The Lucky Country

by Donald Horne

  The other party in the Coalition, the Country Party, may be best thought of as the most powerful pressure group within the Government. It can demonstrably control votes more directly than any outside group. It shows a special and at times ruthless skill in bargaining that provided the only continuing, effective opposition to Menzies’ domination of policy. Since political parties are normally, above all, concerned with surviving, the Country Party’s greatest single interest must be to keep itself alive by maintaining an electoral system that will give a special weight to country votes. In 1963 it put pressure on Menzies to collaborate in something of a gerrymander (his first) to offset the decline in country population by giving extra weight to country votes. A long procrastination in keeping his bargain followed on Menzies’ part. Many Liberals would like to eliminate the Country Party.

  The Country Party may best be considered as an instrument of personal power and policy. It has had only three leaders since it was founded after the First World War and two of them, Sir Earle Page and John McEwen, have used the party as a means of influencing policy on subjects far beyond the kind of subsidising of farmers and provision of public works that would be expected of a party that purports to represent uniquely the rural interest. Page used his position to change the financial relation between the States and the Commonwealth and the control of the Commonwealth Bank; he pioneered a medical benefits scheme; and introduced other reforms that had nothing specifically to do with rural areas. McEwen ran a general economic policy that conflicted with other parts of Government policy; this was the policy of ‘all round protection’, in which manufacturing was protected against competition by high tariffs and farmers were then protected against the resultant rise in costs by subsidies. He may have had ambitions to found a third party on a national basis, not specifically devoted to the rural interest. He showed considerable skill in attracting business interest, as well as that of the farmers, by building up his Department of Trade into a portmanteau department that took over, in effect, some of the role of economic planning from the Treasury.

  The bureaucracy

  The new forms of the bureaucracy of the Federal Government were first thrown together in the Second World War. There was a thin line of officials before then, carrying out what were, before the war, the comparatively small tasks of government, but the need to fight a modern war caused a bureaucratic convulsion. Men were assembled from all over the place and given desks and the strange tasks of wartime official life. Before the war the bureaucracy had been recruited largely from veterans of the First World War; it was a way of giving veterans jobs. The possibility of recruiting university graduates and men of some education had begun to be exploited just before the war. During the war and in the exciting early post-war period when dreams of ‘planning’ were strong, the educated men took over the bureaucracy. Most of those now in charge, and those immediately under them, represent the first generation of the occupation of Canberra by educated men. These are the men who saw themselves as the answer to the nation’s problems: their expertness and intelligence would put everything right. Hard workers and at first dedicated to change, they were determined to introduce standards of expertness and professionalism. They were reformers who were going to show Australia how it should be run. The period of the businessman was to have ended.

  They are still efficient and they still work hard but the excitements of the 1940s have now been revised. Things didn’t turn out as was intended. Apart from the fact that things rarely do turn out as intended, there were many other reasons for this disappointment. Impetus ran down when the Federal Government failed to get all the powers it wanted for efficient national administration. The change in government from Labor to Menzies took the kick out of some officials. There is a natural tendency for men when they get older – if left to themselves – to think more of their families and the self-importance of their jobs and less of a sense of achievement. Living in Canberra seemed to solidify the old arrogance, but take the practical meaning out of it. There is a lot of make-believe in Canberra and a tendency to look down on the rest of Australia as crude, self-interested, troublesome and ignorant. Only officials are believed to be well informed and capable of expert decision; the rest of Australia is a distant interruption. Men who have lived there for some time admire the development of Canberra (with its sixfold increase in population since before the war), their own increase in knowledge and importance and what they see as their own increase in sophistication; but their isolation prevents them from realizing that there are parallels to this experience in the State capital cities. They tend to think of Australia as it was when they left it. Australia has been developing as well as Canberra, in some ways and in some places more quickly than Canberra. Some officials compare Canberra with an Australia that no longer exists.

  The heads of departments gained quite extraordinary power under Menzies and, with a lethargic government little interested in policy-making, the itch to power sometimes extends not in policy but in the display of power within Canberra. There is a dismal lack of experts in Parliament likely to keep officials on their toes; most Ministers remain remote from their departments; and some of the outside ‘advisory boards’ are stocked with stooges. With government becoming partly the business of maintaining the prestige of departmental heads, relations between departments are worse than usual. At the same time some of the snobberies of Canberra can acquire a fascination – the Canberra club life, the smaller diplomatic parties. Officials may see themselves as important national figures when in truth hardly anyone in Australia has heard of them. (There are probably fewer accepted important figures in Australia now than in earlier periods of its history. Some of the Menzies business knights thought it strange that he should waste so many knighthoods on unknown government officials!)

  Perhaps the most deadening of all the characteristics of the present bureaucratic generation is its over-concern with the subtleties of administrative finesse. To the men in Canberra, self-taught in practicality, it seems that they alone are privy to the subtleties of action. The old vigour of the 1940s is now seen as naïve. Style becomes a thing in itself, divorced from action. But style can be the enemy of originality in policy. The conformism and conservatism of this style may avoid even the simplest of new tasks. For the generation in power in Canberra who had built their careers around Menzies the sense of the ‘possible’ is very narrow. That which might entail legislation or new administrative patterns is considered to be impractical. The ‘possible’ tends to mean simply that which can be performed without any change. Usually this is nothing.

  In the business of running the economy there is the usual kind of confusion. The Treasury and the Department of Trade and Industry have for some time been in rivalry in attempting to influence Cabinet on major economic policy; the activities of the Departments of Labour, National Development and Immigration also directly affect economic planning; a number of primary producers’ boards also have differing degrees of responsibility; and the Tariff Board, the Arbitration Commission and the Reserve Bank all make important decisions.

  In all this the Treasury is supposed to be central. Its leadership is highly qualified and highly responsible, although there is a gap in competence between the top men and the lower ranks. Its general style is cautious and conventional, Canberra-proud, academic, remote. So far as the national economy is concerned it pays more attention to internal matters such as inflation, credit control, the circulation of money and employment than to trade. Its members do not often meet businessmen and have little feel for practical affairs outside government business. (They are sometimes proud of this.) Above all, the Treasury is for stability.

  The style of the Department of Trade and Industry is one of get-up-and-go; there is high morale and a desire to deal with businessmen, and to take on the world. The Department’s direct business is with increasing exports relative to imports but through bodies such as its Manufacturing Industries Advisory Committee and the Export Development Council and through its ow
n Industries Division it can state a case on many matters of internal interest. ‘Treasury’ tends towards indirect fiscal methods; ‘Trade’ towards direct control. ‘Treasury’ is academic and Canberra-bound; ‘Trade’ loves the bustle of practical affairs and keeps its eye on the whole globe. Its staff recruitment is perhaps the most eclectic of any Government Department. Above all, ‘Trade’ is for development, protection – and high costs. And therefore an impediment to the policies of the Treasury.

  The Department of Labour deals with the ACTU and seems to take it more seriously, that is to say, agree with it more, than happened with the Chifley Government with its many links with the AWU. It is concerned with technical training and acts unofficially as a diplomatic agent between management and unions. The Department of National Development has a good staff and research work, but has languished for many years. As has been already suggested, the Arbitration and Tariff Tribunals make economic decisions according to a logic of their own, without reference to other planning bodies. The Reserve and Commonwealth Trading Banks play a more constructive role. They implement a lot of Treasury policy and thereby become a clearing house of ideas; they have to interpret the Treasury to businessmen and businessmen to the Treasury, to the advantage of both. They provide a useful conservative factor in internal planning: they have to smooth off the sharp edge of policies to make them work. Their very real concern with trade (as well as dealing with exporters and importers they actually keep the books) helps offset the Treasury’s selective concern with the internal economy. All of this, combined with a fairly independent position and the fact that they have their own Research Department, perhaps gives them a rounded view of economic problems in the administration and makes them an admirable vehicle for a knowledgeable second opinion on economic policy when one is called for.

  It will be seen that there are a number of quite mature agencies for economic planning in Australia, all of which – with the exception of the Arbitration Commission – could be brought together to carry out plans if there were any plans. The overlappings and power-pushings are just part of the nature of things and if they were operating to some more general purpose they might be beneficial. Policy formulation is usually associated with conflicting power blocs. But there is no policy formulation. There seems to be some reason to believe that in economic matters one can be more positive than this: the old idea of the perfect ‘plan’ is discredited but it seems possible now to get things moving in more or less the same direction. There has been little attempt to do this in Australia. To quote from an article I wrote in the Bulletin, attitudes to planning are reminiscent of the Victorian approach to sex: it’s all right in its place, but you mustn’t become expert at it, or even talk about it.

  In foreign policy, there are also conflicts. The Departments of External Affairs, Trade, Immigration, Territories and Defence appear to proceed with little direction from Cabinet as to what they are supposed to be up to as a whole. The External Affairs Department is particularly unfortunate. Although it has had several good Ministers, Menzies – who on the whole seemed rather bored by Asia – intervened, at times with a heavy hand, and no Minister proved able to stay him. The department has no sense of diplomacy as propaganda, although this could be fruitful as an approach in Asia. And there is little successful dramatization of Australia’s position in the world to the people of Australia. (The standard of discussion on foreign policy is appallingly naïve.) This failure has been accompanied by a rather narrow professionalism within the department, as if foreign policy were a private expert matter. Like the Treasury, many External Affairs Department officials suffer grievously from their isolation from Australia, made worse in their case by long periods of absence overseas on diplomatic duty. There is a danger of regarding the rest of Australia as a nuisance that interrupts the professional as he goes about his arcane tasks. At the grand level, foreign policy may perhaps be handled best by those who are experts on life, not merely experts on foreign affairs. The expansion of the External Affairs Department under Dr Evatt was so hectic that it is understandable that a more orderly period with a quieter and more predictable approach should follow. But it has gone on far too long; too much attention has been placed on mere professional subtlety. A little of the robustness of a developing country might have sometimes achieved better results. Within the narrower field of professional diplomacy the Department does well – but you can’t achieve all that much these days by pure diplomacy.

  The pressure groups

  There is corruption in Australian politics but it is not possible to measure it. By the standards of most of the rest of the world (perhaps not those of Britain) politicians in Australia are relatively honest. However in some of the State Governments there have been notorious periods of minor corruption in liquor, gambling, licensing, government contracts and so on. During the war there was minor corruption in the Federal administration (some of it the kind of corruption that sometimes helps to get things done). Federal administration is now almost completely free of corruption of the financial kind. Such finaegling as goes on comes more from favouritism or horsetrading but there is more conspiracy and blackmail – even if it is not corruption – than most people imagine. At what stage this becomes respectable enough to describe merely as ‘tough pressure group tactics’ one cannot say. There are powerful persons who seem to get most of the things they want, but with no other evidence one cannot say more than that.

  It is also difficult to differentiate between pressures on politicians and corruption. Some State politicians make extra money by representing special interests but normally Federal politicians react to pressures of a more subtle kind, some of them merely human, some of them part of their business of representing electors. It is usually easy enough to get a politician to take up a question in the House. A great number of questions and speeches are put into politicians’ mouths but most of this is simply part of the democratic process. It is impossible to estimate the effect of contributions to the campaign funds of political parties. All parties draw secret revenue from business firms. Many firms contribute to all parties, as an insurance. But whether they get their money’s worth is a matter that even many political leaders could not answer. Campaign funds are tightly controlled and very secret.

  Short of corruption – and sometimes one has to draw a very fine line to make the distinction – one can say that the operations of pressure groups on governments, parties, and government officials are one of the ways of running Australia as they are in any other country, and that there is not necessarily anything wrong with that. At their most polite their interventions provide the government and the bureaucracies with information about what is going on; they break down some of the isolation of departments and give officials more of a feel for the realities of policy-making. At their most forceful they set up that conflicting play of demands that is one of the features of democracies; governments sort out policies partly in reaction to the pressures that impinge on them; in this mess they look for areas of possible action, not forgetting whatever is left of their own wishes about how things should proceed. However pressure groups are more ‘naked’ and obvious in Australia than in some countries because Australian politicians are usually particularly inept in rallying political strength to carry out economic or strategic policies that may go against the special interests of some pressure groups but are believed to be in the general interests of national prosperity or sovereignty. Australian politicians tend to become so absorbed in handling pressure groups that they are slow in developing policies in areas where the groups have little or no interest; they just keep things going, with little creative thinking about general problems that are too diffuse to be the business of any particular group.

  So far as the big public pressure groups are concerned – those that aim not at personal but at group advantage – it is relatively easy to assess their significance. The supreme test of their power is votes.

  Although relatively there are not many of them, the wheat farmers dominate enou
gh constituencies for it to be said that the party that holds the wheat seats holds the Treasury benches. Its lobbyists operate directly, and through the Wheat Board. It was Menzies’ refusal to give wheat farmers special treatment during his early wartime Prime Ministership that lost him some support. War or not, they campaigned against him. In the same way, although it contradicted government policy at the time, the early sales by the Wheat Board of wheat to China went through unchallenged; no one would have been game to challenge the wheat farmers. The representatives of dairy farmers are also treated with considerable deference. Politicians are not likely to argue about subsidies to the dairy industry; there may be constituencies to lose that way.

  The sugar lobby is a more private matter, since the industry is largely controlled by the Colonial Sugar Refining Company, one of the world’s top hundred companies and one of the few big companies in Australia that is Australian owned. The CSR is said to be skilful in sophisticated top-level representations but it could be unskilful and crude and still gets its way. Favourable treatment of the sugar industry is built into Australian politics because so much employment in Queensland depends on it and because, like other export industries, it helps the balance of payments.

  The wool pressure groups are less successful. Although wool is still Australia’s staple export, wool growers do not congregate sufficiently strongly in key electorates for the wool groups to be able to hand over votes. Unless a government went off its head it must pay keen attention to wool; but it is not so concerned with the prosperity of wool growers. Past campaigns to put more money into their own pockets have failed. These were the men who were once one of the most powerful groups in Australia.