Prime Minister Joseph Lyons’ Place in History – Tony Smith

On Monday 24 October 2011, The Hon Tony Smith MP, who is the Member for Casey and Shadow Parliamentary Secretary for Tax Reform and Deputy Chairman, Coalition Policy Development Committee, launched Anne Henderson’s Joseph Lyons – The People’s Prime Minister in Melbourne. Tony Smith’s address on Joseph Lyons is published here as a reflection on forgotten Australian history of the Depression and the role of pragmatic politics in defining the Australian political character.

PRIME MINISTER JOSEPH LYONS’ PLACE IN HISTORY

TONY SMITH

Thank you very much for the opportunity to speak about this exceedingly important book by Anne Henderson. A book that fills a yawning gap in the Australian political narrative.

That Joe Lyons was a substantial figure in our history – there is no doubt. He was the first Prime Minister to win “back-to-back-to-back” elections. Despite becoming Prime Minister at the nadir of the Depression, by the time he died on the eve of WW II he had set Australia on a path to recovery.

Given my own philosophical leanings, it will come as no surprise that I’ve always thought highly of Joseph Lyons. But, after reading Anne’s splendid biography, Joseph Lyons – The People’s Prime Minister, I must confess that Joe Lyons has grown even further in my estimation.

Coming from very modest means, Lyons propelled himself to the forefront of Australian politics by dint of hard work and talent. And while he surely was motivated by a healthy measure of ambition – as I’m told all political leaders are – Anne demonstrates that his principles always prevailed over his personal interests.

And those principles were first seriously tested during the conscription plebiscite of 1916. The war effort enjoyed wide support throughout Australia, and Labor Prime Minister Billy Hughes called for a plebiscite on conscription with the full expectation of its passage. But Lyons took a contrary view that was not popular in many quarters. While the plebiscite narrowly failed nationally, in Tasmania the “yes” vote was a thumping 56 per cent. Yet Joe Lyons remained true to his beliefs despite the slings and arrows of his many detractors.

Anne explores this episode as an early example of Lyons’ willingness to brave criticism for the sake of conscience. As we know, the conscription debate became so impassioned that it generated a powerful political centrifugal force that ripped Labor apart. Billy Hughes was expelled and formed the new Nationalist Party of Australia.

In Hobart, the Labor Party schism cost pro-conscription John Earle his post of Opposition Leader. And Joe Lyons was the natural choice to replace him. In 1923, the collapse of the Tasmanian Nationalist government brought Lyons into the Premier’s office, a position he would hold for almost five years.

But then the wheels of politics turned, as they always do, and the Lyons government lost the election of 1928. The following year, Lyons answered the call of federal Labor leader James Scullin to stand for the Australian Parliament. Labor won the October 1929 election, and Lyons went straight to the front bench of the new Scullin Government as Postmaster-General.

But Lyons soon found himself increasingly torn between his instincts for fiscal restraint, and the policies of the government in which he served.

Global commodity prices had plummeted throughout the 1920s. And successive Australian governments had responded to the resulting decline in their main source of revenue by prodigious borrowing. So, as Australia grappled with the most severe economic depression in living memory, the Commonwealth was hamstrung by the fact that it was in hock up to its proverbial eyebrows.

Anne Henderson does an excellent job of providing an exhaustive account of all the twists and turns that ultimately led to the divorce between Lyons and Labor. But a brief synopsis of events will have to suffice us here. In December 1930, Prime Minister Scullin – who also held the post of Treasurer – was attending the Imperial Conference in London and Lyons was serving as Acting Treasurer in his stead.

Lyons sought to restore confidence in the stability of Australia’s public finances by proposing a strategy of fiscal restraint as the antidote to the burgeoning debt crisis. Scullin initially agreed, but then wobbled under pressure to repudiate debt from his from his primary Labor rival, NSW Premier Jack Lang. And when policy-push came to political-shove, Scullin folded like a bad hand of cards.

Concerned more about internal-party support than the fiscal stability of Australia, Scullin made a 180-degree policy U-Turn, opting for Lang over Lyons. His Cabinet adopted an inflationary economic strategy that placed Australia on a trajectory to national insolvency.

As Anne Henderson ably points out, any default would have devastated Australia’s long-term prospects for growth. Had we reneged on our loan commitments, our financial reputation would have been indelibly stained, and our access to international credit would have been severely curtailed for decades to come.

In the end, Joe Lyons would have no part of the Scullin Cabinet’s panicked “funny money” policies that would have caused inflation to soar. For him it was a bridge too far. A bridge he simply couldn’t, in good conscience, put a foot upon, let alone cross.

Yet, while profound policy differences ultimately drove Lyons out of Scullin Government and Labor Party, his decision to depart was not made in a fit of pique. As Anne outlines so eloquently, he agonised for months over this conflict between his beliefs and his affiliations.

In March 1931, Lyons finally concluded that his loyalty to the nation trumped any allegiance to political party. He tendered his resignation to Scullin, declaring that he hadn’t left Labor, but rather Labor had left him.

Over the next few months, a new political movement began to materialise around Lyons in a process of political immaculate conception. The United Australia Party (UAP) brought disaffected Labor centrists together with died-in-the-wool conservatives. Lyons’ new party proved attractive to middle and working class voters alike, including many Catholics who would cast ballots against Labor for the first time in their lives.

In December of that same year, the UAP political juggernaut swept into power through a landslide victory at the polls – with Labor recording a primary vote, I happened to notice, of around 27 per cent. And so, Joseph Lyons went from zero to hero, building an election-winning party over a period of eight short months. That’s a truly remarkable achievement by any political measure.

Equally remarkable was Joe Lyons’ record as Prime Minister. Coming into government at the depths of the Depression, he made tough fiscal decisions that restored stability and confidence to Australia’s national finances.

In her book, Anne provides an exemplary quote  from Lyons, whose wisdom could benefit many political leaders today:

Our unhappy financial position is largely due to the attempts of governments to provide employment on works constructed out of borrowed money, the interest of which has to be paid by the taxpayers of the country. Too many millions have in the past been expended on unproductive works which have robbed existing works of their reproductive capacity by coming into competition with them.

Lyons’ declared war was on Labor’s out-of-control debt and inflationary policies. And just a fortnight before the 1931 election, when the UAP’s impending victory was becoming clear, Lyons gave a speech at Sydney Town Hall where he played straight bat with the Australian people:

I refuse to bid for votes by making rosy promises … If returned to office we will therefore proceed by every means within our power to balance the Budget – in other words, to show we can live within our income.

The economy responded to Lyons’ clarity and temperance by rebounding sharply. Australia’s real GDP grew by almost 17 per cent between 1929 and 1940. And by 1937, Australian unemployment had declined to single digits and continued to trend downwards.

But to fully comprehend the magnitude of Lyon’s economic accomplishments, they should be contrasted to the America of the 1930s where Keynesianism reigned supreme under FDR’s New Deal. In May 1939, Treasury Secretary Henry Morgenthau testified before Congress on Capitol Hill. This was well into Roosevelt’s second term, and the Secretary was asked to explain the stagnant state of America’s economy. Morgenthau’s answer was quite instructive, especially when compared to Lyon’s explanation of Australia’s fiscal woes. The Treasury Secretary declared:

Now gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work … I say after eight years of this Administration we have just as much unemployment as when we started … And with an enormous debt to boot!

As Anne so aptly points out, at the time of Morgenthau’s testimony, the US unemployment rate remained stubbornly stuck at around 14 per cent. And, over the 11 years between 1929 and 1940, America’s real GDP grew at just a paltry 1.6 per cent. Anne Henderson compellingly demonstrates that Joseph Lyons was one of Australia’s great prime ministers.

And that calls into question why Lyons has received such short shrift in the telling of our political history. But with the launch today of this substantive biography, 80 years after Lyons’ writ of divorce from Labor, we finally have the opportunity to get some answers.

In this great book, Anne explores the political factors that have coloured the telling of this history. She explains how Lyons is reviled as a turncoat in Labor’s corporate memory, and how the conservative side of politics hasn’t ever fully claimed him as its own. That is, the vitriol of Labor’s narrative has never been counter-balanced by a welcoming embrace from conservatives.

To some extent this oversight can be also explained by the fact that Menzies and Lyons were both colleagues AND ultimately rivals. And, as Anne ably outlines, the creation of the Liberal Party in 1944 and Menzies’ spectacular success as prime minister spawned a hagiography that overshadowed Lyons’ achievements.

And, in a strange way, it was the very success of the United Australia Party that sowed the seeds of its ultimate eclipse. The UAP was formed under the hand of a particular leader during a time of particular economic crisis. And as that crisis waned, so did the reason for the UAP’s existence.

The historical legacy of Lyons also probably suffers from the fact that he was not a wartime prime minister. Most Australians have heard the voice of Sir Robert Menzies performing his “melancholy duty” by informing the nation on radio that we were at war with Nazi Germany. The same is true of Curtin’s “we look to America” speech of March 1942, and of Chifley’s status as prime minister when victory over Japan was achieved. The drama of the war years has naturally tended to preoccupy historians at the expense of the Lyons era.

For all these reasons – and another I’ll mention shortly – the story of Joseph Lyons has fallen through the cracks of our political historiography. And that’s a tragedy of national memory. A tragedy that has short-changed the ability of successor generations to learn from the giants who preceded them.

And make no mistake, Joseph Lyons was a political giant. This wonderful book is a true “profile in courage”, to borrow the title of another book written by another leader in another land in another time. Anne Henderson ably shows how Joe Lyons demonstrated great personal and political integrity during one of the most trying times of Australia’s history. As did John Latham – Nationalist Party Opposition Leader who stepped aside to make way for Lyons, setting aside his own prime ministerial ambitions for the common good.

Anne’s incredible research and wonderful writing style brings to life Lyons’ political skills. We learn about his inerrant ability to divine and discern the pulse of the Australian people. We read how he quickly developed a command of the new media of the day – film and radio – using them to maximal political effect.

After reading, learning and reflecting I couldn’t help but think that his talents served as an inspiration and example for others. In fact, it’s a fair bet that during the “wilderness years” between his stunning political rejection in 1941, and his political re-incarnation in 1949, Robert Menzies would have pondered the keys to Lyons’ success, carefully studying what he might embrace, mould and adapt to his own needs.

Lyons’ broad appeal to traditional Labor voters, was a natural precursor to Menzies invocation of the “forgotten people” a decade later. Lyons also demonstrated great tact and wisdom of temperament, in relations with his parliamentary colleagues. He instinctively knew how to deploy deference and assertiveness in precisely the right amounts at precisely the right moments.

And as it turns out, a reincarnated “Menzies Mark II” post-1949 demonstrated a much defter touch dealing with colleagues. So it’s fair to say that Lyons kept helping the conservative cause, even in death.

It’s often been said that the Liberals don’t remember their history while Laborites excel at rewriting theirs. This is largely true. But it’s also a poor reflection on Australian academia that the story of Joe Lyons has lain fallow in the fields of history over so many years. This wonderful book by Anne Henderson goes a long way towards redressing that oversight. Anne’s painstaking research draws on letters and other primary documents to illustrate the personal and political aspects of Lyons life.

She reveals the close bond between Lyons and his wife Enid, his quiet strength, his reflective nature, their highs and their lows, and those sheer obstacles of distance and time at that time. The world moved in slow motion by comparison to today. Travel to and from Tasmania and Canberra involved lengthy excursions by boat and train. Communications were largely by letter and cable. And the Lyons family of twelve children was never fully settled, as Joseph and Enid Lyons shifted to Hobart and then Melbourne to try and find balance between their private and public lives.

Congratulations Anne, on a tremendous accomplishment. This book deserves to be widely read and I’m confident that so it shall be. Your work is a welcome and important addition to the canon of Australian history.