The Money Men Chris Bowen (the red fox clan .txt) 📖

they fell into line and supported the prime minister’s position, even though the six ministers continued to defy Cabinet solidarity. Immigration minister Arthur Calwell and transport minister Eddie Ward were the most recalcitrant. Ward took to the airwaves to preposterously declare that the IMF would ‘enthrone a world dictatorship of private finance, more complete and terrible than any Hitlerite dream’. Ward would even abstain from the House of Representatives vote on the issue. Chifley had, however, overcome the ill-advised opposition of most of his radically isolationist Cabinet colleagues to successfully argue for Australia’s membership of the IMF, and therefore our representation in the ranks of the world’s constructive advanced economies.

Arguing for Federal Power: Chifley and Referenda

In 1944, the Labor Government put a referendum before the people that asked for the transfer of fourteen separate powers to the Commonwealth. These included powers over national health, ex-service personnel, employment, prices, air transport, railway gauges, the marketing of commodities, trusts and monopolies, the production and distribution of goods, and Aboriginal affairs. There were several factors working against the success of the referendum. Firstly, and most significantly, the government did not have bipartisan support, and history says that referenda without the support of both sides of politics are almost certainly doomed to fail. Secondly, the opposition of the Liberal Party federally and of the states that were in conservative hands meant that the ‘No’ campaign had a ready organisation. And the Communist Party’s campaign for the ‘Yes’ case would have undoubtedly driven away more votes than it attracted.

Importantly, Curtin and Chifley miscalculated in providing the people with a ‘take it or leave it’ proposition: voters had to decide whether to transfer all the requested powers or none of them. If the voters had been asked to approve each proposed transfer individually, it is likely that some of the less-controversial ones (such as railway gauges, ex-service personnel and perhaps trusts and monopolies) would have been approved. The ‘Yes’ case was also at a disadvantage because the government did not clearly outline what it would do with the requested powers if they were approved. This fed concern about the creeping accretion of federal powers and whether it would result in more price controls, more rationing and more intervention.

Still, despite all these factors arrayed against a successful referendum campaign, the result was fairly close. While only Western Australia and South Australia voted in favour of the referendum, the winning national margin for the ‘No’ campaign was a fairly narrow 342 000. It suggests that if Curtin and Chifley had made some different calculations, they may well have been successful in winning the extra federal powers, given they were still popular wartime leaders and had won a convincing election victory the year before.

Most of the powers requested by Labor were fairly sensible and inarguable. Some of them have since effectively been transferred to the Commonwealth by negotiation (trusts and monopolies, and ex-service personnel, for example). However, the voters were rightly concerned and sceptical that the transfer of powers over prices might lead to more and longer-lasting interventions in the economy using the blunt instrument of price controls.

Chifley attempted another, more limited attempt at a federal takeover of more powers with the referenda he scheduled to coincide with the 1946 federal election. This time, Chifley showed he had learnt the lessons of 1944 and put three separate questions before the people, asking for approval of the transfer of powers over social services, the marketing of commodities, and industrial employment. However, the other factors that had led to the defeat of the 1944 referendum were still present, and only the transfer of social services powers was approved, endorsed by 54 per cent of voters and in every state. This was significant, as up to that point, the Commonwealth had only had constitutional power to deal with old age and invalid pensions, and not social services more broadly. Curtin and Chifley had been running a constitutional gauntlet by introducing payments and schemes with highly questionable constitutional authority, such as the introduction of the child endowment in 1941 and unemployment benefits in 1945. A Curtin government scheme to subsidise medicines had been held to be unconstitutional by the High Court in 1945. Every subsequent federal government has relied on the powers won by the Chifley government in the 1946 referendum.

Chifley was disappointed with the defeat of the other referenda questions, but he never again sought the transfer of powers to the Commonwealth from the people. Even if he had intended to, he would not have the time and the inclination as he was soon embroiled in one of the biggest Australian political fights of the twentieth century.

Chifley and the Banks: Round Two

The passage in 1945 of the Commonwealth Bank Act and Banking Act had been hard-fought, but had resulted in a seemingly political settlement: Labor did not attempt to go further in bank regulation for as long as the controls introduced by the Acts were allowed to work. This settlement was undone in 1947 when the High Court upheld an appeal from the private banks that the section of the Act requiring state and local governments to do their banking with the Commonwealth Bank was an unconstitutional constraint on trade.

This was a fairly inconsequential part of the regime that Chifley had established, and its defeat in the court should have had only limited consequences. Chifley, however, believed that the defeat of this clause opened the way for a potentially successful appeal against the provision of the Act that required that private banks deposit a set proportion of their funds with the Commonwealth Bank as an instrument of monetary policy—a reform that previous governments had shied away from due to the ferocious opposition of the private banks. Chifley was not prepared to countenance the possibility of this element of his reforms becoming inoperative. So he approached the banks and asked them for an assurance that they would not launch a constitutional challenge against this provision. They refused. The course of action