The Victorian Elections

Otago Daily Times, Issue 26626, 24 November 1947, Page 4

The Victorian Elections

—The Daily Times FORUM

The decisive results in the Victorian State elections, which swept the Labour Government out of office, prompt an inquiry into their possibly wider significance for the present-day democracies. The question, “ Have the Victorian Election Results any Lesson for Democracy? ” was put before two professors in the University of Otago, and their replies follow'. Professor W. P. Morrell, M.A., D.Phil. (Oxon.), head of the Department of History: So far as an observer at a distance can judge, the recent Victorian elections certainly seem to have involved more than the local issues on which Australian State elections generally turn. Victoria has, it is true, been one of the more conservative of the States. Hampered by a distribution of seats which favours the country districts at Melbourne's expense, Labour has never held office with a clear majority. On an issue uniting the Liberal and Country Oppositions. Mr Cain’s Labcur Administration was likely to be defeated in any case. But the turnover of votes w'as exceptionally heavy. The Labour vote increased by some 70,000, though this was far outweighed by the increase of 200.000 in the Liberal vote.

It seems to be agreed that Mr Chifleys’ proposals for the nationalisation of the banks were regarded by the electorate as the real issue. A heavy poll, a marked swing against Labour —what does this suggest? It would seem that those great sweeping policies of nationalisation which are so dear to the Labour - stalwart are not the issue most likely to gain electoral victories for Labour. It would also seem that the electorate does not like to have questions sprung upon it. For was the Australian public thinking about the banks when Mr Chifley brought the question of nationalisation to the forefront of politics? It would indeed be surprising if it was. Economic depression may set some men thinking about the adequacy of the financial machinery of the community; but prosperity such as Australia has been enjoying suggests that its financial machinery is working reasonably well. , . . It may be that Mr Chifley s decision to nationalise the banks was made in anger at the High Court’s decision against the more limited policy of compelling public bodies to bank w-ith the Commonwealth Bank, or it may be that this was merely the occasion for which Mr Chifley was waiting. In either case his announcement was nothing less than a bolt from the blue. It formed no part of his declared programme at the general election last year. The adoption of a programme at the party conference; the submission of rival programmes to the electorate; the enactment by the victorious party of ail or part of its programme in the succeeding Parliament—this is the normal democratic legislative process as worked out in the course of the past century by the countries of the British Commonwealth. Mr Chifley did not abide by the rules of the game.

But, to tell the truth, it is more than a game. By such methods only can parliamentary democracy justify its claim to a “ government of the people, by the people, for the people.” Mr Chifley would do better to leave the methods of the blitzkrieg to the totalitarian States. Democracy is on* trial to-day. Its survival in Europe in this coming .cold and hungry winter is m doubt. We may assume, I think, that Mr Chifley is a sincere democrat. But it is exasperating, and a little alarming, that he should have chosen to plunge Australia into a bitter political struggle between Government and Opposition, between Commonwealth and State, between nationalisation and private enterprise, when the will of the Australian people is, to say the least, uncertain, and when the mind of Australia should be fixed on other things If he had put first things first he would have been considering how best to help Europe in its extremity. Professor G. C. Billing, B.A. (Adel.), Ph.D. (Econ.. Lond.), head of the Department of Economics: It is fairly generally agreed that the central bank of a country should be owned by the State. There is less agreement on whether the bank should be subject to political control. Opinions are very sharply divided indeed on the question of whether it is desirable or necessary for the State to go further and assume ownership and control of the trading banks as well as of the central bank. Here in New Zealand we have seen the Government assume complete ownership of our leading bank without any apparent results, as far as banking practice and organisation are concerned. But the State had for a long time been a shareholder with power to exercise control. It would be quite a different thing to se'e the Reserve Bank absorb the Bank of New Zealand and the other five trading banks as well and proceed to be the only commercial banking institution in the, whole country. That is substantially what is proposed for Australia in the legislation now being passed through the Commonwealth Parliament. A fortnight ago the electors of Victoria chose to register a sharp protest against the development of a Federal banking monopoly without the citizens of the Commonwealth as a whole being given their customary right, on all such great questions, to say by means of a referendum, whether they wanted it or not.

The economic issue is between a system of privately-owned and directed trading banks under the guidance of a central bank, on the one hand, and on the other, a single institution combining within itself the functions of a central and a trading bank. Mr Chifley has again criticised the trading banks for the. part they played in the great depression of nearly 20 years ago. He assumes that a single national bank would not only be a better guide and philosopher, but also would be able by its policy either to avoid a depression or to lessen very substantially the' severity of its consequences. It is only fair to the contrary view to point out that the whole machinery of banking organisation, and the generally accepted ideas of appropriate, anti-depression policy, have been strikingly changed since the - early ] 930’s. Before the recent war the Commonwealth Bank had never been given the full powers of a central bank. Legislation in 1945 confirmed war-time developments giving very adequate authority over foreign .exchange dealings and over the credit policy of the trading banks in Australia.

It is at least doubtful whether the assumption of ownership of the trading banks would improve the banking structure in any important way, and the economic significance of the Victorian elections can either be interpreted to be that the people of that State wish to retain the present system, or that they don’t want it changed opportunity to express their opinion by means of a referendum.

Important by-products will be the intensification of the campaign of resistance against the Bill and the Act and the economic dislocation that such a sharp rift in Commonwealth harmony will cause. When some States talk of secession and others talk of economic sanctions against those who oppose the Commonwealth Government some slackening in the country’s productive efforts ,can hardly be avoided. This seems a high price to pay in the attempt to gain title to business enterprise, already subject to such close supervision and control.