Lessons from the Whitlam government

The election of the Whitlam government on 2 December 1972 was a watershed in Australian political history. Whitlam’s was the most reforming of any Australian Labor government, and the last one to introduce significant reforms that improved working-class life.

Even an incomplete listing indicates the breadth of those reforms. Within a few days of the election, the government had abolished conscription, released draft resisters from prison and recognised the People’s Republic of China, ending the Cold War fiction that Taiwan was China and the mainland didn’t exist. Soon to follow in the first eighteen months of the government were free tertiary education, Medibank, increased age pensions, the final burial of the White Australia Policy, the introduction of no-fault divorce and supporting mother’s pensions, increased wages and leave for Commonwealth public servants, and votes for 18-year-olds. 

Before the government’s dismissal on 11 November 1975, it had drafted the first land rights legislation, granted independence for Papua New Guinea and extended the sewerage system to much of outer suburban Sydney.

This is the key reason the right loathes the memory of the Whitlam government. That loathing may be dressed up in the language of “economic incompetence” and “corruption”, but what the right really wants to bury is the idea that any government should introduce measures to benefit the working class and oppressed.

The Whitlam government came after 23 years of unbroken Liberal rule. It is no wonder that much of the nostalgia for Whitlam’s election sees it as Australia liberating itself from the stultifying atmosphere, not only of decades of Liberal rule, but of the right-wing attitudes of the Cold War era more generally. 

Labor’s slogan, “It’s time”, resonated strongly with all that. There is good reason that, for many, Whitlam symbolises a period of dissent, of protest, of revolt against the conservative establishment. 

Despite the myth-making, Whitlam was brought to power, not by a clever marketing campaign and a slogan that captured the mood of the times, but by the votes of the working class, the young and the oppressed who were already fighting for their rights. The Whitlam government arrived riding a wave of revolt.

The Cold War politics that had sustained the Liberals was eroded by mass movements. The anti-strike penal powers were swept away by a historic strike wave in 1969. A mass anti-war movement against Australian involvement in the war in Vietnam, women’s liberation, the Aboriginal rights movement against racism and for land rights, a student radicalisation across every campus in the country all drew on and added to widespread working-class confidence and combativeness.

Much of the credit retrospectively given to Whitlam belongs to the radicalism of the times. Whitlam himself was from the right of the ALP. From a well-off background, the son of the former Commonwealth solicitor, Whitlam supported state aid to private schools, opposed union action on political issues and strongly backed the imperialist alliance with the US.

He was a “moderniser” not just of Australian capitalism but of the ALP. Long before Whitlam became leader in 1967, he made his name campaigning against union control of the party and for more power in the hands of the parliamentary leadership.

On taking over the leadership from Arthur Calwell after Labor lost the 1966 election, Whitlam pushed the party’s policy on Vietnam to the right, scrapping the party’s commitment to immediately pull conscripts out of Vietnam. He denounced the 1969 motion passed by Victorian unionists calling on Australian soldiers in Vietnam to mutiny.

He purged the left-wing Victorian branch of the ALP in 1970. His effort to distance the party from its working-class traditions was part of a strategy to attract support from the middle and capitalist classes.

Labor offered big business a strategy for the renovation of Australian capitalism and a new approach to the increasingly important Asian region (such as recognising China) without jeopardising the US alliance. 

The government’s apparent “anti-colonial” stance in granting independence to Papua New Guinea was based on Australian business and finance continuing to dominate its economy while the Papua New Guinea government was dependent on Australian aid.

The same logic applied (without any anti-colonial gloss) when Portugal withdrew from its former colony East Timor in 1975. Whitlam made clear to the Suharto military dictatorship in Indonesia that his government would not oppose the annexation of East Timor—better that than the instability of an independent state. The Indonesian invasion that ensued cost more than 200,000 East Timorese lives.

So the Whitlam government was a contradictory phenomenon, enacting reforms that changed many workers’ lives for the better (though many were the culmination not of the election but of mass struggles under the preceding Liberal governments) but also meeting the needs of the capitalist class. After all, like all Labor prime ministers before and since, Whitlam was a manager of the capitalist system.

This explains why the ALP’s victory was welcomed not just by working-class people but also by sections of big business, including the Murdoch press and mining magnate Lang Hancock. Whitlam reassured them from the outset: “Nothing could be further from the truth than that we are anti-business or hostile to business”. His history as a head kicker for the right inside the ALP would have further reassured them.

Straddling the class divide seemed possible while the economy continued to boom during the government’s first 18 months. Whitlam’s first budget, in 1973, doubled spending on education, increased spending on health by 20 percent and quadrupled the money spent on housing. And there was still a budget surplus. 

The other factor in understanding why Murdoch and others of his class could support the rise to power of the Whitlam government was that they had lost faith in the bickering and incompetent Liberals, who seemed incapable of “modernising” the country.

The more farsighted bosses could see the benefits of tariff reductions, the ending of White Australia as Australian capitalism looked more to the Asian region, the promise of child care and equal pay to help draw more women into the workforce as industry continued to expand. Corporate profits rose by 16 percent in Labor’s first year in office.

The Whitlam government’s most important welfare reforms can be understood in this light. They were definitely advances for the working class, but they also addressed the needs of the bosses.

Free tertiary education and the public health insurance scheme, Medibank, brought benefits to many, but the ruling class also needed a better educated workforce whose health care could be dealt with more efficiently than the old system of private insurance, which resulted in 10 to15 percent of the population being uninsured.

Yet despite much of the ruling class backing Whitlam in 1972, they never trusted the Labor Party fully. Whitlam might be “one of them”, a well-spoken, well-read QC, but Labor’s links to the trade unions (and therefore a potentially militant working class) meant their trust could never be complete. 

Then, in 1974, the world economy crashed—and so did the illusion that Whitlam could satisfy both bosses and workers. Capitalist hostility to the government rose sharply as the rate of profit slumped from 13 percent in 1973 to 9 percent in 1975. A virulently anti-Labor media campaign blamed the crisis on the demands of militant trade unions and government incompetence. In reality, the supreme incompetence as far as the ruling class was concerned was the government’s inability to rein in the working class.

The ALP attempted to oblige. Early in 1974, Industrial Relations Minister Clyde Cameron denounced the “bloody-mindedness” of militant trade unions for “pricing thousands of Australian workers out of employment”. Other ministers started denouncing “dole bludgers”.

But in the face of spiralling inflation, working-class militancy grew, and successful strikes meant wages outstripped price rises. In 1974, workers took more than 6 million days on strike, the highest number since 1919. 

By early 1975, the government had cut corporate taxes and was handing out subsidies to companies threatening to sack workers. The Prices Justification Tribunal, which had been set up in 1973 promising to keep prices in check, now allowed BHP to raise its prices by 14 percent while blaming unions for rising unemployment and inflation.

The ALP’s Terrigal conference in February 1975, later described by Labor economist Barry Hughes as “a pro-business orgy”, confirmed the retreat. The restoration of profits became the government’s central goal.

The government now froze recruitment to the public service and began to cut large numbers of public sector jobs. In May 1975, the government supported the Arbitration Commission’s introduction of wage indexation to limit pay increases to the rate of inflation. The trade union leaders agreed.

Faced with these attacks, working-class support for the government began to fall.

The August 1975 budget revealed the shift to attacking the working class even more clearly. Treasurer Jim Cairns and Clyde Cameron, seen as too close to the unions, were dumped. New Treasurer Bill Hayden brought down a budget that put the reform process into reverse by cutting welfare and handing out tax concessions to the capitalists.

But still big business wasn’t happy. The working class could not be reined in quickly or sharply enough; the working-class offensive was too recent a nightmare for them. The bosses’ suspicions of Labor because of its links to the trade union bureaucracy came to the fore.

The economic crisis could be solved for only one class, and the ruling class wanted its “A team” in place to do the job. So in the latter part of 1975, there was a highly orchestrated campaign against the Whitlam government, organised through the Murdoch media, the Liberal Party and the capitalist class.

A beat-up about the government’s attempts to borrow petro-dollars (the “loans scandal”) was used to associate the ALP with corruption and incompetence. In the meantime, there was a strike by capital as many big businesses stopped investing and the inflow of foreign capital dried up. In October, Liberal leader Malcolm Fraser used his numbers in the Senate to block the supply of funds to the government. 

The situation was deeply polarised. In the nine days following the blocking of supply, 50,000 workers attended rallies and a further 100,000 struck in defence of the Whitlam government. This resistance produced a sharp rise in Labor’s popularity, and the Age and the Courier Mail took fright and urged the Senate to pass supply. Sir John Kerr, the unelected governor-general representing the unelected queen, resolved the issue by sacking Whitlam.

Workers poured out of their workplaces to strike and join mass demonstrations against the Kerr coup. The overwhelming demand was for a general strike. ACTU President Bob Hawke and Labor’s parliamentary leaders were for anything but. They believed that defeat was preferable to a serious fight that would break the bounds of parliamentary politics.

Despite Whitlam’s oratory on the day of the dismissal, calling Malcolm Fraser “Kerr’s cur” and advising those of us on the steps of Parliament House to maintain our rage, he was trying to direct that rage to the ballot box and away from street rallies and strikes. 

The backing of the left union officials, especially those like AMWU Victorian secretary and leading Communist Party member John Halfpenny, was essential in eventually clearing most workers from the streets. The Communist Party tailed the ALP to the ballot box instead of mobilising its still extensive networks of worker militants for a general strike.

Unlike the reforming mantra of 1972, Labor ultimately fought the 1975 election on the basis of its commitment to budget restraint, something that has been part of every Labor campaign since.

The betrayal of channelling workers’ anger into an electoral contest, of choking off the mass campaign, ended in a landslide to Fraser on 13 December. Some of the biggest swings against Labor were in working-class areas.

As well as illustrating how disposable democracy is to the ruling class, the government’s demise showed something else: the essential contradiction in Labor’s reform programme. To stay in power, the Whitlam government had to placate big business. In doing so it alienated its base, doubly so by demobilising it to show Labor’s commitment to the rules of the game.

The Whitlam government is a case study of the limits of parliamentary reform, even for a government that did deliver real reforms. The conclusion we draw must be not that Whitlam went “too far, too fast” and that working-class expectations must be moderated to prop up profitability, but that attempting to reform capitalism through parliament is utopian, and a strategy of directly challenging capitalism and the capitalist state will be necessary to get what the working class needs and deserves.

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