August 30th 2008

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Articles from this issue:

CLIMATE CHANGE: It's official: the world is cooling, not warming

EDITORIAL: Olympic Games backfire on Beijing

CANBERRA OBSERVED: Tougher times ahead as commodity boom falters

ECONOMIC AFFAIRS: Should we rescue imprudent banks?

WESTERN AUSTRALIA: How Labor's Carpenter may cling to power

WATER: Radical plan to overcome water shortage

NATIONAL AFFAIRS: Remembering Menzies' "forgotten people"

INTERNATIONAL AFFAIRS: Resurgent Russia's conflict with Georgia

STRAWS IN THE WIND: Recipe for social conflict / Putin's gamble / Once more unto the swill buckets, dear friends

SPECIAL FEATURE: B.A. Santamaria, strategist and prophet

MARRIAGE: On breaking the marriage covenant

HISTORY: Hitler proposed a "final solution" for Christianity

OBITUARY: Bob O'Connell (August 29, 1922 - July 30, 2008), a generous man of integrity

Economic production needed, not speculation (letter)

BOOKS: WHAT'S HAPPENING TO OUR GIRLS? Too much too soon: how our kids are overstimulated, oversold and oversexed

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Remembering Menzies' "forgotten people"

by Jeffry Babb

News Weekly, August 30, 2008
Robert Menzies, in constructing the Liberal Party, wanted it to be free of the behind-the-scenes big business interests that had controlled the finances and policies of the old United Australia Party, writes Jeffry Babb.

The Liberal Party is at the crossroads. It is facing a Labor government determined to transform Australia.

Based on historical experience, it has two options: either totally and implacably oppose the Rudd program, which may help a Liberal return to government, if not in one term, then certainly two, when the bankrupting effect of the Rudd program becomes evident; or else adopt the Rudd "lite" option, which tinkers with the excesses while consolidating the basic Rudd program.

In the post-World War II era, the Liberals stood at a similar crossroads during both the Chifley and Whitlam Labor governments. Today's choices are eerily familiar.

Transforming Australia

Chifley came to power after the untimely death of John Curtin in 1945. The Labor Party won the election in 1946, basking in the glow of the Allies' victory in World War II. But Chifley was not Curtin. Curtin was preoccupied with saving Australia from the Japanese, but Chifley was interested in transforming Australia.

Chifley was a self-educated train-driver from New South Wales. He gained a "higher education" in finance when he was appointed as the Labor member on the 1935 royal commission into banking by the United Australia Party Prime Minister Joseph Lyons.

The banks were "on the nose" in the aftermath of the Great Depression. The commission's final report included criticism of the banks. Chifley issued a minority report advocating nationalisation of the banks.

In the post-war era, as PM, he sought to nationalise the banks. He also wanted to maintain war-time government controls to build a new Australia, guided by the Postwar Reconstruction Department, led by H.C. "Nugget" Coombs. What killed the Chifley Labor Government was the successful Liberal attack on Labor's bureaucratic controls over the economy and daily life.

Chifley's push to nationalise the banks - a "light on the hill" policy - is frequently cited by Labor hagiographers as the primary cause of Labor's defeat. The real reason was the number of fresh initiatives by the Liberals. The Liberal proposals included increased child endowment and the end of petrol rationing, which Chifley had reintroduced shortly before the election. Labor lost power and did not regain it until 1972 - 23 years later.

Robert Menzies guided the Liberal Party to victory in 1949. He had previously been Prime Minister as leader of the United Australia Party (UAP) from 1939 to 1941. Menzies had seen the UAP fall apart, becoming little more than a cat's paw for business interests.

Menzies set out his vision for Australia in a series of Friday night radio broadcasts over two years, modelled on the fireside chats of Depression-era US President Franklin D. Roosevelt.

The most famous of these was the "Forgotten People" speech, broadcast on May 22, 1942. Reference is often made to this speech but it is little read, which is a pity, because it is clear that Menzies based the appeal of the Liberal Party on the middle-class.

He said: "I exclude at one end of the scale the rich and powerful: those who control great funds and enterprises, and are as a rule able to protect themselves - though it must be said in a political sense they have as a rule shown neither comprehension nor competence. But I exclude them because in most material difficulties the rich can look after themselves."

Menzies was clear about the people to whom he was appealing - "salary earners, shopkeepers, skilled artisans, professional men and women, farmers and so on. These are, in the political and economic sense, the middle class."

Menzies and his supporters, in constructing the Liberal Party, sought to unify the anti-Labor groups. He wanted to free the Liberal Party from the control of powerful behind-the-scenes forces that had controlled the UAP's finances. For this reason, subscriptions to the new Liberal Party were quite high - the party sought to control its own destiny, free of policy diktats from big business.

Today's Liberal Party must relearn the Menzies lesson. We are told that Australia must embrace the "carbon economy" and that the Liberals must support Labor because business "desires certainty" so it can plan effectively. We are told that Australia will gain "first mover advantage" in the new world economy that will bring us international leadership.


The only certainty business can count on is that entire sections of Australian industry will suffer as a result of the Rudd program. We are also told that the Liberal Party cannot survive without the financial support of the "big end of town". This is all nonsense.

The Liberal Party, sooner or later, with or without a new leader, will have to choose between Rudd-lite or the hope of something better.

- Jeffry Babb

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