Then the numbers went up. We were all beaten. There were two proposals. Both were defeated by some 400,000 votes in all. The majority against them for no in Victoria was just on 250,000, in South Australia 120,000, West Australia 70,000 and Tasmania 10,000. There was a yes majority of 33,000 in New South Wales, and 16,000 in Queensland, on the principal proposal. The majorities for no were smaller on the question to give the Commonwealth powers to deal with industrial emergencies.
The actual figures in NSW on the principal question were:
| Yes | 566,973 |
| No | 533,284 |
When a government realises that it is losing its grip on the political situation it invariably commences to go from one blunder to another. It panics. It loses its perspective. It listens to too many advisers. Then in a moment of despair it is likely to take a desperate risk.
That was what happened to the Bruce-Page government. The 1928 election had rattled it badly. It was being sniped from its own cross benches. Its most effective critics were those on its side of the House. W.M. Hughes, Mann, George Maxwell, K.C., P.G. Stewart, all contributed to the disintegration process.
Then S.M. Bruce played right into their hands. He committed the blunder of blunders. He gave no preliminary warning. He didn't consult his party. Even his ministers were in the dark until he had gone too far. It was a decision very much like that reached by Chifley in 1949 in connection with control of banking.
Bruce's fatal mistake was to try to abolish Federal arbitration. It was a complete volte face. At every election he had campaigned for "law and order”. He was the great apostle of arbitration. He believed in arming the industrial courts with greater powers. He believed in penalties for those refusing to obey the awards of the courts. He wanted stronger ties between the courts and the parties.
In 1926 Bruce had tried to obtain supreme power over all trade unions by holding a referendum to give the Commonwealth complete control of arbitration. His real concern at that time was to upset my Government in New South Wales. He wanted to destroy our 44-hour week. He also wanted to sidestep child endowment. He also wanted to upset the state basic wage. But the people had rejected his proposals.
Then the Bavin Government came to power in New South Wales in 1927. The Nationalist Consultative Council believed that Bavin could do what Bruce had failed to do. They still wanted to get rid of the 44-hour week, which I had enacted by legislation.
Bavin promised that he would do it. He promised to get rid of the Industrial Commission. In particular, he promised to get rid of Mr. Justice Fiddington, who was a thorn in his flesh. His first suggestion was that he abolish the court altogether. He would rely on a kind of collective bargaining. There were to be committees of employers and employees. But they were to be drawn from panels approved by the Government. When Bavin realised that his plan was not practicable, he compromised by appointing two additional judges to the Industrial Commission – Mr Justice Street and Mr Justice Cantor. They could, if necessary, outvote the chairman of the commission, Mr Justice Piddington.
But Bavin could not go through with his complete plan while the unions could still go to the federal courts. It would be no use abolishing the 44-hour week for state awards if a frederal judge could still give a 44-hour week. Bruce's first reaction to the pressure of big business was to suggest to the premiers that they should hand over all their industrial powers to the Commonwealth. He proposed an alteration of the constitution by consent. It was to be another Loan Council formula. But Phil Collier, from Western Australia, shied clear. He didn't trust Bruce. Queensland objected. Even Victoria had doubts. So Bruce had to retreat again.
Then the big four told Bruce that the costs of production must be reduced. That meant that either wages had to be reduced or the working week lengthened. It could mean both. There was also a very important recommendation reading:
"A change in the method prevalent in Australia of dealing with industrial disputes appears to us to be essential, and we hold that there should be a minimum of judicial and governmental interference in them, except in so far as matters affecting the health and safety of the persons engaged in industry may be concerned."
Bluntly, that meant the return to the law of the jungle. Arbitration had protected the workers against sweating, against starvation wages and excessive hours. Now they wanted to go back to those vicious practices. Bruce was only too willing to listen to the big four.
Bruce also resented the hostility aroused over his withdrawal of the summons against John Brown. Hughes told him to his face that it meant the loss of thousands of Nationalist votes at the next elections. The big fines inflicted on the timber workers, the waterside workers and E.J. Holloway had only hardened opinion against the government. Bruce didn't like criticism, especially when it came from powerful newspapers like the Melbourne Herald and Age. They were much too close to home.
Then, without warning, came the bolt from the blue. Bruce sent a long telegram to the premiers offering to vacate the field of arbitration altogether with the exception of the maritime industry.
At the same time he sent an urgent wire to members of the Government parties informing them of his decision. Most of them were appalled. From platforms all over the Commonwealth they had preached law and order. They had defended arbitration. They had alleged that the Communists wanted to destroy arbitration. Now their leader was doing precisely that himself.
Bruce, who had wanted absolute power over arbitration, now wanted none. He had no mandate. No one knew the reasons behind the move. His own party organisation was stunned. It was a complete reversal of form.
The Commonwealth had been in the arbitration business for just five years. The first Commonwealth Arbitration Act was passed in 1904. C. Kingston had drafted it and crusaded throughout the country explaining ow it would bring peace and justice to industry. He had been backed up in the early stages by his Prime Minister, Sir Edmund Barton, and later by his successor, Alfred Deakin. It was Deakin who described it as the "new era in industrial relations". Then Mr. Justice Higgins had laid down the foundations of the New Province in Law and Order, as he described his court later.
For a quarter of a century every federal government had been trying to obtain more, and not less, powers over industrial matters. Now Bruce was trying to destroy it with one savage blow.
All the federal awards were to go into the discard. State awards were to prevail. The state governments were to have absolute power to define conditions governing hours and wages. But still no one knew what had moved the usually cautious Prime Minister to such a revolutionary state of mind. His own followers were as nonplussed as the unions. The engineers and the railwaymen had spent thousands of pounds in preparing and arguing cases in the Federal Court. Now they were to be denied an award. But why?
One explanation was that the attorney-general, Sir John Latham, had been so upset over the withdrawal of the John Brown prosecution that he had insisted that there must be no halfway remedy. If the government was going to retreat before John Brown, then it could not afford to stay in the field. It couldn't have one kind of justice for the wealthy mine owner and another for a striking unionist. If that was the reason it at least did Latham considerable credit for consistency, even though the proposed remedy was a death-dealing purgative.
The timetable of events was most interesting. The vote on the John Brown censure motion was taken at 7.30am on Thursday, August 22, 1929. At 3.30pm that afternoon, Bruce rose in the House and produced his bombshell. He gave notice of his intention to bring in a Bill, called the Maritime Industries Bill, which would deal with industrial matters in relation to trade and commerce. Theodore, who was leading the Labor Party in Scullin's absence, wanted to know something about the proposal. But Bruce told him that he would have to wait until the second reading stage.
Dr Page then presented his Budget. It contained a couple of shocks. But the treasurer was full of abounding optimism about the future.
Next day Mr Bruce produced his Maritime Industries Bill. The reason for the title was that the maritime and waterside workers were to be the only unions left with Commonwealth awards. They were to come under the trade and commerce powers of the constitution. The Conciliation and Arbitration Act was to be repealed. Existing federal awards were to remain in force only until June 1930. After that time they would come under state awards.
The arbitration judges were not to lose their jobs. They were to become judges of the Maritime Industries Court. They would look after the seamen, the marine stewards and the wharfies only. But they would not make the award in the first instance.
Instead there were to be committees representing both sides with an independent chairman, who could be a judge. But the unions were not free to nominate their own representatives. The government would do that out of a panel submitted. The chief judge would make the recommendations. There was to be no evidence in open court. The entire proceedings were to be in-camera without calling evidence.
There was also provision that the tribunals had to take into account the economic effect of their awards on the national economy. The Maritime Court would have the right of reviewing decisions reached by the committees. It would automatically review every decision, whether there was an appeal or not. The new formula satisfied the shipowners. They didn't want to have their profits made public. They didn't want their affairs probed.
For the rest, all the awards were to be torn up and tossed in the wastepaper basket. Why was Bruce taking such revolutionary action?
His theme was that Australia was already in a grave financial and economic plight. It was the first time the Prime Minister talked depression. To cure the depression he had one magic formula: get rid of arbitration. He offered it as his contribution to the economic crisis. His reason was naive: "The passing of this legislation will free industry from many of the embarrassments from which it has suffered in the past."
By industry, Bruce meant big business. He meant Flinders Street, the shipping combine, the coal vend, industrialists and the graziers. How were they being embarrassed? By the shorter working week and award wages.
Bruce left the nation under no misapprehension. His policy was going to suit the John Browns. Of course, he clothed it in his usual self-righteous unction, that the Bill was not being brought forward in a party spirit. It was simply for the benefit of the nation and the empire. Later he was to regret his statement that it was non-party. Some of his own followers took him literally.
Then he proceeded to outline the plight of the nation. Public finance was in a bad way. Both the Commonwealth and the states had deficits. Bavin had one of more than a million, while Page had one of almost five millions. Prosperity was rocking badly. Loan money was difficult to obtain abroad. Public expenditure had to be reduced. But he still didn't believe that he could abolish old age pensions or reduce them. So taxation had to be increased. But he was afraid that increased taxes might increase the cost of production.
Wool and wheat were the only two products which could be sold at a profit abroad. Even there there had been a heavy decline in prices. Secondary industries were being threatened by imports from abroad beingsold lower than local prices. But Bruce said that he could not agree with any increase in tariffs.
Then Bruce produced his magic elixir. The costs of production must be reduced. So they must get rid of duplication of awards and tribunals. His solution was a kind of collective bargaining. But because of large-scale unemployment, that placed the employer in the box seat when it came to the bargaining. So the government had decided to vacate the field of arbitration. Bruce wanted round-table conferences. Then the workers would realise that their claims for higher wages, shorter hours and better conditions would only lead to more unemployment. He was suddenly all in favor of the American system of collective bargaining instead of having industrial courts.
In particular, Mr. Bruce thought the workers should accept the piecework system and payment by results. They would then earn enough to keep their families. Of course, there would need to be safeguards.
"At present Australian industries are passing through a serious economic crisis. Tens of thousands of our workmen are unemployed. It is essential, therefore, that we should all recognise the urgency of improving the relations between employers and employees," he said.
He also wanted equality in competition between the states. "Has any more fatal blow been struck at equality in interstate competition than the 44-hour week and child endowment legislation of the last Labor government New South Wales," asked Bruce, again trotting me out as his King Charles' head. But he still had no idea of the political hurricane building up. He was not left long in suspense.
Of course, Bruce knew that he had enemies. The enemies within his party were more dangerous than any on the Labor side. Chief of them was the irrepressible William Morris Hughes, who had founded the Nationalist Party. There were times when he believed that he had founded the Labor Party. That, of course, was historical licence. But there was no doubt about him being expelled from the Labor Party. There was also no doubt that he founded the Nationalist Party after the conscription break. He even hand-picked his own executive.
But his break with Bruce was now irretrievable. He was out to get his revenge for what he believed was the double-cross perpetrated by Bruce in 1923. He had waited patiently for almost seven years. Now it seemed as if might get his opportunity. But Bruce got in the first blow. He expelled Hughes from the Nationalist Party. With him went E.A. Mann, a caustic critic of the government, who was Nationalist member for Perth.
The Labor member for East Sydney, Jack West, raised the matter in House when he asked whether Hughes and Mann were to be barred from certain rooms and, if so, for how long. Bruce tartly replied that if he wanted know whether it was true that Hughes and Mann would not in future be invited to attend meetings of government supporters, the answer was in the affirmative. In short, they had been expelled from the Parliamentary Nationalist Party.
Riley Senior then asked Bruce whether the Nationalist Party had blown out its brains. Bruce said the suggestion was completely unwarranted. Frank Brennan followed by directing the attention of the Speaker to the fact that P.G. Stewart, Country member for Wimmera, had withdrawn his allegiance to the government, that the member for Wannon, A.S. Rodgers, had retreated to a private room in the basement of Parliament House, and now Mann would need a room, while even W.M. Hughes had been turned out of his own house. He wanted to know what steps the Speaker intended to take to accommodate all the segments of the government that were breaking off. Latham suggested they could all find refuge in the Labor Opposition rooms.
Bruce still had the numbers if he could hold the rest of his party together. His proposal was not getting the newspaper support he had anticipated.
Theodore, in the absence of Scullin, led the attack for the Labor opposition. He said at the caprice of one man, and without warning, the Bill had been flung on to the table of the House. One man was about to undo the work of generations. It was a wrecker's policy. He recalled all Bruce's speeches in favor of arbitration. How he would never give it up. How Latham had defended it.
Bruce had appointed a royal commission to inquire into the constitution. It had not yet finished its work. Yet the government was going ahead without waiting for the report.
Theodore said Bruce was the prophet of doom. Whenever an anti-Labor leader wanted to take away reforms, or reduce wages, he invariably tried to justify himself with doleful prophecies. Even Sir Robert Gibson, chairman of the Commonwealth Bank, had said things were not as bad as they were being represented. The stock exchange was still buoyant. To Theodore that was most important. Bruce was imagining the difficulties. The stock exchange quotations were at their highest level in 20 years. The banks were making record profits. So how could there be a depression?
The attorney-general, Mr Latham, tried hard to defend the proposition. As usual, he was academic. Latham argued from a legalistic brief. He had no time for political rhetoric. He tried to rely on logic. But he was arguing against his own previous convictions. He tried to rationalise the problem. He went back over the dry legal tomes dealing with the development of industrial law in Australia: the Harvester judgment, the engineers' case. They were all given full treatment. He was on the defensive. He referred to the strikes of the marine stewards, led by Bob Heffron, the engineers, the waterside workers and the timber workers.