Lyons government
The Lyons government was the federal executive government of Australia led by Prime Minister Joseph Lyons. It was made up of members of the United Australia Party in the Australian Parliament from January 1932 until the death of Joseph Lyons in 1939. Lyons negotiated a coalition with the Country Party after the 1934 Australian federal election. The Lyons government stewarded Australia's recovery from the Great Depression and established the Australian Broadcasting Corporation.
Lyons government
Background[edit]
Great Depression[edit]
The background to the Lyons government saw Australia grappling with the immense challenges of the Great Depression.
Joseph Lyons began his political career as an Australian Labor Party politician and served as Premier of Tasmania. Lyons was elected to the Australian Federal Parliament in 1929 and served in Prime Minister James Scullin's Labor cabinet. Lyons became acting Treasurer in 1930 and helped negotiate the government's strategies for dealing with the Great Depression. With Scullin temporarily absent in London, Lyons and acting Prime Minister James Fenton clashed with the Labor Cabinet and Caucus over economic policy, and grappled with the differing proposals of the Premier's Plan, Lang Labor, the Commonwealth Bank and British adviser Otto Niemeyer. While Health Minister Frank Anstey supported NSW Premier Jack Lang's bid to default on debt repayments, Lyons advocated orthodox fiscal management. When Labor reinstated the more radical Ted Theodore as Treasurer in 1931, Lyons and Fenton resigned from Cabinet.[1]
Foundation of United Australia Party[edit]
The stance of Joseph Lyons and Trade Minister James Fenton against the more radical proposals of the Labor movement to deal the Depression had attracted the support of prominent Australian conservatives, known as "the Group", whose number included future prime minister Robert Menzies. In parliament on 13 March 1931, though still a member of the ALP, Lyons supported a no confidence motion against the Scullin Labor government. He resigned from the ALP soon afterward, along with Trade Minister James Fenton and four other right-wing ALP MPs. The United Australia Party was then formed from a merger of the six Labor dissidents, the opposition Nationalist Party of Australia, and several citizens' groups. Lyons became the new party's leader, and hence Leader of the Opposition, with John Latham, the last leader of the Nationalists, as his deputy.[1] The presence of the working-class Lyons as leader allowed the UAP to portray itself as the party of national unity, even though it was mostly an upper- and middle-class conservative party.
In November 1931, Lang Labor dissidents chose to challenge the Scullin Labor government and align with the United Australia Party Opposition to pass a 'no confidence' and the government fell.[2]
Domestic policy[edit]
Response to the Great Depression[edit]
Australia recovered relatively quickly from the financial downturn of 1929–1930, with recovery beginning around 1932. Prime Minister Joseph Lyons was the leader responsible for stewarding Australia out of this difficult period. Lyons favoured the tough economic measures of the Premiers' Plan, pursued an orthodox fiscal policy and refused to accept NSW Premier Jack Lang's proposals to default on overseas debt repayments. Australia entered the Depression with a debt crisis and a credit crisis. According to author Anne Henderson of the Sydney Institute, Lyons held a steadfast belief in "the need to balance budgets, lower costs to business and restore confidence" and the Lyons period gave Australia "stability and eventual growth" between the drama of the Depression and the outbreak of the Second World War. A lowering of wages was enforced and industry tariff protections maintained, which together with cheaper raw materials during the 1930s saw a shift from agriculture to manufacturing as the chief employer of the Australian economy – a shift which was consolidated by increased investment by the commonwealth government into defence and armaments manufacture. Lyons saw restoration of Australia's exports as the key to economic recovery.[5] A devalued Australian currency assisted in restoring a favourable balance of trade.
A dramatic episode in Australian history followed Lyons first electoral victory. NSW Premier Jack Lang refused to pay interest on overseas State debts, the Lyons government stepped in and paid the debts. The national Parliament then passed the Financial Agreement Enforcement Act to recover the money it had paid. In an effort to frustrate this move, Lang ordered State departments to pay all receipts directly to the Treasury instead of into Government bank accounts. The New South Wales Governor, Sir Philip Game, intervened on the basis that Lang had acted illegally in breach of the state Audit Act and sacked the Lang Government, who then suffered a landslide loss at the consequent 1932 state election.[3]
Tariffs had been a point of difference between the Country Party and United Australia Party. The CP opposed high tariffs because they increased costs for farmers, while the UAP had support among manufacturers who supported tariffs. Lyons was therefore happy to be perceived as "protectionist". Australia agreed to the give tariff preference to British Empire goods, following the 1932 Imperial economic conference. The Lyons government lowered interest rates to stimulate expenditure.[3] In October 1933, James Fenton, co-founder of the United Australia Party, resigned from Cabinet over the lack of industry protection in the government's tariff schedules.[1]
Death of Joseph Lyons[edit]
On 7 April 1939, with the storm clouds of the Second World War gathering in Europe and the Pacific, Joseph Lyons became the first Prime Minister of Australia to die in office. Driving from Canberra to Sydney, en route to his home in Tasmania for Easter, he suffered a heart attack, dying soon after in hospital in Sydney, on Good Friday.[1]
The UAP's Deputy leader, Robert Menzies, had resigned in March, citing the coalition's failure to implement a plan for national insurance as the cause for his resignation. In the absence of a UAP deputy, the Governor-General, Lord Gowrie, appointed Country Party leader Earle Page as his temporary replacement, pending the selection of Lyons' successor by the UAP.[3]
The UAP selected Robert Menzies to succeed Lyons and Menzies was sworn in as prime minister for the first time on 26 April 1939.[1] Page refused to serve under Menzies and the UAP entered a period of minority government. On 3 September 1939, Australia entered World War II.