Events and issues in 1976

Dr Jim Stokes presented this paper at the National Archives on 5 December 2006. Jim Stokes is a former senior staff member of the National Archives. See below for the audio of his presentation.

It wasn’t, then, one of your shining-peak years – more a sheep-plateau (Come to Fraser Country), with unemployment and inflation burning down the fences and Bob Hawke and the unions arguing with the new Boss about the best way to beat back the flames. Idealism shrank even more as the experts slogged away at the station books – dashing outside now and again to shout: ‘We won’t devalue!’ to pesky Pressmen at the gate.

Ian Moffit, The Bulletin, 25 December 1976

The Fraser government

Politically, 1976 was a year of relative calm, at least by comparison with the tumultuous events of 1975. The Coalition of the Liberal Party (LP) and National Country Party (NCP) had won a convincing victory at the double dissolution election of 13 December 1975, gaining 55.7% of the two party preferred vote and 91 seats in the House of Representatives (68 LP, 23 NCP). The Australian Labor Party (ALP) won only 36 seats. The Coalition also controlled the Senate, with an eight-seat majority.

The ALP showed little sign of early recovery from its election loss. As Alan Reid wrote in The Bulletin on 4 September 1976, ‘The ALP cannot forever live off Kerr. Sooner or later it must face the question of how it is going to live with the Australian community.’ Gough Whitlam remained Leader of the Opposition with Tom Uren as his deputy, but there was talk of generational change, as in The Bulletin of 31 January 1976, which referred to Bob Hawke’s ‘semi-declared intention … to become Prime Minister himself at the earliest convenient date.’ In state politics the Hamer Coalition government was comfortably returned in Victoria, but Neville Wran’s ALP narrowly defeated the Willis Coalition government in New South Wales.

Just as the Coalition dominated the Parliament so Fraser dominated the Coalition. His energy, his determination to manage and achieve so many things and his sheer physical presence made the government very much his own. Patrick Weller wrote ‘Fraser’s impatience was legendary, his demands continuous. When an issue was on his mind he wanted action immediately.’ [1] However there were complexities in this domination. John Edwards wrote: ‘Whilst he dominates Cabinet and the party to the extent that he can force acceptance of some very bold decisions against the advice of the relevant minister, he is also prone to swift concessions and sudden changes if he estimates the opposition will be too strong.’ Edwards attributed this ‘blend of despotism and quixotry’ to the fact that Fraser’s strength in the party was not matched in the electorate at large, ‘where several powerful groups like the trade unions and the middle class left deny him legitimacy as a Prime Minister.’ [2] Even his own party could occasionally rebuff him, as in March when six Coalition senators crossed the floor to defeat the proposed axing of the $40 pensioners’ funeral allowance.

Paul Kelly believed that ‘Fraser’s ultimate instrument of power was always the Cabinet … So reluctant were ministers to act alone that Cabinet became weighed down with business.’ [3] Ministers also became weighed down with papers and meetings. During 1976 Cabinet dealt with nearly 1000 submissions totalling around 50 000 pages, approximately double the volume of submissions in 1975. Kelly quoted one minister as saying that anyone who claimed to read more than 10% of submissions thoroughly was lying. While Fraser very much set his own agenda, he worked closely with a group of key ministers, including the NCP’s Doug Anthony, Ian Sinclair and Peter Nixon, and the Liberal Party’s Phillip Lynch, Senator Reg Withers and Senator John Carrick.

In an attempt to spread the Cabinet workload, Fraser established a series of standing committees (Economic, Foreign Affairs and Defence, General Administrative and Legislation). There were also ad hoc committees to deal with one-off issues. The committees were chaired by the Prime Minister or his nominee and were in general expected to make final decisions, although in practice many issues came back to the full Cabinet. The Legislation and ad hoc committees met quite frequently, but the others appear to have been less successful in diverting business from the full Cabinet.

The economy and the Budget

The government’s principal concerns throughout 1976 were the economy and the budget deficit. Inflation, although declining, was still in or close to double figures, unemployment was about 4.4% and expected to rise, and there were concerns about the competitiveness of Australian industry. There were also representations from a wide range of primary and secondary industries seeking assistance through the maintenance of tariffs, import controls and in some cases, direct financial assistance. Some of these problems flowed from the oil shock and rapid wage and cost increases of the mid-1970s, compounded by the budgetary commitments inherited from the previous government. In January the 1975–76 deficit was predicted to be $4525 million, although it finally came in at $3585 million.

Cabinet was advised on 15 March 1976 that the projected 1976–77 budget deficit was $5000 million, which was ‘not a credible prospect in terms of economic policy or the philosophy of the LNCP government’. It was decided that no new policy initiatives would be pursued unless they were ‘literally essential’ and departments were directed to base their estimates on ‘minimum unavoidable levels of spending’. The decision to introduce full Consumer Price Index (CPI) indexation for personal income tax from 1 July 1976 put further pressure on the budget.

On 7 May Cabinet decided ‘that the government could not inflate its way out of the inflation-induced recession’ and on 20 May the Treasurer announced a mini-budget reducing expenditure proposed for 1976–77 by $2600 million, with urban development, transport and communications taking the biggest cuts. The budget itself was brought down on 17 August. It predicted a deficit of $2608 million and an inflation rate of 8–9% by mid-1977. Spending cuts were widespread, but education, defence, social security and payments to the states fared relatively well.

Between 21 June and 1 July a committee of ministers discussed the state of the economy with industry, consumer, women’s and union groups, illustrating the range of conflicting pressures on the government. The manufacturers agreed that inflation was the number-one problem but were concerned that drastic budget cuts might further depress the economy, especially if there was not adequate protection against imports. They were also concerned that automatic wage indexation should not continue for too long. The farmers wanted reduced tariffs, support for the dairy industry, a national rural bank, an income equalisation scheme and employment contracts to reduce industrial disputes. The miners wanted an end to coal and petroleum levies and accelerated depreciation for new projects; there was also concern about the effect of land rights legislation on the uranium industry. The retailers wanted wage increases curbed and warned against over-protecting industry. The unions wanted full wage indexation maintained, fiscal measures to increase disposable incomes and unemployment reduced. Women’s and consumer groups wanted reduced tariffs, improved child and aged care, retraining and incentives for part-time employment.

Late in 1976 a large capital outflow and concern over the Arbitration Commission’s return to full wage indexation placed increasing pressure on the currency. The devaluation issue came to a head on 28 November when Cabinet agreed to a 17.5% devaluation of the dollar (which brought it almost to parity with the US dollar) and the ‘adoption of a flexibly administered exchange rate, somewhat along the lines of a “managed float”.’ Financial institutions would be closely monitored to ensure that lending ‘comes back from recent excessive and unsustainable levels’, government expenditure would be reviewed once again and the strongest possible arguments for restraint would be put to the December quarter National Wage Case.

Differing views over the need for devaluation and a desire for more comprehensive financial information and advice had already prompted Fraser to announce on 18 November that Treasury was to be split into separate departments of Treasury and Finance. Lynch held both portfolios until after the December 1977 election. At the same time the Prime Minister increased resources in his own department for program evaluation and strategic planning. He also established a Cabinet Planning and Coordination Committee, serviced by his own department.

Industrial relations

The main focus of the government’s campaign to reduce inflation was the quarterly National Wage Case hearings by the Arbitration Commission. This inevitably led to conflict with the trade union movement. As Joe Manton noted in The Bulletin on 12 June, the Coalition’s dominance of the Parliament had left a vacuum ‘filled by a group of some 30 left-wing unions representing all three communist factions and the socialist left of the ALP, who, by reason of their industrial muscle, represent the real opposition to Mr. Fraser.’ The ACTU tended to occupy an intermediate position between the government and the more militant unions.

The government was so disturbed by the December 1975 quarter CPI increase of 5.6% that it urged the Arbitration Commission to increase wages by only half that amount; the Commission in fact granted a 6.4% increase. For the March quarter the Commission granted full indexation to those on the average male wage or less, but only a flat rate increase for those on higher incomes. For the June quarter the government argued for an increase of only 30% of CPI, but the Commission granted around 60%. The Commission was concerned about the ‘dismal picture of industrial disputation’ and feared that to accept the government’s proposal would cause the collapse of wage indexation. The ACTU also argued for a return to full indexation, fearing that the more powerful unions would go their own way with claims such as a 35-hour week and employer payment of the Medibank levy. The Commission restored full CPI indexation in November.

Individual disputes that came before Cabinet included the oil industry, air traffic controllers, postal union bans on Fairfax newspapers and the refusal of the Ships Painters and Dockers Union at Garden Island Naval Base to give up the sole right to supply new employees or to permit workers to be moved from one job to another. Cabinet also considered the possibility of deregistering unions involved in bans over the construction of the Newport power station in Melbourne and the mining and export of uranium.

Reviews of government functions and spending

Fraser, strongly encouraged by the Treasurer and his department, waged almost constant war on Commonwealth spending. This not only attacked the budget deficit but also emphasised the importance the government placed on fiscal rectitude. Within a fortnight of winning the December 1975 election Fraser had established two reviews of expenditure, priorities and structures. On 22 December he appointed Sir Henry Bland as head of an Administrative Review Committee. On 23 December he asked all ministers to identify savings and prioritise programs, identifying those that could be terminated. Ministers’ responses, which varied considerably in the scale of economies volunteered, were considered by Cabinet on 22 January 1976. Cuts of $114 million were approved forthwith and another $187 million referred for further investigation. Commonwealth staff numbers were cut by 2.8% in 1975–76 and a further 3.7% during 1976–77. Even members of Parliament felt the pinch when Cabinet decided to close the Hotel Kurrajong, a traditional Canberra residence for politicians.

The Administrative Review Committee reported on most areas of Commonwealth activity during 1976, often in forceful terms. Foreign Affairs was told that ‘the best safeguard against expansion of overseas Missions is not to open them.’ A suggestion that the various Commonwealth scientific organisations should become statutory authorities was dismissed as ‘idiotic’. The Australian National Parks and Wildlife Service was described as a ‘nonsense’, since it had no parks (nevertheless Cabinet decided to retain it). The Bureau of Meteorology was castigated for its ‘coy reluctance’ to demonstrate that a large increase in staff and costs had improved the quality of weather forecasts.

Dr HC Coombs’ Royal Commission on Australian Government Administration (RCAGA), inherited from the Whitlam government, presented its final report on 22 July. Cabinet considered groups of RCAGA recommendations relating to the Commonwealth Public Service in December. Decisions included abolition of the 10% limit on non-specialist graduate recruitment, reaffirmation of promotion by merit and preference for ex-servicemen, introduction of regular efficiency audits, a reduction in the number of unions covering Commonwealth employees (37), and a more stringent approach to the creation and direction of statutory authorities. Cabinet deferred consideration of the RCAGA’s recommendation for repeal of section 66 of the Public Service Act 1922, which provided for summary dismissal of public servants who went on strike.

Federalism, states and territories

The second fundamental tenet of the Fraser government was its belief in the federal system of government (sometimes referred to as New Federalism), in contrast to what it saw as the unreasonably centralist tendencies of its predecessor. However, this did not mean that the states always got their own way and they were expected to share in the financial pain and administrative reform. Relations with Sir Joh Bjelke-Petersen’s government in Queensland were at times closer in style to foreign policy than federalism. Fraser guaranteed the states one-third of personal income tax revenue, but this was counterbalanced by reductions in specific purpose funding in areas such as urban development and transport.

The Australian Constitutional Convention, established in 1972, held its third series of meetings in Hobart in October. Agreement was reached on proposed constitutional amendments relating to simultaneous elections for the Senate and House of Representatives, compulsory age 70 retirement for federal judges and voting rights for territory voters at referenda. These three proposals were put to the electorate on 21 May 1977, together with a proposal that casual Senate vacancies should be filled by a member of the same party. The simultaneous election proposal was defeated, but the other three were endorsed. The Convention did not reach agreement on the contentious issue of the Senate’s powers in relation to money bills.

Decisions were made to give the two mainland territories self-government. Administrative functions were progressively transferred to the Northern Territory Legislative Assembly in 1977–78, with full self-government from 1 July 1978. In the ACT it was decided to hand over all functions in a single process, without a referendum. A referendum was in fact held in 1979 and Canberra residents rejected self-government, although it was eventually established in 1989.

The Royal Commission on Norfolk Island found that the island would never be viable economically and that the government must decide whether to maintain or abandon it. Arguments for retention (endorsed by Cabinet) included obligations to the former Pitcairn Islanders, heritage, weather station and emergency landing considerations, and the risk that an abandoned island might be taken over by some other power.

Industry assistance and regulation

Industry policy and assistance issues took up a considerable amount of Cabinet’s time during 1976. Struggling industries wanted more assistance and import restrictions, profitable industries wanted less taxation and regulation. This reflected the difficult economic environment and also industry hopes of reversing or modifying some of the measures introduced by the Whitlam government.

Around 50 Industries Assistance Commission (IAC) reports were submitted to Cabinet during the year on products ranging from ball bearings to brassieres. Most submissions related to the textile, clothing and footwear, electrical goods and metal manufacturing industries. The textile, clothing and footwear group was a particularly difficult problem because it employed large numbers of relatively unskilled workers, and even with a complex web of duties and import quotas many companies struggled to survive. The Whyalla and Newcastle shipyards were also struggling, the IAC finding that the subsidy on building large ships would have to increase from 35% to as much as 60% to enable them to compete with foreign builders. The government suggested that two new Australian National Line bulk carriers could be built at Newcastle if the unions and the NSW government undertook to meet additional costs caused by industrial action.

The 85% local content plan for the motor car industry was extended until 1984, and Toyota and Nissan joined it. Fully imported cars were subject to a 45% tariff, dropping to 35% in years when imports took no more than 20% of the market. Concentration of four-cylinder engine construction at the Chrysler plant in Adelaide was found to be impracticable, and production was spread among four different manufacturers.

Before the election the Coalition had called for the abolition of the Prices Justification Tribunal, which was unpopular with business. However, it became a bargaining chip with the unions over wage restraint and Cabinet decided to retain it, subject to a requirement ‘to have due regard to company profitability’. Cabinet also decided to enact national corporations and securities legislation to replace state legislation, although the states would be mainly responsible for its administration.

Mining and agriculture

Dairy cattle line up for hay near Leura, Victoria, during drought  1976.
Dairy cattle line up for hay near Leura, Victoria, during drought 1976. (NAA: A6180, 18/5/76/4)

In mining Cabinet decided to remove the coal export duty imposed in 1975, and loan guarantees were offered to the struggling Mt Lyell and Cobar copper mines. Assistance to the Kalgoorlie and Mt Magnet gold mines was refused. The levy on production from new oil fields was removed, but no final decision was reached on the low price set for oil from Australian fields discovered before the introduction of export parity pricing in 1975. The projected large increase in Western Australian iron ore production was reviewed because of fears that it would undermine prices. Treasury wanted to leave the problem to the market, but Cabinet decided to maintain export controls.

In agriculture, cost and overseas marketing problems were compounded by a drought that covered much of the southern half of the country, requiring natural disaster assistance for fodder supply and livestock disposal. The dairy and fruit industries were in acute difficulties, requiring both price support and adjustment funding to encourage marginal farmers out of the industry. Forty thousand cattle had to be shot in Victoria because of drought and low butter fat prices. One farmer complained of the stupidity of tariff regimes that subsidised Japanese farmers $900 to raise a cow and Australian manufacturers $4000 to make a car.

Agricultural support issues often divided Cabinet, with Primary Industry championing the farmers and Treasury urging a greater emphasis on market realities and structural change. Other measures included the reintroduction of the superphosphate bounty and two increases in the floor price for wool. The Queensland government sought a 16% increase in domestic sugar prices, which had traditionally been inflated to subsidise exports. Cabinet offered 4% on the basis that export prices were good, but Queensland found this ‘completely unacceptable’ and induced Cabinet to raise it to 12%.

Foreign affairs, defence and security

Prime Minister Malcolm Fraser and Mrs Fraser on the Super Express Train, Japan, June 1976, during his visit to Japan to sign the Nara Treaty.
Prime Minister Malcolm Fraser and Mrs Fraser on the Super Express Train, Japan, June 1976, during his visit to Japan to sign the Nara Treaty. (NAA: A13302,1)

The Prime Minister set out his foreign policy objectives in a statement to the House of Representatives on 1 June. He criticised his predecessors for neglecting the realities of power because of ‘unrealistic notions that an age of peace and stability had arrived’. He was particularly concerned about the ambitions of the Soviet Union (evidenced by its intervention in Vietnam and Angola), the strength of Warsaw Pact forces confronting NATO and naval expansion in the Indian Ocean. He condemned ‘undue world criticism’ of the United States and emphasised the importance of Australia’s relations with Japan and China, not least as counters to Soviet influence. He also stressed the importance of close relations with the ASEAN countries, especially Indonesia.

Fraser emphasised his strategic priorities by making his first major overseas visit as Prime Minister to Japan and China during June. He signed the Basic Treaty of Friendship and Cooperation with Japan, which had been the subject of prolonged negotiation to ensure that general principles were not worded in a way that might harm Australian trade, investment or migration interests. Fraser hoped to further strengthen the trade relationship with Japan and to canvass Japanese support for liberalisation of international trade in agricultural commodities. He stressed to Prime Minister Miki that Australia was a stable and reliable supplier to Japan and suggested that both countries should ‘share the burden’ where structural change was needed, such as with the Japanese restrictions on beef and dairy imports and Australia’s temporary limits on motor vehicle imports.

In China Fraser met Premier Hua Kuo-feng and Foreign Minister Ch’iao Kuan-hua. They agreed on the challenge of the Soviet military build-up, the importance of cooperation between the US and its allies, the desirability of a more active Japanese role in the region and the importance of keeping South-East Asia free from dominance by any one power. Fraser concluded that China felt somewhat neglected by the US because the latter was giving priority to negotiations with the Soviet Union. After Fraser’s return, Cabinet endorsed a range of measures to improve relations with China, including ministerial visits, exchanges of experts and the conclusion of consular and family reunion agreements. Ministers were to stress to other governments the need for better communication and understanding with China, and Australian diplomats were urged to consult more closely with Chinese colleagues.

East Timor remained a very sensitive issue. Privately the government accepted integration with Indonesia as a fait accompli and a better option than a radical and unstable independent state. A strategic defence review in September argued, ‘As the alternative is an essentially weak state, open to outside interference, the defence interest is served by East Timor’s incorporation in Indonesia.’ In public the government opposed Indonesia’s use of force and supported a genuine act of self-determination. Members of the Fretilin government-in-exile were refused entry visas to Australia.

Prolonged negotiations with Papua New Guinea (PNG) over the Torres Strait boundary were complicated by the Queensland Premier, who differed strongly with the Commonwealth on issues such as mining rights and the possible transfer of uninhabited islands to PNG. By November it had been agreed provisionally that Australia would retain the inhabited islands close to PNG, with access corridors through PNG territorial waters. However, the question of whether the Torres Strait boundary would apply to the seabed only (as favoured by Australia) or also to fisheries remained unresolved. In the light of unrest in Bougainville, Australia also decided to explore with Prime Minister Somare the possibility of giving Bougainville a share of copper revenues and of establishing a federal structure in PNG.

In October Cabinet reviewed Australia’s aid priorities, revealing substantial differences between Foreign Affairs and Treasury. Treasury wanted greater emphasis on bilateral aid to countries in our region and less on multilateral aid, food and budget support and assistance to non-government organisations. Cabinet generally supported Foreign Affairs and maintained Australia’s aid target of 0.7% of gross national product. Papua New Guinea and Indonesia remained our two largest aid recipients. Cabinet had earlier agreed to honour a Whitlam pledge to maintain aid to Indonesia in real terms and to expand aid to the south-west Pacific in the light of ‘Soviet overtures’ to Tonga and Western Samoa.

A White Paper on defence was tabled in Parliament on 4 November. This noted that Britain, Australia’s traditional protector, was no longer a significant power east of Suez and that Australia’s defence must become increasingly self-reliant. However, there remained a basic community of strategic interest among the industrial democracies of North America, Western Europe and Japan. It was uncertain whether the US would again become involved militarily on the South-East Asian mainland, but in the event of a fundamental threat to Australia ANZUS gave substantial grounds for confidence that US military support would be forthcoming. One irritant in the US relationship had already been resolved in June, when Cabinet agreed to the resumption of visits to Australian ports by nuclear-powered warships. Such visits had been suspended since 1971, but as the US now accepted unlimited liability for any accident it was decided that they could resume, subject to a range of safeguards.

Aircraft debris – Tracker no. 844: On 4 December 1976 the Royal Australian Navy’s fleet of Grumman Tracker aircraft was destroyed by arson in a hangar fire at RANAS (Royal Australian Naval Air Station) Nowra.
Aircraft debris – Tracker no. 844: On 4 December 1976 the Royal Australian Navy’s fleet of Grumman Tracker aircraft was destroyed by arson in a hangar fire at RANAS (Royal Australian Naval Air Station) Nowra. (NAA: SP1725/6)

Mr Justice Hope’s Royal Commission on Intelligence and Security, established in 1974, completed eight reports during 1976–77 on aspects of Australian security and intelligence operations. The only one of these to come before Cabinet during 1976 was the third report, which dealt with the machinery for intelligence coordination. Hope found that the intelligence agencies were fragmented, poorly organised and at times unduly secretive. In addition the intelligence assessment process was controlled too closely by Defence and Foreign Affairs and the agencies lacked adequate resources, although in some cases this was merely an excuse for failure. Cabinet decided to establish a centralised independent intelligence evaluation agency (the Office of National Assessments) responsible to the Prime Minister.

Major defence infrastructure and equipment decisions in 1976 included accelerated completion of the Stirling naval base in Western Australia, establishment of the Defence Force Academy in Canberra and the purchase of two guided missile frigates (Adelaide and Canberra) from the US and an additional 34 Leopard tanks from Germany. On 4 December, twelve of the Navy’s thirteen Grumman Tracker aircraft were destroyed in a fire at the Nowra naval air base.

Commonwealth courts, administrative law and human rights

The Fraser government continued the administrative law reforms initiated by its predecessor. On 10 May Cabinet decided to establish a Commonwealth Ombudsman to investigate complaints against actions by Commonwealth officials. On 26 May Cabinet decided to establish a Federal Causes and Appeals Court to replace the Bankruptcy and Industrial Courts and to relieve the High Court of tax, bankruptcy and industrial property appeals from state courts. The Hon. Sir Nigel Bowen, Chief Judge in Equity in New South Wales, was appointed Chief Judge of the Federal Court in December.

In December Cabinet decided to strengthen procedures for appealing administrative decisions to the Federal Court and to draft Freedom of Information and Archives legislation. The public access provisions of the Archives Bill were controversial from the beginning, requiring the issue of an amended Cabinet decision clarifying that there would be no right of appeal against the exemption of records relating to national security or foreign relations or records containing information provided in confidence. The Australian Archives was less fortunate with its proposed new Canberra records repository at Mitchell, which was rejected.

On 17 December Cabinet agreed to establish a Human Rights Commission to deal with complaints of discrimination on the grounds of race or on other grounds prohibited by future Commonwealth laws. The Commission would review existing and future Commonwealth and state laws, and report on their consistency with the International Covenant on Civil and Political Rights, to which Australia was a signatory but not a party. Cabinet referred to the Attorney-General a report on discrimination against women by the Interdepartmental Working Group on Women’s Affairs, which recommended legislation (administered by the Human Rights Commission) proscribing discrimination on the grounds of sex or marital status.

Health, welfare and migration

The three members of the Royal Commission on Human Relationships established by the Whitlam government in August 1974 to inquire into the effects of human relationships on Australian society. The Commission reported in 1976.
The three members of the Royal Commission on Human Relationships established by the Whitlam government in August 1974 to inquire into the effects of human relationships on Australian society. The Commission reported in 1976. (NAA: A6180, 21/5/75/5)

The new government soon turned its attention to Medibank, which was expected to cost $1.8 billion in 1976–77. Cabinet considered ways of moving more of the cost to users, while preserving the principles of universal coverage and free care for those on the lowest incomes. Decisions were complicated by the fear of inflaming wage claims and political unrest generally; a 24-hour strike in support of Medibank on 12 July was billed as Australia’s first national political strike. The Lynch mini-budget on 20 May announced a 2.5% Health Insurance Levy on taxable income (with a ceiling of $150 for individuals and $300 for families), but exempted those who had adequate private health insurance or paid a premium direct to Medibank. The ACTU argued unsuccessfully for a 1.6% levy with no ceiling or provision to opt out, but it did persuade the government to allow Medibank to offer private health insurance cover.

The government also confirmed its predecessor’s decision to ban cigarette and tobacco advertising on radio and TV from 1 September 1976. The tobacco industry and some industry ministers opposed the ban because of its effects on the advertising, broadcasting and tobacco-growing industries and ‘doubts on scientific evidence on which earlier decisions were made’.

In welfare the government looked at a range of options for tightening up expenditure. The number of unemployed had risen from 34 000 in November 1972 to 220 000 in December 1975, 70% of whom were receiving benefits. Cabinet agreed on 14 January to tighten the work test to weed out the ‘work shy’, including people who deliberately moved to areas of high unemployment or dressed in an unacceptable manner. Benefits would also be withdrawn from single adults who refused to move to areas where work was available. The government did however introduce a trial relocation assistance scheme.

Refugees on a Qantas charter flight, 1976.
Refugees on a Qantas charter flight, 1976. (NAA: A12111, 76/46A/9)

Migration decisions were made in the context of estimates that Australia’s population might stabilise at around 16 million by the end of the century. On 7 May Cabinet set the 1976–77 migrant target at 70 000, of which 30 000 would be given assisted passages. Employers could nominate semi-skilled workers for migration and also a limited number of unskilled workers, provided that they had made genuine efforts to recruit such workers in Australia. There was also an amnesty for about 32 000 illegal immigrants (also described as ‘overstayed visitors’) who had entered Australia on the ‘easy visa’ system operating in 1973–74.

The most sensitive migration issue concerned refugees from the civil war in Lebanon. Selection criteria had been relaxed for relatives of Australian residents, but it was proving difficult to verify hardship claims and to undertake reliable health and character checks. It was also feared that unskilled and semi-skilled migrants would find it difficult to obtain work in Australia. Cabinet decided that from 1 October normal migration criteria would be applied to Lebanese applicants, although until 31 December non-dependent parents did not have to meet economic viability criteria and brothers and sisters of Australian residents were admitted subject only to health and character checks.

Indigenous affairs

The most contentious Indigenous issue in 1976 was Commonwealth land rights legislation. Mr Justice Woodward’s inquiry on land rights had recommended in 1974 that freehold title to Aboriginal reserves and certain other lands in the Northern Territory should be vested in Land Trusts and administered by Land Councils acting on the advice and consent of the traditional owners. The proposed legislation did not please the Minister for the Northern Territory (Evan Adermann) and the elected members of the Northern Territory Legislative Assembly, who argued that it would ‘be deeply resented by a large majority of the local community’. Instead they recommended that the Commonwealth pass only ‘framework’ legislation, leaving the Northern Territory Legislative Assembly to legislate for areas other than existing reserves to minimise ‘discrimination as between Aboriginals and other citizens’. Treasury and National Resources also opposed an Aboriginal right of veto over mining.

Cabinet nevertheless decided on 25 May 1976 to proceed with legislation covering all Northern Territory Aboriginal reserves, the Hermannsburg and Santa Teresa mission leases, and the Kildurk, Willowra and Wave Hill Aboriginal pastoral leases. Exploration and mining rights would require the agreement of the relevant Land Councils and communities, although ‘in the national interest’ the government could override a refusal to grant rights. Attempts to exclude the three pastoral properties from the legislation, remove or modify the mining veto and clarify the rights of existing miners continued, but the basic principles survived and the Act was finally signed by the Governor-General on 16 December.

Visit of Prime Minister Malcolm Fraser to Torres Strait Islands, November 1976.
Visit of Prime Minister Malcolm Fraser to Torres Strait Islands, November 1976. (NAA: A8281, 25/11/76/51)

The government also clashed with Queensland. In the space of two days in December 1975 the Queensland Parliament passed legislation to permit bauxite mining on the Aurukun Aboriginal reserve on Cape York, and Queensland’s Director of Aboriginal and Islander Advancement signed an agreement with the mining companies. The lack of community consultation caused widespread concern, and in March 1976 Cabinet decided to pursue negotiations with the Queensland Premier to ensure that the community’s views were heard. The Aurukun community obtained an injunction in the Queensland Supreme Court to stop the mining, but the Queensland government appealed to the Privy Council, which eventually upheld Queensland’s position in 1978.

There were comprehensive reviews of Indigenous spending and administration. The 1976–77 budget gave the Department of Aboriginal Affairs some $26 million less than its actual 1975–76 expenditure, but after a review Cabinet decided to increase 1976–77 funding by $25 million, mainly for housing. The review took account of a report by David Hay on service delivery by the department since 1972. The report noted many worthwhile projects, but found that the department had been ill-equipped to manage massive initiatives in areas such as housing, local government and legal aid. Specific areas of concern included remote area housing associations, local councils, Aboriginal hostels, staff training and project evaluation.


The Administrative Review Committee found that Commonwealth involvement in education was fragmented, with responsibility divided among the Education Department itself, separate commissions for schools, universities, technical colleges and colleges of advanced education, the Curriculum Development Centre and the territory education services. Despite the Commonwealth’s very large financial support for education it was seen primarily as a state responsibility, and there was no coordinated Commonwealth planning mechanism. The colleges of advanced education in particular were expanding into university and technical college territory.

In July the Minister for Education recommended that the three tertiary commissions be merged into a single Tertiary Education Commission. Cabinet was inclined to favour the suggestion, but was not prepared to formally endorse it until a more equitable funding partnership had been agreed with the states. Officials submitted a funding options report in November, which noted that the Commonwealth was responsible for approximately 40% of all education spending. The Commonwealth met nearly all tertiary education costs, although the Minister wanted to move to a $2 Commonwealth / $1 state basis. Both the funding and commissions issues remained unresolved at the end of the year.

A Cabinet review of the Schools Commission also awaited final decision at the end of the year. The Minister did not recommend structural change, but noted antipathy in some quarters to the Commission’s attempts to impose new education policies and philosophies, its zest for detailed information, its abandonment of the concept of per capita grants for non-government schools and its use of special-purpose grants to exert undue influence on the states.

The environment

Uranium was the principal environmental issue in 1976. The development of up to six new mines awaited the findings of Mr Justice Fox’s inquiry into the proposed Ranger mine in the Northern Territory. Fox delivered his first report (on issues of principle) on 28 October 1976 and his second report (on ‘site specific’ issues around Ranger) in May 1977. The long wait for the Fox report left the government’s uranium policy (which in principle supported mining and export) largely paralysed, to the frustration of miners contemplating an almost sevenfold increase in uranium prices since 1972. Doug Anthony predicted that within 20 years uranium would give Australia an energy predominance similar to that of the Middle East oil states.

The government was forced to make decisions about exports from the existing Mary Kathleen mine in Queensland. Both the Whitlam and Fraser governments had maintained that Mary Kathleen and uranium exported under pre-2 December 1972 contracts were not subject to the Fox inquiry, but this had not been stated explicitly. The government feared that any apparent pre-emption of the Fox report would enrage the unions and environmental groups, who might physically block exports. Conversely withholding exports would create significant difficulties with the companies and countries involved. The temporary solution was to fill Mary Kathleen’s contracts with uranium borrowed first from the UK and then from the government’s stockpile at Lucas Heights.

The first Fox report found that the mining, milling and generation of electricity with uranium, subject to safeguards, was not so hazardous that Australia should ban mining. However it recommended a Parliamentary debate on the ‘unintentional’ contribution of the nuclear power industry to an increased risk of nuclear war. Fox also wanted decisions about mining in the Northern Territory postponed until after receipt of his second report and ample time for public debate. The government supported the broad thrust of the report and promised stringent safeguards for exports both in Australia and the destination country. Deliveries on pre-2 December 1972 contracts for uranium from Mary Kathleen and the government stockpile were allowed to proceed. ACTU President Bob Hawke informally advised the government that he could probably secure union agreement for mining and export for power generation to countries that had ratified the non-proliferation treaty, subject to adequate safeguards and opportunity for public debate.

The second major environmental issue in 1976 was sand mining on Queensland’s Fraser Island, a place of great beauty and scientific interest. An environmental inquiry found that the island could not be restored to its former state after mining and Cabinet agreed in November to use its export control power to phase out mining. The Queensland government, which had refused to cooperate with the inquiry, sought compensation of more than $100 million. Cabinet decided to offer $10 million for alternative employment projects such as tourism and forestry in the Maryborough region, provided the Queensland government cease all legal action against the decision to prohibit sand exports.

Growth centres, housing and transport

The Fraser government had inherited specific commitments to the Albury–Wodonga, Bathurst–Orange and Macarthur growth centres in New South Wales and to the planned Monarto centre in South Australia. The states had also identified a number of other centres for development, in most of which the Commonwealth had capital works commitments in health, education and transport. The Coalition was not hostile to decentralisation, but wanted more emphasis on cost effectiveness. The government continued support for the three NSW growth centres, but no funds were provided for Monarto.

Civil aviation had problems in 1976, despite a high degree of government support and regulation. Qantas reported an after-tax loss of $6.8 million, while Trans-Australia Airlines and Ansett took four of their Boeing 727s out of service because of a slump in business travel and high fuel and wage costs. In August the government decided to establish a Commonwealth–state committee to consider Sydney’s future airport needs; Transport Minister Nixon’s warning that the government would not be awarded any brownie points if it was still ‘considering’ the matter by the next election would haunt a succession of governments.

In land transport, sealing of the Eyre Highway across the Nullarbor was completed, giving a continuous strip of bitumen from Port Douglas to Port Hedland. The government also proceeded with Whitlam’s commitment to take over the South Australian (non-urban) and Tasmanian state rail systems, a decision that brought little joy to the Commonwealth’s accountants. The Northern Territory railway from Darwin to Larrimah was closed down, although it was to be replaced by a new railway three decades later.

On the waterfront the government ended half a century of Commonwealth regulation by disbanding the Australian Stevedoring Industry Authority. It also decided that at least 1200 men should be assisted to leave the waterfront and it established the Australian Maritime College at Launceston.

Broadcasting, entertainment and sport

Helen Morse as Caddie: Helen Morse starred as barmaid Caddie in the 1976 film of the same name. The Australian government invested in the film as part of International Women’s Year. (image courtesy Anthony Buckley Films).
Helen Morse as Caddie: Helen Morse starred as barmaid Caddie in the 1976 film of the same name. The Australian government invested in the film as part of International Women’s Year. (image courtesy Anthony Buckley Films). (NAA: A6180, 3/12/76/9)

The Treasurer failed to persuade Cabinet to reintroduce TV licences. Ethnic radio services were given long-term funding under the ABC, with ethnic advisory bodies. The Australian Broadcasting Tribunal was established as a statutory body to make broadcast licensing decisions. The Australia Council’s control over funding for performing arts, visual arts and literature, and Aboriginal arts was tightened, but film, radio and TV went to the Film Commission. The recently appointed Chairman of the ABC, Sir Henry Bland, provoked an outcry by cancelling the popular TV series Alvin Purple. Another ABC casualty after 5795 episodes was the radio drama Blue Hills, a favourite of generations of Australians in both country and city.

It was a year of mixed fortunes in sport. Australia’s modest medal tally at the Montreal Olympics (one silver in men’s hockey, and four bronze in swimming, equestrian and yachting) caused much national soul-searching. At Wimbledon Australia was unrepresented in the men’s quarter-finals for the first time since 1939. Australia defeated the visiting West Indies cricketers by five tests to one in 1975–76 and Pakistan played three tests in Australia in 1976–77, with a win to each side and a draw. Three female streakers at a Sheffield Shield game in Perth were claimed to be the first to streak at a first-class match. Van Der Hum won the Melbourne Cup and in the major football grand finals Hawthorn defeated North Melbourne by 30 points and Manly–Warringah defeated Parramatta 13–0.

Looking back on 1976

The last Cabinet meeting of 1976, held on 16 and 17 December, epitomised the industry and scope of the first year of the Fraser government. It made no less than 73 decisions, ranging over many of the issues that had become familiar during the year. Ministers were urged to hold the line on expenditure restraint, and the return to Darwin of staff evacuated to Brisbane after Cyclone Tracy was deferred. Relations with Japan, the US, the European Community and PNG were reviewed and it was decided to open embassies in Damascus, Amman and Tripoli. Norfolk Island was to be maintained rather than abandoned. Assistance measures were approved for dairying, fruit canning, metal products, tractors, polyester yarns and brassieres. Compensation measures for Fraser Island sand miners were agreed, and establishment of a Human Rights Commission was approved.

Ministers no doubt left Canberra looking forward to a month away from the Cabinet table after a year of very intense activity. However, there was no overseas travel for them, with Cabinet deciding on 17 December that ministers and their families could not avail themselves of travel entitlements accrued as members of Parliament.

The views expressed in this paper do not necessarily represent those of the National Archives of Australia.


  1. Patrick Weller, Malcolm Fraser PM, Penguin, Melbourne, 1989, p. 48.
  2. John Edwards, Life Wasn’t Meant to be Easy, Mayhem, Sydney, 1977, p. 100.
  3. Paul Kelly, The Hawke Ascendancy, Angus & Robertson, Sydney, 1984, p. 61.

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