4.
Fraser on the offensive
After the elections there was a national mood of tense expectancy. Although Donald Horne (in The Death of the Lucky Country) thought the Liberals might want to keep things quiet -- “They want to be left to sleep it off, like animals after the kill” -- the Nation Review’s Mungo MacCallum had voiced a more common sentiment towards the end of the campaign:
The best thing we can all do now is go out and buy some pressure lamps, a ton or two of firewood and lots of non-perishable food in preparation for the inevitable general strike.
The general populace seemed to agree. A poll found that 64 percent of Australians thought 1976 would be “a year of strikes and industrial disputes”, the highest figure in 13 countries surveyed. I myself was working in a metal shop, where the universal view was: “now there's going to be a lot of strikes.” The question in doubt was: could the unions turn back the Fraser tide? The first half of the year was pretty stormy all right, culminating in a national stoppage over Medibank; during these months the unions demonstrated that they had more than enough muscle to stop Fraser in his tracks. Ironically, however, Bob Hawke and the ACTU found a way to use the biggest stoppage of all -- a major national strike -- to derail the growing workers' movement and hand the government its second big victory.
No sooner was Fraser in office than he began shifting rightward, breaking promises, attacking workers. Though he had promised to restore prosperity in short order, hinting at economic growth rates of 6 or 7 percent a year with unemployment falling, the Prime Minister, egged on by advisers such as Treasury secretary John Stone, soon began to move in the opposite direction. The monetarist philosophy called for a longer recession to stamp out inflation. This was the notorious “fight inflation first” strategy.
Bonds were floated to take money out of circulation. The high returns offered forced up other interest rates, and the government also put restrictions on bank lending. These measures were rather technical, so that the general public didn't immediately grasp where Fraser was heading, until on 30 January he dropped a bombshell no one could ignore. The man who had promised to maintain wage indexation suddenly announced he would urge the Arbitration Commission to award a rise of just half the CPI. And on what grounds? That the December quarter CPI increase of 5.6 percent was too great to be translated into a wage hike without further fuelling inflation. Workers who had seen Whitlam discount the previous CPI figure to under one percent (because Medibank removed health costs from the CPI), and then received no wage rise at all because this inflation figure was too low, now heard Fraser say they should miss out again because 5.6 percent was too high.
The move had no chance of success. Five out of six State governments, including the conservatives ruling in key eastern States, opposed Fraser's proposal while the ACTU responded with predictable outrage. The employers generally lacked enthusiasm for it, believing it would lead to industrial conflict at what for them was an awkward time. Indeed some firms in the metal trades had already negotiated full CPI rises. The Commission refused to cooperate partly because its own prestige had grown with the success of the indexation system. To automatically accept Fraser's demands would both disrupt the system and make the Commission look like a puppet. It awarded the full wage rise demanded by the unions.
Nevertheless the Prime Minister's wage initiative was full of implications for the future. It demonstrated the ascendancy of monetarist theories within the government, and served notice that wage cutting would be a major objective of the Fraser regime. It was also a broken promise, the first in a long saga of what Fraser liked to call “flexibility”. The conviction began to deepen among trade unionists that the Liberals could not be trusted.
The “social wage” also became a target. Fraser abruptly dissolved more than 40 governmental bodies in such areas as foreign aid and assistance to deprived children. He proposed to reintroduce radio and TV licences, and to abolish pensioners' funeral benefits (though on these two points he failed to carry his own back bench). The government began cutting public service staffing, raised pharmaceutical prescription fees, delayed pension increases. Dole crackdowns began, Aboriginal programs were cut back, and the government foreshadowed a tough “mini-budget” for May.
It was said that times were tough all round. Yet there was money for a butler at the Lodge, and there was money to fly 35 ASIO graduate trainees from Canberra to Melbourne on a two-day training exercise, all expenses paid. The ambitious urban development programs of the Whitlam era had to go, but there was cash to provide incentives to industry: the government offered a 40 percent special depreciation allowance to help firms buy capital equipment. To working class Australians it was clear that the new government applied different standards to rich and poor, to bosses and workers.
The Liberals added a dose of insult by their attempts to capitalise on an internal Labor Party crisis over the “Iraqi money affair”. During the election campaign Whitlam had gone along with attempts to raise money for the party from Arab sources. This was really the ALP's business, and in any case it didn't raise a cent, but in the aftermath of the Loans Affair it could be made to seem sinister: some people thought it scandalous for an Australian political party to be funded from abroad, and worse still for the funds to come from Arabs, who were targets for racist paranoia following the 1973 oil crisis.
Fraser announced an inquiry, the press carried lurid stories, there was internal turmoil inside the ALP, yet ironically the controversy strengthened Whitlam's position as leader of the Opposition. Although the ALP National Executive formally condemned his actions the ranks rallied to his support, seeing the episode as a sordid manoeuvre by Labor's foes. Reflecting these pressures the NSW branch endorsed the condemnation, but then gave Whitlam a rousing ovation.
Coming on top of the “Kerr Coup”, Fraser's actions in early 1976 aroused immense bitterness in the working class and they entrenched in the popular mind the arrogant, elitist image that Fraser would never escape. It mattered little that in policy terms, Labor was proposing nothing very different. In fact Bill Hayden later described the ALP's economic policies of 1976 and 1977 as doing “things pretty much the same, except that we will do just a little bit more on the employment side of the equation.” But society had been polarised on a class basis, and those aware of Labor's political “me-tooism” simply looked instead to the unions or to other forms of struggle outside parliament.
Preliminary skirmishes
In 1976 the economy picked up for a time, largely because Whitlam's earlier deficit spending had stimulated the private sector. Consequently quite a few employers lacked enthusiasm for industrial confrontation. They wanted to seize the opportunity to make profits, not fight strike battles, so it seemed that Fraser's election victory had not cemented anything like an impregnable business-conservative front. The unions, finding their economic bargaining power somewhat strengthened, became more aggressive. Bob Hawke set the tone by calling Fraser's wage proposals “an act of blatant dishonesty”, and even the politically conservative Australian Workers Union threatened to break out of the wage fixing system. By March there was something of an industrial offensive underway. A strike by tug crews had immobilised 110 ships at a cost of $1 million a day, and 2500 Transport Workers Union members were on strike at the airports, while train guards, Storemen and Packers and meatworkers were all taking action of some kind.
Some of the difficulties the government would have in cutting wages were highlighted by a wage rise paid by General Motors Holden to its clerks, engineers and scientists. This was a flow-on from an earlier increase awarded by Arbitration to almost 90 percent of the company's employees. GMH asked the Commission to allow the flow-on and was knocked back -- in a decision delivered eight months late -- on the grounds that a flow-on could technically breach the wage indexation guidelines. The company paid the rise anyway, pointing out that it was already being paid by Ford and Chrysler. Fraser reacted with threats to cut Commonwealth purchases of Holden cars. This provoked great annoyance among business leaders and the press; the Sydney Morning Herald thought it was not very constructive for the Prime Minister to “attack others for breaking down wage indexation when his own government's policy means the effective end of indexation.”
A similar dilemma faced the conservative government of NSW. In an effort to block “sweetheart agreements” in which employers and unions sought to by-pass the indexation guidelines, the Lewis government decided to challenge a $19 rise that had been granted to nurses by the NSW Industrial Commission. There was such widespread sympathy for the nurses that Justice Dey, who had originally awarded the rise, remarked that “the cost of placing the salaries of nurses at a reasonable level is something which the conscience of the community must face.” A mass meeting of 1600 nurses voted for rolling stoppages along with a series of bans, then marched to Parliament House where they sat down in the street before establishing a permanent vigil. The speaker of the Legislative Assembly later refused to allow them to take shelter from a rainstorm on the Parliament House veranda lest the next step be “the equivalent of Aboriginal tents on [the] front lawn”. This was a sign that the government was out of touch. Public outrage over the NSW government's penny-pinching probably contributed to its narrow defeat at the polls in May.
The conservative forces had promised administrative measures to curb “union power”, but this too would not be easy. During the election campaign Malcolm Fraser had talked about controlling militant unions by imposing secret ballots in elections for official positions, and by creating a sort of industrial police force. Coalition policy declared that industrial action for “non-industrial” purposes was illegitimate -- a formulation directed against political strikes -- and provided for a “third arm” of the conciliation and arbitration machinery called the Industrial Relations Bureau. The IRB would investigate breaches of industrial law and bring them before the industrial court. The penalties (or in Fraser's preferred terminology, the “consequences”) could include deregistration, seizure of funds, fines or assistance to people wishing to claim damages.
These proposals sounded ominous, and Victorian Meatworkers' Union secretary Wally Curran was not alone in warning that “the government was more concerned about trying to break the power of the trade union movement than the actual state of the economy.” He added that Fraser “wanted to pull on a confrontation as a threshold to the introduction of new industrial legislation.”
Between the pay disputes, the IRB and constant speculation about the future of Medibank, the industrial temperature rose steadily. And if unionists like Curran thought Fraser was spoiling for a fight, observers on the political right made the same charges about the unions, especially those with left leaderships. The Bulletin's Joe Manton wrote:
Already the left is searching for the right issue to “go” on. Interference with Medibank and a heavy handed portrayal of Fraser's arbitration clauses as “penal clauses” have both been given a run over the holiday period … Sooner or later, the left can be expected to make its run, probably not until later in the year.
Conspiracy theories about the trade union left had been a common theme of both Liberal and Labor politicians in the preceding year or two, and would reach a new intensity during the Medibank dispute. It was true that while most unions expected a fight, the centre and right were less enthusiastic about the prospect than the left. Organised labour was no more monolithic than its opponents. Bob Hawke, for his part, sought from the start to find some sort of accommodation. His election night TV comment was that while 1976 would be a” difficult year”, the unions would accept the election result: “The will of the people will be respected.” A day later he said he would meet with Fraser, “and I would hope I could persuade him of the stupidity of some of his industrial programs.”
There ensued a period of detente at peak level. On 16 January a meeting of employers, unions and the federal government decided to set up a consultative committee and hold a special conference on the Prices Justification Tribunal. Though Fraser had vowed to scrap the PJT, he knew the employers were no longer concerned by it -- if anything, they were growing fond of it. (The Age would later report that “the main push for retention of the Tribunal has swung around from the unions to employer groups.”) Therefore Industrial Relations minister Tony Street indicated it was now negotiable, seeing it as a relatively painless concession to make to Hawke in exchange for his help with more serious issues.
Hawke's conciliatory approach was supported by key Trades and Labor Councils, but the industrial left was less impressed with the Hawke-Fraser rapprochement: the pair looked all-too chummy in their joint photographs. Plain-spoken Norm Gallagher of the Builders' Labourers' Federation accused Hawke of “pussy-footing”. Twenty-two Victorian Socialist Left unions issued a statement describing the government as illegitimate and the PJT as being of “doubtful importance”. They wanted no industrial peace conferences:
The talks for industrial peace are aimed at establishing social contracts which are little more than no strike guarantees in return for talks about wages. As well, Mr Hawke seems to have forgotten the ACTU Executive decision of November 25 which heartily condemned Liberal/National Party industrial policies.
A federal caucus of left unions also took a fairly hard line, with Pat Clancy of the Building Workers' Industrial Union declaring: “If the ACTU and State Labor Councils don't want to engage in industrial action … we will.” Even within the left, however, there were differences. The Victorian unions were significantly more militant than the forces Clancy represented. There was also a layer of shop stewards and rank and file activists, some of them politically oriented, which was more militant still. On the industrial right, too, some unions like the Storemen and Packers were capable of very effective strikes while others lived off crumbs from arbitration. A confrontation with Fraser would quickly expose these factional divides.
When the confrontation came, it would not be about the Industrial Relations Bureau. Though the spectre of an “industrial police” haunted the unions for several years, it proved impractical. The 1969 Clarrie O'Shea battle had shown this was one issue that could unite officials of right, left and centre unions, and Bob Hawke probably convinced Tony Street of this in their first discussions. Government members were soon telling the press that “there are problems with the feasibility of the policy”. Finally on 23 June, Street indicated in a speech to the Economics Society that the IRB was to be indefinitely shelved. He said there were “quite severe limitations on the Commonwealth Government in this area, and we have frankly found great difficulty in defining the role which the third arm might play.” The IRB was finally established in 1977 but never did much.
Fraser and Street also had trouble with their plans to regulate union elections. Fraser had said he hoped his proposals would get rid of Communist union leaders such as Laurie Carmichael and John Halfpenny of the Metal Workers, arguing that low voter turnouts in this union meant its leadership was unrepresentative. Halfpenny retorted that Fraser was out to “destroy the union movement as the independent voice of Australian workers”.
The term widely used for the Fraser plan was “compulsory secret ballots”; however as the Sydney Morning Herald reported in April, “a wide canvas of unions this month failed to reveal any of them which elected their officials by non-secret ballots. Therefore, while some may have misgivings about the methods used, it is pointless to argue that union ballots are not secret.” The genuinely new proposal was that all ballots be conducted by the Commonwealth Electoral Office, with election rules under its administration. Watersiders' federal secretary Charlie Fitzgibbon, by no means a left winger, identified unions' key objection to the plan: it would “give complete control of trade union ballots into the hands of the government. It means the ballot will no longer be the property of the union members.” Many in the industrial movement feared Fraser would be able to rig election results to suit his own ends.
But here too, the proposal was not as radical as it seemed. There were already provisions for ballots to be conducted by the Commonwealth Industrial Registrar upon a petition of 1000 members or 10 percent of the membership, or the Commission could order a ballot in disputed cases. Moreover there was a trend for unions to use these avenues voluntarily, as the service was free. On the other hand, in the Waterside Workers' Federation, the Fraser plan would have meant a lower return, for the WWF had long used compulsory voting at its own polling stations and achieved returns up to 92 percent. That hadn't stopped Communists from winning office. Then there were the Federated Clerks, whose collegiate voting systems had served to keep arch-right wingers in office. They, too, opposed the Fraser plan.
More sophisticated voices among the bourgeoisie recognised that union militancy wasn't a simple reflex of political ideology. The Sydney Morning Herald said for example:
Anyone who believes that the ousting of Communist officials from unions will automatically stop strikes should study present industrial unrest. The three biggest disputes -- in the wool industry, airlines and NSW public transport -- involve unions which are not Communist controlled or influenced, or particularly left wing.
Finally there was the irritating fact, which Bob Hawke helpfully pointed out, that holding more government-run elections would increase the budget costs Fraser was keen to cut. In May the government retreated at last: it would merely require that all union ballots be secret. Thus neither the IRB nor control of union ballots could provide the spark for industrial confrontation, but other issues were not in short supply. The most emotive of them all was served up in the government's autumn mini-budget.
Storm over Medibank
When Treasurer Lynch brought down an economic statement on 20 May, Hawke startled Labor supporters by describing it as “good in parts”. He had in mind the introduction of tax indexation. But most union militants thought Bill Hayden was right to call it a “horror budget in the worst Liberal tradition.”
While the package did increase child endowment, reflecting a traditional conservative stress on the family, that was really the only positive aspect. Tax indexation was part of a wider framework which, on the government's own estimates, left 57 percent of taxpayers worse off, including large sections of the working class. Among other regressive moves the dole, sickness benefits and various pensions became taxable. Moreover, Fraser intended tax indexation to be a discipline on the public sector: by holding revenue down he would force departments to cut programs.
These were controversial measures, but the greatest attention focused on the changes to Medibank. Lynch announced a 2.5 percent levy on taxable incomes to finance the scheme, though pensioners and low income earners would be exempt. Most importantly, you could opt out and use private health insurance, and it was clear that under the Fraser plan, a large section of the population would find it cheaper to leave Medibank. The government itself expected about half of all taxpayers to opt out. The basic principle of the Medibank scheme -- universal health cover -- was being undermined as an initial step towards its complete abolition.
Health policy had long been a battleground, and attempts by successive governments to get some control over doctors' fees and medical benefits had foundered in the face of powerful medical lobbies. In the postwar era, health cover had been the preserve of private funds, some controlled by doctors. However from the late fifties these funds had found an increasingly powerful critic in Gough Whitlam. Whitlam proved that the funds were wasteful, not to say irresponsible (in 1967 it emerged that a major NSW fund had bought an aeroplane for its chief executive). The Labor leader hammered the fact that a sizeable minority of the population, many of them living in poverty, were without health cover. As Labor fine-tuned its Medibank concept, Whitlam laboured tirelessly to win the public. The ALP carefully explained the policy before and during its term in government, and this painstaking preparation made the scheme harder to kill than the doctors or the Liberals anticipated.
The medical lobbies had fought the scheme with a single minded fury. Some health funds had even used contributors' money for political propaganda. In the Senate, the Opposition twice rejected Whitlam's enabling Bills; he could not implement Medibank until he called a double dissolution, won a second election, and forced the Bills through in a joint sitting. Even then the conservatives cynically rejected his proposed 1.35 percent tax levy to fund the scheme, forcing further delays while arrangements were made to finance it from general revenue. Medibank only commenced on 1 September, 1975, less than three months before Whitlam's fall. And even after that, doctors' boycotts gave it a rough passage.
Once Fraser took power the anti-Medibank forces were anxious to wreck it as quickly as possible, for the simple reason that it was rapidly proving a success. In January 1976 the Financial Review outlined its achievements after only a few months, while explaining that many weaknesses were only teething problems. Medibank had “reduced the personal cost of health services for many Australians, as well as ensuring that all, and not just those who take out private insurance, are covered for illness. It has also led to quicker processing of medical benefit claims …“ There had been some confusion in the early stages, and some abuses, but the confusion owed much to the unexpectedly high volume of claims, and the scheme's administrators were doing “considerable legwork” to detect abuses.
Even the doctors seemed to be winners. Their boycott of the hospital side of Medibank in NSW and Victoria had forced patients from public wards into private and intermediate wards, where they paid fee-for-service. Outpatients were forced to visit specialists in private consulting rooms. Meanwhile the practice of bulk-billing was slowly gaining in popularity among the medical profession.
But if the doctors were doing well in the short run, their organisations feared the longer-term consequences, because Medibank's universal computer files held out the prospect of full accountability by doctors to government. At the same time, bulk billing allowed governments to control fee structures. If bulk billing became common, the government-set rebate would virtually become the fee itself. Consequently the doctors, and alongside them the ideological forces of free-market Liberalism, developed a sense of urgency. Quadrant warned that Medibank would “largely destroy the private practice of medicine and therefore the private doctor. Doctors will increasingly become salaried servants of the government, little stooges of the state while the Medibank bureaucrats will steadily move into the field of controlling diagnosis and treatment.”
On the other hand some sections of business opposed the attacks on Medibank. Not only were there employers who saw long term benefits in having a healthy workforce, but others had gained more directly from the scheme, for example the OPSM eye care chain which profited from a surge of people seeking eye examinations. On the negative side, the employers were uneasily aware that the unions might press them to pay their employees' levy. The State governments -- even those of conservative bent -- were also less than enthusiastic about Fraser's plans, because the assault on Medibank came together with his “new federalism” under which they were to be starved of hospital funds. Thus Fraser was by no means assured of victory.
The unions mobilise
Many activists in both the industrial and political wings of the labour movement felt this was a battle they could and must win, so by the start of June the union leaderships were under growing pressure from their members to do something. The Queensland TLC urged the ACTU to take “vigorous nation-wide action” to resist any changes to Medibank, while its South Australian counterpart demanded a 24 hour stoppage. In Victoria, Left officials declared that “rank and file support was greater than in the 1969 battle for the repeal of the penal provisions” and a meeting of about 30 Victorian left unions took an uncompromising stance. Under their prodding the Victorian Trades Hall Council (THC) announced proposals for a four hour strike, to be presented at a shop stewards' and job delegates' meeting on 9 June.
But it was the workers of the NSW South Coast who made the first important move. This was a militant area. Labor Council secretary Merv Nixon was a Communist, while the President of the Port Kembla wharfies, Stewart West, was an ALP member who regarded the Communists as too moderate. On 26 May the South Coast TLC called for delegates' meetings as well as lunch-time meetings on the job. Delegates voted by 426 to 17 for a 24 hour stoppage, to be backed by a march and rally “incorporating the public, pensioners, housewives, etc.” Australian Workers' Union delegates from the district followed up this decision the next day by visiting a meeting of the NSW TLC in Sydney, where they argued unsuccessfully for action. Meanwhile miners' pit-top meetings not only backed the district stoppage but demanded more resolute leadership from Bob Hawke.
On 7 June some 40,000 workers throughout the district struck for the day. Thousands assembled outside the Labour Council building then marched to the Showgrounds, where they endorsed a second delegates' meeting to “determine further sustained industrial action in this district next week”. The only serious weakness was in the railways, where key unions had pulled out of the stoppage. Even so, engine drivers at Thirroul decided to halt more than a dozen local services and three Sydney trains.
The strike showed the strength of local militancy, and also had a certain impact further afield. Delegates at subsequent meetings in Melbourne showed considerable interest in the news from Wollongong. But a small district could not maintain this momentum on its own. While local officials attempted to form links with the Victorian left unions, even participating in a phone link-up with one of their meetings, developments in NSW, or rather the lack of them, inevitably weighed more heavily on the minds of South Coast workers. The passivity of the NSW TLC, together with Bob Hawke's reluctance to back industrial action, discouraged them. They were reluctant to be “one out” if the wider union movement was holding back.
On 16 June, less than 100 people turned up at a public meeting intended to revitalise the campaign. ACTU vice-president and Victorian left official Jim Roulston declared bravely from the platform that “there can be no truces with the Fraser Government. We can't turn off the campaign to save Medibank,” but there was no further industrial action on the South Coast until July.
In early June, however, when Wollongong first swung into action, the industrial momentum was still growing nationally. Counter staff at post offices voted to ban literature explaining the Medibank changes, forcing the government to hunt for alternative outlets. At this time Fraser also came under attack from another quarter, and an authoritative one. The chair of his own Health Commission, Dr Richard Scotton, slammed the government for “loading the dice” against Medibank by ensuring it was unable to compete against the private funds.
Scotton was not really saying anything new, since a report by Dr Sidney Sax of the Medibank Review Committee which had been leaked on 2 June began with the words: “People are to be encouraged to insure privately. The encouragement will take the form of subsidies …” However the mounting pressure was enough to force Fraser into an embarrassing retreat: Medibank would be allowed to compete with private health funds in the sale of intermediate and private ward insurance (this was the origin of Medibank Private). The changes came only 10 days after publication of 1.4 million government pamphlets, explaining the first round of changes. These pamphlets were now so much waste paper.
The unions saw the changes as trivial, because the way was still open to force large numbers of people out of Medibank. But they were a sign of weakness on Fraser's part, and brought down on him the wrath of the private funds, who complained of a “blatant move to placate union pressure”. To the general public their greatest impact was to increase the already widespread confusion about just what the government intended. Fraser was stumbling on every front. While the ALP leaders had run to the ends of the earth to avoid a confrontation -- Whitlam was in Scandinavia and Hayden was in Japan -- the organised working class was showing immense determination, and at this point it seemed that a concerted union offensive could defeat the government. In The Age Claude Forell declared:
Something startling and significant happened this week in Australian politics and its full implications have yet to be realised. The trade union movement has become the effective opposition to a government whose authority and arrogance had seemed invincible.
As Forell wrote, the industrial ferment was about to rise further. On 9 June, 1500 shop stewards and job delegates packed Melbourne's Dallas Brooks Hall for a crucial meeting. By this time it was clear to everyone that the Victorian unions would be the locomotive for any anti-Fraser offensive. Under these circumstances the four-hour strike proposal put forward by Trades Hall appeared utterly inadequate to a large section of the meeting -- yet the left unions continued to back it, with John Halfpenny lining up with the conservative Council secretary, Ken Stone. A Communist Party leaflet distributed to arriving delegates called on them to “vote for action”, but specified none. It seemed the four-hour proposal might triumph by default … but there was one alternative. A leaflet signed by a collection of shop stewards and circulated by the International Socialists demanded a 24 hour stoppage, and called for weekly stoppages in every State as a move towards generalised national strike action.
When Max Costello, an I.S. member and Technical Teachers' delegate, got a chance to move the proposal he won an overwhelming endorsement. Few workers wanted to trifle with a four-hour stoppage when they were offered something more meaningful. “The mood was very angry,” Costello later told me. “Whoever got up and moved for stronger action, it was going to get carried.”
The delegates returned to work looking forward to the 24 hour strike. But there was alarm in the workplaces the next day, when they learned that the Trades Hall Executive was deadlocked eight to eight on whether to proceed with it. Two days later the alarm gave way to outrage after the full Council voted to stick to the original four-hour proposal, with mass meetings of strikers to be held at Festival Hall and suburban venues.
The militants were beside themselves. The I.S. rushed out leaflets overnight to the doorsteps of key shop stewards. Partly because of this agitation, telephone calls began to pour into union offices. By the time the stoppage took place on 16 June, the left union leaders had recognised that the mood was hardening, and that they risked being outbid by the tiny forces of the revolutionary left. They made an abrupt left turn.
Whereas at the Dallas Brooks Hall meeting, John Halfpenny had been aligned with Ken Stone, now he appeared before 6000 angry strikers at Festival Hall as the vengeful champion of the militants, taking the floor himself to demand the 24 hour stoppage go ahead. The unions, he declared, would not allow the “rape of Medibank and of our living standards”. Max Costello, moving a slightly different proposal, was heard respectfully, but he had suddenly become irrelevant. There was still plenty of rank and file anger though: at one stage a nurse snatched the microphone from Halfpenny's hand to address the crowd. The meeting's message for Bob Hawke, said The Age, was that:
there will be no compromise or bargaining with the government on matters of principle, and Medibank is the top priority. Mr Hawke will have to fight for the protection of the original context of the scheme -- that those with greater ability to pay should foot a bigger share of the national health bill.
Seeing the strong rank and file response in Victoria, some key federal unions announced their own plans for a national stoppage. However by this stage, a combination of bureaucratic inertia and clever manoeuvring by Hawke was beginning to turn the tide against the militants at the national level.
The movement declines
Hawke had announced as early as January that some sort of Medibank levy might be acceptable, and eventually the ACTU settled on proposals for a smaller across-the-board levy similar to that envisaged by Whitlam. The ACTU plan would have preserved Medibank's universal coverage and was also more equitable, but it was a second-rate compromise just at the point when union activists wanted to charge ahead. At a time when Fraser was being attacked in the media for the confusion he had created, the ACTU had an opportunity to stand firmly on the simple principle of defending an existing and popular scheme. Instead, workers saw their leaders endorsing a new tax by the Fraser regime.
If the militants found this discouraging, they were just as unhappy about Hawke's delaying tactics. On 22 June he persuaded the ACTU executive to postpone any decision on a national stoppage until a special unions' conference in July. By now it was clear that Hawke's objective was to contain, and eventually suffocate, the industrial struggle. Following the executive's non-decision, many unions which had announced national actions rapidly retreated. The Victorian unions went ahead with their 24 hour stoppage, which was effective in halting production for a day: trains and trams stopped, factories closed, there were severe power cuts and television viewing was restricted. The industrial movement had shown it had the power to challenge the government. Yet at this very point Victoria's left union officials showed clear signs of waning enthusiasm.
They called no rally on the strike day. To workers and students accustomed to meetings or rallies on any such occasion, this came as a disagreeable surprise, one so unexpected that hundreds of people gathered spontaneously in the City Square, looking for a demonstration. That they actually found one was due to the intervention of the same two small, rival radical groups who had initiated a breakaway march during the Constitutional Crisis. The Maoists, who had a presence in some hospitals, organised a Healthcare Action contingent with a banner, while the I.S. arrived with sound equipment in the expectation that a crowd would gather, and Phil Griffiths spoke to the gathering about the health needs of “meatworkers who get their fingers chopped off”. While the I.S. controlled the platform, their Maoist rivals led the subsequent march along Bourke Street with a banner reading: “Defend And Extend Medibank”.
Hawke had managed to confine the struggle largely to Victoria along with militant enclaves such as the NSW South Coast and the maritime industry, the Victorian left officials led by Halfpenny had been inconsistent at best, yet still the movement lived and breathed, and Fraser had not made enough concessions for the ACTU to end the stand-off without a massive loss of face. With immense reluctance, Hawke and the more right wing union bodies moved towards a general stoppage. The special conference, attended by 129 federal unions, set it for 12 July.
Meanwhile the extraordinary confrontation over Medibank had sparked a furious public debate over the rights and wrongs of political strikes. The Age editorialised against them. John Halfpenny replied forcefully:
On each occasion when trade unions have taken action on a political or social issue they have proved to be acting in the best interest of the majority; not always the majority in society, sometimes the majority directly concerned with a decision by government or industry. Trade union green bans have saved much of our national heritage. Union bans saved the Regent Theatre. Union involvement helped get Australia out of Vietnam … Employers make decisions and take actions in the privacy of board rooms which have a vital effect on our environment, the economy and the welfare of thousands of people. Their right to make such decisions regardless of the consequences is seldom challenged by the politicians, employers or the media.
The capitalists replied, but mostly in ringing cliches. Ian Spicer of the Victorian Employers' Federation asked: “Who Runs The Country?” and cited a long list of recent political strikes -- as if you could discredit a tactic by proving that it was used a lot. Spicer did identify the fears haunting the employing class: that a state of affairs might arise where “it would be necessary for a government to seek trade union approval before being able to implement the policies on which they were elected. Obviously that system could not be tolerated.” This prospect did not seem so intolerable to unionists, however, particularly those who recalled that Fraser had been elected on a policy of preserving Medibank.
The unions' critics may have felt they didn't need sophisticated arguments, since they were virtually assured of dominating debate in the press. Apart from the fulminations of the Murdoch tabloids (culminating in the Daily Mirror's classic “Killed By Medibank” front page of 19 July) and talk of “union fascism” in the Bulletin the anti-strike agitation dominated the letters pages of the “quality” dailies.
There were initial calls for workers to “tell their union leaders that they want no part of political strikes”, but such appeals seemed to be falling on deaf ears as more and more unions announced their support for a national stoppage. The letter writers then offered a range of explanations. They castigated the efforts of union leaders to “make union members strike when they do not wish to strike”, but also the sloth of the rank and file, who went on strike to get “another long lazy week-end”, and who were anyway so stupid as to be “led unthinkingly and sheep-like to yet another economic precipice in order to force a purely political issue.” This oafishness was alarming, as a long lazy week-end would apparently “precipitate economic chaos”, indeed “possibly death could occur”. To forestall disaster, one man fortunately had the perfect solution: “For their next training exercise some Israeli commandos should make a raid on July 11 on the communist terrorist offices of the ACTU …” (*)
Actually there was considerable debate within the union movement, resulting in some major divisions. For reasons never satisfactorily explained the NSW branch of the Australian Workers' Union held its own, separate 24-hour strike on a different day during which branch Secretary Charlie Oliver, the classic right wing machine man, told a small indoor rally that Bob Hawke wasn't militant enough. A general meeting of Tasmania's Shop Assistants' union adopted a more typical right wing stance, voting to reject “attempts by the extreme left wing elements in the trade union movement to enter into bans, limitations and stoppages on political issues”. Under pressure from the “Shoppies”, the State's right wing Labor Council decided to limit its Medibank action to “cooperation with the dissemination of literature”.
Nonetheless about 25 Tasmanian unions joined the national strike and shut down much of basic industry. Meanwhile the white collar unions' national peak body, ACSPA, unanimously recommended that its 37 affiliates join the national stoppage. The great majority of active unionists around the country backed the strike, so that it was exceptionally empty rhetoric for Tony Street to blame the unrest on “extremists” and to claim that “hundreds of thousands of workers are bitterly resentful at being forced to strike for political purposes”. Even the most apathetic strikers were unlikely be resentful, both because of overwhelming support for Medibank itself and because the national strike was only for one day -- on a Monday in fact, creating what did amount to a “long lazy week-end”.
This holiday atmosphere was the ultimate Hawke tactic. Unable to prevent union militants winning mass support for the idea of a general strike, the ACTU leadership chose to embrace it, then gut it of all political content. Most of the officials were prepared to go along with this. A group of health workers complained that “when the general strike was called, they seized on the exemption of medical services and directives were given not to strike. No meetings were called before or on the day … except where job delegates took their own initiatives.”
In the days immediately before the stoppage, as unionists began to grasp the bureaucratic nature of the exercise, a general air of passivity spread through union ranks. An AMWU delegates' meeting I attended in Sydney captured the mood very well. Delegates complained the national stoppage had been called and run bureaucratically; they supported the strike but saw it as an unnecessarily top-down affair. When Janey Stone, a socialist and shop steward at STC Alexandria, called for a rally on the strike day, the officials simply replied it would be “a flop”. The delegates, feeling this assessment was all too accurate, showed little interest in a rally. This helps explain why although there were small demonstrations in capital cities, involving mostly students, Hawke had little difficulty ensuring no significant gatherings of workers occurred.
Thus in place of the scenes of angry strikers one might have expected, the television coverage of the event showed no workers at all -- the rank and file had become invisible. Rather there were endless shots of Bob Hawke playing tennis. Hawke told the media further strikes were unlikely, and few doubted that this was true. The historic event had been turned into a huge, yet harmless, safety valve. For the second time in seven months, Hawke's foot dragging and sabotage combined with the fatal caution of Victoria's left union leaders, had succeeded in dissipating a challenge to Malcolm Fraser and the employing class.
This experience began to bring home to a wider layer of union activists what a small number had always suspected: for all his bluster, when it came to fundamentals, Bob Hawke was an ally of the Fraser Government. In his book on Fraser in power, War Without Blood, Russell Schneider later described their relationship:
Fraser relied on Hawke's influence and later on his political ambitions to prevent industrial chaos in the country. Their close contact began through Ian Macphee at a time when Fraser was campaigning for the Liberal leadership and Hawke was becoming disillusioned with Whitlam … The honeymoon was public: they could be seen talking together for hours about the state of the nation at the Victorian Football League finals.
Medibank's defenders fought a rearguard action through August and into September. The Federal Union Conference of 5-6 July had asked the ACTU leadership to persist with the campaign after the national stoppage, and while the statement mentioned only “the use of pamphlets and the media” it did offer some scope for a minority of union leaders and activists to continue agitating. Plans for further rolling strikes came to nothing because no union was prepared to act independently of the ACTU, but rallies and demonstrations persisted.
About 1800 members of ten Melbourne ethnic groups assembled at Collingwood Town Hall in August, where Gough Whitlam called on them to “let the Fraser Government know the strength of our anger, the depth of our indignation, at their deception and incompetence.” Bob Hawke was there too, denouncing Fraser's “undemocratic piece of bastardry”, though his only action proposal was to “extend pressure on members of parliament.” In September, again in Melbourne, 3000 people joined a “Medibank moratorium” march, including some builders' labourers and waterside workers who had walked off the job. Even towards the end of the year, a workers' meeting in Wollongong challenged Hawke over his acceptance of a Medibank levy.
The example of workers taking national strike action also had a flow-on effect on campuses, where support grew steadily in September for a national strike called by the Australian Union of Students, against education funding cuts and Fraser's decision to freeze benefits under the Tertiary Education Assistance Scheme. The AUS call followed a successful city-wide campus strike in Brisbane in July. All the campuses were polled, and when voting finished 52 had endorsed the national stoppage, with four against and 18 abstaining. Unlike the ACTU, the students organised sizeable rallies on the strike day. AUS education research officer Mike Gallagher called them the “biggest student demonstrations since the Vietnam moratoriums.” Moreover the actions achieved some tangible results. Six days later the Education Minister, Senator Carrick, announced that tertiary allowances would be raised and made a number of other concessions.
If a failed working class mobilisation could engender such a sequel, we can surmise that a victorious Medibank campaign would have had a much more sensational impact on public consciousness. The fact remained, however, that having defeated the unions at the end of 1975 on the explicitly political issue of who would govern, Fraser had routed them seven months later on the social issue closest to workers' hearts. The danger now was that a debilitating pattern of defeat would become established.
Chasing John and Mal
Yet resistance continued. Although confrontations between the “big battalions” of capital and labour over wages and Medibank began to subside, a guerilla war of sorts continued to rage at stage left -- for virtually everywhere they went, Sir John Kerr and Malcolm Fraser faced rowdy demonstrations.
The fun had begun in Adelaide back in March, when 200 students jeered and heckled the Governor-General as he opened a new college. They occupied the upper levels of the amphitheatre, making such a racket that at times Kerr could only be heard in the front rows. Numerous invited guests had declined to attend, forcing the administration to invite all the staff -- most of whom likewise declined. Kerr said he would not be deterred by the demonstrators' “illiterate stupidity”, but was reportedly very shaken.
A week later 600 students appeared when the Governor-General arrived for a dinner at the Australian National University in Canberra. They blocked the front entrance, obliging Sir John and Lady Kerr to enter through a side door. The dining room had one wall made of plate glass windows so the guests had to eat in full view of the protesters, who pounded on the glass until forced back by police. The protesters, “some drinking beer, said they were not to be outdone by the demonstration by Adelaide students last week.” In May, a crowd forced the Kerrs to enter Perth's Parmelia Hotel through the back door, while Senator Peter Walsh jumped onto his car to call the Queen's representative “a megalomaniac”.
By June, Kerr-baiting had become something of a national sport. His popularity amongst the labour movement had not been enhanced by reports that the extreme right wing League of Rights was campaigning in his defence. When he arrived at a Royal Commonwealth Society function in Melbourne, 700 people blocked his car despite efforts by mounted police to clear a path:
Suddenly a young man jumps on the roof of the Rolls-Royce [and] starts banging the windscreen with a loudhailer. The noise he makes is deafening. A moment later he's lifted from the car roof and appears to vanish in the crowd. Several others throw themselves on the car bonnet.
Two weeks later a 1000-strong crowd awaited Kerr at Leonda Receptions, also in Melbourne. Although a huge police presence kept things more or less under control, guests were harassed on arrival. Even in Bendigo there were angry crowd scenes when the vice-regal Rolls Royce, “still battered and with heavily taped windows from Melbourne,” arrived at a pottery industry function.
Some protests were more genteel, as when Canberra concert-goers hissed the Kerrs twice in one evening, or a group called Society for Asserting the Constitution over Kerr (SACK) appealed for 15 cent donations towards Sir John's “Early Retirement Fund”, but inevitably the demonstrations got more attention. Fears were raised about incidents when the Queen visited in 1977 (“They'll have to round up half the population of Australia to make sure no one is going to throw a stink bomb.”) Two Archbishops warned the unrest could lead to social divisions like those in Northern Ireland. A public opinion poll showed 53 percent of people thought the Governor-General should not resign, but a sizeable 39 percent thought he should. “If two out of every five people think you're a bastard,” wrote Mungo MacCallum, “it's a bit hard to claim the overwhelming support of the silent majority.”
If Kerr was having a hard time, Fraser fared no better when he came to open the Krongold Centre for Exceptional Children at Monash University. 1500 students showed some exceptional talent of their own, sealing off all exits to the Alexander Theatre and forcing the PM to take shelter in the manager's basement office for 80 minutes. Finally, flanked by a column of uniformed and plain clothes officers, Fraser dashed to a waiting police car, which raced from the scene.
The conservatives sought to use the tumultuous protests to put ALP leaders on the spot with a motion to the June Premiers' Conference “deploring violence”. But so strong was the anti-Kerr and anti-Fraser mood among Labor supporters that the three ALP Premiers refused to support the motion, though Bob Hawke and Jim McClelland did call on demonstrators to protest peacefully.
The Kerr issue persisted for years, partly through the man's own doing, as with his “tired and emotional” performance while presenting the Melbourne Cup in 1977. It faded with his eventual departure from the job and the country, but rowdy protests remained a constant feature of the Fraser years, evidence of a country deeply divided. The pleasure of harassing the two individuals might be poor compensation for defeat in more important battles, but at the same time it was a warning that Fraser's enemies were by no means cowed. They hurled flamboyant insults at him: his policies were “Mal-Practice”, his government was “Mal-Functioning”, his promises were (in John Halfpenny's words) “Empty Phrasers”. He was the “Crazy Grazier” and “Mal the Knife”. Eric Bogle sang:
He's our buddy, he's our mate, he's our pal, pal, pal
Ain't we all so lucky to have Mal!
And if Bogle's irony was too gentle for you, you could always join the young demonstrators in the street, chanting: “One more cut -- Fraser's throat!”
______
* The paragraph with an asterisk is a precis from K Windschuttle, “Sir, It's Not Often That I Write, But …”, in K and E Windschuttle (eds), Fixing the News, Sydney 1981, p.109-112.