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Vale Gough Whitlam - last real ALP foe to the Growth Lobby

There had been almost continuous high immigration from 1949-1970 – although immigration from 2009 dwarfs those figures now. Whitlam related population growth statistics to high land prices and the need for more appropriate management of development. Menzies had brought in policies that favoured the private housing industry over the public housing supply. Whitlam would try to counteract this tendency which now drives homelessness and overpopulation.

In 1973 land prices increased by up to 46 per cent in Melbourne and Adelaide and 34 per cent in Sydney. The highest increases were in outer-metropolitan areas where rapid population growth exceeded the supply of serviced blocks. The Whitlam government attempted to establish Federally funded public land development agencies in each State which would "establish a presence in the market sufficient to influence the general level of land prices and the rate of development of particular areas". This was intended to "create direct competition with private developers" "with a vested interest in the escalation of land prices" by "selling to home builders at the cost of production of the block." Whitlam also attempted to stabilise Australia's population numbers and to plan for Australia to become self-sufficient. See the full thesis.

Resistance to Change in the Residential Construction Industry in Australia after 1973

As discussed in an earlier chapter of Sheila Newman, The Growth Lobby and its Absence in Australia and France (2002)23, Australia had been unable or unwilling to educate and train enough skilled tradesmen. 1 Greater funding and access to education and training were particularly important if the building industry was to change its boom and bust approach to business. The Whitlam Government's policies to improve access to training, combined with urban planning innovation, might have improved this situation, by producing skilled building workers for Australia. Like the French, Australians now had access to free tertiary education and technical and further education and training. This was a revolutionary policy, for, with the Whitlam government's plans for reducing immigration and the Commonwealth funding the States to buy up land cheaply, there would not have been the same opportunities for private speculation. This would have created pressure on the industry to change. With better skilled workers, however, the building industry would have had a greater chance of achieving modern restructuring, which would have assisted its adaptation to new conditions.

Anti-speculation Innovations attempted under the Whitlam Government : the Department of Urban and Regional Development (DURD)

Whitlam writes at some length on these issues in his autobiography and in this, as in immigration, he favoured consolidation over growth.  2 The Department of Urban and Rural Development (DURD) was created under Whitlam and was the first federal department of its kind. It was meant to be virtually co-equal with treasury, dealing with the urban budget and co-ordinating departments with urban responsibilities, but competition and tradition within the public service hampered its function. 3

Whitlam believed that consolidation of urban development through better planning and services required more Federal intervention, since the Commonwealth Government had more tax funds at its disposal. He believed that part of the problem of high land prices and inappropriate developments had come about through urban planning being a responsibility of State governments. 4 He also observed that "Government programs for housing renewals swim against the tide of private urban development. In the private housing market the greatest profits are made on the urban fringe".

In his opinion, urban redevelopment of depressed inner city areas would be greatly facilitated by Commonwealth grants for this purpose. He deemed that public acquisition of development land is necessary not only to reduce land prices and provide competition for private developers, but to ensure the orderly and comprehensive development of large areas of land. He was concerned at the sacrifice of previously designated green belts and the environmental and social costs this entailed. It was debatable, he wrote, whether the land should thence be returned to private ownership, but good initial development relied on public participation. 5

He commented that land speculation had been allowed to run unchecked as private developers held the supply of land constant so that its price would increase. He wrote that during the 1960s the average price of land in Australia had increased by 182 per cent. He attributed these characteristics of the Australian housing industry and market to the ideology of previous right wing governments. 6 He also commented that planning was fragmented at State level between various isolated concerns such as education, electricity supply and water supply etc., which used Commonwealth loan money for State and Local Works, with little reference to State and local planning agencies, which were often staffed by innappropriately qualified persons. 7 He also attempted to introduce a capital gains tax on profits made through land rezoning. 8

He deplored the premature development of suburbs like Blacktown and Green Valley in New South Wales, attributing to them later severe social problems, including unemployment (through simple inability due to distance and transport problems of employer to access employee and vice-versa), delinquency and criminality. Blacktown, he explained, had been developed by private developers on the fringes of the city because costs of development were lower there than in land available and zoned for future development closer to the city. Blacktown lacked adequate sewerage, paving, drainage, public transport, shopping amenities and schools and jobs. Green Valley was a public housing estate that had also been built on the fringes of Liverpool. Although this estate contained 20 per cent more blue-collar workers, 50 per cent less white-collar workers, and 15 per cent more children below the age of 16, and lower ownership of private transport than the national average, it was five kilometers from the nearest railway station, had no proper bus service, and was a long way from the location of jobs. 9

There had been almost continuous high immigration from 1949-1970. In his book, Whitlam constantly relates population growth statistics to high land prices and the need for more appropriate management of development. In 1973 land prices increased by up to 46 per cent in Melbourne and Adelaide and 34 per cent in Sydney.10 The highest increases were in outer-metropolitan areas where rapid population growth exceeded the supply of serviced blocks. The Whitlam government attempted to establish Federally funded public land development agencies in each State which would "establish a presence in the market sufficient to influence the general level of land prices and the rate of development of particular areas". This was intended to "create direct competition with private developers" "with a vested interest in the escalation of land prices" by "selling to home builders at the cost of production of the block."11

This was of course the long-standing policy of the French government.

The success of these policies was patchy,12 mostly due to opposition from institutionalised vested interests. A South Australian land commission was created in 1973. In New South Wales (March 1975), Victoria (May 1975), and West Australia (May 1975) Urban Land Councils, with inadequate statutory authority and which were obliged to go through other State authorities were created. Queensland was in the process of confirming an agreement to establish one when the Whitlam Government fell. Tasmania reluctantly established an Interim State Land Co-ordination Council in October 1975, which never met.13

Whitlam compares the impact of the powerful land commission in South Australia with the relatively impotent urban land council in Victoria. The South Australian commission received a total of $28.8 million from the Whitlam Government and $4 million from the Dunstan State Government and acquired 1920 ha of urban land, 1094 ha of rural land and 654 ha of non-urban land between 1973 and 1976. By 1977 it was providing 70% of new residential allotments. According to Whitlam this kept land prices down and guaranteed better land development and planning.14

The situation in Victoria was much different. The Urban Land Council there only marginally affected land prices, according to Whitlam. He also writes that the Council only purchased land when demand was low, which helped out developers who could not otherwise have capitalised on this land and therefore maintained high land prices. Furthermore, the Land Council resold the land to builders at close to market prices. (We need to remember that in the Australian system developers and builders are usually separate concerns, with the former generally much better financed than builders and the latter working on very small profit margins, due to the initial cost of land bought from developers.) Whitlam's observation is that the Victorian Liberal Goverment (and the New South Wales and Western Australian governments) acted in accordance with the private land market and against the public interest. He provides evidence that, using public money, the Victorian Housing Commission purchased land at well above market price in 1973 under the Minister for Housing in Victoria, Vince Dickie.15

The Hamer Government in Victoria achieved another remarkable feat, which has not received any critical comment, to my knowledge, although it has been recently documented in Australian immigration literature. This was the successful passing of an amendment to the Local Government Act whereby non-citizens became eligible to vote on council elections and to run for local government election.16

Leonie Sandercock was moved to write a book about the corrupt Victorian Housing Commission, which engaged in land speculation under the Hamer Government in Victoria :

"... the VHC [Victorian Housing Commission], as much as any private speculator, assisted in the maintenance of the land boom in Victoria by paying to other speculators urban prices for land which was at the time of purchase zoned as farming land, thereby contributing to land price inflation and making it more and more difficult for low income workers to enter the land market, and thereby adding clients to its own waiting list. And this amazingly counter-productive policy was pursued because the State Government, at a Cabinet meeting on 16 July 1973 (after six months' concern at the likely consequences of the establishment of a land commission on the Victorian land market), decided to try to pre-empt this Federal program by allotting to the VHC the role of land banking and development."17

These and other speculatory activities under the Victorian government resulted in an Inquiry and criminal proceedings, and such was the extent of this land speculation that it impacted on the Federal Liberal government that followed on from Whitlam's and resulted in the removal of Treasurer Lynch in December 1977.18 This is ironic because it was Lynch, whilst in opposition, who had instigated the events that led to Whitlam's fall from government. One cannot help but wonder if this was pure coincidence or if Whitlam's strategies to frustrate land speculation, combined with his policies reducing migration, had not significantly added to the number and dedication of his enemies in the Victorian Liberal Party. This would be a very interesting and difficult object of future study but is not within the purview of this thesis.

If Whitlam's land development and housing reform strategies had succeeded, in combination with much reduced net immigration and, arguably, policies for lower energy use, it seems likely the housing industry in Australia might have adapted to a much lower rate of population growth and household formation. However these measures were doomed, along with the Whitlam government.

Leonie Sandercock, in her close analysis of the subject in the Transaction edition of Property, Politics and Urban Planning19 with hindsight almost concludes that the Australian State based political system may make it impossible to reform land speculation traditions. She nevertheless concedes that Whitlam did succeed in influencing State Labor governments, although he failed with State Liberal governments. She also allows the possibility that Whitlam might have succeeded in establishing greater long term changes if the economic problems of rising unemployment and inflation had not undermined the government's ability to finance these changes and if the government had not been brought down. Her introduction to the Transaction edition is of documentary interest in its own right, if you depart from the premise that the she is revising a book that was written on the cusp of an era of great social and environmental optimism and confidence, just as the global effects of the oil shock related world recession had taken hold of Australia.20 Her concluding paragraph is poignant:

"If the left is to put its energy behind practical reforms of this kind, it will need to redirect its thinking away from grand schemes based on the premise that capitalism is about to collapse ... Now that the prospect of a continued, unlimited increase in material wealth has faded, we need more than ever a worked out conception of the good society - that is, an ideological stand - if we are to discuss policies intelligently.21 [My emphasis.]

In this section we saw how Labor, under Whitlam, attempted to curb land and housing speculation. The success of these innovations was limited by external events, the short life of the government, and institutional resistance by those with focused benefits in speculation. If Whitlam's innovations had succeeded, along with the maintenance of low net overseas immigration, according to my argument, then we might have seen a similar picture in Australia to the one in France in Figure 7.3. That is, there might have been a similar huge drop in the number of property development and building companies, to the extent that their ultimate regrouping would have been as a much smaller and more efficient sector, with substantially modified technologies, modes of production and organisational forms. According to this argument, the industry would thereby have lost its dependence on high immigration and a major immigrationist force in Australia would thus have become spent. Without the traditional recourse to population pressure and population competition to drive up land and house prices, property inflation and prices would have become substantially lower. Money might have been invested in new industries. The long-term demographic outlook of Australia might have been stabilisation at a smaller population.

In fact, the property development and building industries did go through a doldrums between 1974 and 198622 and these doldrums did coincide with a net fall in overseas immigration between 1972 and 1979.

In the end, however, Fraser reversed Whitlam's innovations and there was ultimately a return to high immigration. This, plus progressively more liberal access to foreign capital, progressively more banking deregulation, and progressively more globalisation of the property market, under successive governments, seem to have restored the old speculative system in good health. I will introduce these changes in the next section and then go into more detail about their nature and impacts in Chapter Eight.

NOTES

1.↑ Robert Birrell and Tanya Birrell, An Issue of People, Population and Australian Society, 1987, op.cit., p.68. In 1966 2.8% of overseas born males had degrees, compared with 2.4% of Australian born males. 16.5% of overseas born males had completed secondary school whilst only 7.8% of Australian born had.

2.↑ Whitlam, The Whitlam Government, op.cit., Chapter entitled "The Cities", pp. 371-405. Although I will go on to derive a great deal of my information from Whitlam's autobiography, his account is corroborated by a number of authors on the issue of urban development planning. Leonie Sandercock has specialised in this area and in Property, Politics and Urban Planning,Transaction Publishers, New Jersey, USA, 1990, "Introduction to the Transaction Edition", p.13-20, gives a review of the literature that analyses the fate of Whitlam's urban planning initiatives.

3.↑ Whitlam, The Whitlam Government, op.cit., p.382 and Leonie Sandercock, Property, Politics and Urban Planning, op.cit., p.13

4.↑ Whitlam, The Whitlam Government, op.cit., p.373.

5.↑  Ibid., pp.373-375.

6.↑ Ibid.

7.↑ Ibid., p.379-380. "In NSW for instance, the State Planning Authority was established in 1963 with no experts on housing, health, education or industrial development. To plan for five million people it had a smaller staff than Canberra had in planning for its first 100,000 people."

8.↑ Miles Lewis, Suburban Backlash, Bloomings Books, Victoria, Australia, 1999, p. 14. However his government was thrown out before this could be done.

9.↑ Whitlam, The Whitlam Government, op.cit., p 373-375.

10.↑ Ibid., p387-388.

11.↑ Ibid., p388.

12.↑ Leonie Sandercock, Property, Politics and Urban Planning, op.cit., pp.13-16. Here Sandercock makes a critical analysis of the fate of the Whitlam planning innovations and comes to much the same conclusions as Whitlam, although she refers to a number of other sources.

13.↑ Whitlam, The Whitlam Government,op.cit., p.388

14.↑ Ibid.

15.↑ Ibid., p389-90.

16.↑ Mark Lopez, The Origins of Multiculturalism, MUP, 2000, pp 303. Clause 5 of the Local Government Act 1974. Lopez records that this change to the Victorian Act was heavily lobbied by Zangalis and Sgro, who had been denied Australian citizenship due to their communist political beliefs.

17.↑  Leonie Sandercock, The Land Racket, op.cit., cited by Gough Whitlam in The Whitlam Government, op.cit., p.390.

18.↑ Whitlam, The Whitlam Government, op.cit., pp390-391.

19.↑ Leonie Sandercock, Property, Politics and Urban Planning,op.cit., pp.11-20.

20.↑ The first edition of the book she is representing to an American audience in the Transaction edition, was published as Cities for Sale: Property, Politics and Urban Planning in Australia by MUP in 1977.

21.↑ Her remarks remind me of those from a medical practitioner in her 80s, Dr Shirley Francis, whom I interviewed about her master’s thesis on the effects of contraception on the birth rate in a suburb of Melbourne in the 1970s. I commented to her that her thesis was written against a background of the educated middle-class when it was taken for granted that social equity and a clean and biodiverse environment would be given priority and that it was understood that we all lived in a precious and finite world. "Yes", she said, "We must seem terribly naive to people now. Do you think we were wrong?" In fact, perhaps the idealists of the early 1970s were not wrong and it is possible to change Australia's land development practices. Perhaps Whitlam was simply terribly unlucky. What might change things is another crisis, by reducing the high immigration that seems to feed housing demand, in order to permit a sustained challenge to some of our more antisocial land development practices.

22.↑ See my figure 8.1, Chapter 8 and the discussion below it. This figure also gives shows net overseas immigration. Trevor Sykes describes a wave of property crashes in June 1974 and at the start of 1977. See. Trevor Sykes, The Bold Riders, op.cit., p.267. David Hayward, "The Reluctant Landlord", in Urban Policy and Research, Vol. 14., No.1, 1996, p.23, describes the property recession as lasting from 1975-1986. There were however also small peaks in 1976 and 1982.

23.↑ A login account may be necessary to retrieve the pdf file from here. We will ensure that a copy of the thesis pdf file will be made more freely available to all readers in the near future.

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Comments

Thanks for the article Sheila. Gough was arguably Australia's greatest politician and leader, certainly in my lifetime. A man of vision, strength, compassion and humility. Our current crop of would bes and never will bes on tip toes only reach his ankles. Such is life!!

The coincidence that the home where E. Gough Whitlam was born, in Kew, Victoria, was to be demolished the day or the day after Whitlam's death has highlighted an insidious part of the Foreign Investment Review Board set of rules. An article in “the Age today says "The ticking time bomb beneath 46 Rowland Street is a restriction on foreign buyers of established Australian homes, which states they must demolish and rebuild within two years.
Ngara was bought by overseas buyer Youquing Liang for $3.3 million in November 2013, and the new owner has just over a year to level the property and construct a new residence, or face potential difficulties with the Foreign Investment Review Board."
The demolition of Melbourne's built heritage quite apart from any historical significance such as being the birth place of a Prime Minister is of huge annoyance and dismay to local residents. This is what the website of FIRB says "..Foreigners can normally get approval to buy vacant land as long as they start continuous construction within 12 months. Foreigners can normally get approval to buy existing residences for redevelopment- as long as this will increase the supply of housing. As well, the house must remain unoccupied during re-development." Is Gough bringing this to the public mind and having a final say?

I am told from a reliable source that there was a crowd of people at "Gough's house " around 1.30pm today laying down flowers and protesting the imminent demolition. I believe that the Victorian Minster for Planning has now stepped in and the house will not be destroyed.

Ironic that if Gough had set policies for Australia today
(a) built property would not have gone to a foreign buyer
(b) there would not have been incentive to destroy established houses
(c) population pressure would hardly exist
(d) we would not have developers running parliament and changing laws in their industry's favour and against citizens

Pity that Matthew doesn't step in and save homes from the East West Link.

Oh Vale Gough! Vale!

Those, who may have missed the excellent two part documentary broadast on ABC television on Monday 21 October can still watch it on ABC Iview. Episode 1 is here and Episode 2 is here.

The following is a contribution to a discussion in response to John Quiggin's artcle Gough Whitlam (23/10/14).

Thank you, Professor Quiggin. I find the above a helpful guide to Gough's achievements that his successors and the mainstream media have tried to bury.

However, as noted by Christopher Boyce in "The Falcon Lands" episode of SBS Dateline of 18 February, the subversion of Australian democracy by no means ended in 1975. It continued until the influence of all who shared Gough's vision was marginalised within the Labor Party by the likes of Bob Carr, Paul Keating and Peter Beattie.

John Quiggin wrote:

With the failure of the global financial system now evident to all, social democratic parties have found themselves largely unable to respond.

I think that supposed social-democratic parties of the twenty-first century have shown that they are unwilling, rather than 'unable' to respond.

John Quiggin continued:

We need a renewed movement for a fairer society and a more functional economy. We can only hope for a new Whitlam to lead that movement.

So, let's try to bring that about. A good start would be the repudiation of leaders of the Labor Party, mentioned above, who have attempted to bury Labor's traditional program and have, instead, embraced economic neoliberalism and privatisation.

James

See Christopher Boyce: Burial of Gough's legacy continued after 1975, above.

Sheila Newman

Gough’s policies showed that he was well aware that the long boom was ending; he engaged with a project for energy self-sufficiency. Arguable, had he not been deposed, he might have made Australia independent, like so many other oil-producing countries of the era. (We no longer produce much oil at all, having used it all or exported it.) For more on this see “Another take on Whitlam, Population, Energy Resources, and the Khemlani loan scandal” at http://candobetter.net/node/4135. When I was engaged in a research thesis that I finished in 2002, I approached the history of the Whitlam government at an angle from which it had not previously been approached.

John Brookes

So what do we aim for? I don’t see much point in starting with the leadership of the ALP. We need to start with a vision of a world we want. Unless we have a vision, how can we sell it?

In many ways we need to go back to Gough. He wanted equality of opportunity, hence the free education and health care. Where do we go?

I look at life a bit like a game of footy on the school oval. The best game has everybody playing. But more and more we have too many people sitting on the side lines, not really wanted or needed. Out there on the oval, if the game doesn’t work for the majority of kids, then it breaks up. Kids start changing the rules until the game works again.

But right now, to stretch an analogy, we have the kids who are getting all of the footy telling us that this is the only way that footy works.

So we need someone to step up with a clear vision for remaking society so that it works for more people. Back in 1972, the conservative world was looking more and more ridiculous. Change seemed inevitable. But back in that era, there was a youth movement. They really wanted change. When I look at today's uni students, my main worry is that they are too trusting and may end up being sorely disappointed when they do all the right things and life doesn’t work out for them. We’ve already put home ownership out of reach of many.

James

This comment is 'awaiting moderation' - JS, 01:14 +10:00 25 Oct 2014

John Brooks @ #9 wrote:

@James

So what do we aim for? I don't see much point in starting with the leadership of the ALP. We need to start with a vision of a world we want. Unless we have a vision, how can we sell it?

Apologies for being so slow to respond, and apologies and that my initial response is so brief:

If you look around the world in 2014, as well as military aggression, mass murder and tyranny, there is much in the world to give us hope, but only if you remember to believe almost nothing that you read about today's geopolitical conflicts in the mainstream media .

Whilst despots, fraudsters, gangsters and fascists run much of the world, much of the rest of the world is run by people who are every bit as humane and decent as Gough was.

However, unlike Gough, they have shown themselves to be far more capable of standing up for themselves and their countries against the global forces of darkness. Of course, those same leaders are demonised by the mainstream media.

Two striking examples are Syrian President Bashar al-Assad and Russian President Vladimir Putin. Contrary to the implication manufactured by msm 'reports', both have not only been elected in certifiably democratic elections, both enjoy domestic popularity which dwarfs that of any Western leader I can think of - Tony Abbott, Barack Obama, Francois Hollande, David Cameron, Stephen Harper, Angela Merkel, Kevin Rudd, John Howard, Paul Keating, Bob Hawke, Malcolm Fraser and even Gough in 1972 and 1974.

Presidents al-Assad and Putin have also shown themselves to be far more willing to confront critical media scrutiny than any of today's Western 'leaders'. I have watched a number of interviews where both were able to demolish what has been peddled as 'news' to Western audiences. No doubt, Gough would have been able to do the same before a far less unbalanced international mass media.

Some good web sites are:

globalresearch -dot- ca, voltairenet.org, presstv -dot- com, landdestroyer -dot- blogspot -dot- com, rt -dot- com (as well as my own web site, candobetter -dot -net).

By all means, continue to read the printed msm and watch and listen to the msm broadcast media, John Brookes, but I think, over time, you will see, when you are able to compare their narratives with those on the sites such as those listed above, that little truth is to be found there.

@FranBarlow (11:42 21/10/1),

Given that whistleblower Ray McGovern has labeled US Secretary of State John Kerry a "serial liar" for his repeated assertions, earlier this year, that he had proof that the Syrian Government had used chemical weapons against its own people, in order to justify an invasion of Syria (which so far has lost 195,000 lives resisting US-armed terrorists) Kerry's failures to win the 2004 Presidential elections and the Democratic Party Presidential nomination in 2008, were no great losses to humanity.

Whatever his flaws may have been, Al Gore's defeat at the 2000 Presidential elections, given the scale of tragedy that humanity had to endure at the hands of President George W.Bush since then, clearly was.