An admiring study of postwar reconstruction

What is it about wars and the military that produce so much innovation and capacity? This a big and bold book which takes the contemporary collective awareness of Australia's wartime efforts on the battlefield and reflects on the building of the country on the back of the victory in 1945. It also invites the question of how best we can address the imperatives of building social infrastructure.

1939 was a watershed year in a number of ways. As Stuart Macintyre explains, the nation was in continuing decline following the Depression of the late 1920s (with nine per cent unemployment), and was faced with yet another major war on top of the terrible losses in World War I. On the backing of Britain's declaration of support in the face of the threat from an expansionist Japan, Australia committed to assist in the defence of Britain and reluctantly entered yet another European war.

In 1949, by contrast, Australia enjoyed full employment, the first Australian-manufactured car came off the production line, 150,000 immigrants arrived, farmers earned record prices for wool, university enrolments increased dramatically, and the great Snowy Mountains Hydro-electric Scheme was soon to be under way. Macintyre highlights the role of H.C. 'Nugget' Coombs, Director-General of Post-War Reconstruction, who led a group of university-trained economists in the senior ranks of the public service, as well as the political leadership of Curtin and Chifley.

The notion of 'reconstruction' took its impetus from measures imposed following the American Civil War, and from the idea of national conflict as a precursor to nation building. The term had a ready place in the bellicose environment of the early 1940s, particularly with the stimulus of the war against Japan. The Japanese invasion of Singapore, following the withdrawal of British defences, led to the capture of 17,000 Australians and the refocusing of Australia's alliance with the United States. It also meant that Australia had to mobilise in its own self-defence (rather than the defence of Britain) in a manner which involved unprecedented centralised control by the federal government. 'Manpower' became the focus of home defence. Massive new development projects were undertaken, including support for the US war effort in the Pacific. The level of government control extended to bans on 'unnecessary' activities, like the commercial production of cakes (except wedding cakes, which could only use white icing) and the advertising of Christmas gifts. Hotel bars were only permitted to open for seven hours each day. War loans from the public helped to subsidise the war effort, supported by price and wage controls as well as rationing. Australia had become a command economy, with the Commonwealth able to regulate all it wanted by use of the defence power in the Constitution.

'Your every waking hour,' said Curtin in his 1942 Australia Day speech, 'must be an hour devoted to Australia.' It was during the same year, in the thick of the war effort, that the Coombs reconstruction agency, under the political leadership of  Treasurer Ben Chifley, was established to meet the demands which would follow when and if the conflict ended, and to address the political need to reward the burden of wartime austerity.

A key problem in managing the postwar recovery was going to be the limitations on Commonwealth power in the Constitution in the absence of special wartime powers. Interestingly, opinion polls during the war revealed a marked preference for the abolition of the states, which would have solved the legal problem altogether – a view which Macintyre considers reflected national feeling at the height of the war. While the course of any referendum to expand Commonwealth powers became bogged down in familiar federal–state bickering, Macintyre documents the wartime planning to reform virtually every sector of the economy, including a significant overhaul of housing, social welfare, education, and migration. On the latter, Curtin declared in 1943 that the Australian population (seven million) was too small 'to hold indefinitely this large continent'.

By the time the constitutional reforms were ready to be submitted to the referendum in August 1944, the appetite for centralised Commonwealth control had significantly waned, and the referendum was decisively defeated. With its failure went many of the plans for centralising the postwar reconstruction effort, a development satirised in a cartoon showing an out-of-control minister for Post-War Reconstruction declaring to Coombs, 'I had a terrible nightmare last night doctor. I dreamt peace was declared!'

The end of the war created its own political challenges with the need to manage expectations built up around the years of heavy sacrifice. There were about 600,000 men and women in active military duty. Their demobilisation was staggered over a period of years because of the need for adjustment to civilian life and the search for employment. In fact, demobilised soldiers were generally able to find work quickly, and there was actually a labour shortage, with a particular focus on the demands for housing and the rapid expansion of the manufacturing sector. Full employment encouraged policies of opening Australia to intakes of population from Britain and Europe. It was promoted to the public as a means for capitalising on postwar growth opportunities. Still, prejudice ran high against all but British and Northern European migration.

The period was also one of considerable industrial disputation, with demands for increased wages (following years of Commonwealth control) and a forty-hour working week. The rise of the 'communist bogey' created schisms in the labour movement which afflicted the ALP for more than two decades. The most calamitous of the strikes was that of the coal miners in 1949, which pitted communist officials in the Miners' Federation against the government and resulted in miners being forced back to work and huge power shortages limiting electricity and gas to a few hours a day.

The legacy of rationing also remained in place with the rationing of sugar, meat, and clothing, which did not end until the late 1940s. Butter was still rationed to meet the needs of Britain, as were tea and petrol. These controls continued under the defence power, which the High Court allowed during the transition to peace. When this power lapsed, Chifley sought to maintain price, rent, and capital controls through another referendum in 1948; it was defeated. The High Court ended the Commonwealth's reliance on the defence power in 1949.

By 1949 the energies of the Curtin–Chifley governments had been exhausted and ideas of centralised reconstruction control were comprehensively eschewed. Robert Menzies became head of a free enterprise government that ruled for two decades. With the foundations for continuing growth set, the Australian economy continued its unprecedented surge.

At the time of his election defeat in 1949, Chifley spoke movingly of the time before the war when thousands were unemployed and people queued for the dole: 'Today things are different. I do not take credit for that change, but I take pride in being associated with a Government which saw that change come about.' Criticising Paul Keating's thoughtless belittling of Curtin and Chifley, Stuart Macintyre writes: 'A people that can throw up leaders with their qualities should honour them.'

These watershed days of national grit are recorded here with considerable authority and unreserved admiration by one of our pre-eminent historians.

First published in the Australian Book Review, April 2016