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Land of Opportunity: Australia's post-war reconstruction


During the war responsibility for transport policy and administration was divided among several departments: Transport, Civil Aviation, Supply and Shipping, and Interior (Commonwealth Railways). The Department of Transport was a wartime creation, intended to ensure the most efficient use of road and rail transport. EJ Ward, who became Minister for Transport in September 1943, made a number of attempts to extend the functions of the department. At various times he proposed that it assume responsibility for shipping, the Commonwealth Railways, and the rationing of automotive supplies. None of these proposals was accepted by his ministerial colleagues. In the immediate aftermath of the war, the Department of Transport acted as the executive body of the Australian Transport Advisory Council (established in 1946) and the Australian Road Safety Council, administered the Commonwealth Aid Road Grants (renewed in 1947), and promoted rail standardisation.


Ward was a great advocate of rail standardisation: he once told JB Chifley that it was 'the major national work to be undertaken in the post-war period'. In the inter-war years a mere 151 miles of track had been converted to the standard gauge. The need for a uniform gauge became obvious during the war, with gauge breaks causing great congestion of troops and civilians at Brisbane, Albury, Tocumwal and elsewhere. In 1944 Ward commissioned Sir Harold Clapp, the former Victorian Railways Commissioner, to report on the standardisation of rail gauges and rolling stock. The report, presented in March 1945, was comprehensive and ambitious. It incorporated many of the recommendations of a 1921 royal commission, with the addition of a standard gauge rail from Broken Hill to Port Pirie. The estimated cost of standardising existing railways, including the entire broad gauge systems in Victoria and South Australia, was £44.3 million. In addition, Clapp recommended the construction of new strategic and developmental lines, including an inland route from Bourke in New South Wales to Charleville and Longreach and a line from Dajarra in Queensland to Darwin.

In November 1944, following an interim report by Clapp, Cabinet gave its approval in principle to rail standardisation, in the interests of defence and national development. At a conference with state ministers in May 1945, Ward declared that rail standardisation was essential for Australian defence, development and settlement, and implementing the first phase of the project would not detract from post-war projects such as housing and water conservation. Commonwealth officials were less enthusiastic. HC Coombs, who had talks with Clapp, was supportive and suggested that priority should be given to converting the Broken Hill–Port Pirie link. Sir Harry Brown, on the other hand, considered that there were far more urgent works projects and doubted if sufficient labour would be available for many years. He pointed out that no state government had included rail standardisation in its list of works priorities. Treasury officials were dismissive, while the defence committee decided that, while desirable, rail standardisation was not essential from the defence viewpoint. Other organisations were unenthusiastic. Both the Graziers Federal Council and the Associated Chambers of Commerce urged that rail standardisation be deferred in favour of housing, water conservation, irrigation and other developmental projects.

In January 1946 Cabinet decided that work on the standardisation of gauges should start as soon as possible and the Commonwealth would contribute 40 to 50 per cent of the capital needed for the tracks, locomotives and rolling stock. At the premiers conference in the same month, New South Wales, Victoria and South Australia showed some interest. An agreement providing for the conversion of the entire Victorian and South Australian systems and the construction of a line between Alice Springs and Birdum was ratified by the Commonwealth, Victorian and South Australian parliaments. In 1949 a new agreement with the South Australian government covered the funding of the conversion of broad and narrow gauges to standard gauge. The Commonwealth completed the standard gauge from Marree to Port Augusta in 1957. It was not until the 1960s that significant progress was made and the standard gauge lines were finally completed from Sydney to Brisbane (1968) and Perth (1970).


The initiative for an inquiry into post-war shipping and shipbuilding came from the Secondary Industries Commission. It was opposed by AV Smith of the Department of Supply and Shipping, but in January 1944 the War Cabinet set up an inter-departmental committee, chaired by Smith. Its members included HC Coombs and FT Merrett (a member of the Secondary Industries Commission) and its report was mainly drafted by BW Hartnell and KJ McKenzie of the Department of Post War Reconstruction. Although the report was completed in October 1944, it was not presented to the War Cabinet until February 1945 and it did not reach the full Cabinet until August 1945. Coombs told Dedman that the main interest of the Secondary Industries Commission was in the maintenance of the shipbuilding industry, which had developed substantial capacity during the war, and this was the thrust of the report. The committee considered that Australia needed to become more self-reliant in both shipping and shipbuilding in order to broaden its industrial structure and strengthen its position as a Pacific power. Shipbuilding should not be allowed to decline, as happened after World War I, but this would require a larger mercantile fleet. There was no reference to nationalisation in the report and, according to Coombs, members were divided on the question of the re-establishment of the Commonwealth Shipping Line. It did, however, agree that coastal shipping should be confined to ships built in Australia and vessels should be replaced as soon as they were obsolete. It also recommended that one authority be responsible for both shipping and shipbuilding and that it have the power to sell vessels to private ship owners.

On 27 August 1945 Cabinet approved Dedman's recommendations that the coastal trade be reserved for Australian-built ships and that freight and charter rates, fares and routes be subject to government approval. It decided that for the time being the Commonwealth would retain ownership of all ships built to its order, but for 12 months they would be operated by private companies. The proposal for a single authority was rejected. The Australian Shipbuilding Board, which had been set up in 1941, remained responsible for all shipbuilding matters, while in January 1946 an Australian Shipping Board was created to control the fleet of government-owned ships and coordinate the work of port authorities. In June 1946 WP Ashley told Cabinet that the establishment of a Commonwealth coastal line would merely add another competitor to a developed industry, although it could meet the needs of unprofitable outports. In July 1947 the Cabinet decided to form a Commonwealth shipping line for the coastal trade and for trade between Australia, Papua New Guinea and adjacent islands.

The Shipping Act 1949 formally established the Australian Shipping Board with power to manage interstate and overseas shipping services. It also required the building of merchant ships more than 200 tons to be licensed by the minister and carried out in accordance with designs approved by him. The Opposition opposed ministerial discretions and instead favoured protection and subsidies for the Australian industry. It advocated the sale or lease of the wartime fleet to private companies and made many disparaging references to the Commonwealth Shipping Line which operated in 1916–28.

By 1950 the Shipping Board owned 28 vessels, all but one built in Australia. George McLeay, the new Minister for Shipping and Transport, was initially critical of both boards and there were repeated reports that the government was proposing to sell the fleet. Instead, it purchased new vessels and expanded its operation. The Shipping Board was replaced by the Australian Coastal Shipping Commission in 1956. The Australian Shipbuilding Board commissioned the construction of 29 vessels between 1943 and 1949. It was actively involved in the design of the ships, but contracted the construction to private companies such as BHP and Evans Deakin & Co. The volume of shipbuilding fell in the 1950s, with the decline of coastal shipping, and the board was dissolved in 1957.


The most radical developments took place in the field of civil aviation. Since 1936 a series of takeovers and mergers had given the Australian National Airways (ANA) a dominant position in domestic aviation. By 1945 its planes carried about 80 per cent of passengers and an even higher proportion of freight on the inter-capital routes. Labor politicians were highly critical of a company owned by shipping interests and accused its chairman, Ivan Holyman, of planning a nation-wide monopoly. Chifley said that if there were a monopoly it should be a government monopoly. With the exception of Qantas Empire Airlines, most of the other Australian airlines were small companies dependent on government subsidies.

In October 1943 the War Cabinet set up a committee, headed by AB Corbett, the Director-General of Civil Aviation, to report on the principles that should govern Australian civil aviation policy and organisation. Other members included HC Coombs, Daniel McVey, William Dunk and Paul Hasluck. They agreed that a single company operating under government control would be more economical and efficient than a multiplicity of airline services. Corbett had earlier recommended that the government set up an airways corporation, but there were serious doubts about the constitutional powers of the Commonwealth in regard to civil aviation. The Corbett Committee instead recommended the establishment of a joint stock company to operate all Australian domestic airlines, with the Commonwealth holding a substantial proportion of the shares. It was optimistic that ANA and other companies would voluntarily merge with the new company, thereby ensuring that it secured the services of experienced executives. The committee also considered international airlines and recommended that the Commonwealth acquire the British Overseas Airways Corporation (BOAC) interest in Qantas Empire Airlines.

Following the defeat of the 14 powers referendum in August 1944, a Cabinet committee considered the three options of a statutory corporation, a joint stock company or the continuation of the existing arrangements between the government and the airline companies. It failed to reach a decision. McVey, Corbett's successor, opposed nationalisation, but Sir George Knowles, the Solicitor-General, held that under the trade and commerce power a Commonwealth authority could monopolise any form of interstate transport, provided that it did not impede interstate trade in any way. In November 1944 Cabinet decided to nationalise the interstate airlines. The Prime Minister stated that the government had decided to follow the Canadian model, which was greatly admired for its efficiency.

After a lengthy and acrimonious debate in Parliament, the Australian National Airlines Act was proclaimed in August 1945. It set up the Australian National Airlines Commission to control interstate aviation, while a new airline, Trans Australia Airlines (TAA), would have a monopoly of interstate air services. The legality of the Act was immediately challenged by ANA, Guinea Airways and MacRobertson Miller. In December 1945 the High Court held that a government-owned airline could participate in interstate trade, but under Section 92 of the Constitution the Commonwealth could not restrict or prevent the interstate operations of private airlines. The Act was subsequently amended, withdrawing references to an interstate monopoly. Nationalisation had been thwarted, but it remained to be seen whether the domestic market could support two large airlines. The first TAA flight took place in September 1946. With massive financial support from the government, a monopoly of government business and airmails, and lower fares, TAA soon achieved 50 per cent of interstate traffic. It acquired a reputation for efficiency and good management, while ANA suffered from a reputation for poor service and a series of major accidents in 1945–49. It also faced competition from Ansett Airways, which was beginning to increase its share of the market. The change of government in December 1949 saved ANA for the time being, but by then TAA was making a profit and predictions that it would soon be abolished were not realised. Instead, debate on the future of civil aviation continued and finally led to the two-airline policy adopted by the Menzies government in 1952.

In August 1946 Chifley announced that Qantas Empire Airways would be its principal instrument in the development of international services and the government would acquire a half interest in the company. As the Corbett committee had recommended, it proceeded to purchase the Qantas holdings of BOAC. In July 1947 it completed the process and became the sole owner of Qantas, with Hudson Fysh remaining as its general manager. Fysh, the founder of the company, welcomed the takeover and there was very little public criticism.

War Cabinet
Series: A2671
Civil aviation, 19 October 1943 381/1943
Civil aviation, 21 January 1944 381/1943 Supp 1
Australian ship and ship-building industry, 21 January 1944 33/1944
Post-war shipping and shipbuilding, 27 February 1945 76/1945
Series: A2700
Standardisation of railway gauges, 14 March 1944 629
Standardisation of railway gauges, 10 November 1944 629A
Standardisation of railway gauges, 17 April 1945 629B
Standardisation of railway gauges, 6 September 1945 629D
Standardisation of railway gauges, 18 January 1946 629E
Railways standardisation and North-South line, 26 March 1946 629F
Railway Standardisation Agreement: separate agreements with South Australia and New South Wales, 10 November 1948 629J
Railway Standardisation Agreement: separate agreement with South Australia, 11 October 1949 629K
Transport: post-war planning, 10 November 1944 734
Civil aviation: policy in respect of ownership and operation of internal airlines, 10 November 1944 740
Civil aviation: policy in respect of ownership and operation of internal airlines, 6 March 1945 740A
Shipping and shipbuilding, 27 August 1945 900
Shipping and shipbuilding, 18 January 1946 900A
Shipping and shipbuilding: correspondence from UK government, 2 April 1946 900B
Commonwealth shipping policy, 2 July 1946 1200
Commonwealth shipping policy, 23 August 1946 1200A
Commonwealth shipping policy, 2 July 1947 1200B
Australian Shipbuilding Board: ship construction, 25 November 1947 1200C
Commonwealth shipping policy: placement of orders for B and C class vessels, 12 January 1948 1200E
Commonwealth shipping policy: placement of orders for vessels, 3 November 1948 1200F
Commonwealth shipping policy: shipping legislation, 22 November 1948 1200G
Federal Aid Roads and Works Agreement Act, 17 February 1947 1299
Commonwealth Aid Roads and Works Agreement Act 1947, 5 April 1948 1299A
Attorney-General's Department
Series: A432
Nationalisation of interstate commercial aviation, 1944–45
An opinion (25 September 1944) of Sir George Knowles on the nationalisation of interstate airlines and correspondence on the drafting of the 1945 Australian National Airlines Bill. The correspondents include D McVey and JGB Castieau.
Department of Civil Aviation
Series: MP183/16
Civil aviation policy during the war and post-war period, 1943–44
Report (23 December 1943) of the Inter-Departmental Committee on Civil Aviation (chair: AB Corbett) and a Cabinet submission (25 September 1944) by AS Drakeford.
Inter-departmental report on the establishment of new air services in Australia, 1947
Report (July 1947) of an inter-departmental committee on the establishment of new intra-state airline services (chair: AH Cobby).
Proposed Australian Air Transport Corporation and civil aviation policy: inter-departmental committee meetings, 1943
Summary of proceedings of meetings (November–December 1943) of the Inter-Departmental Committee on Civil Aviation Policy (chair: AB Corbett).
Exhibits and schedule of exhibits for Inter-Departmental Committee on Civil Aviation, 1943
The exhibits (1–52) include submissions (January 1943, 16 December 1943) by AB Corbett, a submission (2 November 1943) by D McVey, memoranda by airline companies, replies by companies to questionnaires, statements by the Department of Civil Aviation, submissions by the Postmaster-General's Department and the Department of External Affairs, financial statements, and a War Cabinet agendum and minute (19 October 1943).
Series: MP347/1
Civil aviation policy, 1943–45
War Cabinet and Cabinet submissions, correspondence, minutes and speeches on post-war civil aviation policy, the establishment of the inter-departmental committee, submissions by airline companies, the effect of air competition on railway services, the nationalisation of interstate airlines, legislation to establish a government-owned airline, and parliamentary questions. The correspondents include AS Drakeford, AB Corbett, D McVey, EC Johnston, RM Ansett and CA Butler.
Rural Reconstruction Commission reports, 1947–48
Summaries of the Rural Reconstruction Commission reports and correspondence with JG Crawford concerning the views of the Department of Civil Aviation on recommendations of the commission.
Butler Air Transport Pty Ltd: policy file, 1941–46
Draft agreement, correspondence, minutes and notes on services in New South Wales and Queensland, subsidies, stopping places, the financial position of the company and aircraft. The correspondents include AS Drakeford, AB Corbett, EC Johnston, VW Burgess, AJS Scott and CA Butler.
Australian National Airlines: policy file, 1941–43
Draft agreement and correspondence concerning stopping places, mail contracts, interstate and intrastate services and parliamentary questions. The correspondents include AS Drakeford, AB Corbett and IN Holyman.
Australian National Airlines: policy file, 1944
Correspondence and minutes on the discontinuance and resumption of airline services, mail services, airline licences, the condition of aerodromes and parliamentary questions. The correspondents include AB Corbett, D McVey, EC Johnston, R Badenach and IN Holyman.
Ansett Airways air services: policy file, 1941–44 (2 parts)
Draft agreement and correspondence on interstate services, subsidies, special trips and financial statements. The correspondents include AB Corbett, EC Johnston, C McDonald and RM Ansett.
Ansett Airways air services: policy file, 1943–46
Correspondence, minutes and newspaper cuttings on the allotment of aircraft, arrangements with the United States army, airline licences, the use of government-owned aircraft, financial statements, applications by Ansett for the extension of interstate services and government subsidies. The correspondents include AS Drakeford, AB Corbett, D McVey, EC Johnston, R Badenach and RM Ansett.
Australian National Airlines Commission: policy file, 1946–48
Correspondence and minutes on the establishment of new services, applications for airline licences, the carriage of mails on TAA planes and parliamentary questions. The correspondents include AS Drakeford, EC Johnston, R Williams, LJ Brain, JP Ryland and SH Crawford.
Department of Post War Reconstruction
Series: A9816
Research on internal subjects: shipping, 1943–45
Correspondence on Australian shipbuilding and post-war shipping policy. The correspondents include NJO Makin, AV Smith, HC Coombs and GG Firth.
Research on internal subjects: aviation, 1941–44
Includes letters (1944) from WH Fysh to JB Chifley on proposed Qantas services to Darwin, Papua New Guinea and the Pacific Islands.
Transport and communication, 1941–45
Correspondence (1943–44) of M Allen of the Institute of Transport with the Department of Post War Reconstruction concerning standardisation of rail gauges, road accidents, voluntary pooling of transport and the work of the institute. Other correspondence deals with the relationship of transport to post-war reconstruction; transport and decentralisation; electrification of country rail tracks and control of interstate transport of goods. The correspondents include HC Coombs, GG Firth, PR Judd, PA Dorrian and AG Crawford.
Ansett Airways, 1943–45
Includes a memorandum (16 November 1943) by RM Ansett on the control and development of civil aviation.
Unification of railway gauges, 1944–48 (3 parts)
Correspondence concerning the report (March 1945) of Sir Harold Clapp on the unification of railway gauges, the financial and employment aspects of a unification scheme, and its relationship with other construction and developmental projects. The correspondents include EJ Ward, JB Chifley, HC Coombs, KJ McKenzie, JG Crawford and HP Breen.
Shipbuilding and Shipping IDC, 1944–47 (2 parts)
The draft report (1 June 1944) of the Inter-Departmental Committee on Shipbuilding and Shipping and correspondence relating to the committee, its recommendations and the subsequent Cabinet agendum. The correspondents include JB Chifley, HC Coombs, JJ Kennedy, BW Hartnell and RJ Murphy.
Australian Transport Advisory Council, 1944–45
Correspondence and notes concerning the establishment of the Commonwealth Transport Advisory Council and minutes of the first meeting (15 December 1944) of the council. The correspondents include RJ Murphy, HC Coombs and KJ McKenzie.
1944/549 Pt 1
Regional planning: Federal Roads Aid Agreement, 1947
Includes a letter (8 January 1947) from G Rudduck to the Treasury on questions that might be considered in a review of the Federal Aids Road Agreement, including funds for special defence and developmental purposes.
Department of Transport

Minutes of meetings of the Commonwealth Transport Advisory Council and of conferences of Commonwealth and state ministers of transport. The council first met in December 1944, chaired by the Minister for Transport and comprised representatives of several Commonwealth departments, including the Department of Post War Reconstruction. It was dissolved in 1946, following the establishment of the Australian Transport Advisory Council, representing the Commonwealth and the states.

Series: MP1506/15
Prime Minister's Department
Series: A461
Post war reconstruction: shipping and shipbuilding, 1945–49
Includes correspondence between JB Chifley and the NSW premier on the development of shipbuilding in and outside Sydney.
Subsidy for national roads, 1944–49
Correspondence, mainly between JB Chifley and the state premiers, motoring organisations and shire councils, concerning the revision of the Federal Aid Roads and Works Agreement in 1947.
A395/1/2 Pts 4-5
Post-war organisation of road transport, 1945–46
Correspondence on the relaxation of controls of road transport, the interest of the Commonwealth Government in the transport system, and the establishment of the Australian Transport Advisory Council.
Shipbuilding: general, 1940–50
Correspondence concerning post-war shipbuilding in Australia and the future of various shipyards. The correspondents include JB Chifley, NJO Makin, JK Jensen, HC Coombs and WJ McKell.
N418/2/1 Pts 3-4
Proposed establishment of Commonwealth Shipping Line, 1946–50
Correspondence of JB Chifley with WP Ashley and others on the establishment of the Commonwealth Shipping Line and the 1949 Shipping Bill.
Unification of railway gauges: policy, 1931–47
Correspondence of J Curtin and JB Chifley with EJ Ward, state premiers and others on the rail gauge proposals of Sir Harold Clapp, costs of surveys and materials, and the 1946 Rail Standardisation Agreement.
A418/3/3 Pts 3-4
Unification of railway gauges: general, 1942–46
Correspondence concerning resolutions of the Queensland parliament, the Graziers Federal Council, the Associated Chambers of Commerce and other organisations on the question of standardisation of rail gauges.
B418/3/3 Pt 2
Series: A571
Civil aviation: international aspects, 1943–46
Correspondence, cables, memoranda, reports and Cabinet papers on Australian policy on international air transport, Commonwealth talks on civil aviation and bilateral civil aviation agreements. They include a report by AS Drakeford on the Commonwealth Conference on Civil Aviation (October–December 1944).
1943/1406 Pt 1
Australia–UK air service: post-war, 1945–53
Correspondence and cables concerning discussions in London and Canberra with the British government, BOAC and Qantas Empire Airways on the 'Kangaroo Service', financial arrangements and the purchase of aircraft. The correspondents include JB Chifley, AS Drakeford, J Brophy, GPN Watt, F Stanton, R Williams and EC Johnston.
Air transport: Qantas formation and legislation, 1947–71
Includes Cabinet papers and correspondence on the purchase by the Commonwealth Government of shares held in Qantas Empire Airways Ltd by BOAC and Qantas Ltd, the appointment of WH Fysh as Chairman and Managing Director, and the drafting of a financial directive to be issued to the board of directors. The correspondents include AS Drakeford, PW Nette and EC Johnston.
1971/6050 Pt 1
JB Chifley
Series: M1457
Transport, 1947–49
Includes letters from EJ Ward, RJ Murphy and AW Paul to JB Chifley in response to representations seeking Commonwealth contributions to the cost of constructing main roads.
John Curtin
Series: M2319
Report on civil aviation, 1944
Report (24 July 1944) by D McVey on civil aviation in Australia.
Sir John Jensen
Series: MP730/19
History of the Australian Shipbuilding Board, 1941–46
Unpublished history of the Australian Shipbuilding Board (1941–45) and related documents.
Chapter 18: shipbuilding, 1940–44
War Cabinet submissions, correspondence, minutes and reports about the work of the Australian Shipbuilding Board, shipping and shipbuilding in the post-war period, and merchant shipbuilding. The correspondents include JK Jensen, NKS Brodribb, AL Nutt, FP Kneeshaw and Sir Thomas Gordon.
Sir Frederick Shedden
Series: A5954
Standardisation of rail gauges: Clapp Report, 1945–48
Report (March 1945) by Sir Harold Clapp on standardisation of Australian rail gauges, report (2 October 1945) by the Defence Committee on the defence aspects of the proposals, related correspondence and newspaper cuttings. The correspondents include Sir Frederick Shedden, RJ Murphy and FR Sinclair.
Standardisation of rail gauges, 1944–54
Newspaper cuttings, taken from Sydney and Melbourne papers, on the Clapp Report and standardisation of rail gauges.

Further reading

Brogden, Stanley, Australia's Two-airline Policy, Melbourne University Press, Melbourne, 1968.

Bromby, Robin, The Railway Age in Australia, Lothian, Melbourne, 2004.

Butlin, SJ and Schedvin, CB, War Economy 19421945, Australian War Memorial, Canberra, 1977.

Gunn, John, Challenging Horizons: Qantas 19391954, University of Queensland Press, Brisbane, 1987.

Harding, Eric, Uniform Railway Gauge, Lothian Publishing Company, Melbourne, 1958.

Packer, G, 'Australian interest in post-war air transport', Austral-Asiatic Bulletin, vol. 6, no. 2, 1945, pp. 81–8.

Yule, Peter, The Forgotten Giant of Australian Aviation: Australian National Airways, Hyland House, Melbourne, 2001.