“It’s Time!”

Whitlam became leader of the Australian Labor Party (ALP) in February 1967. Five years later, on December 2, 1972, Labor swept to power under the slogan “It’s Time.” Whitlam’s victory ended twenty-three years of Liberal Party rule and came with a promise of social transformation.

Whitlam himself was not a radical. He hailed from the ALP’s NSW Right faction and rose in the party as an opponent of the Victorian Socialist Left faction. But he led Labor during an extraordinary time, as movements against the Vietnam War and in favor of women’s liberation and Aboriginal land rights pushed social attitudes rapidly to the left. In 1969, the jailing of union official Clarrie O’Shea triggered a general strike that set the scene for an upsurge of union militancy without precedent since World War One.

Much of the nostalgia for Whitlam today conflates the man with the radicalism of his times. Having said that, his government did begin a historic process of reform, opening the door to legal equality for women and the decriminalization of homosexuality. Perhaps most famously, Whitlam began the process of granting land rights to Aboriginal Australians. In 1975, he handed the title deeds to part of the Gurindji people’s traditional lands to Vincent Lingiari, a leader of the nine-year strike at the Wave Hill station.

After taking the party leadership, Whitlam also maintained Labor’s opposition to the Vietnam War, calling for an end to conscription and the withdrawal of Australian troops. Although the process of withdrawing from Vietnam had already commenced in 1970, Whitlam ordered the evacuation of the remaining Australian troops on his seventh day in power. Whitlam also ended conscription, freed seven imprisoned draft resistors, and dropped pending charges against another three hundred and fifty.

It was never Whitlam’s intention to overturn the established social order. In his own words, he had spent his “whole public career dedicated to the proposition that reform and change, needed in Australia, can and must be achieved through democratic parliamentary means.” Whitlam hoped to modernize Australian capitalism by rationalizing the economy, developing the welfare state, and bolstering domestic capital against foreign competitors with an expanded public sector.

The promise of modernization won support from the business class — even Rupert Murdoch supported Whitlam’s 1972 campaign. With the Liberal Party ineffective and disorganized, corporate Australia hoped that Labor could quell industrial unrest, thanks not least to its structural connection with the union movement.

Whitlam’s first year in the Lodge was frantic. He stressed that Labor’s program did not seek to redistribute wealth and relied upon the continuation of the postwar boom. “A Labor government will establish the machinery for continuing consultation and economic planning to restore and maintain strong growth,” Whitlam said in 1972. “This is the real answer to the parrot-cry, ‘Where’s the money coming from?’”

In this perspective, strong economic growth would increase tax revenue, allowing Labor to fund its social programs. For example, the 1973 budget increased government spending by 40 percent. In 1974, Whitlam introduced free tertiary education, as well as publicly funded childcare and women’s services. He established Medibank, a public health insurance agency, and pumped millions of dollars into it.

Whitlam’s government also launched extensive regional development programs and increased social security spending, while maintaining a budget surplus of $211 million. It presented this expanded “social wage” as an alternative to unions striking for higher direct wages.

At the same time, in 1974, Whitlam also implemented a 25 percent tariff cut across all industries and revalued the Australian dollar twice. By doing so, he hoped to make imports more competitive and force the closure of inefficient firms, redirecting capital to more efficient sectors.

End of the Boom

The 1973 oil shock triggered an unprecedented crisis, plunging Australia into its most severe recession since the Great Depression. Profits slumped, commodity prices fell, and inflation peaked. Companies shut down factories and laid off workers.

Despite rising unemployment, levels of union militancy were still at a historic high. Not only did unions fight against Whitlam’s plan for a federal income policy, they also struck to defend real wages and conditions won during the long boom. In 1974, six million working days were lost to strike action — the highest rate since 1919.

Yet with the economic basis of Labor’s program now shattered, Whitlam faced a choice: his government could either cut social spending or increase corporate taxes. He chose the former.

Having led the most reformist Labor government in history, overnight Whitlam dropped his program. At the ALP’s Terrigal conference in February 1975, Deputy Prime Minister Jim Cairns, a key figure on the Labor Left, declared that the Labor government “must follow policies generally in the interests of the private sector.” Labor’s new program promised “reasonable returns on investment.” Whitlam’s economic adviser Barry Hughes called the Terrigal conference “a pro-business orgy.”

Whitlam’s 1975–76 budget encapsulated the shift. The work of treasurer Bill Hayden, it contained savage cuts, rolling back free tertiary education, and abolishing the first child endowment, a regular welfare payment available to families upon having their first child. The Financial Review welcomed the Hayden budget, describing it as the beginning of a “new economic orthodoxy.” However, despite Whitlam’s commitment to austerity, sections of the Australian ruling class still feared social unrest and wished to see austerity pushed further.

On top of this, the United States viewed Whitlam’s government as a threat. Having already opposed the Vietnam War openly, Whitlam further raised American ire by making overtures to the Non-Aligned Movement. In response to the US-sponsored overthrow of Salvador Allende in 1973, Whitlam put an end to cooperation between Australian intelligence agencies and the CIA, and refused to renew the lease for the US spy base Pine Gap.

A Coup in Canberra

Whitlam’s 1975 sacking was not unprecedented. In 1932, the governor of New South Wales dismissed Jack Lang, a renegade Labor premier who repudiated his state’s debt commitments to Britain. In the ’70s, Lang was not just a living memory — he had been readmitted to the Labor Party in 1971, aided by his protégé and future ALP prime minister Paul Keating.

The political crisis that led to Whitlam’s sacking was also a long time in the making. The 1972 election that brought Whitlam to power only elected MPs to the House of Representatives, with the exception of a single Queensland Senate seat. The Senate — Australia’s upper house, which has the power to block legislation and whose members sit for six years — was not up for reelection. As a result, the first Whitlam government met with considerable resistance in the upper house.

In 1974, Liberal leader Billy Snedden announced that his party would use the conservative majority in the Senate to block the supply bill, paralyzing government funding. In response, Whitlam asked John Kerr’s predecessor as governor-general, Sir Paul Hasluck, to call a double dissolution election, in which both houses would be up for election.

On May 18, 1974, voters again gave Labor a majority in the House of Representatives — but not in the Senate. This gave the Liberal Party, which was soon to be led by millionaire grazier Malcolm Fraser, the parliamentary means to destroy Labor’s agenda by further blocking basic budget appropriation bills.

Fraser found a pretext for withholding supply in the “Loans Affair,” when Whitlam’s government tried to fund infrastructure spending by raising $2-4 billion ($50-100 billion in today’s money, or 5-10 percent of Australia’s GDP) from Middle Eastern financiers. The Liberals hoped to use their Senate votes to block the supply bill until they had forced Whitlam to call another election — one the Coalition felt it couldn’t lose.

As the Palace Letters confirm, by 1975, US intelligence and defense operatives were in regular contact with Sir John Kerr, actively encouraging him to dismiss Whitlam’s government. The US government and most Australian capitalists — by now including Rupert Murdoch — had actively turned against Whitlam and were campaigning for his removal by any means necessary. The scene was set for a showdown.

As the bitter political war escalated, public support for Labor recovered. According to a Herald/Age poll, taken in the capital cities of Australia’s states, 70 percent of people wanted the Senate to pass supply, including 41 percent of people who had voted for the Liberals at the last election. In early November, a Morgan/Gallup poll gave the Liberal Party 46 percent of the vote, with Labor ahead for the first time since the 1974 election on 47 percent.

Even though workers were unhappy about Whitlam’s wage restraint policy and his abandonment of Labor’s program, they recognized the threat posed by Fraser’s brazen bid for power. Farsighted sections of the ruling class saw danger too, believing that Fraser’s maneuver could provoke greater social and industrial upheaval. The Australian warned: “There’s a very real danger that people might seek to express their opinions violently rather than democratically through the ballot box.”

Meanwhile, the governor-general was busy consulting with leading figures such as the chief justice of Australia, Garfield Barwick, and corresponding regularly with the Queen via her secretary, Sir Martin Charteris. Writing to Kerr in November, Charteris said: “People should know that the Queen is being informed by [you].”

On November 11, 1975, Kerr used the “reserve powers” granted to him by the constitution to sack the prime minister. Whitlam, for his part, had hoped to break the political deadlock by asking Kerr to dissolve half of the upper house, and set a half-senate election for December 13.

“Before we go any further,” the governor-general told Whitlam, passing him a document bearing his order, “I have to tell you that I have decided to terminate your commission.” After glancing at it, Whitlam said, “Have you discussed this with the Palace?” “I don’t have to,” replied the governor-general. “And it’s too late for you: I have terminated your commission.”

Minutes later, Kerr swore in Malcolm Fraser as the caretaker prime minister, on the basis that his government could guarantee supply, with a general election to be held on December 13. The Labor-dominated House of Representatives passed a motion of confidence reinstalling Whitlam as prime minister. Meanwhile, the Senate finally passed the budget appropriation bills, whereupon Kerr dissolved parliament.

“We’ve Had the Guts Ripped Out of Us”

When the news of Whitlam’s dismissal broke, anger and shock swept through the workers’ movement. Famously, on the steps of parliament house, Whitlam spoke the words: “Well may we say ‘God save the Queen,’ for nothing will save the governor-general.” But instead of leading an open fight to save Australian democracy, he urged his supporters to “maintain your rage and enthusiasm — you will have a Labor government again.”

The ALP and the Australian Council of Trade Unions (ACTU) feared that a mass movement would spiral out of control. As ACTU president Bob Hawke warned, if people “move for a general strike,” it could “unleash forces in Australia which we’ve never seen before.” Marching in lockstep with Whitlam, the ACTU steered the labor movement away from strikes, concentrating instead on December’s elections.

Laurie Carmichael, a communist who was assistant national secretary of the Australian Manufacturing Workers’ Union, disagreed with Whitlam and Hawke. Carmichael argued that workers should mount strike action, having been “refused a government which passes even the mildest social reforms” by the powers that be in Australian society:

The Australian people are confronted by a triumvirate of conspirators bent on thrusting a most reactionary program down their throats. Only the people in constant action can save even the slender democracy that exists in the parliamentary system.

In defiance of the ACTU, left-led unions organized nationwide strikes on November 14. Four hundred thousand people walked off the job in Melbourne, culminating in a rally of fifty thousand people in the City Square. But the ALP and Bob Hawke discouraged such actions, focusing instead on the “unconstitutionality” of Fraser’s behavior, launching procedural attacks on the lack of “fair play” from the Liberals in the Senate.

Workers became demobilized and demoralized. When the ALP and ACTU held back the struggle of Australian workers, it sealed Whitlam’s fate. On the final day of the election campaign, ALP and ACTU leaders gathered outside parliament house for a televised candlelight “vigil for democracy,” but to no avail.

The ALP took a hammering at the polls. Their majority of five seats became a deficit of fifty-five as the Liberals won ninety-one seats to the ALP’s thirty-six. It was the biggest landslide in Australian political history. That night, in the national tally room, ACTU president Bob Hawke was a blubbering mess. “We’ve had the guts ripped out of us,” said the man who had blocked a union mobilization that could have saved Whitlam’s government.

“Something of a Social Revolution”

“When the constitution becomes a weapon used by one side,” observed the first governor of the Reserve Bank of Australia, H. C. “Nugget” Coombs, “then it leaves violence the only option open to the dissatisfied.” A close confidant of Whitlam, Coombs believed that the dismissal and its aftermath brought Australia “closer to such a breakdown, and therefore to serious civil strife, than at any time in its history.”

The governor-general was worried, too. In the weeks following Whitlam’s sacking, against the backdrop of rising social and industrial unrest, he wrote to the Queen. “Should [Whitlam] be returned to power,” Kerr wrote, “he ought to be extremely grateful to me.”

Kerr believed that by sacking him, he had given Whitlam “an opportunity for a possible victory of considerable significance.” “If this were to happen,” wrote the governor-general, “the result would be something of a social revolution in Australia.”

Commonwealth documents are usually released to the public after thirty years. Yet the National Archive blocked the release of the Palace Papers for years.

This letter is one of two hundred eleven letters that were released by the National Archive in July 2020. Dubbed the Palace Papers, the trove contains twelve hundred pages of documents exchanged between the Queen and Sir John Kerr during his term as governor-general from 1974 to 1977.

It’s easy to understand why the Palace Papers were kept hidden for so long. They reveal far more than the complicity of the British Crown in Whitlam’s sacking, offering a valuable insight into the superficiality of Australia’s democracy. And they expose ruling classes — American and Australian — willing to go to any length to bring down even a mildly reformist Labor government.

Today, nostalgia clouds our memory of Whitlam’s time in power. The ALP’s inability to predict or fight the constitutional coup that brought him down not only doomed the party at the time — it also sowed the seeds for Labor’s dramatic shift to the right under Hawke and Keating.