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Term of Government (1929-1932) Ministries Elections  | ||
The Premiers' Plan was a deflationary economic policy agreed by a meeting of the Premiers of the Australian states in June 1931 to combat the Great Depression in Australia that sparked the 1931 Labor split.
The Great Depression in Australia saw huge levels of unemployment and economic suffering amid plummeting export income. [1] Although the economic downturn was a product of international events, Australian governments grappled with how to respond. Conventional economists said governments should pursue deflationary policies. Radicals proposed inflationary responses and increased government spending. The James Scullin Labor Government had won office at the 1929 federal election just in time to face the full force of the global crisis—the ‘Wall Street crash’ took place in the first week of his government. [2] Division emerged within the Labor government over how to respond. [3]
Scullin invited Sir Otto Niemeyer of the Bank of England to come to Australia to advise on economic policy. Niemeyer recommended a traditional deflationary response of balanced budgets to combat Australia's high levels of debt and insisted that interest on loans be met. [4] Labor Treasurer Ted Theodore meanwhile supported the view of John Maynard Keynes that an inflationary policy of increased government spending was required. The Senate and Commonwealth Bank rejected his spending plans. The Labor Premier of New South Wales meanwhile announced the Lang Plan in February 1931, which entailed a temporary cessation of interest repayments on debts to Britain and that interest on all government borrowings be reduced to 3% to free up money for injection into the economy. [5]
With the rejection of the Theodore and Lang inflationary plans, the governments of Australia met to negotiate a compromise in 1931.
The plan required the Australian Federal and State governments to cut spending by 20%, including cuts to wages and pensions and was to be accompanied by tax increases, reductions in interest on bank deposits and a 22.5% reduction in the interest the government paid on internal loans. [6]
The policy contrasted with the approach put forward by the British economist John Maynard Keynes and which was pursued by the United States, which held that governments needed to spend their way out of the Depression. The plan was signed by New South Wales Labor Premier Jack Lang, but he was a notable critic of its underlying philosophy and went on to pursue his own policy of defaulting on debt repayments, which led to confrontation with the Federal Scullin and Lyons Governments, and ultimately resulted in Lang's dismissal from office in 1932. [7] [8]
Australia's recovery from the Great Depression began from 1932, aided by a slow recovery in international wool and wheat prices. The influence of government policy on Australia's recovery is a matter contested by historians.
The Labor Party split in 1931 over how to respond to the Depression, with the radical left led by Jack Lang and the fiscal conservatives led by Joseph Lyons. Lyons supported the Premiers' Plan, opposed Lang and distrusted Theodore's approach. Theodore was removed from cabinet due to an investigation for financial misconduct while Premier of Queensland, but was returned to cabinet after being cleared of wrongdoing. Lyons and the other main proponent of the Premiers' Plan in cabinet, James Fenton, resigned in protest. Two months later, Lyons, Fenton and other disaffected Labor members joined with the opposition Nationalist Party of Australia to form the United Australia Party. The newly merged party went on to sweep the 1931 federal election and govern Australia for a decade. Federal supporters of Jack Lang meanwhile became known as Lang Labor. [9]
The Hogan government in Victoria fell in 1932 after a dispute with the Victorian Executive of the Labor Party about how to restore public service salaries that had been cut under the Plan, with the cabinet unanimously opposed to restoring salaries above 500 pounds, the Victorian Executive insisting on this under pressure from the Public Service Association. After the cabinet's unanimous resolution was broken by Ministers Tuncliffe and John Cain (senior) in negotiation with the Executive, other Ministers starting with E.L. Kiernan and J.P. Jones resigned and were ultimately expelled from the party. [10]
Prime Minister Joseph Lyons governed from 1932 to 1939 and was thus the leader responsible for stewarding Australia out of this difficult period. Lyons favoured the tough economic measures of the Premiers' Plan, pursued an orthodox fiscal policy and refused to accept NSW Premier Jack Lang's proposals to default on overseas debt repayments. Australia entered the Depression with a debt crisis and a credit crisis. According to author Anne Henderson of the Sydney Institute, Lyons held a steadfast belief in "the need to balance budgets, lower costs to business and restore confidence" and the Lyons period gave Australia "stability and eventual growth" between the drama of the Depression and the outbreak of the Second World War. A lowering of wages was enforced and industry tariff protections maintained, which together with cheaper raw materials during the 1930s saw a shift from agriculture to manufacturing as the chief employer of the Australian economy—a shift which was consolidated by increased investment by the commonwealth government into defence and armaments manufacture. Lyons saw restoration of Australia's exports as the key to economic recovery. [11] A devalued Australian currency assisted in restoring a favourable balance of trade.
The United Australia Party (UAP) was an Australian political party that was founded in 1931 and dissolved in 1945. The party won four federal elections in that time, usually governing in coalition with the Country Party. It provided two prime ministers: Joseph Lyons (1932–1939) and Robert Menzies (1939–1941).
Joseph Aloysius Lyons was an Australian politician who served as the 10th Prime Minister of Australia, in office from 1932 until his death in 1939. He began his career in the Australian Labor Party (ALP), but became the founding leader of the United Australia Party (UAP) after the Australian Labor Party split of 1931. He had earlier served as Premier of Tasmania from 1923 to 1928.
John Thomas Lang, usually referred to as J. T. Lang during his career and familiarly known as "Jack" and nicknamed "The Big Fella", was an Australian politician who twice served as the 23rd Premier of New South Wales from 1925 to 1927 and again from 1930 to 1932. He was dismissed by the Governor of New South Wales, Sir Philip Game, at the climax of the 1932 constitutional crisis and resoundingly lost the resulting election and subsequent elections as Leader of the Opposition. He later formed Lang Labor and was briefly a member of the Australian House of Representatives.
James Henry Scullin was an Australian Labor Party politician and the ninth Prime Minister of Australia. Scullin led Labor to government at the 1929 Australian federal election. He was the first Catholic, as well as Irish-Australian, to serve as Prime Minister of Australia. The Wall Street Crash of 1929 transpired just two days after his swearing in, which would herald the beginning of the Great Depression in Australia. Scullin's administration would soon be overwhelmed by the economic crisis, with interpersonal and policy disagreements causing a three-way split of his party that would bring down the government in late 1931. Despite his chaotic term of office, Scullin remained a leading figure in the Labor movement throughout his lifetime, and served as an éminence grise in various capacities for the party until his retirement in 1949.
Edward Granville Theodore was an Australian politician who served as Premier of Queensland from 1919 to 1925, as leader of the state Labor Party. He later entered federal politics, serving as Treasurer in the Scullin Labor government.
Australia suffered badly during the period of the Great Depression of the 1930s. The Depression began with the Wall Street Crash of 1929 and rapidly spread worldwide. As in other nations, Australia suffered years of high unemployment, poverty, low profits, deflation, plunging incomes, and lost opportunities for economic growth and personal advancement.
Lang Labor was a faction of the Australian Labor Party (ALP) consisting of the supporters of Jack Lang, who served two terms as Premier of New South Wales and was the party's state leader from 1923 to 1939.
James Edward Fenton was an Australian politician. He is notable for having been appointed a cabinet minister by two governments of different political complexions, but resigning from both governments on matters of principle. His first resignation looms largely in history as that came with his political defection, whereas there was no defection with his second resignation.
The history of Australia from 1901 to 1945 begins with the federation of the six colonies to create the Commonwealth of Australia. The young nation joined Britain in the First World War, suffered through the Great Depression in Australia as part of the global Great Depression and again joined Britain in the Second World War against Nazi Germany in 1939. Imperial Japan launched air raids and submarine raids against Australian cities during the Pacific War.
The 1931 Australian federal election was held in Australia on 19 December 1931. All 75 seats in the House of Representatives and 18 of the 36 seats in the Senate were up for election.
George Albert Reginald Gibbons was an Australian politician. He was an Australian Labor Party member of the Australian House of Representatives from 1929 to 1931, representing the regional New South Wales electorate of Calare.
The 1932 dismissal of Premier Jack Lang by New South Wales Governor Philip Game was the first real constitutional crisis in Australia. Lang remains the only Australian premier to be removed from office by his governor, using the reserve powers of the Crown.
This is a list of members of the Australian Senate from 1929 to 1932. Half of its members were elected at the 14 November 1925 election and had terms starting on 1 July 1926 and finishing on 30 June 1932; the other half were elected at the 17 November 1928 election and had terms starting on 1 July 1929 and finishing on 30 June 1935. The process for filling casual vacancies was complex. While senators were elected for a six-year term, people appointed to a casual vacancy only held office until the earlier of the next election for the House of Representatives or the Senate.
The Menzies government (1939–1941) refers to the federal executive government of Australia led by Prime Minister Robert Menzies. Menzies led the United Australia Party in the Australian Parliament from 1939 to 1941. Menzies served a later and longer term as prime minister as leader of a successor party, the Liberal Party of Australia from 1949 to 1966.
The Lyons government was the federal executive government of Australia led by Prime Minister Joseph Lyons. It was made up of members of the United Australia Party in the Australian Parliament from January 1932 until the death of Joseph Lyons in 1939. Lyons negotiated a coalition with the Country Party after the 1934 Australian federal election. The Lyons government stewarded Australia's recovery from the Great Depression and established the Australian Broadcasting Corporation.
The McMahon government was the period of federal executive government of Australia led by Prime Minister William McMahon of the Liberal Party. It was made up of members of a coalition between the Liberal Party and the Country Party, led by Doug Anthony as Deputy Prime Minister. The McMahon government lasted from March 1971 to December 1972, being defeated at the 1972 federal election. Writing for the Australian Dictionary of Biography, Julian Leeser describes McMahon's prime ministership as "a blend of cautious innovation and fundamental orthodoxy".
The early 1990s recession saw a period of economic downturn affect much of the world in the late 1980s and early 1990s. The economy of Australia suffered its worst recession since the Great Depression.
The Australian Labor Party split of 1931 was caused by severe divisions within the Australian Labor Party (ALP) over its economic response to the Great Depression in Australia. Amidst intense disagreement between economically conservative and radical elements of the party, two senior ministers in the Scullin Labor government, Joseph Lyons and James Fenton, resigned from Cabinet in January 1931. Lyons, Fenton and their supporters would subsequently merge with the conservative opposition Nationalist Party to form the new United Australia Party (UAP), led by Lyons with the last Nationalist leader, John Latham, as his deputy.
The Australian Labor Party held a leadership election on 2 March 1931, in the context of the developing party split. Prime Minister James Scullin was easily re-elected, defeating Jack Beasley of the Lang Labor faction.
The Federal Labor Party were the members of the Australian Labor Party in the state of New South Wales who supported the federal party leadership in the split with the state Labor party which broke away in 1931. Federal Labor retained some seats in the Parliament of Australia but was a minor party in state elections. The dispute was healed in 1936.
