The Press THURSDAY, MAY 23, 1974. Australia’s uncertainty

Press, Volume CXIV, Issue 33541, 23 May 1974, Page 12

The Press THURSDAY, MAY 23, 1974. Australia’s uncertainty

Australia is likely to be ruled by a Labour Government for a second term, but with a Senate evenly balanced between the main parties and still able to reject legislation passed in the House of Representatives. Referenda held in conjunction with the elections last Saturday rejected changes in the electoral system which would have reduced the power of the Senate. Another deadlock between the two Houses, leading to another early election, remains a possibility. But the major parties should, at least, be relieved by the diminished appeal of minor parties. Something like a two-party system is emerging with the decline of the Democratic Labour Party and the failure of the Australia Party to make inroads into the vote for the Liberal-Country Party coalition. Even the Liberals and their partners in the coalition repaired some of their differences and Mr Snedden emerged as a Liberal leader with better standing in the eyes of the electorate than any since Mr Harold Holt was drowned in 1967. In an election fought on economic issues, Mr Snedden forced the Government to discuss inflation after Mr Whitlam had hoped to defend his position on other issues. In the end, neither side convinced the electorate that it was sure what to do next, but Mr Whitlam’s assertions that inflation had been beaten were made ridiculous when several militant unions achieved wage increases approaching 30 per cent while the campaign was on and the A.L.P. leaders would do no more than appeal ineffectually for voluntary restraints on incomes. The result was a reduction in the A.L.P. majority in the Lower House, but Mr Whitlam will probably still have sufficient margin to govern effectively. In the Senate, which is elected by a system of proportional representation in each State, the A.L.P. gained a little at the expense of the minor parties. Like many other Western democratic leaders Mr Whitlam must now attempt to govern a country with diminishing foreign exchange reserves, rapid internal inflation, and an increasingly divided electorate. Mr Snedden would have faced the same problems, but what many Australians describe as Mr Whitlam’s “arrogance” in international affairs and in his Government’s attitude to the farming and industrial interests on which Australia’s prosperity still depends, has generated a special bitterness. New Zealand has little cause to welcome the outcome. Mr Whitlam’s Government has worked less closely than might have been expected with its Labour neighbours here, perhaps because the A.LP.’s doctrinaire approach to many questions accords uneasily with Mr Kirk’s pragmatism. The Australians have been more ready than New Zealand to abandon important defence arrangements, and less ready than New Zealand to co-operate in matters of mutual economic benefit. The risk that much of Australia’s inflation will, unavoidably, be imported into New Zealand diminishes the attractiveness of increasing trade with New Zealand’s closest and most important neighbour, especially when the New Zealand Government is showing itself rather better than its Australian counterpart in restraining economic ills.