Former Labor Prime Minister Edward Gough Whitlam has died. He was 98. Whitlam served as the 21st Prime Minister of Australia from 5 December 1972 until his controversial dismissal by the Governor-General, Sir John Kerr, on 11 November 1975. He is often remembered for the progressive reforms that were introduced during his time in office.
Leading the first Labor government since 1949, Whitlam oversaw a legislative agenda that included free tertiary education, the establishment of Medibank (forerunner to Medicare), equal pay for women, granting Aboriginal land rights for the first time, abolishing what remained of the White Australia Policy, withdrawing troops from Vietnam, and providing greater funding for housing, social security, urban development, culture and the arts.
Unsurprisingly his passing on 21 October has led to an outpouring of grief. Labor and Liberal politicians alike have dubbed Whitlam a “giant of his time”. Even the Murdoch-owned Australian editorialised on 22 October that a “more open, confident, diverse and optimistic nation will forever be indebted to (Whitlam), a colossal shaper, rare visionary and magnificent servant”.
In an age of cuts and counter-reforms, the progressive reforms associated with the Whitlam government can seem almost utopian. The truth is Whitlam did not exist in a vacuum but was a product of the economic and social processes of the times. The fact that his government was able to pursue a progressive, yet limited, agenda says more about the era than it does about the Labor Party.
Amidst a period of international social unrest, Whitlam was elevated to the leadership of the ALP in February 1967. Though from the right of the ALP, Whitlam was pushed to the left on a number of issues by the growing social movements of the late 1960s. These movements – against the Vietnam War, for indigenous rights and women’s liberation – both here and internationally, developed in the midst of the post-WWII economic boom.
From 1945 to 1973, an unprecedented growth of capital helped create the conditions for ordinary people to win significant gains from their employers and their governments. The boom led to an upsurge in strikes and industrial action. In 1969, the number of work days lost to strikes reached 2 million. The truth is the progressive reforms of the Whitlam era were not merely handed down but won by the struggles of ordinary people.
It was against this backdrop that the ALP, under Whitlam’s leadership, was swept to power in December 1972, thus ending 23 years of Liberal Party rule. However, Whitlam never intended to challenge the prevailing social order but rationalise the economy and develop the welfare state. The support of media baron Rupert Murdoch during the 1972 election was a sign that many corporate leaders had trust in a Labor government to carry out these tasks.
Under pressure from the social and trade union movements, the government pumped millions of dollars of into expanding the public sector. From $442 million in 1972, spending on education had risen by 196% in real terms to $1.9 billion by 1976.
The abolition of tertiary fees in January 1974 saw the number of full time university students rise to 350,000 within a decade. Funding for public health received a similar boost, increasing by 156%, therefore making the introduction of the universal health care, Medibank (forerunner to Medicare) in 1975, a reality.
To ensure continued economic growth to sustain his programs, Whitlam imposed a 25% tariff cut in July 1973. The idea was to force inefficient firms and industry to close, with capital flowing into more efficient areas. His recognition of China in 1972 and support of the dictatorial Suharto regime in Indonesia – including its annexation of the resource rich East Timor in 1975 – were motivated entirely by economic interests.
However, the reform program consciously rested on the post-war boom that Australia had enjoyed since the end of WWII. In a 1972 policy speech, Whitlam declared that Labor’s ambitious program could “only work successfully within a framework of strong uninterrupted growth”. The frantic economic growth created increased tax revenue which the government funnelled into its social programs. Despite the 46% increase in overall government spending in 1973-74, the budget still recorded a $211 million surplus.
The boom, which Whitlam’s program was built on, began to falter in 1973. The 1973 ‘oil shock’ – the result of OPEC countries imposing oil embargoes which, drove up energy prices – triggered an unprecedented crisis in the global economy. Commodity prices plunged. In Australia, inflation rose to a staggering 22%. Unemployment reached 5.4%. As a percentage of GDP, profits fell from 14% to 9%.
Announcing the 1974 budget, Whitlam’s first Treasurer, Frank Crean, declared that “crucial as the fight against inflation is, it cannot be made the sole objective of government policy. The government is committed to the program of social reform to improve the position of the less privileged groups in our society and to maintain employment opportunities”.
However, by February 1975, under enormous pressure from big business, Labor abandoned this position and vowed “reasonable returns on investment” and to “work with the private sector”. This was reflected in the last Whitlam budget. Handed down by his last Treasurer, Bill Hayden, in 1975, the government made deep cuts to public spending. The Australian Financial Review described the Hayden budget as the beginning of a “new economic orthodoxy”.
Throughout 1975, big business turned against the Whitlam government and supported its removal by whatever means necessary. Even though the ALP posed no threat to the prevailing social order, big business was concerned. In 1974 strike levels reached 6 million days, its highest level since 1919. The corporate sector was not confident that Labor could keep an uneasy population in check.
The “loans affair”, in which the government sought to raise $4 billion for infrastructure projects from financiers in the Middle East, was the pretext that forced the Liberal Party, to block the budget in the Senate and withhold supply.
With a constitutional crisis looming, the Governor-General, Sir John Kerr intervened. On 11 November 1975, Kerr dismissed Whitlam, installed Opposition Leader Malcolm Fraser as interim Prime Minister, and called elections for 13 December. In times of crisis, the formal trappings of democracy, even in one of the richest countries in the world, can be bypassed using extraordinary powers held by the capitalist state.
In the aftermath of the dismissal, hundreds of thousands of people stopped work and took to the streets throughout the country. In Melbourne an estimated 400,000 people went on strike and a huge rally was held in the City Square. The Australian warned that further protests raised “the very real danger that people might seek to express their opinions violently rather than democratically through the ballot box”.
Both the ALP and Australian Council of Trade Unions (ACTU) feared that a mass movement, outside of their control, could develop in response. ACTU President Bob Hawke was concerned that if “people move for a general strike” it “could unleash forces in Australia which we have never seen before”. Whitlam implored his supporters to “maintain your rage and enthusiasm for the [election] campaign”. The ACTU and ALP refused to mobilise the organised working class in response to the undemocratic coup.
The ALP ended up losing the 13 December election in the biggest landslide in Australian political history. Against the backdrop of economic crisis people voted for what they perceived to be a more stable government. Whitlam remained ALP leader until 1977 before leaving the parliament the following year.
Since 1975, many of the progressive reforms introduced by Whitlam have either been scaled back or scrapped entirely. Both the Liberals and Labor have been complicit in adopting similar economic policies of privatisation, deregulation and spending cuts to social welfare, health and education. The Hawke-Keating Labor government, which served from 1983 to 1996, were the first to wind back many of the Whitlam era gains.
It is understandable that many people associate Whitlam with progressive reforms and the hard won gains of the past. The question at hand though is how to re-win these gains and make them secure. While socialists fight for every possible reform under capitalism, we recognise that unless the fundamental structure of society is transformed, and power is taken out of the hands of big business, progressive reforms will never be permanent.
Whitlam came to power in an extremely unique period for capitalism. It will not be repeated. The only way to secure things like free education, universal healthcare, equal pay for women and funding for public services in the future is to transform the economy along socialist lines. Major sectors of industry need to be brought into public ownership and under democratic control. On that basis a sustainable plan of production could be introduced by a workers government that acted in the interests of the majority. Under socialism the reforms of the Whitlam era would not only be repeated by surpassed.
By Conor Flynn