REFORM IN HARD TIMES JOHN CURTIN MEMORIAL LECTURE-1984 BRIAN BURKE

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Historial Overview

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 unemployment.

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.

2. The then growing view within the cabinet and caucus that it was also essential to curb the power of private banks by nationalising them.

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 1944.

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 the Parliament.

More significantly, Labor won control of both Houses of Parliament for the first time since 1916. In short-

• Despite the social cohesiveness engendered by war,
  
• Despite the fact that our party was dominant in Government within the Commonwealth, and
  
• Despite Curtin's undoubted skill and popularity,
  
• The electorate rejected proposals to weaken the role of the States in the Federation.
  

Significantly, the ultimate success achieved by opponents of the referral of powers was one factor in the establishment of the Liberal Party.

Nationalising the Banks

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 possible.

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.

Persisting in Power

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 those here.

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:

• A society where power is shared between different levels of government;
  
• A nation where, with the exception of Queensland, power is divided within each State between Houses of Parliament which represent different and contradictory interests;
  
• A federal party structure that ensures power is constitutionally shared between elected politicians and their senior officials.
  

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 Development

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 ends.

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.

Accommodating the States

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 defeated predecessors.

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 about efficiency.

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 its distribution.

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 itself.

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.

Budget

In the Budget presented to Parliament on Tuesday night we continued our attempts to ensure that:

• The administration of Government reflected the priorities upon which we were elected.
  
• Government policy continued to address the fundamental economic and social problems confronting our community.
  
• That our policies paid tribute to the positioning of our Government for re-election.
  

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:

• To achieve a balanced Budget, and
• To hold and, if possible, reduce taxes
  

-both confiscating our conservative opponents' reputation as good managers.

The next goal was:

• To give major impetus to employment and the private business sector to enhance economic recovery and growth and to make further inroads into the tragically high level of unemployment that continues, despite the recovery.
  

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:

• To take initiatives in selected areas of social policy where we believe action is overdue and where the constraints on us last year prevented significant action, and
• To continue our drive to improve efficiency.
  

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.

Public Service

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 representation.

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 Coordinating Committee.

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 supporters.

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.

Political 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

• Electorally unsuccessful within the Commonwealth arena,

but

• Highly successful (with a couple of aberrations) at the State level.
  

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 bequest.

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.