REFORM IN HARD TIMES
JOHN CURTIN MEMORIAL LECTURE-1984
Like our present Prime Minister, John Curtin spent much
of his life in Western Australia. Curtin arrived in Perth early in 1917
and, until late 1928, he was editor of the Westralian Worker. He
then first entered Parliament as the Member for Fremantle.
Both John Curtin and Bob Hawke became prime ministers in
a period of national crisis.
In the case of Curtin, it was the crisis of war.
In the case of Hawke it was--and remains--the crisis of
Most of the writing about Curtin emphasizes the crisis
of war and the changes he initiated in Australia's international relationships.
In fact it is arguably the domestic context of Curtin's prime ministership
which is of greatest interest to us today.
Curtin, his cabinet and his party, were haunted by the
prospect of renewed high unemployment after the war. Curtin had survived
the depression but he was defeated in the 1931 federal election. Confronted
with the prospect of unemployment himself, Curtin became a freelance journalist.
At the time of his Parliamentary defeat, unemployment among
trade unionists in both Western Australia and Australia as a whole stood
at 27 per cent.
Two years later, when Curtin was re-elected Member for
Fremantle, the figure was 25 per cent and by the outset of war in 1939 the
unemployment rates had fallen to 7 per cent and almost 10 per cent respectively.
Curtin, in particular, was determined that unemployment
on this appalling scale would not recur after the war was won. So too was
his Treasurer, Ben Chifley.
Between them Curtin and Chifley fought two 'wars'-the war
against fascism and the war against unemployment. In doing so, they developed
policies and initiated action which went to the heart of Labor philosophy.
At the core of their endeavour were two issues:
1. A belief that the solution to postwar problems, including
a return to full employment, required an expansion of the constitutional
powers of the Commonwealth.
Each of these issues has enduring significance for our
movement--both have contemporary counterparts.
As early as October 1942 the Curtin Government publicly
began to implement its postwar objectives.
Evatt, then Attorney General, introduced a Bill for a referendum
which would greatly extend Commonwealth powers in anticipation of postwar
reconstruction. Evatt believed the division of powers between the Commonwealth
and the six States would frustrate planning.
While the defence power had given the Commonwealth authority
in war, without additional powers in peace time Evatt anticipated "social
and economic disorganisation, chaos in production, mounting unemployment,
widespread social insecurity, in short anarchy."
Critics argued that the proposed new powers would effectively
enable the Government party to abolish the States and make other radical
changes to the Constitution.
In response, the Government convened a constitutional convention.
Evatt presented revised proposals, apparently with the intention of obtaining
wider support for additional Commonwealth power.
The convention debates show that virtually all the participants
recognised the need to transfer power to the Commonwealth for reconstruction.
And, in the end, the convention unanimously supported a limited referral
of powers for a specified period and subject to a postwar referendum.
When the Bill was referred to the State Parliaments it
became, in the words of a contemporary commentator, "bogged down ...
in a morass of legal controversies, constitutional doubts, regional jealousies,
business fears, and political antagonisms."
In the event only two States, both Labor, passed the Bill
in the form agreed by the convention.
The strategy of referring powers had failed. Undeterred,
the Commonwealth Government put the proposals to a referendum in August
The proposals were again defeated by an overall majority
of voters and by a majority of voters in four States.
The Commonwealth Government and the Labor movement had
made the same mistake as Billy Hughes did in 1915-that is, instead of holding
a referendum early in the war, when there was some prospect of success,
the decision to seek the States' agreement to refer the powers delayed the
holding of a referendum until there was little prospect of public support.
Ironically, at the 1943 Federal election, before the 1944
referendum, Curtin achieved the then biggest majority in the history of
More significantly, Labor won control of both Houses
of Parliament for the first time since 1916. In short-
Significantly, the ultimate success achieved by opponents
of the referral of powers was one factor in the establishment of the Liberal
Arguably it was the attempt to nationalise the banks which
confirmed the Labor Party's shift away from the electorate.
Curtin himself was undoubtedly aware that the context of
Government was changing-during the 1943 election campaign he undertook not
to socialise any industry during the war and within a year he'd dropped
even this caveat.
While Curtin clearly favoured a Keynesian economic strategy,
following his death in 1945 the party became increasingly vulnerable politically
to claims that it had adopted a socialist path to postwar reconstruction.
Just as the Keynesian strategy held out the promise of
an economic and political accommodation between capital and labour, the
developing debate over the role of the banks left the party exposed to threat
of conflict between the two.
The failure in 1931 of the Commonwealth Bank Board to cooperate
with proposals of the Scullin Government and the failure of that Government's
financial proposals to pass the Senate in 1933, underpinned the determination
of Curtin and Chifley to reform the banking system in 1945 when Labor had
a majority in both Houses of Parliament.
But unlike Chifley and Chifley's Shadow Treasurer--who
was my father--Curtin believed the nationalisation of banking was unacceptable
to public opinion.
So the 1945 legislation nationalised nothing--it expanded
the functions of the Commonwealth Bank and the authority of the Treasurer
over it. And it enabled the bank to act in accord with Keynesian principles
and objectives, including the goal of realising full employment.
When the legislation was presented to Caucus for approval
in February 1945, my father moved that it be withdrawn and a Bill introduced
"Giving the Government power to acquire the business and assets of
the private banks as a going concern." In the course of his speech,
he reminded Caucus of a brilliant speech Curtin had made in 1931 advocating
the nationalisation of banks.
Curtin commented dryly that he recalled the speech and
reminded Caucus that 1931 was also the year in which he lost his seat.
Following Curtin's death Chifley, as Prime Minister, did
attempt to nationalise the banks. As one writer subsequently observed, Chifley
was easily returned to office on Curtin's banking legislation-only to be
defeated by his own.
Curtin, then, was a powerful exponent of the art of the
In financial policy, particularly, he defined the electoral
limits of our party's initiatives and endeavoured to raise the electorate's
aspirations. Curtin argued tirelessly for intelligent, constructive Government
and succeeded in winning popular consent. He knew the opportunities and
limitations of public opinion.
From 1943 Curtin governed not only with control of both
Houses of Parliament but the support of Labor Governments in four of the
six States. Unlike all other Federal Labor Party leaders--until Hawke--Curtin
positioned our party for a long period in power.
The reality is that his bequest was squandered: within
four years of Curtin's death our party was defeated. As we all know it then
remained out of office for more than a generation.
The political drought through which our party passed nationally
between 1949 and 1972 had many causes. It is not my intention to canvass
My purpose instead, is to suggest to you that Curtin's
experience as Prime Minister and the demise of Labor in Government so soon
after his passing is of enduring relevance to how we manage conflict;
in determining to remain in office long enough that our achievements cannot
easily be undone.
It is of particular relevance today when our party
stands positioned, as it was when Curtin left it in 1945, for a long period
in power. Many of the challenges to our persistence remain unchanged.
There are structural reasons which make it difficult for
our party to retain office, constraints which relate to, but do not entirely
depend upon, the economic environment within which we act. In the first
place, the organisation of the Australian Labor Party has always
been a federal one.
Unlike the Commonwealth of States, our federation
of branches adopted a unitarian rather than a federal
political structure. The result has been that there has always been inherent
conflict within our party. I am not referring to the conflict between ideology
and power, or if you prefer, between principle and pragmatism-that's not
peculiar to our own political party. What's unique is that among labor
parties this inherent conflict occurs in Australia within:
Each of these arenas impose their own constraints and challenges.
At the same time, the clear contradiction between the long
period in power we naturally seek and the context in which we seek it, is
reflected in the relationship our party has with its traditional support
base-the trade union movement.
It's a relationship distorted by the dramatic differences
in the States we pretend to govern.
Within our party the affiliated trade unions remain
fundamental to our progress. It's commonplace to observe that we've failed
to attract the affiliation of white collar trade unions. What's more significant
is the subtle way in which the composition of the party's industrial base
restrains our capacity to--as Curtin did--accommodate the electoral limits
imposed on our party's initiatives.
In the Commonwealth, and in a majority of the States, affiliated
trade unionists now represent a minority of the estimated total number
of trade unionists. More importantly, it is a minority which largely
consist of urban industrial workers, most notably in manufacturing. In turn,
the importance of manufacturing varies widely between the States.
Patterns of Economic
The result is that different patterns of economic development
between the States are reflected in different attitudes toward public policy
within the branches of our party.
In the older, more industrialised States the interests
of both capital and labour differ in some respects from those of States-and
branches of our party-in which manufacturing is less important.
In the history of the Federation this conflict is well
known. What's not well known are the implications of this pattern of past
industrial activity for the future economic development of our country.
And for the re-election of Labor Governments.
Just as there is an interest within the older branches
of our party to maintain tariff barriers and pursue industry policies which
emphasize manufacturing; in those States where the pattern of industrial
development has not spawned a large unionised workforce, the capacity to
foster a more rapid rate of technological change is greater.
Again, while all Labor Governments have been committed
to the maximum level of Australian participation in major resource projects,
circumstances may well arise in which a marginal project can only proceed
with greater use of foreign policy.
As these circumstances arise, Labor Governments will have
to confront some difficult judgements about how best to encourage economic
growth. Difficult judgements that go directly-within the uncomfortable context
I've already described-to the persistence of our party in office.
Applying as an example that difficulty of judgement today
to the question of Aboriginal land rights, it is important to understand
that, unlike most federations, our Commonwealth has not hitherto been divided
by internal ethnic differences.
Rather, conflict has largely been based upon differing
economic interests and the natural suspicion that those who exercise power
remote from the people will exercise it to benefit themselves.
Some of these economic contradictions have, in the past,
provoked differences within our community over the place of immigration.
Recently, attempts have been made to revive these prejudices for political
It is my view that the issue of Aboriginal land rights
is typical of the conflicts that confronted Curtin in different guises as
he sought to ensure our party's persistence in Government.
Unless the Commonwealth and the States can reach agreement
upon the basic issues involved, what is fundamentally an economic conflict
will become a racial, regional and intergovernmental one.
The worst consequence is simply that it will become electorally
impossible to redress the grievances of our most deprived minority. Unless
those States which have a small proportion of Australia's original inhabitants
accommodate those States where the opposite is the case, then not only will
there be major conflict in the Federation but the course of the original
Australians will be set back a generation.
It is not by accident that it is only in the Northern Territory
that the principle of Crown ownership of minerals has effectively been abandoned
and the Aboriginal people given rights that no other Australians, except
Western Australian farmers, presently possess.
It was precisely because the Northern Territory is a
dependency of the Commonwealth Government that the then Liberal Government
was able to overthrow the socialist principle that the State, that is all
of the people, owned and should benefit from our nation's natural wealth.
Of course, within the Northern Territory itself Aboriginals are in
the majority. If in fact the Northern Territory acquired statehood, then
it would be competent for the electors of that new State to elect to do
what the Commonwealth did.
As a result of the 1967 referendum, the Commonwealth Government
undoubtedly has the constitutional power to impose uniform national land
rights upon the States as well.
In these circumstances, my view is that the Commonwealth
must accommodate those States, like our own, which recognise an obligation
to the Aboriginal people, but are not prepared to abandon the fundamental
basis of land tenure which the expansion of the European industrial centres
in the 18th and 19th centuries imposed.
In the Northern Territory--the one part of Australia where
a Commonwealth Liberal Government abandoned this system--the result had
been not racial harmony but racial discord.
In the circumstances I have described, it is utterly
against the interests of this State for any political party to
oppose the principles which this Government has enunciated in response to
the Seaman Enquiry.
Here then, is a great issue. It has not only racial, moral,
regional, economic and intergovernmental implications; it challenges the
very basis of our democratic system. And, in terms of our legacy from Curtin,
that is the prospect of enduring Labor Government, this issue confronts
the changes of success.
In this State, the Opposition has not only opposed our
proposals to redress the grievances of black Australians, but also our attempts
to make the Legislative Council more democratic.
The reform of the Council is one of the structural challenges
I referred to earlier that is an injustice to all Western Australians and
also makes it harder for Labor Governments to survive. Despite the fact
that our party was elected to office with a record majority, power
still ultimately resides not with the elected Government, but with our
Referring to land rights proposals--tempted though the
Opposition might be to reject them--it should be clear to every Western
Australian that the alternatives to our proposals are much more destructive.
In short, our position proposes that compassion and economic
self interest can be reconciled. At the same time, the quest for persistence
in Government can be assisted, not contradicted.
Equity and Efficiency
Within our system of Government then, power is shared not
just between branches of our party, between the Commonwealth and the States
and between the Houses of Parliament, it is also shared between elected
politicians and their permanent counterparts. But governing is, and, in
Curtin's terms, surviving is, essentially about the allocation of resources.
So is business.
The contrast between the two is that the former is concerned,
at least under Labor Governments, about equity; the latter is concerned
Historically, it has been the Liberal Party which has monopolised
the concept of efficient financial management by equating it with profitability-the
creation of wealth and private sector practice.
The Australian Labor Party, however, has been preoccupied
with questions of equity-not about the creation of wealth but about
Historically, then, the political party with a unitarian--or
centralist--and redistributive ideology, the Australian Labor Party, has
been unsuccessful in the very arena in which it professes to implement its
core policies. Instead, it has been the Liberal Party, in coalition with
the National Country Party, which has usually governed the Commonwealth.
Liberal Governments have also professed to support small
government. For its part, the Australian Labor Party has largely ignored
the question of how the public sector should be organised and what its role
should be. Our view has simply sought to expand, support and accept its
role. In terms of Curtin's legacy of survival in Government we can no longer
afford this luxury.
The plain fact is that the community is increasingly aware
that the burden of taxes and charges has reached a level that is intolerable.
In these circumstances it is not only politically stupid but morally repugnant
to increase the burden upon business and working men and women and their
families, without exploring every avenue to reduce the cost of Government
It was this commitment which underlay the difficult decisions
which the present Government took soon after it was elected to office. And-married
to this commitment-is our belief that its expression went directly to our
persistence in power.
In the Budget presented to Parliament on Tuesday night
we continued our attempts to ensure that:
Practically expressed, as we did last year, we set for
ourselves major goals for the year and built the Budget around them.
Two of these goals were:
-both confiscating our conservative opponents' reputation
as good managers.
The next goal was:
This goal was set because there is not the slightest doubt
that unemployment, especially among young people, is the most traumatic
social problem in our community. It recognises that if there is to be a
significant reduction in unemployment, the private sector must play the
major part because it employs about 70 per cent of the workforce.
Our other goals were:
Efficiency in Government is not simply a quest to reduce
costs and implement policies that meet community needs. As I have said,
it is an endeavour to make the best use of available resources. Another
aspect of that endeavour reflects the symmetry of efforts to maintain and
retain Labor Governments.
The resources which governments use to govern have historically
been embodied in a tenured cadre of officials competent to administer affairs
of State at the direction of the elected representatives of the people.
This then, is the traditional concept of government: a permanent,
impartial, exclusive bureaucracy servicing temporary, partisan political
In fact, in order to strengthen the role of the temporary
political actors, most governments in western industrial societies also
bring with them to office personal staff to assist elected decision-makers.
Within Australia the appointment of ministerial staff chosen
by the members of an incoming Government was first introduced on a significant
scale by the Whitlam Labor Government.
The Fraser Liberal Government continued the practice and,
indeed, strengthened the ministerial staff structure.
In both the Commonwealth and most State Governments the
employment of ministerial staff is well established. Their roles complement
those of the Ministers to whom they are responsible and they can be removed
by another Government.
It is only in Western Australia that the present Opposition
continues to oppose this change-the Western Australian Liberal Party is
out of step even from its Liberal colleagues.
The report of the Committee of Review into the Liberal
Party, the Valdor Committee, commented last year that:
If the next Liberal Government is to meet Liberal objectives, it will be essential for it to allow its Ministers considerably more professional (and office) support.
The committee recommended that:
Developing the political support staff needed for the Liberal Party in Government should be a matter of priority for the Party in its opposition period.
In other words, the Liberal Party at the national level
has now admitted what the Australian Labor Party recognised a decade ago:
any Government must qualify or supplement the role of the Public Service
if it is to secure its own priorities.
And there is nothing sinister in these practices. They
strengthen the role of the elected Government and enable an interchange
of ideas and experience between the public and private sectors.
In the latter case we have also sought to second appropriate
individuals from the private sector into the Policy Secretariat within the
Department of the Premier and Cabinet.
We have consulted key community organisations, including
the Trades and Labour Council, in the course of developing our budgets.
We have invited the Opposition to join the America's Cup
We have sought the advice of business leaders and trade
unions in reorganising Government departments and agencies.
The use of private sector practices to manage public institutions
and assets has provoked some unease. The plain fact is that when the present
Government came to office there was no inventory of Government assets, the
accommodation costs of many Government agencies were unaccountable and the
financial resources of the State were underutilised.
The price of inefficiency was, of course, an increasing
burden of taxes and charges and a dwindling capacity to implement public
policies. The price of inefficiency was not only higher taxes but increasing
inequality. Under the previous governments the business community found
itself excluded from activities of Government in which it could legitimately
have participated and from which the community benefits.
In short, unlike its Liberal predecessors, this Government
has sought to work in cooperation with the private sector and the Western
Australian business community in particular. As I have already implied,
this is especially appropriate in periods of high unemployment.
Let me give you three examples.
As you know in the 1983 election campaign the present Government
promised to encourage economic development to ensure that Western Australians
had a greater share in the ownership and processing of our mineral resources.
We moved promptly to ensure that Western Australians could participate in
the Argyle Diamond Mine, in which the Government of Malaysia already had
a direct interest.
In addition to its role in managing the Western Diamond
Trust, the Western Australian Development Corporation (WADC) is now evaluating
the possibility of the Government participating in the feasibility study
for an aluminium smelter, power station and new coal mine in the South West
of the State.
We are determined that Western Australians will have a
significant role in this and other resource development projects. The plain
fact is that until the present Government was elected there was no commitment
to redress the growing foreign ownership of our resources and the limited
extent on mineral processing.
I am not painting a caricature. The most prominent Western
Australian entrepreneur recently described this period in our State's development
as one in which:
Western Australian companies were not able to be involved ... projects in the 1960s were mostly owned and managed outside the State.
Western Australia, he said, "has very little equity
and very little to do with the management of major projects that make up
our State economy. In many cases the benefits have not stayed."
As part of our strategy to strengthen the State's economy
and the opportunities for public participation in it, WADC has also been
actively pursuing a new joint venture which would bring the Australian headquarters
of a major international bank to Perth. In conjunction with the WADC, the
bank will bring new skills and financial resources into the community and
lessen our dependence upon interstate and overseas financial institutions.
In each of these cases, Government action has been the
catalyst to worthwhile social objectives, achieved in cooperation with the
private sector. Furthermore, our electoral standing has been enhanced, to
the mutual benefit of both the business community and our more traditional
At the same time, in most cases the marginal line to be
walked between the implementation of policy and the extent of public accommodation
has been highlighted.
Structure and Party Ideology
In terms of Curtin's legacy, tribute has been paid to his
proposition that policies be implemented according to the perceived limits
the electorate is prepared to accommodate.
The Australian Labor Party has been
It is a party which has represented the interests of labour
rather than capital but has governed only with the consent of capital.
The record shows that Labor has governed for long periods
at State level, but has rarely governed the Commonwealth. The party's postwar
prime ministers have been embroiled within a difficult structural context
by the party's ideology in conflict with State Governments on the one hand
and capital on the other.
Even in the most propitious of circumstances the electoral
legacy of Curtin's prime ministership was short lived. The implications
for our present position are clear.
The fundamental goal of our movement must be to persist
in office. Without that persistence, as the history and aftermath of
the Curtin, Chifley and Whitlam Governments shows, our movement will have
failed to realise the aspirations of our supporters.
This is not an argument for timidity in Government, it
is a plea for creative policy making which seeks to recognise both the limits
and the opportunities which are inherent in the federal structure of our
party and our Commonwealth. And it's so important. Is there any one among
us who would doubt the profound impact that the Liberal Party had on our
society in the years between 1949 and 1972?
This was a period of rapid economic growth, of rising expectations.
It was a period when reform was possible. It was an opportunity our
party lost, only to see society become more unequal and more intolerant.
By contrast, in our short period in office no one
would doubt that our party has already achieved significant reforms. Our
economy is expanding, unemployment is falling.
How much greater then, are the opportunities ahead of us
today when we stand with Bob Hawke on the threshold of fulfilling John Curtin's
There is a great opportunity before us--it is the opportunity to govern in the States and in the Commonwealth, not just until the bicentennary, not for a decade, but for the rest of this century.