Events and issues that made the news in 1975

Introduction

Australian voters preferred a dull government, claimed Malcolm Fraser during the December 1975 election campaign, so they could turn directly to the sports news and not worry about what politicians were doing. [1] There had obviously been little opportunity to follow the Australian Cricket Team’s fluctuating fortunes in 1975, a year that saw two high-profile ministers – Jim Cairns and Rex Connor lose their front bench positions as a result of the ‘Loans Affair’, a stubborn Senate, the dismissal of a prime minister and the installation of a caretaker one.

In between reading the sports pages and watching the biggest constitutional crisis in the nation’s history unfold, Australians in 1975 faced further price rises and mounting unemployment in the midst of a world economic downturn. The sense of disaster following the decimation of Darwin by Cyclone Tracy on Christmas Day 1974 had barely lifted when the bulk carrier Lake Illawara crashed into Hobart’s Tasman Bridge: twelve lives were lost and the destruction of the bridge effectively cut the city in half.

The long war in Vietnam came to an end with the fall of Saigon in April, the Khmer Rouge claimed victory in Cambodia, and Indonesia invaded the former colony of Portuguese Timor. There was a spate of attacks in Europe and the United Kingdom by various terrorist groups, the long rule of Spain’s dictator Franco ended with his death in November, King Faisal of Saudi Arabia was murdered, and Margaret Thatcher became leader of the Conservative Party in the United Kingdom. United States President Gerald Ford escaped two assassination attempts in the space of a month, reportedly prompting a US senator to comment that ‘There are too many guns in the hands of people who don’t know how to use them.’

For Australians, 1975 ended with their third federal government of the year. On the basis of a campaign that urged Australians to ‘Turn on the lights’ after three years of Australian Labor Party (ALP) ‘darkness’, Malcolm Fraser’s Liberal-National Country Party coalition came to power with a devastating swing against the former government. The new prime minister pledged to curb the alleged extravagances of his predecessors, apply a steady hand to the economy and restore orderly government. It may have been a vote for a ‘dull’ government, to quote Fraser, but with the introduction of colour television, at least some lucky Australians could watch the momentous events of 1975 unfold in full colour.

Domestic politics

Labor’s already precarious position in the Senate worsened in February when Attorney-General Lionel Murphy left the Senate to join the Full Bench of the High Court of Australia. The New South Wales Liberal Premier, Tom Lewis, broke convention and appointed an independent, Cleaver Bunton, rather than an ALP nominee to the vacant Senate position. With the precedent set, Queensland’s Premier, Joh Bjelke-Petersen (labelled a ‘Bible-bashing bastard’ by Whitlam), appointed a virtually unknown anti-Whitlam ALP member, Albert Patrick Field, to fill the seat left vacant after the death of Senator Bert Milliner. While a legal challenge meant that Field did not fill the seat during the Budget crisis, the Whitlam Government continued to be frustrated by the Senate.

The Government also looked shaky in the House of Representatives. The Speaker, Jim Cope, resigned in February after Whitlam failed to back his rulings against Clyde Cameron. Further disruption occurred when Defence Minister Lance Barnard decided to retire from Parliament. When Whitlam supported his former deputy’s decision, he was criticised by Bob Hawke, President of both the Australian Council of Trade Unions (ACTU) and the ALP, and ALP National Secretary David Combe for exposing the Government to an unnecessary by-election. Whitlam took the opportunity to reshuffle the Ministry, with Bill Hayden replacing Cairns as Treasurer and an angry Clyde Cameron losing his treasured Labor and Immigration portfolio to Senator James McClelland.

The Bass by-election pitted Whitlam against the new Liberal leader Malcolm Fraser for the first time in an election campaign. As Opposition leader, Fraser proved a much more formidable opponent than Billy Snedden, who he had toppled 37 votes to 27 in a leadership ballot in March. The ALP lost the seat of Bass with a swing of 16 per cent against the Government. The lesson was not lost on Don Dunstan: in the South Australian state election later in the year, his Labor Government distanced itself from its federal counterpart and hung on to power.

The biggest controversy to hit the Whitlam Government was of its own making. The Loans Affair, featuring a cast of characters from the shadier side of international finance, billions of Middle Eastern oil dollars and briefcases full of ‘secret’ documents, exposed the Labor Government to claims of impropriety and misconduct. The Federal Executive Council decision in December 1974 bypassed the Loans Council and authorised Rex Connor to pursue loans of US$4 000 million to finance his ambitious plans for Australia’s mineral and energy resources. The authority was revoked on 7 January 1975. On 28 January, approval was again given for Connor to seek loans of US$2 000 million.

For several months Connor pursued negotiations with London-based Pakistani commodities dealer Tirath Khemlani, who was to secure the loan from oil-rich Arab countries. Late-night telexes and telephone calls were exchanged as Connor waited in vain for the promised funds. Against a background of leaks, rumours, media reports and questions in Parliament, on 20 May the Executive Council finally revoked the loans authority. A special one-day sitting of Parliament on 9 July failed to put the issue to rest. Khemlani flew into Australia in early October and was greeted with much interest from the Opposition and the press. On 13 October, Melbourne’s Herald Sunnewspaper published telexes that showed Connor had continued to pursue negotiations with Khemlani after 20 May. Connor was forced to resign.

Connor was the second minister to fall, following the sacking of Cairns in July. Cairns had discussions with a Melbourne businessman about raising overseas loans, and in March signed a letter agreeing to a 2½ per cent brokerage fee. The letter found its way into the hands of the Opposition, who questioned Cairns in Parliament on 4 June. He told the Parliament that he had not offered such a commission. When Whitlam confirmed the existence of the letter, he sacked Cairns from the front bench for misleading Parliament. It was an unfortunate end for Cairns, the hero of the Vietnam Moratorium marches of the early 1970s. Many within the ALP blamed his political downfall on the disorganised state of his office and on Junie Morosi, who had been hired to manage Cairns’ office despite little experience. The attractive and confident Morosi provided rich fodder for the press. Claims of impropriety were not helped by Cairns’ comments during the federal ALP conference that led to headlines proclaiming ‘My love for Junie’. Morosi and Cairns argued that the attacks were the result of sexism and racism (Morosi had a Filipino background). This was undoubtedly true, but there can also be little doubt that the Cairns-Morosi controversy coincided with a decline in Cairns’ political performance.

The Loans Affair provided the ‘extraordinary and reprehensible’ circumstances for the Opposition to defer passing the Budget in the Senate in an attempt to force an election. The stalemate continued for several weeks and culminated in ‘the Dismissal’. The chain of events is well-known: the Governor-General, Sir John Kerr, armed with advice from the Chief Justice Sir Garfield Barwick, called Fraser to Government House on 11 November. Whitlam arrived soon after and was shown to the Governor-General’s study, where Sir John terminated his commission as Prime Minister. The Senate finally passed the Budget and Fraser informed the House of Representatives that the Governor-General had commissioned him to form a caretaker government pending elections on 13 December. The House passed a vote of no confidence in the new government but it counted for little. Late in the afternoon on 11 November, the Governor-General’s official secretary stood on the steps of Parliament House and read the proclamation dissolving the Parliament.

The events of 11 November triggered demonstrations across the country at the manner of Whitlam’s dismissal, debates over the actions of Kerr, Barwick and Fraser, and a re-examination of the role of the Queen’s Representative in Australia. Ultimately, however, the public showed its loss of confidence in Labor on 13 December when the coalition won the election convincingly. The new Fraser Ministry was sworn in on 22 December 1975.

The economy

The year began with grave warnings to Cabinet: the economic situation, reported Treasurer Jim Cairns, was ‘very bad’. There were ‘no quick solutions’.[2] Unemployment, at over 4.5 per cent, was challenging the postwar principle of ‘full employment’, the wages’ explosion was continuing and inflation was rising. The Government had rejected the harsh Treasury line in 1974 and increased government expenditure in the 1974–75 Budget. By January 1975, Cairns was predicting that actual Budget outlays would increase by 42 per cent over the previous year and that the deficit was likely to be ‘several times’ the estimated figure of $570 million. He admitted that business confidence was ‘feeble’, a problem exacerbated by the Government’s policies and large increases in public expenditure. Cairns attributed the economic situation to ‘bad luck and our energetic pursuit of social and economic reforms’.[3]

In early 1975 the Government was coming to terms with a new economic reality – inflation was making unemployment resistant to traditional stimulatory measures such as the tax cuts introduced in late 1974. Cairns argued that the expansionary measures were working, but that it would take time for their effects to be felt. Funding to the states was increased and measures introduced to stimulate the motor vehicle industry. For Cairns and Cameron, the key issue was wages policy and their chief concern was to prevent further unemployment.

In his last major submission to Cabinet as Treasurer, Cairns affirmed that inflation must be controlled. But, he argued, any attempts to control inflation by severe monetary or fiscal measures would worsen the unemployment situation and further depress the private sector. He advocated reducing expenditure and mounting a publicity campaign to explain the impact of excessive wage claims on inflation and unemployment. The deficit, he said, must be reduced for ‘political and economic reasons’, but not at the cost of further unemployment or a halt to the Government’s reform program. The fate of the Government would not be decided by the Budget strategy, but by its determination to fight for its policies. He called upon his colleagues to ‘resist the attack’ by the media and the Establishment, and to ‘fight with confidence for what we believe in’.[4]

Cairns was increasingly out of step with new ‘rationalist’ trends in economic thinking. He rarely visited Treasury and made off-the-cuff comments that he would rather increase the volume of money than allow high unemployment. Despite some signs of recovery, fears that the enormous Budget deficit would further erode confidence prompted Whitlam to choose a tougher economic line. Bill Hayden and James McClelland were appointed Treasurer and Minister for Labor and Immigration respectively in the June reshuffle. McClelland gained a reputation for being a ‘union-basher’ as he focused upon controlling wage increases and selling wage indexation through tough negotiations with the unions.

Hayden set his sights on reducing the Budget deficit. He warned of the consequences of accepting expenditure proposals that would result in a deficit of almost $5 000 million: there would be ‘pervasive psychological shock’, employers would ‘step up their search for survival by moving even deeper into their shells’, and inflation would spiral out of control in the longer-term.[5] The ‘simple Keynesian world’ was gone. Reducing the deficit to around $2 500 million was essential and had to be achieved by reductions in expenditure – in existing as well as proposed programs. In contrast to Cairns, Hayden warned that the Government’s achievements would be undermined if economic instability continued:


Our drive for social and economic reform through redistribution will be discredited for a decade or more. Our record as a Government will be jeered at and our capacity to manage the basic affairs of the country ridiculed.[6]


The Prime Minister wrote to all ministers in early May asking them to identify possible reductions in expenditures. In early June, the Officials’ Expenditure Review Committee identified $2 000 million of possible savings across 50 programs.[7] Ministers were asked to agree to the proposals or to justify their disagreement. Some responded positively to the proposals; others, such as Kim Beazley (Education) and Tom Uren (Urban and Regional Development) protested that the suggested cuts would jeopardise programs and break faith with the electorate. Hayden made further suggestions to reduce spending, including reintroducing tertiary fees, abolishing the maternity allowance and restricting the pharmaceutical benefits scheme to life-saving and disease-preventing medications.[8] Cabinet, unsurprisingly, did not agree to such drastic measures, but that they were even put forward indicates the importance the new Treasurer attached to restraining the deficit. Cabinet – perhaps reluctantly – agreed to reduce expenditure on current programs and virtually halt new initiatives.

Cabinet instructed all departments to cut administrative expenses by 10 per cent. Politicians were not immune from the belt-tightening: all members and senators, their staff and public servants were instructed to fly economy rather than first class.[9]

The media and economic commentators generally praised Hayden’s Budget. The Government appeared to have regained some control over the economy after the difficulties of 1974–75. However, it was not enough to save the Whitlam Government in the December elections. The Government’s previous stumbles with the economy, as well as the Loans Affair, undermined public confidence in its ability to manage the economy. Hayden’s predictions were to prove – at least partially – correct.

Other domestic matters

With a tight Budget and potentially obstructive Senate, the pace of the Government’s hectic agenda slowed. Many felt that it was time to consolidate and assess the achievements of the previous two years, particularly in the big-spending areas of education, Aboriginal welfare, and urban and regional development.

Significant reforms were achieved during the year. Medibank commenced operations in July 1975 after over two years of planning. Elizabeth Evatt was appointed Chief Judge of the new Family Court of Australia, which was to come into force on 5 January 1976. The Racial Discrimination Act was passed and former minister Al Grassby, the ‘father of multiculturalism’, was chosen as the first Commissioner for Community Relations. Immigration, however, was further reduced, from 89 000 in 1974–75 to a low of 53 000 in 1975–76. The Federal Government continued to promote Aboriginal land rights, despite conflict with the conservative governments of Queensland and Western Australia. In August, Whitlam formally granted the Gurindji people title to part of their traditional lands at Wattie Creek in the Northern Territory.

Having already confirmed the Monarch as the ‘Queen of Australia’, overseen the replacement of God Save the Queen with Advance Australia Fair as the national anthem and the term ‘Commonwealth’ with ‘Australian Government’, in 1975 the Whitlam Government introduced the Order of Australia, replacing the British honours system. The Labor Government further encouraged the forging of a more independent Australian cultural identity by upgrading Harold Holt’s Australian Council for the Arts to the Australia Council and establishing the Australian Film Commission.

The Whitlam Government also pursued proposals to set up an Australian government insurance office to compete with the private insurance industry, and to revive the Inter-State Commission to facilitate state-federal cooperation on transport issues. The Privy Council (Appeals from the High Court) Act 1975 was proclaimed, and the Labor Government prepared legislation to establish a Federal Court. The report of the Henderson Commission of Inquiry into Poverty was tabled in Parliament, exposing the extent of hardship in an otherwise affluent society. In response, Cabinet approved a comprehensive review of the income security system.[10]

Cyclone Tracy had left Darwin devastated. Initial efforts focused on the immediate problems of evacuating residents, finding temporary accommodation and clearing debris. The Federal Government promised compensation for death, injury, and uninsured losses and damages, despite Treasury concerns that such financial assistance would set a dangerous precedent in the event of future disasters.[11] The Government then turned its attention to the longer-term future of the Northern Territory capital. The Darwin Reconstruction Commission produced a five-year plan to rebuild the city at an estimated cost of $770 million, based on a target population of 56 000 by 1980.[12]

Public concern with the environment gained momentum and caused conflict within Cabinet. Rex Connor and Minister for the Environment, Moss Cass, had a public disagreement over sandmining on Fraser Island. Cass also accused Connor and his department of ignoring requirements to provide environmental impact statements on mining ventures.[13] In 1975, the Government signed a memorandum of understanding with two companies for uranium mining, production and sales from the Ranger area in the Northern Territory, pending the findings of the Ranger Uranium Environmental Inquiry (the ‘Fox Commission’).[14] The ACTU called for an immediate stop to uranium mining pending a ‘thorough-going’ public access inquiry and an embargo on the export of uranium. With the Fox Commission due to deliver its first report in 1976, the thorny issue of uranium mining was to fall into the hands of the Fraser Government.

1975 marked International Women’s Year, or, in the rather sexist words of one newspaper, ‘The year of the bird’. In 1974 Cabinet had approved $2 million for IWY activities. A further $1.3 million was provided in 1975. Some members of Cabinet pointed out that this expenditure was being held up as an example of unnecessary government spending.[15] Melbourne’s The Age newspaper ran the headline: ‘$2 Million for the Sheilas: Surprisingly It’s Not a Joke’. Elizabeth Reid, Advisor to the Prime Minister on Women’s Affairs, and Margaret Whitlam attended the United Nations (UN) World Conference of the International Women's Year in Mexico where Australia was praised for its progressive reforms in areas such as equal pay and no-fault divorce. A conference on ‘Women and Politics’ held in Canberra in September attracted considerable criticism. Disillusioned at a decision by John Menadue to shift her influential position within the Prime Minister’s Office to the Department of the Prime Minister and Cabinet, Reid resigned.

Foreign affairs

The Government continued its regional foreign policy focus in 1975. With Australian financial and political support, Papua New Guinea became an independent nation on 16 September after years of colonial rule. Australia and Japan signed the Nara Treaty to promote friendship and trade between the two nations. Following the end of the war in Vietnam, Australia recognised the communist government in Vietnam and the Khmer Rouge regime in Cambodia. The Australian Government was criticised, however, for not accepting more refugees fleeing the region. Relations with North Korea soured in October when Australia announced it would vote against a draft resolution calling for reunification talks with South Korea. Australia later abstained from the vote; North Korea promptly abandoned its Canberra embassy and ejected its Australian counterpart from Pyongyang.

Wary of damaging Australia’s developing relationship with Indonesia, the Whitlam Government sent mixed messages on the question of independence for the former Portuguese colony of East Timor. Indonesian President Suharto met with Whitlam in April and a communiqué was issued proclaiming agreed support for the principle of self-determination. Whitlam had previously stated that an independent East Timor was unviable and in August suggested that East Timor was ‘in many ways part of the Indonesian world’. With Portugal unable to oversee decolonisation, conflict broke out between independence movement supporters and pro-Indonesian integrationists. The Government was criticised for its response to reports of Indonesian incursions into East Timor and the deaths of five Australia-based journalists at Balibo’. Following the Indonesian invasion on 7 December, Australia, under the new Fraser Government, voted in the UN General Assembly to condemn Indonesia’s actions.

Australia did its bit to promote international cultural exchange. Cabinet approved expenditure of $2.5 million for Australian involvement in the US Bicentennial in 1976. An advisory committee endorsed exhibitions of nineteenth-century Australian paintings and a visit by a local rodeo team to showcase Australian culture on the world stage.[16]

Making news in 1975 ...

Tragedy:

  • thirteen miners were killed in a fire in the Kianga Coalmine in Queensland;
    • eleven passengers and crew died in a plane crash near Cairns;
    • a letter-bomb addressed to Premier Joh Bjelke-Petersen injured two of his staff in November; and
    • Christmas Day was again marked by tragedy with the deaths of fifteen people in a fire at the Savoy Hotel in King’s Cross, Sydney.

In the world of cultural affairs:

  • Xavier Herbert’s Poor Fellow My Country won the Miles Franklin Award.
  • Ethnic radio began broadcasting in Sydney and Melbourne, and ‘experimental young style’ radio station 2JJ played its first track.[17]
  • AC/DC released their first album, High Voltage.
  • Peter Weir directed an ALP advertisement featuring John Gorton during the election campaign; his other notable achievement for the year was the release of the film, Picnic at Hanging Rock.
  • Ernie Sigley and Denise Drysdale won Gold Logies, the soapie Number 96 attempted to revive its ratings with a deadly bomb-blast that killed off several characters, and Graham Kennedy was banned from live television when his ‘faaark’ routine offended some sensitive viewers.
  • South Australia displayed its liberal attitudes – and more – by declaring the first legal nude-bathing beach in Australia. Victorian Premier Rupert Hamer’s opinion on nude bathing was reported: ‘I don’t go in for it myself, but I think it’s worth looking at.’

On the sporting stage:

  • Think Big won its second successive Melbourne Cup;
  • West Perth got the better of South Fremantle in the WAFL, Norwood triumphed in the SANFL, and North Melbourne won its first VFL premiership over Hawthorn;
  • Eastern Suburbs made it two in a row in the Rugby League Grand Final; and
  • Australia lost the final of the first limited-overs Cricket World Cup to the West Indies, but won the four-test Ashes series 1–0, with three matches drawn.

Footnotes

[1] Cited in Laurie Oakes, Crash Through or Crash: The Unmaking of a Prime Minister, Drummond, Richmond, 1976, p. 241.

[2] NAA: A5915, 1534.

[3] NAA: A5915, 1548.

[4] NAA: A5915, 1698.

[5] NAA: A5915, 1928.

[6] NAA: A5915, 1928.

[7] NAA: A5915, 1739.

[8] NAA: A5915, 1935; NAA: A5915, 1937; and NAA: A5915, 1940.

[9] NAA: A5915, 1936.

[10] NAA: A5915, 1962 & NAA: A5915, 1999.

[11] NAA: A5915, 1610.

[12] NAA: A5915, 1861.

[13] NAA: A5915, 1708.

[14] NAA: A5925, 4021/CCR; NAA: A5925, 4040/CCR; NAA: A5925, 4043/CCR; NAA: A5925, 4110; and NAA: A5925, 4110.

[15] NAA: A5915, 1818.

[16] NAA: A5915, 1795.

[17] NAA: A5915, 1890.

Copyright National Archives of Australia 2014