Our Neighbor Down Under
Labor in Politics
Beaten in its conflicts
with capital, labor turned to the ballot box. In 1891—within less than a
year of the failure of the “Great Strike” of 1890—a Labor party
had been formed in New South Wales and had won 36 out of 45 seats for which it
put up candidates. Within ten years there was a Labor group in every parliament,
state or federal. The first Labor majority was won in New South Wales in 1910
and by 1915 Labor controlled every government in Australia but one.
success has been the result of a strong appeal and a strong organization. The
first appeal was to wage earners, for the party’s primary aim was to safeguard
and improve working conditions by political action. All through the years this
aim has been uppermost in the program. It had been fairly well realized even before
World War I, and only minor additions have been made since then.
enthusiasts would have the party go further and adopt a socialist program and
philosophy. The philosophy has always found supporters, including zealots who
are eager to win converts to the teachings of Marx and Lenin. But the converts
have been few and the results meager; the Australian worker does not take easily
to long-worded abstractions.
Socialism and state enterprise
socialist program, with its plan for the public ownership of the means of production,
distribution, and exchange, was another matter, however. To the Australian there
is nothing sacred about private enterprise and nothing sacrilegious about state
enterprise. He argues that if you need something which private enterprise will
not supply because there is no profit in it, let the state do the job. Better
still, he says, why bother to wait and see what private enterprise will do?
had to build almost all its railroads by state action, because early private efforts
broke down. The telegraph and telephone are natural parts of the postal system.
When a corporation began to construct a huge hydroelectric plant in Tasmania and
then quit, the state had to finish the job. When Victoria’s expanding industries
suffered from lack of cheap coal and electricity, the state tapped the large brown-coal
deposits it owned, used part for generating electricity, and turned the rest into
State enterprise is thus
an old tale in Australia, and men who would have been violently angry if they
were called socialists wrote some important chapters of it. But Labor wanted the
state to do still more, especially where capitalistic services seemed to be bleeding
employees or the consumer. Eventually in 1921 the party adopted as its ultimate
objective “the socialization of industry, production, distribution, and
Yet the list of enterprises
which Labor has socialized when it has been in power is very small. In 1912 a
Labor government set up the Commonwealth Bank, to handle the government’s
account and to compete with the existing banks. Perhaps it has served as a check
on them, but it certainly did not destroy them. Soon it became the country’s
“central bank,” discharging the functions of our Federal Reserve System.
But it has not been either the slayer of its rivals or the slave of its creator,
and any socialists who thought it would provide them with money to rattle in their
pockets whenever they wanted some have been terribly disappointed. A Commonwealth
fleet of steamships started in 1916 lost so much money that the government was
glad to get rid of it in 1928.
rest of the list of ventures looking to the socialization objective seems to be
one of failures. Experience has evidently shown the Australians that public enterprise
is no magic panacea.
The labor platform
chief economic achievement of the Labor Party has therefore been the regulation
of private enterprise in the interests of the wage earner. But Labor has had to
make a wider appeal if it hoped to ruin elections. It must obtain the support
of that middle class—or middle-of-the-road class—which is not bound
to any union or political party, and which judges between Liberal and Labor on
the basis of their platforms or performance.
middle class favored some of Labor’s labor aims. It also liked the democratic
and progressive proposals for electoral reform, improved education, general social
betterment, help to farmers, attacks on monopolies, and so on. Beyond that, it
approved the party’s championing of Australian nationalism, for Labor was
more wholehearted in its advocacy of White Australia, federation, a navy, and
a citizen army than were the anti-Labor parties.
Labor won some middle-class support because it was for labor, some because it
was for healthy social progress, and some because it was for Australia. On the
other hand it lost that support when its appeal was to narrow class interests
rather than to the wider welfare.
The labor machine
success of any party must depend in some measure on the strength of the machine
it builds up. Labor was quick to learn this lesson and did a thorough job. In
each state there is a party organization, with branches which anyone can join.
Most unions affiliate with the party, and supply the greater part of the membership,
funds, and leadership, though some nonunionists have managed to rise to the top.
The party shapes its platform at annual conferences, and candidates who are chosen
to fight the next election swear complete loyalty to the platform.
do snore: They pledge themselves, if elected, to vote in the house as a majority
of the Parliamentary party decides at its weekly secret meeting, or “caucus”
as it is called. The caucus chooses the men who are to be ministers when the party
wins a majority of seats. Thus solidarity and unity are maintained in face of
the opposition. Finally, the party executive keeps its eyes on the members of
Parliament to see that they do their job and honor their pledges.
machinery produced the desired disciplined solidarity and gave the party the maximum
fire power in its attacks on the old parties. But when Labor got into power, difficulties
might arise. Ministers found that it was not always easy to translate the platform
into laws and they might be attacked by the executive or conference for faintheartedness
or heresy. Or some unexpected development might face the party with problems for
which it had no ready-made solution. If this happened, all the discipline and
pledges in the world could not preserve unity, and the party might be torn asunder.
1916 the party split over conscription and wandered in the wilderness for over
a decade. Then in 1929, just when it had reached the promised land of office again,
the depression came, and it split once more over methods of dealing with the disaster.
For another ten years it roamed the wastelands of opposition, returning to power
once more in 1941. Faced with the dire danger of invasion, the party has readily
accepted policies which probably would have torn it apart ten, twenty, or thirty
all Australian experiments, the governmental regulation of wages is the most famous.
The practice is now forty years old, and is taken for granted by employer and
Like most living things,
it had two parents. One was the desire to stamp out “sweating.” In
the early 1890’s Australians were shocked to learn that some men, women,
and children were working excessively long hours in unhealthy homes or workshops
for miserably low pay. Vigorous agitations burst out to demand that such people
be paid a living wage. The second parent was the desire to preserve industrial
peace. The strikes of 1890 disturbed Australians. “There ought to be a law,”
they cried, to prevent this young country from being torn by such strife. If employers
and employees could not settle their differences peacefully, let them be compelled
to submit their disputes to some court of arbitration and be bound to abide peacefully
by its decision.
From this double
agitation emerged the machinery for the regulation of wages. It is of two kinds.
The first is the wages board, consisting of equal numbers of employers and employees
in an industry, with an independent chairman. It fixes wages for the industry
and these rates are enforced by the state. The first boards were set up in Victoria
in 1896; there were over 500 in the various states by 1913; and nearly 700 by
The second kind of machinery
is the court of industrial arbitration. The first one was set up in New South
Wales in 1901 and in three other states later on. In 1904 the Commonwealth Court
of Conciliation and Arbitration was established to settle disputes which extended
beyond the limits of one state. To such a court either side, organized in an employers’
or employees’ union, may submit notice of a dispute. The matter is argued
before a special high-ranking judge or judges. Then the court gives its award,
which is binding. If either side rejects it and resorts to lockout or strike,
punitive action can be taken.
The basic wage
Since most disputes concern wages,
the courts and the boards have been chiefly engaged in determining rates of pay.
A “basic wage” is fixed for the least skilled type of work. To this
figure additions are then made for skill, degree of responsibility, regularity
of employment, overtime, etc. In fixing the basic wage the judges were told to
decide what was “fair and reasonable.”
1907 Mr. Justice Higgins said that a fair and reasonable wage must be large enough
to meet the “normal needs of the average employee regarded as a human being
living in a civilized community.” He decided that $1.75 was a fair and reasonable
basic daily wage, and this amount became the accepted figure on which other rates
were fixed. It was regarded as the bare minimum needed to keep a family of four
or possibly five persons; and hence the basic wage for women was fixed much lower,
on the ground that a woman had to maintain only herself. Then the practice was
gradually established of periodically raising or lowering the basic rate, and
therefore the higher rates, in accordance with changes in the cost of living as
revealed by an index number compiled by the commonwealth statistician.
this way the pay of most wage earners has been regulated for the last thirty years,
as has the salary of journalists, bank clerks, public employees, and other white-collar
workers for about twenty years. Like every other method of determining wages or
settling labor questions, it has been the subject of constant criticism. Labor
has insisted that the base is too narrow and low; that no married man can keep
a wife and two or three children at a decent standard on the figure fixed; that
many women have dependents to maintain; and that the index number is not sufficiently
accurate to measure changes in the cost of living. Many of these criticisms have
been met by broadening the base, by adding to the basic rate, by increasing the
margin for skill, and by schemes of child endowment when a family contains more
children than are supposed to be covered by the wage.
and some observers have pointed out that since many men are unmarried or have
no children, industry is paying for the support of a lot of nonexistent people.
They used to complain that no thought was given to what industry could afford
But this criticism has been
met in lean times by reducing wages on account of “absence of prosperity.”
When prices and living costs began to fall in 1929, the federal court cut wages
in proportion each quarter, thus reducing employers’ labor costs but leaving
the purchasing power of the wages untouched. In January 1931, however, the court
said that the loss in national income caused by the depression must be shared
by wage earners and it therefore reduced wages by 10 per cent in purchasing power.
This cut, combined with those made because of falling prices, brought money wages
down by nearly 30 per cent and thus lowered production costs substantially. When
better times came the wages were raised again. The whole matter was handled fairly
smoothly and was accepted peacefully.
Australia and the Outside World