AUSTRALIA NEARLY BECAME ENERGY SELF SUFFICIENT IN 1974 : Melbourne Indymedia

Initial Reaction in Australia to the First Oil-Shock 1
Policy Implementation and Outcomes in France and Australia 4
Fig. 7.1 France : Total Oil Consumption and Total Population, 1965-1997. 7
Fig. 7.2 Australia: Total Oil Consumption and Total Population Growth. 8
Changes to the Residential Construction Industry in France after 1973 9
Fig.7.3 France and Australia, Total New Dwellings Commenced, 1964-1997 10
Resistance to Change in the Residential Construction Industry in Australia after 1973 11
Anti-speculation Innovations attempted under the Whitlam Government : the Department of Urban and Regional Development (DURD) 12

WHITLAM’S PLANS FOR AN ENERGY SELF-SUFFICIENT AUSTRALIA & A SMALL POPULATION IN THE 1970S

(Full thesis of 9 chapters - with references and other data at http://www.alphalink.com.au/~smnaesp/populationspeculation

Also available on CD with other articles and overheads from PO Box 1173 Frankston VIC 3199 at cost of $20.00)

Initial Reaction in Australia to the First Oil-Shock
The will was at the level of party politics and at a popular level as well.
ALP policy was heading towards one of population stabilisation before the Whitlam government was elected. The strategy of reducing immigration in order to alleviate the pressure of population growth in the cities was debated and adopted at the ALP's June 1971 policy conference in Launceston. On 13 October 1972, Tom Uren, who was to become the Minister for urban and regional development, referred to the role of immigration in affecting urban population pressures. In a policy speech opening the 1973 election campaign Whitlam also referred to the changes to immigration policy.
Contrary to suggestions that ALP policy to reduce immigration was not in response to international economic considerations, I would argue that the beginnings of the oil-shock may be dated to well before the time of the ALP conference in Launceston, in mid 1970. In fact, the evidence suggests that ALP energy policy was formed as the situation that culminated in what is known as the 1973 oil-shock evolved. This was due mainly to the influence on ALP energy policy of the extraordinary Rex Connor, who was to become Whitlam's minister for Minerals and Energy. Connor was unusually attuned to global and local mining and energy economics and is said to have anticipated the oil-shock. In fact Connor claimed this feat himself on behalf of the ALP:
The national policy on minerals and energy approved at the 1971 Launceston Conference of our party has proved to be not only singularly relevant but even historically visionary in the light of subsequent events. We anticipated the world energy crisis (1973), have dealt with international currency turmoil, established a sound export pricing policy, checked the inroads into Australia of the multinational corporations, and secured the respect and understanding of our trading partners.
There was to follow an extraordinary sequence of events, as the Whitlam Labor Government emerged gloriously from many years in the wilderness only to sink, almost without a trace, like the lost city of Atlantis, along with all its brilliant policies and plans, in a series of devastating international and national events.

On 7 December 1971 Whitlam moved to recommence suspended debate on the need for Australia to establish sovereign control over the mineral resources of the sea bed off the Australian coast. In December 1972 the Whitlam Labor government took office. In May 1973 Cabinet authorised Rex Connor to confer with State Mines Ministers on the construction and operation of a national pipeline system.

The Australian government seemed to be boldly seizing the initiative to defend Australia's energy resources against a background of worsening international events. Across the sea other old colonies rose up and nationalised their oil reserves. In September 1973 Algeria suspended immigration to France. In October OPEC oil ministers used oil as a weapon in the Arab-Israeli war and Saudi Arabia, Libya and other Arab states announced an embargo on oil exports to the United States and the Netherlands. In November the Arab oil-producing states proclaimed a 25 % cut in oil production, and threatened worse; Germany officially suspended immigration from outside the European Economic Community (EEC) and President Nixon signed the Emergency Petroleum Allocation Act (EPAA). In February 1974 Libya nationalised three US oil companies and Nixon and Kissinger announced a seven point plan to make the US energy independent. In June the IMF created a special fund to lend money to nations that had become indebted due to the high oil prices. In July France suspended immigration from outside the EEC. In Australia the government implemented progressive reduction of the new settler program between December 1972 and late 1975, from 140,000 to 50,000.

On December 13, 1974 the executive council of the Commonwealth of Australia, made up of Prime Minister Whitlam, Attorney-General Murphy, Treasurer Cairns, and the Minister for Minerals and Energy, Rex Connor, met to seek four billion US dollars to finance national energy self sufficiency and to fund unemployment reduction. For this they sought $US 4,000,000,000 (four billion US dollars). The minute of the meeting stated,

"The Australian government needs immediate access to substantial sums of non-equity capital from abroad for temporary purposes, amongst other things to deal with exigencies arising out of the current world situation and the international energy crisis, to strengthen Australia's external financial position, to provide immediate protection for Australia in regard to supplies of minerals and energy and to deal with current and immediately foreseeable unemployment in Australia." (My emphasis)

At this point Australia was momentarily poised on a similar policy path of self-sufficiency to France and the EEC's. But this was not to be. The Whitlam Government was brought to an abrupt and ignominious end by the associated Khemlani loan scandal.

On 16 October 1975 Governor General Kerr dismissed Whitlam from office.
The Khemlani loan objectives (stated in the above minute) had not been conceived overnight. The kind of loan was itself a method of avoiding surrendering ownership of Australian oil assets to foreign oil companies and the objectives it sought to finance were ideologically based on the premise that population and energy consumption stabilisation, plus national self-sufficiency were the way to go for the long term future. (Would national exploitation of petroleum and gas reserves have assisted paying back such a this loan?)
The Whitlam government was a government by intellectuals at a time of heightened ecological and environmental concern. This concern manifested in many contemporary conservationist activities and documents in the Australian and international community. It is often forgotten that the United States attempted to introduce a formal population policy under President Nixon, as well as energy conservation, as a result of a National Security Study undertaken in 1974. At the same time, the Australian Government undertook a national population enquiry, resulting in the Borrie Report, 1975. This conservationist and global outlook seems to have disappeared from ESSS - and to have been revised and forgotten in Australia under Fraser and subsequent economic rationalist governments.
There is no doubt that Whitlam was a sophisticated electoral player and he would probably have used anti-immigrant preoccupations in marginal seats to his advantage. International comparisons, however, testify to an over-riding motive for reining in immigration-led population growth, that of energy conservation and infrastructure consolidation. These motives dominated in France, where energy conservation efforts were considerably assisted by massive industry restructure and increased efficiency.
The evidence is thus strong that Australia's policies to lower immigration at this time reflected a similar Malthusian basis to France's. This seems even more likely when they are considered in conjunction with other Whitlam government contributions to demographic policy, in the realms of increased foreign aid for population control, subsidised abortions, subsidised access to contraception, grants to State and Federal family planning clinics, and promotion of women's rights. In addition, urban planning initiatives under the Whitlam government were complimentary to population stabilisation. These planning initiatives focused on consolidation, redistribution of metropolitan coastal growth to inland rural areas, financial support for State purchase and development of land for resale at low prices for home building, and funding and support for public housing.

Finally, the Whitlam government abolished the Department of Immigration and replaced it with the Australian Population and Immigration Council. Of the decision to cut down on immigration, Whitlam himself writes,

"The Government, due to the advent of the world recession, was forced to constantly reduce its annual targets for migrant intake. The size of the new settler program was reduced from 140,000 to 110,000 in December 1972, to 80,000 in late 1974 and to 50,000 in late 1975. On 2 February 1975, the Australian Population and Immigration council was established to assist the Government in the accurate assessment of Australia's immigration and population needs."

Clearly Whitlam was contemplating the review of population goals for the long term. His government was, however, suddenly dismissed from office and replaced by a government with very different objectives. Had the growthist lobby groups actually managed to engineer a situation favourable to their interests or did this come about entirely fortuitously?

There is room here for an ideologically related political explanation.

The threat of the possibility of long term Malthusian policies was only averted because the Whitlam Government was sacked. A traditional reason given for the sacking is that the government showed itself to be so financially incompetent and procedurally unorthodox with regard to procuring finances, that the opposition had virtually no alternative but to block supply and the Governor General had virtually no option but to dismiss the government.

A political opportunity was thus created for a caretaker opposition government to step in. This caretaker government was subsequently elected to office amidst the disarray of the ALP.

Another interpretation, (reserving judgement on the quality of the Whitlam Government's policies and practices) might be that the political fortunes of this government suffered due to the impact of the global economic crisis on the Australian economy. The 25% across the board tariff reductions that Whitlam introduced had alienated manufacturing and farmers. Changes to land planning development and housing and cuts to immigration had alienated property development, building materials suppliers, and banks and building societies. There were therefore many important and influential dissatisfied voices supporting the opposition and the Governor General. And so a way had been left open whereby the Fraser opposition might exploit any vulnerability in the Whitlam Government.

If the Whitlam Government had not run so counter to entrenched growthist interests, would the opposition have been able to mobilise such support?

The new Fraser government was a vehicle for a new ideology which not only favored the old guard that had a vested interest in high population growth, but which took their interests much further. This was the beginning of important changes liberalising Foreign Takeovers and Acquisitions law, and of greatly increased foreign borrowing for development, in exchange for equity. I will be expanding on these post-Whitlam themes at the end of this chapter and in Chapter Eight.

Policy Implementation and Outcomes in France and Australia

France's response to the massive price rises in oil based energy that accompanied the oil shock was drastic; oil imports were sharply reduced as the French State, in conjunction with business, set about a strategy of maximising energy self-sufficiency. Between 1960 and 1973, 78-79 kg oil equivalent were required to produce 1000 francs of GNP. By 1980 this had gone down to 72 kg oil equivalent. This was mainly due to the falling away of secondary industries which were big energy consumers. Objectives were next set for 1985 at 68 kg oil equivalent and for 63 kg oil equivalent in 1990.

Some strategies for diminishing petroleum based energy consumption were the further development of nuclear energy to replace oil generated electricity, improvement of technological efficiency, and organisational restructuring. Many energy sparing technological adaptations or changes of energy sources were assisted by government targets, standards and financial incentives. A department for Energy Saving was created and this lent its expertise to working out possible economies and substitutions for current energy use. It instituted incentives of 200 francs for every tonne of oil equivalent energy replaced by coal and 400 francs for "freely sourced energies" (solar, geothermic). Subsidies were given for innovation (to finance research and development) and, upon demonstration that they worked, up to 50% of the investment finance was provided. Car design was improved. Some specific changes to building design and energy use are described further on.

Importantly, the French State also sought to cushion the effects of the unemployment that followed by maintaining generous social welfare policies, including unemployment benefits and enhanced opportunities for education and training.

Popular economic theory of the time points to a confluence of interest between local labor on the matter of employment protection and business on the matter of energy conservation.

Whereas such policies have endured in France, where it seems that more focused costs than focused benefits were attached to immigration, they did not survive the Australian system with its many focused benefits and few focused costs attached to immigration.

As noted in the introduction to this thesis, increases in energy consumption and human population since World War Two challenge economic policies based on consumption and population growth. Although there are limited alternatives to oil based energy, including nuclear, Australia appears to have failed to explore these. Apart from the Whitlam Government's aborted attempt at implementing the quite radical policies alluded to above, Australia was to continue and to increase its reliance on oil-based energy. Even in the short-term, it had little success in diminishing oil energy consumption, and continued a population building policy entailing high immigration. In the absence of dramatic cuts in per capita oil consumption, it was inevitable that high immigration would increase overall oil-based consumption merely by increasing the Australian population. The outcome may be seen below in a comparison of national oil-based energy consumption and population curves for both countries.

Fig. 7.1 France : Total Oil Consumption and Total Population, 1965-1997.

Source: Petroleum based energy consumption: BP Amoco Historical Download excel file of 'World Oil Consumption 1966-1999", website, http://www.bp.com/worldenergy/xl/hxl/
French Population numbers: French Population Data, from 1946-1990: Roselyne Kerjosse, Irène Tamby: “La situation démographique en 1994: mouvement de la population”, Institution nationale des études économiques (INSEE) Paris, 1996, 264P.: carte, graph, Tableau; 30 cm, Tableau 3, "Evolution de la population totale depuis 1946, Evaluation fondée sur les résultats des recensements de 1946 à 1990." Data source for 1987-1997 was INSEE: “France Métropolitaine. Indicateurs démographiques 1987 a 1997” (As at 1 January).
Note that France made more dramatic reductions from 1980, after the second oil shock.

If we compare Graph 1 with Graph 2, of Australia, we can see that France's population growth is relatively slow and that this has perhaps assisted its ability to reduce total oil consumption, which has remained well below record high levels in 1973. (Per capita oil consumption has only recently begun to rise slightly since 1980.) It is likely that this increase in use will be sharply reined in after the oil shock that began in 1999.

Fig. 7.2 Australia: Total Oil Consumption and Total Population Growth.
Source: Petroleum based energy consumption: BP Amoco Historical Download excel file of 'World Oil Consumption 1966-1999", website, http://www.bp.com/worldenergy/xl/hxl/
Population numbers: Total Annual Population figures for Australia data source for all tables were, from 1978 to 1997, from Demographic Statistics, ABS, Cat no 3101.0. Figures for 1952 to 1977 are from J. Shu, S. E. Khoo, A. Struik and F. McKenzie, Australia's Population Trends and Prospects 1993, (BIR), AGPS, Canberra 1994. Figures for 1945 to 1951 are from Demography 1954, Bulletine No. 72, Commonwealth Bureau of Cenus and Statistics. (Total population at 31st of December of the year named)

Although Australia's total consumption of oil is less than France's (see Fig. 7.2), on a per capita basis it is about one third higher, according to calculations based on the same source. Australia's population is about one third the size of France's. If we compare Fig. 7.2 with Fig. 7.1, we can see that Australia's population growth is relatively fast.

If we compare Fig. 7.2 with Fig. 7.1, we can also observe two small dips in energy use in 1972 and 1973-74. Although Australia did manage to make some small reductions in total oil use between 1980 and 1987, after the oil shock, nevertheless, use has risen quite steeply in comparison with France's. Australia has never managed to keep its oil use below 1973 levels and the general trend has been far above this. The rapid population growth has probably contributed to this pattern.

This concludes my brief overview of the different outcomes of post oil shock policies in France and Australia.

There had, of course, been a complete change of policies in Australia after 1975. Replacing the sacked Whitlam Government, the liberal government, headed by Malcolm Fraser, had returned Australia to its traditional nation-building population policy course and away from nation consolidation. However, before I treat the matter of the return to populationist and expansionist policies, I will talk about the role and impact of changes to the residential construction industry in France. I will also look at the institutional changes that Whitlam attempted to bring about in land development planning in Australia and to education. These changes might have led, respectively, had they succeeded, to less land speculation amongst property developers and to more efficiency in the Australian building industry.

Changes to the Residential Construction Industry in France after 1973

Energy rationalisation, economic strictures and decline in population growth forced changes in the French housing construction industry. The industry adapted to the decline in demand by promoting renovation of old properties, much of which was also energy conserving due to the stimulation afforded to the industry by the oil crisis.

Some examples of changes to building design and use were as follows. In houses, offices, government and shops, temperatures were limited to 19 degrees Celsius; there were tax deductions for the use of insulation; and insulation standards were stricter for new buildings than old ones. There was a program to insulate 500,000 existing dwellings at 20-30,000 franc subsidy per dwelling. In 1973 a new home of 100 metres squared consumed 3.2 tons of fuel per annum. The goal was for this to be reduced to 2.6 per annum by 1980 and then to 1.3 by 1985.

As construction of new dwellings in France fell by 3.7% per annum between 1974 and 1985, renovations increased by 0.9% over the same period. What this means is that the French were spending some money upgrading their homes, for instance with insulation and other innovations to reduce domestic fuel consumption, but there was little formation of new households in new homes (which involves a much greater outlay).

The French government also reduced its annual commitments to public housing construction and to subsidised loans for the purchase of both public and privately constructed dwellings. André Postel-Vinay's requirement that money be ploughed into increasing the immigrant housing stock to compensate for the harshness of 'ceasing' worker immigration was flouted and he resigned in protest. As well as this, inflation affected the public's ability to purchase houses as it did everything else. These factors combined to produce a very severe recession in the housing industry and many companies failed. On a graph total production of housing in all sectors in France falls away dramatically from 1974, although the private sector struggled on a little longer than the public, until about 1975.

Fig.7.3 France and Australia, Total New Dwellings Commenced, 1964-1997

Source for Australia: ABS Timelines series, 875001_wks, Table 1, "Number of Dwelling Units Commenced: Seasonally Adjusted and Trend."
Sources for France: The original source for all my secondary sources was the Ministère de l'Equipement, du logement, des transports et de la Mer. My actual sources were: Insee Annuaire Rétrospective de la France, 1948-1988, Tableau 1, "Situation de la construction", for the years 1948-1988 and Annuaire Statistique de la France, INSEE 1999, for or the years 1992-1997. The figures for the years in between (1989-1991) came from Maurice Blanc and Laurence Bertrand, Housing Policy in Europe, Routledge, 1996, p.127, for the years 1980-1991.

Fig. 7.3 shows how abruptly the construction of new dwellings fell in France and how different the pattern was in Australia, where no long term change in demand or production occurred.

This was a time of major reorganisation of how the housing, building and private developer industries operated in France. After a rash of (largely British inspired) investment in speculative office blocks and housing estates, which, in the absence of high population growth and high economic growth do not pay, the private industry adapted to customer demand and factory construction and introduced a requirement for major prepayments. Factory construction meant that less building was done on sites. The major components of dwellings could be built in factories and assembled later on sites. In effect, rather than purchasing a site and erecting dwellings, then awaiting buyers, the builder waited instead for orders for houses from home buyers who already had a site. Materials could then be ordered as necessary, components of the house could be constructed in the factory and later transported and assembled on site. Up front and total costs to the builder were minimised.

"Through better trained workers, long term planning and methods that overcome seasonal and climate problems and other factors which had plagued the building industry with a stop-go character, in France the number of person-hours required for an average size dwelling decreased from 3,600 in the early post war period to around 1,000 hours in 1980. This was primarily due to industrialisation of the building process."

This section on changes to the residential construction industry in France after 1973 illustrates my argument that where there is economic contraction, and finance for public and private sector housing depends importantly on public subsidies, then there will be very little expansion if government is not prepared to borrow finance.

The building industry in France adapted to decreasing household formation, but the Australian industry had no need to and continues to use very inefficient methods of production.

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

As discussed, Australia had been unable or unwilling to educate and train enough skilled tradesmen. 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. 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.

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. 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.

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. 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. He also attempted to introduce a capital gains tax on profits made through land rezoning.

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.

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. 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."

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

The success of these policies was patchy, 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.

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.

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.

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.

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."

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. 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 Planning 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. 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. [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 1986 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.

This story is continued in the next section and then impacts in Chapter Eight of http://www.alphalink.com.au/~smnaesp/populationspeculation

Also available on CD from PO Box 1173 Frankston VIC 3199 at cost of $20.00