July marked the seventy-fifth anniversary of Ben Chifley's prime ministership which ran from 1945 to 1949. This was an era that presented similar challenges to those we face today.
Throughout the 1930s, the Great Depression had created widespread unemployment and left many industries, such as the coal industry, devastated. Then, from 1939, Australia had to borrow massive sums to fight the war against Germany and Japan. By the end of the war, Australia's debt was 120 per cent of Gross Domestic Product (GDP).
Chifley's solution was to pay off the debt over the long-term by growing the Australian economy and maintaining full employment. Strong economic growth at full employment reduced the war debt so that it returned to pre-war levels in just a decade. Taxation reform helped. Until the Second World War, both the Commonwealth and the states levied income taxes. In 1942, Chifley induced the states to vacate the field of income tax. This provided the federal government with a stronger revenue base to fight the war and reconstruct Australia.
In 1942, John Curtin appointed Chifley to head a new Department of Post-War Reconstruction, which would plan and co-ordinate Australia's reconstruction. A key area of reform was social security, which Chifley announced would be 'developed progressively' to operate after the war so as to provide Australians with a safety net. Major reforms included unemployment and sickness benefits (1944), the Pharmaceutical Benefits Scheme (1947) and the Commonwealth Employment Service, which matched job seekers with employment opportunities.
In 1943, a Housing Commission of the DPR advised Chifley that Australia had a shortage of 300,000 houses. To alleviate the problem, Chifley negotiated housing agreements with the states to construct new dwellings to be offered for rent. Section 96 of the Constitution, allowing for Commonwealth financial assistance to the states, was used then and since to allow for the construction of public housing and the lending of funds for home purchases.
The Chifley years saw Australia commence a large-scale immigration program as a result of which some four million immigrants arrived in Australia between 1945 and 1985. His biggest nation-building scheme was the Snowy Mountain scheme that constructed seven power stations and sixteen major dams in south-eastern Australia between 1949 and 1974, as well as providing thousands of jobs for migrants. Chifley also made agreements with the states to stimulate industry, such as with Tasmania to establish an aluminium industry and with NSW to reform the black coal industry.
Seventy-five years later, COVID has left us with high levels of debt, a period of significant and prolonged unemployment and many industries that require extensive reform. In looking for lessons on how Australia can recover, Chifley, the modest engine driver from Busby Street Bathurst, offers a fine example.
David Lee is Associate Professor in History, University of New South Wales, Canberra
