaign. A concerted effort began to build up Australia’s manufacturing industries and increase population and wealth through settling Australia’s interior with ex-soldiers and British migrants. However, making the interior of Australia arable proved to be a lot harder than just coming up with a catchy slogan.
Postwar Australia — from sour to unlimited
In the years immediately after World War I, Australia experienced an economic slump and recession. The great demands that war had been placing on the economy dropped off dramatically, and there was a lag before the more usual peace time realities could take hold. The inflation of the war years continued, with the added problem of wages not having kept pace with high prices, and strikes continued — in 1919 alone, 6.3 million working days were lost to strikes and lockouts.
The recession began to ease in the early 1920s (although strikes continued to be a problem throughout the 1920s), and a new surge of economic growth was coupled with big new dreams about what Australia could and should be turned into.
In the early 1920s, E J Brady, a journalist, publicist and author, created a stir when he published a glossy book called Australia Unlimited. In it, Brady argued that a country with an entire continent at its disposal should develop its resources and population at breakneck speed.
As Australia entered the 20th century, the demographic trend of the 19th century continued, with most Australians living in towns and cities. However, the sheer geographic mass of Australia dwarfed the area of towns, suburbs and cities where most people settled. The ‘Australia Unlimited’ plan tried to resolve this tension by
filling up the empty spaces with big rural settlement schemes
continuing restrictions on imports to encourage growth in the manufacturing industry and help build up the Australian economy to be the next big America
The ‘Australia Unlimited’ idea took off, and came to define the ebullient, go-ahead 1920s. Ambitious projects of intensive rural settlement, sustained migration from Britain, increased customs tariffs to encourage local industry, and large development schemes were all implemented under a Liberal Nationalist Government (see following section).
The sky was seen as the limit, and possibilities of expansion and growth were seen everywhere. Many people expected Australia would soon begin to rival the US in size and power. The expectations of what Australia could and should achieve in the years to come were . . . well, unlimited.
A report in Western Australia on the possibilities of settling migrants on the land gives a good sense of just how wide the horizons of the future were being seen as in the 1920s: ‘It would be difficult to fix a limit to [Australia’s] absorptive capacity . . . the prolific lands of Western Australia will in the future . . . richly reward every genuine effort made to win the inexhaustible treasure they hold in store for all who do their simple duty as self-reliant and self-respecting citizens’.
Postwar blues? Take the ‘Men, Money and Markets’ cure
Building on the enthusiasm created by the ‘Australia Unlimited’ plan, through the 1920s the Nationalist Government, led from 1923 by Stanley Bruce, won successive election campaigns with the slogan ‘Men, Money and Markets’.
The slogan could be broken into its three parts:
Men: Increased migration inflows to build up the population
Money: Big loans from London to fund the various migration and development projects
Markets: Increased access to local and overseas (that is, British) markets in which to sell Australian projects
Bruce’s big thing, as a successful businessman, was doing things efficiently, logically and well. He established or developed various boards and councils to back up the initiatives promised in the ‘Men, Money and Markets’ campaigns:
Tariff Board, to evaluate the effects of various tariffs in encouraging local industry.
Development and Migration Commission, to help coordinate the integration of economic development and increased migration.
Council for Scientific and Industrial Research, to use scientific research for the improvement of Australian industry (which exists still today, as the CSIRO).
Protecting Australia with more tariffs and a Great White Train
Under the former prime minister, Billy Hughes, an Australian Industries Protection League was formed in 1919 and, in 1921, a new tariff was introduced, increasing the amount charged on imports brought into the country. As always, the purpose behind these protectionist measures was nation-building. Australia had been thrown back on its own resources in World War I, and many industries and manufactures had expanded to fill the requirements of the local market that Britain hadn’t been able to take care of.
Massy Greene, the parliamentarian who brought the new Tariff Act into the House of Representatives in 1921, summed up its intent, saying ‘it will protect industries born during the war, will encourage others that are desirable, and will diversify and extend existing industries’.
In the postwar environment of the 1920s, and with Bruce as prime minister, the idea of having a self-sufficient manufacturing industry continued to appeal. If Australia could become more self-reliant it would also become safer. More than that, however, was the ‘Australia Unlimited’ ambition (refer to preceding section). If Australia was going to be bigger than Ben Hur, it needed plenty of local industries to develop. Lacking much in the way of population (Australia nudged into five million over the course of the 1920s), the local market was going to have to be ‘protected’ for local manufacturers.
On the back of ‘Australia Unlimited’ patriotic sentiment, the first ever ‘Buy Australian’ campaign developed, and in 1924 the Australian-Made Preference League was formed. Based on ‘sane and practical patriotism’, it set out to encourage the consumer to exercise ‘a little practical patriotism’ in buying Australian-made goods.
Most spectacular of all ‘Buy Australian’ campaign measures in the 1920s was the Great White Train (clearly in the service of White Australia) — a travelling exhibition of Australian-made goods, on train wheels. In 1925, it covered over 4,000 miles (or almost 6,500 kilometres) and visited 90 NSW country towns, as an ‘Ambassador of Nationhood’ that would, the organisers said, ‘plant the seed of a national sentiment that will yield its harvest in the progress, prosperity, and security of Australia’. A fair load for one train to pull.
Bruce used the newly established Tariff Board to develop his policy of giving full protection to industries that he thought were well-placed to flourish, while scaling back support for those industries that didn’t seem likely to prosper.
At the time, Bruce’s measures were met with wide agreement. Protection had been a strong part of colonial life since the 1860s and 1870s (although NSW had held out), and dominant in the Commonwealth since the early 1900s. But reports from the Tariff Board itself soon began to make clear that protection was creating problems. Although many tariffs stayed in place, Bruce’s strategy meant that if you had an industry you wanted to prosper, it required government favour. If the government didn’t like what you were doing, it was more often sink rather than swim.
Despite Bruce’s wish for a more scientific approach to industry, his style of protection created severe imbalances in Australian economic life, the consequences of which were ignored by practically every government after Bruce until those of Hawke, Keating and Howard in the 1980s and 1990s (see Chapters 20 and 21).
Development and migration
In 1919, Prime Minister Billy Hughes, in Britain and France for postwar negotiations, was struck by the need to increase Australia’s population. He cabled back to Australia: ‘If we are to hold Australia and develop its tremendous resources we must have numerous population’. He thought the British soldiers being demobilised and returning to civilian life in Britain were perfect candidates.
The British liked this idea too — Lloyd George, British prime minister, with 300,000 unemployed war veterans on his hands, thought that shipping them off to Australia was an excellent idea. (Refer to Chapter 3 for more on Australia’s white settlement origins and to see how this wasn’t the first time Australia was thought of as a good place to ship unemployed men to after a war). The next prime ministers, Stanley Baldwin of Britain and Stanley Bruce of Australia, agreed and a series of agreements were struck:
In 1922, the British Government passed the Empire Settlement Act, with the British Government agreeing to cover half the cost of transporting and settling migrants through grants or loans.
In May and June 1923, the Australian state premiers and prime minister agreed to establish a loan council to promote the policies behind the ‘men, money and markets’ campaigns — namely, to better coordinate the big sums of money that were going to be borrowed from England to underwrite the various development and migration projects that were expected to fast-track Australian growth to ‘seriously major nation’ status.
In April 1925, a loan from Britain to Australia of £34,000,000 was agreed on to fund British migration to Australia, land settlement and infrastructure development.
From 1925 onwards, an extra £20,000,000 per year was borrowed to promote and organise migration.
The aim to increase population was effective: Australia’s population went from 5,455,136 in 1921 to 6,526,485 in 1931.
Prime Minister Bruce was particularly enthusiastic about the idea of increasing Australia’s population and opening up its rural land. In 1926, Bruce set up the Development and Migration Commission, saying, ‘These two problems are linked together inseparably. We cannot develop unless we have more population, and we cannot absorb more migrants unless we develop’.
The Commission was put in place to advise the Commonwealth on various development and settlement schemes being put to it by enthusiastic state governments to divide up the £34,000,000 British cash cow.
The main focus of the settlement schemes would be to install the new British migrants on uncleared and previously non-productive land in the interior of the country, quickly creating more prosperity and a bigger market for Australian goods (see Figure 14-1).
Figure 14-1: Front cover of a handbook of farming advice for new settlers in the 1920s.
Hand in hand with the idea of increasing migration and settlement of uncleared lands (and integral to the ‘Australia Unlimited’ plan) was the idea of expanding Australia through increased development.
Through the 1920s, huge funds were borrowed by state and federal governments to fund development projects such as the following:
Irrigation systems
Public buildings
More railways
More roads and bridges (Sydney Harbour Bridge being a prominent example)
Sewerage systems
Water supply systems
On top of this, large amounts of borrowed money went to buy land holdings to cut up for small farms. The focus was on putting farmers on the land — even before the infrastructure was in place to support them. Loans were then made to small farmers for houses, fencing and equipment.
Scientific and industrial innovation
Like the Tariff Board, the Council for Scientific and Industrial Research (later to become the CSIRO) was first established — hastily — by Billy Hughes, but it was Bruce who dramatically increased its role and influence in Australian economic life. Bruce’s main idea was to improve Australian industries and their productivity with expert advice and scientific expertise. He tracked down the best scientists available in Britain to bolster Australia’s ranks, and set them to work to bring some order and intelligence to previously haphazard government attempts to improve industrial performance.
Australia Not-So-Unlimited
A lot of the big dreams and ambitions created by the ‘Australia Unlimited’ idea and the Bruce Government didn’t actually have much detailed substance to back them up. The 1920s was a period of expansion based on borrowed money, government subsidies and empty promises made to new migrants about the possible productivity of the land they would be given — and pretty soon clear signs emerged that it would all go pear-shaped.
Borrowing unlimited for little Australia
Growth and employment in the 1920s were dependent on the government borrowing money to fund urban and rural development projects and prop up manufacture-friendly massive import tariff rates. But the value of key exports stagnated after the first few years of the 1920s, and rural settlement schemes proved on the whole to be a disaster (see following section). Servicing the overseas debt became a bigger and bigger problem — with imports exceeding exports, maintaining Australia’s standard of living became dependent on the continued goodwill of overseas lenders, which couldn’t last forever.
In 1927, a financial agreement was reached between the federal and state governments resulting in the Australian Loan Council becoming a permanent body. Under the new agreement, the Loan Council’s approval was required before the states could borrow money. This, it was hoped, would slow down some of the madder development schemes that were being hatched by various state governments.
But the Commonwealth Government, the coalition between Stanley Bruce’s Liberal Nationalists and Earl Page’s Country Party, were themselves not the best guardians of fiscal prudence. Imports kept overshadowing exports, as the price of wheat and wool received by Australian producers stagnated after the rapid increases of the war years and early 1920s, and the interest payments required on overseas borrowing kept rising dramatically. By 1927, the Treasurer, Earl Page, who in the early 1920s — along with the rest of the Country Party — had lambasted the policies of deficit and tariff, was now being criticised by even some in his own government for going too far with his borrowing and protection.
In parliament, Henry Gullett from the Nationalist Party declared Page was ‘the most tragic Treasurer that Australia has ever known’. Page’s policy of ‘protection-all-round’ and bolstering up weak rural industries with bounty schemes was a house of cards, Gullett said. The approach was all based on the assumption that the main Australian exports — wheat and wool — would continue to go gangbusters on the world market. But, said Gullett, those who remembered the same assumptions being made in the 1880s, and the disaster that followed in the 1890s (refer to Chapter 11), would remember ‘when scores of thousands of men, down on the breadline and below it, were out of work. Knowing the seasonal uncertainties, and the variations in prices that have occurred in my lifetime, and will, no doubt, be experienced again, in the wool and wheat industries, those two supports cannot be regarded as immovable. They may fail us at any time. If they do, we shall assuredly see an era of human suffering that we have never known before . . . we cannot bury our heads in the sand’.
On this last point Gullett turned out to be quite wrong. Australians proved more than capable of burying their heads in the sand, for another two years at least. All the causes of the big crunch to come — insanely high debt level, falling export prices, unproductive rural settlement schemes, ridiculously high tariffs driving up the cost of living — were in place. But instead of being dealt with, to they were ignored wherever possible. What the 1920s sowed in wild expectations, the 1930s would reap in hard consequences (see Chapter 15 for more on the disastrous reaping process).
The problem of ‘Australia Unlimited’ (which the 1930s Depression would soon make abundantly clear) was it was actually quite a Little Australia, dependent on capital and imports from the outside world to develop and maintain its high standard of living. This was fine only for as long as the price of exports held.
Land disasters
The land settlement scheme aimed at thousands of British migrants proved to be an almighty disaster. Beyond the grand visionary scheming, the planning on the micro-level was bad and the immigrants themselves had no knowledge of settling rural areas.
Offered little or no support, thousands of newly arrived British migrants were sent out, along with returned soldiers, to try to carve out wheat and dairy farms in virgin bush land or in mallee scrub that needed clearing. The scheme was an utter failure, resulting in bankruptcies, destitution, suicides and near-starvation. Costs skyrocketed, with little actually being achieved.
In NSW and Victoria, plans to settle 8,000 British families resulted in no more than 730 families settled on the land. The planned cost per farm was £636, but the actual cost per farm was a staggering £31,380 — which, unless you’re getting gold-plated wheat bushels, isn’t good value.
The assisted migration scheme was abandoned in 1929.
The scheme also managed to be a comprehensive public relations disaster. By 1928, word had started to filter back to Britain about the truth behind the promotions of sunny fields and perfect pioneering life for British men and women. Tabloids ran stories about the tragedies of suicide and financial failure, and the British parliament established an inquiry into the nature and causes of the disaster in Australia.
British newspapers reported 20,000 migrants had been left stranded after the project was packed in. A petition of 50,000 seriously angry migrants was presented to the House of Commons. The promotional propaganda had conned them, they said, and the migration agreements had been dishonoured by the Australian Government.
One migrant expressed the disappointment of many when he said, ‘Englishmen who have been cramped for room and opportunities at home are encouraged to think that there is room and hope for them in Australia; they have been told that they will be assisted to travel thither, not out of charity, but because they are needed; and when at last they apply for this assistance they are only too likely to find that they are not wanted’.
Schizoid Nation
If you were looking to get a grip on the national headspace in the 1920s, it wouldn’t be too much to say that Australia was showing definitely schizoid, or split personality, tendencies.
In the seeming prosperity of the 1920s, with more time and money on people’s hands, sport again captured the national attention, as did new pursuits such as the beach and picture shows. New imports such as cars and radios were within reach of many people, and a new lifestyle developed around the large suburban block.
However, tensions were also evident. Returning soldiers, who had done so much to establish the ideal of the Anzac hero and helped Australia position itself as an international hero, felt themselves to be removed from the rest of society, and became frustrated with empty promises of homes and jobs. The race bogey also continued to show its ugly face, this time focusing on new Italian migrants.
Sport, the beach and picture shows
As life returned to normal after the tragedy and austerity of the war, Australians wanted to enjoy themselves again.
Cricket renewed its role of expressing great national self-regard and esteem under the captaincy of ‘Big Ship’ Warwick Armstrong. Australia established an immense postwar superiority led by a fast-bowling duo, Gregory and McDonald, who were the forerunners of latter-day fast-bowling heroes Lindwall and Miller in the 1940s and 1950s, and Lillee and Thompson in the 1970s. The English were comprehensively beaten at their own game 5–0 in 1920–21 in Australia, then 3–0 in England.
Australians also began flocking to the beach in record numbers. Swimming, surfing and surf-lifesaving became popular pursuits in postwar Australia, as society began to shed some of its previous inhibitions about happily soaking up the sun and swimming in bathing suits increasingly designed to show off rather than cover up their bodies.
When they wanted to get out of the sun, Australians flocked to a new 20th-century entertainment: Cinema. By 1927, 1,250 ‘picture palaces’ were operating throughout Australia showing silent films of British, Australian and American production. In 1928, the first ‘talkies’ began, and by 1936, some 3.5 million people were going to the cinema each week.
Cars, radios and Californian bungalows
In the 1920s, the average weekly wage in Australia was a third better than in Britain — 94 shillings in Australia to 60 shillings in Britain. Although the price for goods bought in Australia was often higher than in Britain due to the high tariff wall Australia had established against imports, Australians still enjoyed a higher standard of living, and had more discretionary income at their disposal to spend on some of the new developments in travel, lifestyle and communications: Cars, the suburban block of land and radio.
By 1928, over 500,000 motor vehicles were registered in Australia. Given that the population was around five and a half million, and given that most vehicles were registered to families of an average number of four, this means that some two million Australians, a little more than a third, had a car in their daily lives.
When it came to lifestyle changes, the explosion of car ownership, and road construction, meant that in the 1920s large suburbs began to fan out from the hubs of 19th-century cities. Thousands of returned soldiers got married and took advantage of special purpose low-interest, low-cost bank loans to build new houses on quarter-acre blocks. This gave the construction industry a huge boost, with on average 20,000 new homes being built around Sydney and Melbourne each year of the 1920s.
In the years following World War I, a new architectural style — the Californian bungalow — became popular. Unlike many houses built previously, Californian bungalows had no servants’ quarters — servants having gone out of fashion since the turn of the century. The antecedent of the Hills Hoist — ‘Toyne’s Rotary Hoist’ — was patented in Adelaide in 1926 to provide a new way of drying clothes above all the suburban lawns that were spreading out across the country.
In January 1924, the first radio station (2FC) began broadcasting news, music and race results from a studio on the roof of a department store in Sydney. By 1929, over 300,000 radio listeners across Australia had licences, and countless others used unlicensed ‘crystal set’ devices to listen in as well. (Until the early 1970s, people had to purchase a licence if they wanted to listen to the radio.) In 1932, the Australian Broadcasting Commission (ABC) was established by the Commonwealth. With 12 stations around Australia, by the end of 1936 the ABC had established permanent symphony orchestras in all six state capitals.
The Returned and Services League — larrikins and heroes
By the 1920s, the Anzac digger soldier was a national icon, and the characteristics of the previously dubious semi-criminal larrikin and of the bush worker now became the accepted characteristics of the Australian soldier — a soldier who was, it was now unanimously agreed, the finest fighting man anywhere in the world and not to be taken lightly. These characteristics that the digger inherited from the previously disreputable larrikin and rural worker were:
Enthusiastic about grog, swearing and gambling
Self-confident to the point of arrogance
Not much impressed with the claims of authority and order
And the digger’s great success meant that these previously more dubious characters of Australian cultural and social life acquired more respect in the eyes of the wider Australian public. It was hard to frown at the excesses of the larrikin when he and his mates had marched off to fight in war for the country.
On their return to life in Australia, and seen by all in a new light, returning soldiers worked hard to marry the exclusivity of their group with a spirit of egalitarianism.
Returned soldiers wouldn’t let people who hadn’t served overseas have any say in how their league (the Returned and Services League) was going to be run. And, true to the egalitarian reputation that the AIF had built up over four years of war, and unlike the US and Britain, ranks were no longer used by returned soldiers — men went from being Major, Lieutenant or Captain back to being plain old Mr. On the memorials that began to be built to honour those who had served and those who had died, no ranks were used to order the names — the order was simply alphabetical.
Returned soldiers — elite, but angry
Soldiers coming back to Australia exemplified the great extremes of the postwar Australian mentality. On the one hand, they were full of pride for what they had proved about Australian qualities while fighting in the war. On the other hand, they were in many cases scarred and traumatised by the experience, and soon made angry by the fact that the boundless promises made about what they would return to (jobs and ‘homes fit for heroes!’) weren’t forthcoming or, as in the case of the soldier settlement schemes, were disastrous failures.
The returned soldiers felt proud of what they’d achieved — and rightly so. Their actions had established a new reputation for Australia in the world. Although they returned to Australian society after the war, they had a strong sense of themselves as a distinct group within it. They were distinguished often by a sort of warriors’ solidarity, and felt themselves superior to those who hadn’t fought. For the next 20 years, not having volunteered could be thrown into a person’s face as a kind of slur — Australia’s future prime minister, Robert Menzies, would be denounced in parliament in 1939 by his coalition partner Earl Page for having lacked the courage to enlist and fight.
Soldiers had gone to the war being promised that there would be jobs available for them on their return. When they came back, they found that many of the jobs had been taken by people who hadn’t gone to war. In their opinion, government wasn’t keeping its promise (see Figure 14-2).
In January 1919, about 200 returned soldiers forced their way into government offices in Melbourne and demanded the jobs of those ‘eligibles’ (that is, people who, due to their age, sex and lack of any disqualifying disability, could have signed up) who hadn’t enlisted. In July, riots ended the peace celebrations in Melbourne that marked the signing of the Versailles peace treaty, and ex-soldiers were arrested. A mob stormed the state offices demanding that the arrested men be released, and the Victorian premier was assaulted. Afterwards, shaken but unstirred, the premier released a statement declaring the government would resist all returned soldier intimidation.
In March 1919, returned soldiers in Brisbane attacked a meeting of trade unionists who were flying the red flag (of the Communist, or ‘Bolshevik’, revolution). In March 1920, 500 jobless returned soldiers surrounded the doors of the Commonwealth offices in Melbourne and demanded to speak to Billy Hughes. Doubtless the ‘little digger’ was going to be questioned closely about the gap between promises and reality for returned soldiers. Mr Hughes, unfortunately, was ‘not available’.
A new and unexpected phenomenon was taking place. Thousands of highly trained soldiers were being released back into the general community, and governments feared that they may easily become a source of civil disorder.
To try to ease the frustration felt by returned soldiers, the government introduced ‘soldier settlement schemes’, in which men were given blocks of land to clear and farm. Because many of the returned soldiers didn’t have farming experience, and because the land itself wasn’t particularly suitable (try farming tough mallee scrub for a few weeks and see how your mood is), and because many were still harbouring various deep traumas from the war years, this ‘solution’ just made things worse.
Figure 14-2: Cartoon from 1916, highlighting what many returned soldiers felt was a broken promise.
The race bogey
Another thing that flourished in the schizoid national mentality of the 1920s was the race bogey. Australia was widely agreed to be necessarily a fortress in order to protect its unique social experiment in equality and progress and good wages. Heavy protective tariffs to keep out imports were meant to protect good wages for workers. The still-formidable British navy was expected to protect Australia from outside invasion. And the White Australia Policy was meant to complete the fortress, as an exclusionary immigration policy aimed at keeping out non-white and non-British potential migrants.
In the 1920s, a concerted project was developed to encourage migration to Australia for the first time in the Federation’s history (refer to the ‘Expanding Australia’ section earlier in this chapter for more on this). This migration scheme was specifically focused on Britain, aimed at strengthening the British–Australian link. Australians were proud to boast that they were ‘more British than the British’ — 98 per cent of Australians were of British ancestry or origin. And any signs that the level of Britishness in Australian might drop below 98 per cent were met with a fair degree of national paranoia.
In 1925 a new Immigration Act was passed, giving the Commonwealth new powers to prohibit from entry ‘any specific nationality, race, class, or occupation’ if economic, racial or cultural conditions saw an individual classified as ‘unsuitable’. One source of racial fear were Italians. Whereas most other non-British arrivals were barred, a special treaty allowed Italian migrants into the country because they were allies in World War I. Out of the overall number of annual migrant arrivals, the proportion of Italian arrivals was small — in 1927 only 7,784 Italians arrived compared to 93,352 Brits — but this was enough to trigger racist outbursts.
Campaigning in the 1928 election, Ben Chifley, future Labor prime minister, criticised Prime Minister Bruce for providing homes ‘for dagoes not [returned soldier] heroes’. Trade unions, Billy Hughes and newspapers frequently described Italians and southern Europeans as ‘the scum of Europe . . . cheap, ignorant and low grade . . . miserable semi-slaves . . . simian . . . degraded’. Not one of Australia’s finer moments.
The Workers of Australia . . .
Through the 1920s, the workers of Australia watched as their political party — the Labor Party — progressively marginalised itself from any prospect of gaining power. Labor adopted socialism as a central plank of its political policy platform, which ultimately made it seem a dangerous option.
Meanwhile, unions became more militant, adopting strike measures more frequently than arbitration. Prime Minister Bruce then sharpened the conflict by pushing to remove workers’ rights that had been won before and since Federation. This included trying to remove the Commonwealth government from the arbitration process — handing it all back to the states.
Labor turns hard left
Labor split in 1916 over the issue of conscription, lost most of its parliamentary leaders, and was comprehensively trounced at the 1917 election — the first time in Australian history that this happened (refer to Chapter 13 for more detail on this). The party shifted further left after 1917 and throughout the 1920s, until being briefly brought back to power in 1929 by moderate James Scullin.
During Labor’s long era of political dominance and power (from the early 1900s to 1916), there had been a tension in Labor, between the pragmatic politicians like Watson, Hughes and Fisher (all of whom became prime ministers) and George Pearce (defence minister for most of the period from 1908 to 1921) and the more actively socialist idealists in the trade union movement. After the split, that tension was largely gone, as the moderates and political pragmatists were diminished in number, and union officials began to rise to positions of political authority and leadership.
In 1921, the party officially adopted socialism as part of its central policy platform, which meant it pledged to put under government ownership banks, factories, major industries, large shops and businesses. The moderates, while unable to stop this going through, were able to tack on an amendment reaffirming support for private ownership, but in a climate of fears of ‘Bolshevism’ and the ‘world revolution’ of communism, the damage was already done, playing right into the hands of critics and enemies like Hughes who had no difficulty in stigmatising Labor as a party of extremists at loggerheads with the aims and values of the majority of Australians.
The Labor party, however, continued its hard swing to the left, with Labor parliamentarians announcing plans for a Supreme Economic Council, which would effectively have more power than either the prime minister or parliament. Workers would be put in control of industries. Through these plans, Labor lost all chance of an allegiance with the Country Party (which had originally been open to the idea), and any hope of a vote from many of the middling classes of Australia’s voters who made up the national majority.
In 1923, Jock Garden, head of the Australian Communist Party (which was officially established and linked with Moscow in 1920) and head of the Sydney Labor Council, moved a motion at the NSW Labor Party Conference to grant affiliation to the Communist Party. At the same time, communists began gradually taking many key positions in the Labor Party.
The Miners Federation Union was communist-controlled by 1934, as were various and vital waterside and transport unions. By the end of World War II (1939–45), the Communist Party dominated the leadership of 25 per cent of unions. Of the major unions, only the moderate Australian Workers Union (AWU) stayed free of communist influence.
Labor in state governments
After World War I, people kept voting in the ALP to run the state governments even if federally the party was consigned to the political wilderness. People still wanted progressive, forward-moving policy at a state level. Labor’s brand of socially progressive legislation was elected to take over many of the states:
Joseph Lyons in Tasmania
Ned Hogan in Victoria
Thomas Ryan, Edward Theodore and William McCormack in Queensland
Jack Lang in NSW
Philip Collier in Western Australia
John Gunn and Lionel Hill in South Australia
By March 1928, the Labor Party held power in all states except South Australia (which had just lost its Labor government 11 months previously).
An attack of the Wobblies
At the same time as the Labor Party moved closer to a far-left ideology, the trade union movement was becoming more of a fan of confrontational strike action rather than the arbitration system.
International working-class movements influenced by the Communist Party, such as the Pan-Pacific Trade Union Movement, established links with Australian trade unions. The Industrial Workers of the World (the IWW, or the ‘Wobblies’, as they were affectionately or fearfully called) and the Australian Communist Party pushed hard for direct strikes rather than the negotiated agreements and compromises that were the hallmark of Australia’s arbitration system. The IWW wanted to overthrow the government with a massive general strike, where everyone just stopped working under the current system and brought society to a standstill.
Prime Minister Billy Hughes blamed the Irish (Sinn Fein especially) and militant revolutionaries (such as the ‘Wobblies’) for much of the industrial conflict of the late 1910s and early 1920s. In December 1916, 10 IWW members were jailed for periods of 5 to 15 years for arson and sedition. Two other members of the IWW were hanged for the murder of a policeman. In 1917, the IWW movement was declared illegal. The actual Australian membership of the IWW was always quite low, but their fierce enthusiasm for massive general strikes and rulership of the world under ‘One Big Union’, coming at the same time as the Communist Revolution in Russia, influenced opinion in favour of ‘direct action’ and strike action among unions and workers through the 1920s.
Bruce arbitrates his own destruction
In the first decade of the 20th century, the Commonwealth Parliament established a Court of Arbitration and Conciliation to resolve industrial disputes between bosses and workers in the workplace. The aim was to resolve problems before push came to shove and people went out on strike. The court did something special — officially recognising the existence and legitimacy of trade unions as the organisations that represented their workers’ rights. While unions were still struggling against hostile legislation and government suspicion in other countries, the Arbitration Court made for a proliferation of unions. (Refer to Chapter 12 for more on the creation of the Arbitration Court.) But things turned sour in the 1920s.
Around the beginning of the 1920s, two contradictory things happened:
The field of Commonwealth arbitration opened wider. In the High Court Judge Isaac Isaacs gave a judgment that opened up the Commonwealth Court of Conciliation and Arbitration to workers in state-run enterprises that had previously been confined to state tribunals. In a decision in the Engineers Case that would make 1920 ‘a year of revolution’ according to Sir Robert Garran, Isaacs produced a new doctrine when he returned to the Constitution’s original wording — ‘when a law of a State is inconsistent with a law of the Commonwealth the latter shall prevail’ — after this, the previous doctrine of ‘implied prohibitions’ and ‘mutual non-interference’ between states and Commonwealth was effectively dead.
Some militant unions, increasingly dissatisfied with what arbitration might deliver, began striking rather than conciliating. Increased union strike activity had won some spectacular gains (for example, the coal miners in 1916 where, after a prolonged strike, miners’ demands were met) and some crushing losses (for example, the general strike in 1917, where strikebreakers were used by the Hughes government). At the same time more revolutionary ideas were filtering through from the Industrial Workers of the World and the Communist Party, radicalising unions, and making them more confrontational than they’d been previously. Gains were made by strikes in the early 1920s, increasing the incentive.
So even as federal arbitration became more accessible to more unions, many unions were losing interest. Employers started forming more close-knit organisations to counter the threat of the unions. For their part, the federal government under Prime Minister Bruce spoke about banging the heads of bosses and workers together, but spent more time kicking the workers’ rather than bosses’ heads, with a string of harsh laws.
In 1925, the Bruce government called an election, and ran on law and order issues, like security on the waterfront, and dealing with militant and aggressive unions. The campaign worked — the Nationalist coalition increased its majority from 17 to 29 seats. The Bruce Government then started passing harsher legislation:
In 1926, the Bruce Government brought in a new Crimes Act, which gave wider powers to crack down on militant extremists in the workplace.
In 1927–28, a new Conciliation and Arbitration Act was brought in. Under the new Act wages were reduced, and a 48-hour working week brought back.
The harsher legislation had an almost immediate effect in terms of retaliatory actions:
In 1928, strikes took place on the waterfront. Guns were used, a man was shot, and volunteer ‘scab’ labourers were bashed.
In early 1929, a strike among timber workers started in protest against the new award system. Violent confrontations took place as sawmills were set on fire.
In March 1929, 12,000 coal miners in the northern NSW coalfields went on strike after they refused a one shilling per tonne reduction in the award rate.
The tensions culminated in the most unexpected of ways: Bruce, having tried and failed in a 1926 referendum to have industrial powers moved entirely into the federal sphere, now got fed up. On the morning of a Premiers’ Conference in May 1929, he did the completely unexpected — he sent a telegram to all the premiers saying if the states didn’t get out of industrial issues, then the federal government would.
Bruce told the states, ‘States or Commonwealth may be able to deal with the problem but it is impossible for both to do so at the same time. Accordingly the government is proposing to states that either they immediately give full powers to Commonwealth or that Commonwealth repeals its industrial legislation’.
The states, unsurprisingly, said they didn’t much like the idea of giving up their powers on this one. Bruce, expecting this, said fine. Time to abolish the Arbitration Court, keep shipping and waterside industries under the Commonwealth, but leave everything else. This meant that 149 trade unions and some 700,000 workers would lose their Commonwealth awards, and federal unions would have to deal with up to six different state tribunals.
After Bruce lost the support of some of his own side in parliament (including ex–Labor prime minister Billy Hughes), Bruce called an election on it, asking voters to decide if his solution was the best tactic. At the 1929 election, he got his own head kicked — not only did his government get swept out of office, but he lost his own seat to a firebrand union organiser.
The election held on 12 October 1929 was the biggest landslide since the Nationalist victory in 1917, and a heavy defeat for Bruce’s Government. The Labor Party, led by the moderate James Scullin (who had once said that he was committed to socialism, but was happy to wait 1,000 years before it happened) won an immense 46 seats — next best were the Liberal Nationalists with a miserable 14 seats, followed by the Country Party with 10 seats.
The downside for Labor was that the election was only for the lower house of parliament not the upper house, as the previous government was only seven months old and senators had fixed terms. So, despite having overwhelming support in the House of Representatives, the Senate would require finessing. (The other, pretty huge, downside came less than one month after the election — and Chapter 15 shows how the 1930s Depression wasn’t really the best time for finessing.)
For Bruce, the final humiliation was losing his own seat of Flinders. From a majority of 12,000 votes, he lost by 305 votes, and the president and general secretary of Melbourne Trades Hall Council, E J Holloway, replaced him. Bruce was the only prime minister to lose his seat at an election until John Howard managed to repeat the same feat at the 2007 election. The added irony was that both elections — 1929 and 2007 — were dominated by the issue of workers’ rights.