Lyons government

The background to the Lyons government saw Australia grappling with the immense challenges of the Great Depression.

Joseph Lyons began his political career as an Australian Labor Party politician and served as Premier of Tasmania. Lyons was elected to the Australian Federal Parliament in 1929 and served in Prime Minister James Scullin's Labor cabinet. Lyons became acting Treasurer in 1930 and helped negotiate the government's strategies for dealing with the Great Depression. With Scullin temporarily absent in London, Lyons and acting Prime Minister James Fenton clashed with the Labor Cabinet and Caucus over economic policy, and grappled with the differing proposals of the Premier's Plan, Lang Labor, the Commonwealth Bank and British adviser Otto Niemeyer. While Health Minister Frank Anstey supported NSW Premier Jack Lang's bid to default on debt repayments, Lyons advocated orthodox fiscal management. When Labor reinstated the more radical Ted Theodore as Treasurer in 1931, Lyons and Fenton resigned from Cabinet.[1]

The stance of Joseph Lyons and Trade Minister James Fenton against the more radical proposals of the Labor movement to deal the Depression had attracted the support of prominent Australian conservatives, known as "the Group", whose number included future prime minister Robert Menzies. In parliament on 13 March 1931, though still a member of the ALP, Lyons supported a no confidence motion against the Scullin Labor government. He resigned from the ALP soon afterward, along with Trade Minister James Fenton and four other right-wing ALP MPs. The United Australia Party was then formed from a merger of the six Labor dissidents, the opposition Nationalist Party of Australia, and several citizens' groups. Lyons became the new party's leader, and hence Leader of the Opposition, with John Latham, the last leader of the Nationalists, as his deputy.[1] The presence of the working-class Lyons as leader allowed the UAP to portray itself as the party of national unity, even though it was mostly an upper- and middle-class conservative party.

In November 1931, Lang Labor dissidents chose to challenge the Scullin Labor government and align with the United Australia Party Opposition to pass a 'no confidence' and the government fell.[2]

Australia recovered relatively quickly from the financial downturn of 1929–1930, with recovery beginning around 1932. Prime Minister Joseph Lyons was the leader responsible for stewarding Australia out of this difficult period. Lyons favoured the tough economic measures of the Premiers' Plan, pursued an orthodox fiscal policy and refused to accept NSW Premier Jack Lang's proposals to default on overseas debt repayments. Australia entered the Depression with a debt crisis and a credit crisis. According to author Anne Henderson of the Sydney Institute, Lyons held a steadfast belief in "the need to balance budgets, lower costs to business and restore confidence" and the Lyons period gave Australia "stability and eventual growth" between the drama of the Depression and the outbreak of the Second World War. A lowering of wages was enforced and industry tariff protections maintained, which together with cheaper raw materials during the 1930s saw a shift from agriculture to manufacturing as the chief employer of the Australian economy – a shift which was consolidated by increased investment by the commonwealth government into defence and armaments manufacture. Lyons saw restoration of Australia's exports as the key to economic recovery.[5] A devalued Australian currency assisted in restoring a favourable balance of trade.

A dramatic episode in Australian history followed Lyons first electoral victory. NSW Premier Jack Lang refused to pay interest on overseas State debts, the Lyons government stepped in and paid the debts. The national Parliament then passed the Financial Agreement Enforcement Act to recover the money it had paid. In an effort to frustrate this move, Lang ordered State departments to pay all receipts directly to the Treasury instead of into Government bank accounts. The New South Wales Governor, Sir Philip Game, intervened on the basis that Lang had acted illegally in breach of the state Audit Act and sacked the Lang Government, who then suffered a landslide loss at the consequent 1932 state election.[3]

Tariffs had been a point of difference between the Country Party and United Australia Party. The CP opposed high tariffs because they increased costs for farmers, while the UAP had support among manufacturers who supported tariffs. Lyons was therefore happy to be perceived as "protectionist". Australia agreed to the give tariff preference to British Empire goods, following the 1932 Imperial economic conference. The Lyons government lowered interest rates to stimulate expenditure.[3] In October 1933, James Fenton, co-founder of the United Australia Party, resigned from Cabinet over the lack of industry protection in the government's tariff schedules.[1]

A further point of difference between the Country Party and UAP had been the issue of establishing a national system of unemployment insurance, which the CP saw as aiding urban dwellers over country people and a stretch on the national finances during a time of increased defence spending. Treasurer Richard Casey introduced the National Insurance Bill in 1938 and it passed through the Parliament despite some opposition from Country Party members, however in the face of further criticisms over costs, the government repealed sections of the Act. This back-down led to the resignation of UAP Deputy leader Robert Menzies in March 1939, who supported the plan and was by now openly antipathetic to Country Party members – notably Earle Page.[3]

The Lyons government became involved in multiple controversies over its use of the Immigration Restriction Act 1901 for political purposes, rather than its stated purpose of enforcing the White Australia policy. In 1934, the government sought to exclude Communist and anti-Nazi activist Egon Kisch from Australia, but lost a series of legal challenges and was widely seen as having embarrassed itself. In 1936, British woman Mabel Freer was refused entry to Australia due to her relationship with a married Australian man, with immigration minister Thomas Paterson publicly defaming her character. The Freer case became a cause celebre and led to Paterson's resignation in 1937.[6]

In December 1938, the government announced that 15,000 European refugees would be admitted to Australia over the following three years. However, only a small number of Jewish refugees were accepted due to anti-semitism within the immigration office.[7]

Notable acts passed by the Lyons government include:[8][9]

• Australian Broadcasting Commission Act 1932, established the Australian Broadcasting Commission (ABC)
• Beaches, Fishing Grounds and Sea Routes Protection Act 1932, restricted ocean dumping and scuttling
• Loan (Unemployment Relief Works) Act 1932, granted £1,800,000 to the states for unemployment relief programs
• Australian Antarctic Territory Acceptance Act 1933, created the Australian Antarctic Territory
• Commonwealth Grants Commission Act 1933, created the Commonwealth Grants Commission
• Carriage by Air Act 1935, gave effect to the Warsaw Convention on international air travel
• Income Tax Assessment Act 1936 (ITAA36), new primary statute for the collection of income tax in Australia