The Menzies government (1949–1966) refers to the second period of federal executive government of Australia led by Prime Minister Robert Menzies. It was made up of members of a Liberal–Country Party coalition in the Australian Parliament from 1949 to 1966. Menzies led the Liberal–Country Coalition to election victories in 1949, 1951, 1954, 1955, 1958, 1961 and 1963. Robert Menzies was Australia's longest serving prime minister. He had served a previous term as prime minister as leader of the United Australia Party from 1939 to 1941. Although he would retire in 1966, his party would remain in office until 1972, an unprecedented 23 years of government from nine consecutive election victories.
Background
United Australia Party
The United Australia Party had been formed as a new conservative alliance in 1931, with Labor defector Joseph Lyons as its leader and John Latham, hitherto leader of the Nationalist Party of Australia as his deputy. The stance of Lyons and another former Labor minister, James Fenton, against the more radical proposals of the Labor movement to deal the Great Depression had attracted the support of prominent Australian conservatives. In March 1931, though still a member of the ALP, Lyons supported a no confidence motion against the Scullin Labor government and the UAP was formed from a coalition of citizens' groups and with the support of the Nationalist Party. In November 1931, Lang Labor dissidents chose to challenge the Scullin Labor government and align with the UAP to pass a 'no confidence' and the government fell.
With Australia still suffering the effects of the Great Depression, the newly formed United Australia Party won a landslide victory at 19 December 1931 Election, and the UAP commenced its first term in government in January 1932. The Lyons government won three consecutive elections, pursuing a conservative fiscal policy of balanced budgets and debt reduction, while stewarding Australia out of the Depression.
Lyons death in April 1939 saw Robert Menzies assume the prime ministership on the eve of World War II. After a decade in office, the party had declined in popularity, and faced the demands of war in a shaky coalition with the Country Party. Forced to rely on the support of independents following the 1940 election, Menzies resigned in 1941, whereupon the UAP was unable to replace him with a suitable leader and allowed the leader of the junior coalition party, Arthur Fadden to take office. The Fadden government lasted just 40 days, before the independents crossed the floor bringing Labor's John Curtin to the prime ministership just prior to the outbreak of the Pacific War.
Labor's John Curtin proved a big war time leader and the Curtin government won in a landslide in the 1943 election. In the aftermath of this defeat, the UAP began to disintegrate, and Australian conservatives and anti-socialist liberals looked to form a new political movement to counter the Australian Labor Party.
Foundation of Liberal Party
Fourteen political parties had allied to form the United Australia Party, but disenchantment with the United Australia Party was now widespread. A group of New South Wales members had formed the new "Democratic Party". This new group looked to Robert Menzies to provide leadership.Brian Carroll; From Barton to Fraser; Cassell Australia; 1978 Menzies called a conference of conservative parties and other groups opposed to the ruling Australian Labor Party which met in Canberra on 13 October 1944, and again in Albury in December 1944. The formation of the party was formally announced at Sydney Town Hall on 31 August 1945.
Menzies had been prime minister as leader of the United Australia Party from 1939 to 1941. From 1942 onward, Menzies had maintained his public profile with his series of "Forgotten People" radio talks, similar to US President Franklin D. Roosevelt's "fireside chats" of the 1930s, in which he spoke of the middle class as the "backbone of Australia" but as nevertheless having been "taken for granted" by political parties and of being effectively powerless because of lack of wealth on the one hand, and lack of organisation on the other.
Outlining his vision for a new political movement in 1944, Menzies said:
Menzies wanted the new party to be independent of interest groups like big business and so sought to organise a structure under which the Party would only receive money from individuals in small amounts, rather than from trade groups or associations.
After only modest gains against Labor at the 1946 election, Menzies saw out another three years as opposition leader – opposing Labor's efforts to nationalise Australia's banks, criticising petrol rationing and speaking out against Communism in the early stages of the Cold War. Menzies characterised the incumbent Chifley government as "socialist". With Arthur Fadden of the Country Party as his deputy, Menzies led the Liberal-Country Party Coalition to victory at the 1949 election. He was now to become the longest serving prime minister in Australian history.
Terms in office
Following victory in the 1949 election, the Menzies government secured a double dissolution election for 28 April 1951, after the Australian Labor Party-controlled Senate refused to pass the Menzies' banking legislation. The Liberal-Country Coalition was returned with a reduced majority in the Lower House, but with control of the Senate. The Government was returned in the aftermath of the Petrov affair in the 1954 election and again after the formation of the anti-Communist Democratic Labor Party split the Australian Labor Party early in 1955 and Australia went to the polls in December 1955. John McEwen replaced Arthur Fadden as leader of the Country Party in March 1958 and the Menzies-McEwen Coalition was returned again at elections in November 1958 – their third victory against Labor's H V Evatt. The Coalition was narrowly returned against Labor's Arthur Calwell in the December 1961 election, in the midst of a credit squeeze. Menzies stood for office for the last time in the November 1963 election, again defeating Calwell, with the Coalition winning back its losses in the House of Representatives. Menzies went on to resign from parliament on 26 January 1966.
Menzies' 1949 Cabinet had the leader of the Country Party, Arthur Fadden, as the treasurer and deputy prime minister and included Dame Enid Lyons as the first woman to serve in an Australian Cabinet.
Economy and trade
After winning office in 1949, Menzies fulfilled his promises to end rationing of butter, tea and petrol and provide a 5 shilling endowment for first born children, as well as for others.
Australia experienced a prolonged economic boom during the Menzies years. Menzies remained a staunch supporter of links to the monarchy and British Commonwealth but formalised an alliance with the United States and launched post-war trade with Japan, beginning a growth of Australian exports of coal, iron ore and mineral resources that would steadily climb until Japan became Australia's largest trading partner. John McEwen, as minister for commerce and for trade, negotiated the Agreement on Commerce between Australia and Japan which was signed in July 1957. The agreement carried political risk for the Menzies government, because memories of atrocities perpetrated on Australians by Japan in World War II were still strong in the community. Britain meanwhile was negotiating entry into the European Economic Community in the early 1960s with major implications for Australian trade, which had previously enjoyed preferential treatment in the UK. McEwen was active in maintaining tariff protections for agriculture, mining and manufacturing, which he believed would sustain employment and contribute to national defence.
In the Menzies government, McEwen pursued what became known as "McEwenism" – a policy of high tariff protection for the manufacturing industry, so that industry would not challenge the continuing high tariffs on imported raw materials, which benefited farmers but pushed up industry's costs. This policy was a part (some argue the foundation) of what became known as the "Australian settlement" which promoted high wages, industrial development, government intervention in industry (Australian governments traditionally owned banks and insurance companies and the railways and through policies designed to assist particular industries) and decentralisation.
In the early 1950s, external affairs minister Percy Spender helped to establish the Colombo Plan for providing economic aid to underdeveloped nations in Australia's region. Under the scheme, many future Asian leaders studied in Australia.
In 1951, the top marginal tax rate for incomes above £10,000 what is equivalent to $425,000 today, was 75 per cent under Menzies. from 1955 until the mid-1980s the top marginal tax rate was 67 per cent.Hit the very wealthy with more tax as Robert Menzies did The Australian 9 January 2019
Other than blocking the nationalisation of the Banking system by the Labor Party, Menzies sold the Commonwealth Oil Refineries to the Anglo-Iranian Oil Company.Government sells shares in oil refineries Riverine Herald 27 September 1952 page 2 The wool industry remained a mainstay of the economy through the 1950s, indeed it was said that the Australian economy "rode on the sheep's back". Nevertheless, important developments in further industries occurred, such as the construction of Australia's first commercial oil field at Moonie, Queensland in 1961.
In 1960, the government split the Commonwealth Bank into the Commonwealth Banking Corporation and the Reserve Bank of Australia.
While for most Australians the Menzies era was an era of prosperity, the nation experienced high inflation during the early years of Menzies' rule. The Korean War increased demand for commodities. Wool in particular boomed, leading to a rise in growers' incomes, but also to inflation. The Arbitration Court helped stabilise wages from 1953. From 1959 to 1960 Australia experienced something of a boom, spurred by overseas speculators and high domestic spending – resulting in recession by 1961, following a "horror" mini-budget designed to slow the economy. Unemployment reaching 2.1% (at that time considered "high") and Menzies went on to win the 1961 election by just one seat. Following the election, Menzies and Treasurer Harold Holt introduced another mini-budget designed to spur growth and the economy was in recovery.
Foreign affairs
The Menzies era saw immense regional changes, with post-war reconstruction and the withdrawal of European Powers and the British Empire from the Far East (including independence for India and Indonesia); the consolidation of Communist regimes in China, North Vietnam, North Korea and Communist insurgencies elsewhere.
Cold War
Menzies was firmly anti-Communist. In 1950 his government committed troops to the Korean War and attempted to ban the Communist Party of Australia. Menzies secured passage of the Communist Party Dissolution Bill through Parliament in June 1950. Although it had popular support, for many it went too far in such measures as allowing the disqualifying of declared Communists from public offices, or industries considered vital to defence. The Bill had the support of anti-Communist Labor Senators, and so passed through Parliament. Early in 1951 however, the High Court declared the Act invalid for unconstitutionally interfering with civil liberties and property rights. Following the 1951 election, Menzies held a referendum seeking power for the Federal Parliament to legislate "With respect to Communists or Communism as the Parliament considers to be necessary or expedient for the defence or security of the Commonwealth". Labor leader H V Evatt campaigned against the proposal and the referendum was narrowly defeated.