(2024): The Consequences of Losing in 1954

Published under the heading of ‘1954. The Third Great Labor Split’, in Tocsin, journal of the John Curtin Research Centre, Issue 20, Special edition: Labor First in the World: Labor Making Australian History, March 2024, pp. 30-33.

It is interesting to speculate about what might have been. If Ben Chifley in August 1947 had not pronounced in a Cabinet meeting, un-foreshadowed, his intention to nationalise the banks – leading to twenty-eight months of constitutional challenges, controversy, and defeats in the High Court of Australia – would Labor have cruised to another comfortable win in the December 1949 election? Bank nationalisation was not the only issue in that election. The ’49 coal strikes and other Communist Party of Australia (CPA)-inspired efforts to destroy the Labor Government hurt. As did the incredible stupidity of Chifley’s determined insistence that petrol rationing (and other controls) be maintained, all apparently to show ‘solidarity’ with the UK Labour Government.

Better political leadership, especially from the strong result Labor achieved in 1946, should have ensured Labor victory in 1949 which would then have spelt the end of Bob Menzies’ political career.

Another ghostly question arises about the 1954 Federal election: If Prime Minister Evatt had of emerged from that contest, would the ALP split, at least in its severity, have been avoided? This short paper explains why 1954 was a watershed year in Australian Labor’s history, the consequences of which are still with us.

But, first, back to 1949. Labor had finally got its act together in the war years. Chifley’s contribution to various programmes associated with post-war reconstruction was a golden thread in ALP and Australian history. Until the Curtin-Chifley governments, Labor’s periods in office nationally were short and ended catastrophically. But at the end of the 1940s, bank nationalisation seeped support away from the ALP, which had won a thumping majority in 1946. As in 1943 an even better result for Labor occurred, its best of all time.

Consider this history.

For the first time, in 1910, ahead of social democratic parties globally, Labor won a majority of the vote and a majority of members in the Federal Parliament. Losing unexpectedly by one seat in June 1913, Labor regained office in September 1914 – both times under Prime Minister Andrew Fisher. His successor, William Morris Hughes, disastrously split the ALP over conscription in 1916 during World War I, and Hughes formed a new anti-Labor Party, the Nationalists.

Labor only returned to office in 1929, after the then patrician Prime Minister Stanley Melbourne Bruce proposed the abolition of the compulsory arbitration in industrial relations and lost control of the House of Representatives (Hughes voting against Bruce in a vote of confidence). Bruce called an early election and was defeated by Labor’s James Scullin. In office only a few days before the Wall Street Crash of 1929 which ushered-in the Great Depression, the government badly split in 1931, with breakaways from Lang Labor and Joe Lyons quitting and voting against the government, with Lyons leading the newly formed United Australia Party and becoming Prime Minister. Scullin entered government with the biggest win of any party to that time and left government with the greatest loss ever. The latter record is not yet beaten.

Historically, Australian Labor might be said to exemplify the political science equivalent of Dornbusch’s Law – the theorem coined in the 1990s that financial crises take much longer to come than you might imagine and then accelerate much faster than you might anticipate. Something similar applied to the ALP. The under-currents might seem tame on the surface, but when a dramatic change materialises, the turbulence becomes more tumultuous than expected. Observers therefore get a chance to be wrong twice in anticipation of the severity of the problem, and then about how all-encompassing and rapid might be the consequences.

The events of 1954 exemplify the point.

The party seemed united under Dr H.V. “Bert” Evatt, the former High Court Judge and Foreign Minister, who in June 1951 succeeded the revered, if politically flawed Ben “Light on the Hill” Chifley, who died that month.

In the leadup, Labor was ahead in the polls prior to the 29 May 1954 Federal elections. The massive Korea War-fuelled inflation burst of 1951/2 (25 per cent at the end of 1951, but rapidly falling thereafter) dented the Menzies government’s economic credentials. Between the Federal elections of 1951 and 1954, the ALP won an absolute majority in Victoria for the first time; returned to government in WA in 1953; won significantly increased majorities in NSW, Queensland, and Tasmania, and was only denied a clean sweep of all states by the ‘Playmander’ in South Australia which denied the ALP a majority there despite the party winning 53% of the two-party preferred (2PP) vote at the 1953 state election. Then the ALP won the May 1953 Senate elections. What could possibly go wrong?

Menzies, however, had recovered in polling, with trends beginning to tip in his favour. It was a different Australia then. The Royal visit from early February to early April 1954 – the first tour of Australia of a reigning monarch – had a ‘feel good’ impact for the government. The monarch’s tour was in the works since Chifley’s Prime Ministership. George VI’s illness and death and the wait until the Queen’s coronation in 1953 had successively postponed the visit.

Notwithstanding any benign intentions, the 1954 visit should be seen (and not 1975) as the Queen’s most decisive intervention in Australian politics. Her departure from our shores occurred three years exactly to the month of the previous Federal Election. Most expected that Menzies would call the election soon after her departure. And he did. The election was called in April and held in May. Thereafter, none of her visits occurred immediately prior to a forthcoming election.

At the previous poll, the April 1951 Federal election, Labor picked up five seats – which underscored the electoral disaster that was the 1949 Federal election. In December ’49, in an expanded parliament, Labor won only 47 seats to Menzies’ Liberal-Country coalition’s 74. In the previous contest, the 1946 Federal election, won by ‘Chif’, Labor won 43 seats to the Liberal/Country coalition’s 29. (One other seat was held by rebel ex-Labor hater, Jack Lang.)

There are two myths about the 1954 election: That Labor triumphed with the popular vote. And that Menzies used the Petrov defection to destroy Labor.

First, it is not true at the 1954 election that Labor on a two-party preferred basis easily ‘won’ but lost where it mattered: the seats clinched by each party. With six of the Liberal-Country party seats uncontested, arguably Labor had no 2PP lead, and the formulation of Labor ‘winning a majority of the vote but lost in seats’ is flawed. Overall, it was very close with no clear 2PP winner. The Liberals won 64 seats and Labor 52; but Labor was a long way behind to begin with – part of the ongoing legacy of ’49.

Second, Menzies was lucky in that a nervous, unstable Third Secretary of the Soviet Embassy in Canberra, Vladimir Petrov, feared repatriation to the Soviet Union. He was part of the Soviet secret service. The ‘liquidation’ of Soviet spy chief Lavrentiy Beria in late December 1953 by the Kremlin leadership made Petrov anxious if purges and executions, the Stalinist model, might follow. Petrov was cultivated by the Australian Secret Service Organisation (ASIO) and he defected to them on the eve of the 1954 election. Menzies had no impact on the timing. But he was deceitful in announcing the defection in the parliament on 13 April 1954, a night he knew Evatt would be absent at a school reunion in Sydney.

More than any other event, the two-month visit of Queen Elizabeth and Prince Phillip, immediately before the election, had a profound impact on the electoral climate. Two days after the Queen’s departure, Petrov defected. On the 12^th April (nine days later) Menzies announced the defection. The Royal Commission on Espionage (as foreshadowed in Menzies speech) was established on 13^th April and Evdokia Petrov was detained at Darwin Airport on 20^th April. On the 23^rd writs were issued for the election. 

Stumbles over economic policy, the ‘cost’ of promises in the 1954 campaign, damaged Labor’s chances. And with all of that, Menzies just scrapped through at the election held on 29^th May.

Afterwards, Labor Leader Dr Evatt sought answers as to why his ‘obvious’ merits were somehow rejected by the electorate. He came to believe that Catholic Social Studies Movement members and Labor MPs in Victoria associated with them were undermining him. The Movement, headed by excitable Catholic intellectual Bob Santamaria, organised across Australia, recruited co-religionists into the Labor Party to join the ALP Industrial Groups which ran candidates endorsed by Labor in union elections. (Though this varied between the states.) In the mid-1940s the Church was invited to get organised in union affairs, rather than the other way round – by leaders of the ACTU, the Victorian Trades Hall Council, and the Labor Council of NSW, who were worried about communist infiltration. Arguably, by 1953, the job was done in reversing communist infiltration in the unions, but Santamaria wanted to keep going.

There is no evidence that Evatt knew of Santamaria’s ‘Movement of Ideas’ speech given around September 1954 to Movement operatives in Melbourne. Here, Santamaria’s paranoia and ideological sectarianism was on full display. Even union leaders like the Ironworkers’ Laurie Short, and the NSW Australian Railway Workers Union’s Lloyd Ross, two courageous and thoughtful leaders who had battled communist influence, were viewed suspiciously.

Meanwhile, in the early 1950s onwards, the Catholic Church had become divided about Santamaria and unchecked Movement activities before the ALP Split. The NSW hierarchy wanted a divorce. Archbishop Mannix in Melbourne, however, was all in favour and perhaps intrigued by Santamaria’s rambunctious boast that not since the Reformation were Catholics positioned to decisively influence the politics of a nation in the Anglo world.

On 6 October 1954, Evatt launched his attack on “disloyal elements”. Immediately Labor was convulsed. He accused “a small minority group of Labor members, located particularly in the State of Victoria” of sabotage, claimed that their criticisms of Chifley harmed his health before he died, and made up that they opposed the introduction of a means test on pension benefits (an issue in the 1954 elections), and noted that the publication Newsweekly was the organ for “the small group” of Fascist-like infiltrators. It was incredible, over-the-top rhetoric. Weirdly, a few days later, Evatt telephoned Federal Labor MP Standish Michael Keon, who was close to the Movement, but a critic of Santamaria, to say he never intended to include him in any list of traitors. Evatt said that he would bring his concerns to the ALP Federal Executive. A vote of no-confidence in Evatt’s leadership was lost in the Federal Caucus room, 52-28. The red-faced ‘Doc’, looking a little unhinged, jumped on a table in the caucus room demanding that those who put up their hands against him be recorded. The Federal Executive was thereafter quickly convened and narrowly voted to sack the Victorian ALP executive and call for fresh elections for Victorian delegates to the National ALP conference due in March 1955. (One crucial vote on the National Executive was WA’s Kim E. Beazley, who would have voted with the ALP Right. He was in India at a Christian conference, replaced for this emergency meeting by an anti-Grouper, giving the Evatt forces a majority.)

In the ensuing mayhem, the old Victorian executive boycotted the Victorian ALP Conference in February 1955, claiming the new proceedings were ultra vires (that is, illegal under ALP rules). An anti-Grouper executive was elected, and six anti-Groupers out of six delegates were selected for the ALP Federal Conference in Hobart. One of those, Dinny Lovegrove, the Victorian ALP Secretary, a former Grouper supporter, thought that the Movement forces were over-reacting. Two Victorian delegations turned up, the old and the new, with the former refused admission. Then, a few short of a majority (including all the NSW delegation) walked out, believing natural justice was denied to the old Victorian executive. A narrow majority of Federal ALP conference delegates voted for the Evatt position and dissolved the ALP Industrial Groups. From there the Labor split exploded.

In Victoria, Labor had waited to 1952 to form a majority government. Victorian Labor Premier John Cain, a decent man, tried to hold the party together. Mass expulsions occurred under the new ALP executive, Federal and Victorian state MPs, Mayors, and local government councillors summarily included. Keon was one of them. In April 1955, the expelled state MPs supported a vote of no confidence moved by the Liberals. At the May 1955 Victorian state election, each ‘Labor’ ticket – official Labor and the ALP (anti-communist) – preferenced the Liberals ahead of the other. Labor was smashed, winning 32.5% of the vote, to the ALP (A-C)’s 12.6%. Labor was out of office for 27 years thereafter. The ALP (A-C) became the Democratic Labor Party (DLP) and preferenced conservatives before Labor.

Menzies saw advantage in calling a snap Federal election for December 1955. ALP (A-C) candidates ran in every seat in Victoria, and three of 11 electorates in South Australia, three of five seats in Tasmania, but none in Queensland, NSW, or Western Australia. Their antipathy to Labor increased the Liberal majority.

In NSW, the Premier Joe Cahill, and the unions centred on the Labor Council of NSW, and the ALP machine, strove to avoid the Victorian disaster. The Catholic hierarchy privately urged that ALP activists stay in the party & not leave. That was broadly the position across the country, outside of Victoria. The hard Left were now in the saddle in Victoria, however, and many of their supporters saw an opportunity to win influence across the country. Expulsions in Victoria and other pockets of the country, including many fence-sitters bewildered by the factional plays, hurt mainstream Labor, and drove some into the DLP, who hoped to be united one day with official Labor. (One reason Victoria, the state most riven by the Split, is today so strongly Labor is because in large numbers ex-DLP voters and their families ‘returned’ to Labor after Hawke became PM in 1983. They liked what they saw.)

The NSW state election was called for early March 1956, with NSW ALP Assistant Secretary Jack Kane, the campaign Director. Labor Premier Joe Cahill won re-election. But Kane’s days in the ALP were numbered. Expelled by the Federal Executive in June 1956, sacked from his party position, Kane went on to form the DLP in NSW in September 1956. He was later elected a DLP Senator in 1970 from NSW (to 1974). But most Catholics stayed in the ALP in NSW (unlike in Victoria).

In Queensland, the ALP split was decidedly different. Labor Premier, Vince Gair, by big margins won elections in 1953 & 1956. In 1957 he was ostensibly expelled over a dispute concerning an extra week’s long service leave for public servants. The Queensland Labor Central Executive voted 35-30 to do so. All but one minister supported Gair. The Queensland Labor Party was formed, ran candidates, and in 1962 merged with the DLP. Hard drinking anti-Groupers, who styled themselves as part of the Left, ruled the roost in Queensland Labor. The Australian Workers Union, though involved in Gair’s expulsion, later disaffiliated from the party. Queensland, where Labor had held office continuously from 1915, but for one term during the Great Depression, was rent asunder, never again the dominant party in regional Queensland, and denied office for the next 33 years.

In 1958, the DLP ran candidates in every Victorian, South Australian, and Tasmanian electorate, all but one NSW electorate, seven of nine WA seats, with the Queensland Labor Party running in all but one electorate in their state. All their preferences flowed to anti-Labor candidates, materially assisting Menzies’ hold on power. In 1958, Evatt promised to resign in exchange for DLP preferences – another sad debacle after an earlier stellar career.

Cynically, the Left propped Evatt up from 1954 to 1960, when he finally resigned from parliament to become Chief Justice of the NSW Supreme Court. A low point came in October 1955 in the House of Representatives. Evatt gleefully produced a letter from Molotov, the Soviet Foreign Minister, denying that Petrov was ever a Soviet spy. Evatt paused for a moment, the still broken by laughter from the government MPs and stunned, incredulous silence from the Labor benches. In an instant, his effort to discredit the Royal Commission into Espionage, launched by the Menzies government, after Petrov’s defection – along with Evatt’s own credibility – turned to ash. Labor was unelectable under his leadership.

The DLP was a negative, minority party; strident anti-communism came to the fore, incongruous in eclipsing their previous, centrist ideas. Reconciliation with mainstream Labor became impossible. The bitterness associated with highly disciplined preferencing against Labor candidates, including moderates, added toxicity to the bitterness.

The highpoint for the DLP came in Victoria in 1970 when Senator Frank McManus won 20% of the vote in the Senate that year. In May 1974, however, under Whitlam PM, all DLP Senators were defeated in the House of Representatives and Senate election.

In 1954, the Victorian ALP, that unique and intriguing species among the state Labor parties in Australia, wrought changes that unleashed unexpected forces that swept through the party across the country. Evatt turned on members of his own side. The title of Paul Strangio’s biography of the Victorian ALP, Neither Power Nor Glory: 100 Years of Political Labor in Victoria, 1856-1956 (2012) could have described the ALP nationally, right up to the advent of Whitlam as party leader in 1967. The latter’s intervention, through the Federal ALP executive, in the affairs of the Victorian ALP in 1971 was aimed at curing the arrested development of Labor as a credible force in that state and in the nation. Whitlam’s reforms had an important consequence: the DLP withered on the vine as Labor’s electability recovered from all that erupted in and soon after 1954.