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Land of Opportunity: Australia's post-war reconstruction

Full employment

In 1981 HC Coombs wrote that the Ministry for Post War Reconstruction was 'identified from its inception with the idea of full employment, and with policies to achieve it'. The obsession of Coombs and his colleagues with the problems of employment stemmed largely from their memories and experiences of the inter-war years. World War I had been followed by a boom, but it was short-lived and in 1921 unemployment doubled, reaching 12 per cent of the workforce. Throughout the 1920s it was seldom under seven per cent and at the height of the Depression it reached 28 per cent. By 1938 it had returned to 18 per cent.

Many Commonwealth officials and ministers had seen mass unemployment and its consequences at close-hand. Coombs, for instance, was profoundly influenced by his experiences as a casual teacher in the East End of London in 1933–34. Similarly, his Minister, JB Chifley, wrote in a speech that 'I look back – and I admit the steel enters into my soul when I do – to the days when hundreds of thousands of men were on the dole' (Sydney Morning Herald, 11 November 1946, p. 3). There was general agreement with LF Giblin who in 1943 stated that 'I think the sort of thing Australian people want more than anything else after this war is – prevention of unemployment; cures for such unemployment as cannot be averted; and generous relief for it as far as it cannot be immediately cured'. Moreover, among economists there was a strong belief that governments could adopt policies that would prevent high unemployment. The publication in 1936 of John Maynard Keynes' General Theory of Employment, Interest and Money convinced many Australian economists, especially younger ones such as Coombs, Ronald Walker, Dick Downing, Trevor Swan and Gerald Firth, that a new approach to economic policy was needed, especially in relation to employment.

Discussion of employment policy was stimulated by the publication in 1944 of Sir William Beveridge's Full Employment in a Free Society and the British government's 'White Paper on Employment Policy'. On 29 June 1944 Coombs gave the Joseph Fisher Lecture at the University of Adelaide, which he entitled 'Problems of a high employment economy'. He began by referring to the improved techniques of economic management available to governments, largely due to the economic theory of Keynes and the 'political arithmetic' (national income statistics) of Colin Clark. High employment, he argued, did not mean that everybody would have a job, but there would be more jobs than people to fill them. It could be achieved by government intervention, with the government underwriting expenditure to ensure that it did not fall below the level required to sustain production at a maximum. The main problems arising from high employment were the threat of excess expenditure, which could result in inflationary price increases, the tendency of high employment to unbalance international payments, difficulty in maintaining the efficiency of labour and management, and the efficient use of resources.

White Paper on Full Employment

On 21 July 1944 John Curtin tabled in Parliament the British 'White Paper on Employment Policy' and promised that a similar document would be prepared on Australia's plans for post-war reconstruction. A few days later, Coombs asked Firth to prepare a white paper and suggested it cover the principles of a high employment policy, the application of the principles to both the post-war years and the transition period, and the problems of a high employment economy. Firth was assisted by his colleague Jim Nimmo, who had earlier written a paper on employment problems in the transition from war to peace and who had compiled the statistical tables that Coombs incorporated in his Joseph Fisher Lecture. The first draft was completed by the end of the year and read by Coombs and several other officers in the Department of Post War Reconstruction.

Early in 1945 a revised draft was given to Chifley and then circulated among officials in the Treasury and several other departments. They quickly appreciated the significance of the document and an extraordinary and tortuous process of revision followed, which continued until late May. It involved written critiques by numerous officials and several ministers, two lengthy inter-departmental meetings, a working committee, three Cabinet meetings and a committee of ministers. Firth coordinated the drafting to the very end, but in the later stages it was the economic advisers to the Prime Minister and the Treasurer (Douglas Copland, Downing, Giblin and Frederick Wheeler) who had the most influence on the final draft. The 19-page White Paper was arranged in six sections: (i) Introduction, (ii) Employment and expenditure, (iii) Maintenance of full employment, (iv) Special problems of a full employment economy, (v) Change-over from war to peace, (vi) Machinery of government. John Dedman tabled the paper, entitled 'Full Employment in Australia', in Parliament on 30 May 1945.

The White Paper was inevitably a compromise, for the differences of opinion among ministers and officials were extreme. Unsure of their audience, they argued about the length, style and tone of the document. A few thought that the paper should be deferred until after the war. Some considered that it should focus on the problems of the transition period, while others wanted more attention given to long-term policy. Some complained that it was too wide-ranging, dealing with wages, prices, import controls, taxation and other policies, while others pointed to major omissions. There was disagreement about the inclusion of statistical tables (eventually they were omitted) and about the treatment of Commonwealth–state relations, constitutional limitations, machinery of government (reduced to generalities), post-war controls, the funding of public investment, and the importance of private investment. Curtin was surprisingly timid, demanding the exclusion of anything that might create political difficulties. As it eventuated, the White Paper was not debated in Parliament and it was left to newspaper editors to express their misgivings. Despite its limitations, the White Paper was the most important and wide-ranging public document issued by the Curtin and Chifley governments. For the first time, the government of a democratic country had formally committed itself to pursuing a policy of full employment and applying a Keynesian approach to immediate and long-term economic problems.

Post-war employment trends

The planners expected the war to be followed by a period of transitional unemployment, as a result of massive demobilisation and the shift from war to civil production. For some time the Department of Post War Reconstruction continued to take a strong interest in employment trends and problems. In particular, it studied those regions or towns where unemployment was relatively high, such as northern Queensland, Broken Hill, Lithgow, Ballarat, Bendigo, Geelong and Adelaide. Coombs was particularly concerned about problems in his home state, where rapid demobilisation and a lack of secondary industries had resulted in a rise of unemployment. In February 1946 he visited Perth and discussed public works and other possible remedies with the premier and other ministers. After 1946, however, the department left the analysis of employment trends to the Commonwealth Employment Service. Coombs and others had envisaged a peacetime unemployment figure of about 4 per cent. Instead, the figure was 1.2 per cent in 1947 and 0.9 per cent in 1948. Australia was entering the long period of full employment that was to continue until the early 1970s.

Full employment as an international objective

In a paper written in August 1942 Giblin argued that if Australia unilaterally adopted a policy of full employment, imports would rise in response to increased domestic demand and there would be a corresponding fall in exports as local costs rose. It was therefore in Australia's interests to promote full employment and a larger market among its trading partners, especially the United States. This was the beginning of the 'positive approach' or 'full employment approach' to international commercial and financial negotiations, an approach that was strongly espoused by Coombs, LG Melville, Roland Wilson and other officials. If the more powerful countries adopted domestic policies aimed at full employment and rising living standards, the poorer primary producing countries would be able to increase their exports and incomes. They would then be more amenable to reducing tariffs and other protections in accord with Article VII of the Mutual Aid Agreement. In line with the positive approach, Australian officials pressed for an international employment conference and an international employment agreement.

The Australian argument for domestic policies of full employment was first put forward by Wilson, when he attended British Commonwealth economic talks in London in October 1942. It was reaffirmed by the Australian delegations at a series of conferences: the Food and Agriculture Conference at Hot Springs (May 1943), the conference of Australian and New Zealand Ministers in Canberra (January 1944), the International Labour Conference at Philadelphia (April 1944), and the Monetary and Financial Conference at Bretton Woods (July 1944). The Australian proposals were strongly opposed by the United States, while the British government prevaricated. Nevertheless, opposition was gradually worn down.

At the San Francisco Conference in June 1945, Wilson battled with a belligerent John Foster Dulles and eventually secured a modest victory. Article 55 of the United Nations Charter pledged the organisation to promoting higher standards of living and full employment. Subsequently, the United Nations Economic and Employment Commission circulated questionnaires and produced reports on the employment policies of member nations. In November 1945 the United States government altered its position and proposed that the United Nations organise an international conference on trade and employment. At Havana in December 1947 the Australian delegation, led by Dedman and Coombs, pressed for a full employment objective to be included in the charter of the International Trade Organization, thereby linking trade obligations to employment levels. They were successful but, as Arthur Tange later wrote, 'by then "the positive approach" had run its course'.

Series: A2700
Administrative machinery for the Commonwealth Employment Service, 19 February 1945 790
Commonwealth Employment Service, 26 February 1945 790A
Full employment in Australia, 20 March 1945 821
Full employment in Australia, 30 April 1945 821A
Department of Commerce and Agriculture
Series: A606
Government Paper on Full Employment in Australia, 1945–48
Minutes by CL Steele and K Wallace commenting on the 1945 White Paper on full employment and a letter (21 September 1948) by E McCarthy referring to the United Nations questionnaire on full employment.
Department of Labour and National Service
Series: MP574/1
Employment organisation: full employment in Australia, 1945
Drafts of the White Paper on full employment, notes for the minister, and correspondence and minutes commenting on the White Paper. The correspondents include ER Toms, LM Brady, AW Welch, KCO Shann, EJR Heyward and HC Coombs.
Employment organisation: full employment in Australia, 1945
Drafts of the White Paper on full employment and comments by AW Welch and EJR Heyward.
Department of Post War Reconstruction
Series: A9790
Employment surveys, 1947
Review of the labour market (31 January 1947) prepared by the Department of Labour and National Service and correspondence about workforce statistics to be included in an economic survey. The correspondents include TW Swan, PJ Lawler and HA Bland.
United Nations questionnaire on full employment, 1948–50
The Australian and New Zealand responses to a United Nations questionnaire on full employment and correspondence between the Department of Post War Reconstruction and other Commonwealth departments regarding the preparation of the Australian response. The correspondents include JJ Dedman, HC Coombs, AS Brown and JW Burton.
International coordination of employment policies, 1944–49
A draft proposal for an international agreement on employment policies (January 1945) and correspondence concerning an international employment conference and the relationship between domestic and international employment policies. The correspondents include JJ Dedman, HC Coombs, AH Tange and JW Burton.
Female employment, 1942–46
Statistical tables and correspondence concerning the effects of a shortage of women in employment on the expansion of industry. The correspondents include AS Brown, HP Breen and T Halsey.
Series: A9816
Miscellaneous contacts: GA Waller (employment policy), 1941–42
Correspondence of GG Firth and other officials with GA Waller of Yungaburra, North Queensland, concerning employment policy, income, inflation, rent and other economic matters and referring to the writings of Lord Keynes, FA Hayek and HD Dickinson.
International coordination of employment policies, 1943–44
Memoranda by Department of Post War Reconstruction officials and correspondence regarding the 'positive approach' to full employment and a possible international agreement on full employment. The correspondents include HC Coombs, AH Tange, CL Steele, FL McDougall, Lord Keynes and T Balogh.
1943/1324 Pt 1
Correspondence with FL McDougall, 1943–45
Correspondence between HC Coombs and FL McDougall in London and Washington referring inter alia to international aspects of full employment and the 1945 White Paper on full employment.
General policy on full employment, 1942–45
Memoranda by GG Firth, AH Tange, LF Crisp, L Ross, JF Nimmo and LF Giblin on employment policy and correspondence referring to the British and Canadian White Papers on employment (1944–45) and the United States Full Employment Bill (1945).
IDC on Commonwealth Employment Service, 1944–46 (2 parts)
Transcript of a conference (13 April 1945) of Commonwealth and state officials on the Commonwealth Employment Service (chair: JJ Dedman) and correspondence concerning the conference, the establishment of the Commonwealth Employment Service, vocational guidance and other employment matters. The correspondents include JB Chifley, HC Coombs, PWE Curtin, WC Wurth and W Funnell.
Problems of a high employment policy: Joseph Fisher Lecture, 1944
Draft of the Joseph Fisher Lecture delivered by HC Coombs at the University of Adelaide (29 June 1944) and correspondence about the distribution of the lecture and its reception. The correspondents include SM Bruce, NG Butlin, LG Melville, Sir Lennon Raws and JJ Dedman.
Proposals for an international agreement to maintain a high level of employment, 1944–45
A memorandum (27 December 1944) by AH Tange on an international agreement to maintain high levels of employment, with comments by GG Firth, JL Knott, MW Phillips and LG Melville.
Publicity: White Paper on Full Employment, 1945–48
Correspondence about the printing and distribution of the White Paper on full employment, including a minute (20 June 1945) from GG Firth to AS Brown urging that the paper be discussed at the premiers conference. There is also the draft of an article about the White Paper by RI Downing, later published in the International Labour Review.
Forum of the Air debate on full employment, 1945
Letters to and from JJ Dedman concerning the debate on the subject 'Can governments ensure full employment?' broadcast on 5 September 1945.
White Paper on Full Employment, 1944–45
A series of files maintained by GG Firth documenting the drafting of the 1945 White Paper on full employment and the debate within the government about its scope, structure, proposals, arguments and language. They contain eight drafts (A–H) of the paper, statistical tables, memoranda by Firth and JF Nimmo, correspondence, minutes and notes of meetings. Among the many ministers and officials who commented in writing on the drafts were EJ Holloway, RV Keane, W Scully, HP Lazzarini, JA Beasley, BW Hartnell, AH Tange, LF Crisp, L Ross, PWE Curtin, TW Swan, Sir Harry Brown, LF Giblin, DB Copland, FH Wheeler, AC Moore, WE Dunk, SR Carver, EJR Heyward, AW Welch, W Funnell, and JK Jensen. Other correspondents include J Curtin, JB Chifley, JJ Dedman, HC Coombs and AS Brown.
Employment problems: Western Australia, 1945–47 (2 parts)
Correspondence, minutes, notes and newspaper articles about employment problems in Western Australia, Commonwealth support for Western Australian industries, shortages of materials and the visit of HC Coombs to Western Australia in February 1946. The correspondents include HC Coombs, KJ McKenzie, G Rudduck and W Funnell.
Employment problems: Victoria, 1946–47 (2 parts)
Copies of the Monthly Summary of Employment Trends in Victoria, minutes by KJ McKenzie on employment trends, and a letter (17 October 1946) by W Funnell about unemployment in Victoria and shortages of materials.
Employment problems: Tasmania, 1946–47
Copies of the Monthly Summary of Employment Trends in Tasmania and minutes by KJ McKenzie.
Employment problems in special areas, 1946
Correspondence about joint investigations by the Commonwealth Employment Service and the Department of Post War Reconstruction of employment problems in special areas, including northern Queensland, Western Australia, Bathurst, Lithgow, Broken Hill, Adelaide, Ballarat, Bendigo and Geelong. The correspondents include HC Coombs, KJ McKenzie, W Funnell and JK Jensen.
Employment problems: South Australia, 1945–47 (2 parts)
Copies of the Monthly Summary of Employment Trends in South Australia, a list of Adelaide firms in order of importance to the general level of employment (1 September 1945), minutes by KJ McKenzie, and correspondence regarding shortages of building materials in South Australia.
Employment problems: New South Wales, 1945–46 (2 parts)
Copies of the monthly summary of employment trends in New South Wales and minutes by KJ McKenzie.
Employment trends: Commonwealth of Australia, 1945–47
Correspondence and minutes concerning investigations of employment problems, employment statistics, female labour and materials shortages. The correspondents include AS Brown, KJ McKenzie, HW Allen and HA Bland.
State–Commonwealth Employment Committees, 1946–48
Correspondence, minutes, statements and notes concerning efforts to secure Commonwealth representation on state employment committees and agenda papers of the Victorian Employment Advisory Committee (the only committee to have a continuing existence). The correspondents include HC Coombs, TW Swan, KJ McKenzie, EF Router and RA Wood.
Monthly employment figures to Commonwealth Bank, 1946–47
Monthly summaries (August 1946 – September 1947) of employment conditions compiled by the Department of Post War Reconstruction and supplied to the Commonwealth Bank.
Employment problems: Australia, 1948
Notes on employment trends in Australian industries compiled by the Commonwealth Employment Service.
Department of Trade and Customs
Series: A9879
Employment: general papers, 1943–51
Miscellaneous papers on employment policy, including full employment: 10 articles reprinted from The Times (1942–43), extracts from British, American and Canadian sources, and a paper by J Pierson.
9124 Pt 3
Employment: proposals for an international employment agreement, 1944
Memoranda on an international employment agreement prepared by the Department of Post War Reconstruction, the Department of Trade and Customs and the Department of External Affairs.
9124 Pt 6
Employment: Full Employment in Australia, 1945
Memoranda commenting on draft texts of the White Paper on full employment.
9124 Pt 7
Department of War Organisation of Industry
Series: CP80/1
Post-war problems of employment in South Australia, 1944
A report by JW Wainwright, the South Australian Auditor-General, on likely post-war employment problems in South Australia.
Full employment in Australia, 1945
Includes a letter (5 March 1945) from GT Chippindall to HC Coombs commenting on the draft White Paper on full employment.
Directorate of Manpower
Series: B551
White Paper on full employment in Australia including Manpower comments, 1945
Drafts of the White Paper on full employment and correspondence between W Funnell and HC Coombs.
Series: A571
International employment policy, 1942–45 (3 parts)
Correspondence and memoranda concerning a possible international employment agreement and reports of Commonwealth and international discussions in London and Bretton Woods. They include memoranda by LF Giblin, HC Coombs, GG Firth, LG Melville, JB Brigden, SR Carver and F Pryor.
White Paper on Employment, 1944–49 (2 parts)
Drafts of the White Paper on full employment and minutes and comments by SG McFarlane, FH Wheeler, WE Dunk, HP Brown, L Jackson and RI Downing.
HC Coombs
Series: M448
Full employment in Australia: White Paper, 1945
Includes a minute (20 April 1945) from Coombs to JJ Dedman, suggesting points to be raised in the Cabinet discussion of the White Paper, and a draft of the speech by Dedman on tabling the White Paper in the House of Representatives.
Miscellaneous correspondence W, 1943–48
Includes correspondence of HC Coombs with SM Wadham, ER Walker and R Wilson on aspects of full employment policy.
White Paper on Full Employment, 1944–45
Documents relating to the White Paper on full employment, including the 1944 Joseph Fisher Lecture given by Coombs, entitled 'Problems of a high employment economy', copies of minutes by ministers and officials commenting on drafts of the paper, and the speeches by JJ Dedman and RV Keane when tabling the White Paper in Parliament.
Sir Douglas Copland
Series: CP6/1
Reconstruction: employment and social organisation, 1941–45 (2 parts)
Includes a letter (14 June 1944) from Copland to WR Hodgson concerning a draft international employment agreement.
Employment policy: Australia and abroad, 1943–45 (2 parts)
Includes memoranda by Copland on the change-over to peace (28 January 1943) and post-war economic and social policy (26 November 1943), a draft statement (11 July 1944) by J Curtin on the British White Paper on employment, annotated drafts of the White Paper on full employment, and draft proposals for an international employment agreement submitted to the New Zealand government (January 1945).
Employment policy: White Paper on Full Employment, 1945
Annotated drafts (F and H) of the White Paper on full employment and memoranda (May 1945) by FH Wheeler and AS Brown.
International policy: employment policy, 1942–44
Includes papers of the Financial and Economic Committee, documents on Article VII, letters to Copland from HC Coombs and WR Hodgson, cables, a memorandum (4 May 1943) by LF Giblin on Australian proposals for international economic policy, and a Department of Post War Reconstruction memorandum (15 November 1943) on national employment policy in international relations.
AC Joyce
Series: CP184/2
Full employment, 1944–45
Extracts from weekly letters from London regarding full employment (1944–45) and copies of the White Paper on full employment (30 May 1945) and Employment and Income, with Special Reference to the Initial Period of Reconstruction (Ottawa, 1945).

Further reading

Black, Laurel, 'Social democracy and full employment: the Australian White Paper 1945 , Labour History, no. 46, May 1984, pp. 34–51.

Butlin, SJ and Schedvin, CB, War Economy 1942–1945, Australian War Memorial, Canberra, 1977.

Cornish, Selwyn, Full Employment in Australia: the genesis of a white paper, Australian National University, Canberra, 1981.

Crisp, LF, 'The Australian full employment pledge at San Francisco', Australian Outlook, vol. 19, no. 1, April 1965, pp. 5–19.

Hasluck, Paul, The Government and the People 1942–1945, Australian War Memorial, Canberra, 1970.

Tange, Arthur, 'Planning for the world economy', Australian Journal of International Affairs, vol. 50, no. 3, 1996, pp. 259–68.

Turnell, S, 'Australia's "employment approach" to international post war reconstruction', History of Economics Review, no. 36, 2002, pp. 111–25.

Walker, E Ronald, The Australian Economy in War and Reconstruction, Oxford University Press, New York, 1947.

Waters, WJ, 'Australian Labor's full employment objective 1942–45', Australian Journal of Politics and History, vol. 16, no. 1, 1970, pp. 48–64.

Wilcox, Craig, Chaos, Keynes or controls: drafting the Australian white paper on full employment, 1945, BA (Hons) thesis, University of New South Wales, Sydney, 1989.