By John Doyle
Historian Frank Bongiorno recently suggested that Gough Whitlam’s achievements as opposition leader in the lead-up to Labor’s election victory in 1972 ‘should grab our attention’ because he succeeded ‘both in keeping governments accountable and in preparing for office’. The origins of his government’s positive legacy, says Bongiorno, lay in ‘a fruitful period of opposition.’
In that vein, this paper, which draws from my book, Crossed Lines: Disruption, Politics and Reshaping Australian Telecommunications, seeks to pay due attention to the Whitlam-led Labor opposition’s ‘fruitful’ development of plans during 1967-72 to reform Australia’s telecommunications system. This was fundamental in the new government’s ability to hit the ground running within weeks of its election.
In the 1960s, Australia’s federation-era Postmaster-General’s Department (PMG), responsible for national telecommunications and postal services, was straining under ever-increasing pressures. Technological advances meant major improvements to the quality and functionality of telephone services. The PMG had been leading a massive network upgrade program since the turn of the decade and was also moving into the new world of data. Demand was surging all over the country.
The PMG’s sheer scale and its relentless call on the Commonwealth for capital were becoming increasingly problematic. By the early 1970s, its permanent staff numbers were more than 110,000, constituting nearly half of all Commonwealth public servants. The department’s capital expenditure absorbed more than a third of the federal capital budget.
But while its operating environment was becoming more fast-paced, more technically complex and more capital-hungry, the PMG’s administrative structures remained inflexible and subject to political interference. Staffing arrangements fell under the Public Service Board’s remit and pricing and annual appropriations were set by parliament.
Many politicians, especially those from the Country Party—for which the PMG was something of a fiefdom during the long years of post-war Coalition government—cherished this level of control and considered it essential to maintaining the flow of subsidies to ensure affordable services in rural areas. When the Coalition left office, the fee for a new telephone service covered just 0.25 per cent to 3 per cent of the average connection cost.
It was clear that Australia’s telecommunications arrangements were no longer fit for purpose. While successive post-Menzies Coalition governments kicked the policy can down the road, the Whitlam-led Labor opposition advocated and planned for more fundamental reform. The driver of this was twofold. First, a reinvigorated political and industrial campaign by the 40,000 member Labor-affiliated Amalgamated Postal Workers’ Union (APWU). And second, Whitlam’s election as Labor leader.
A key APWU objective had long been removing the PMG from Public Service Board jurisdiction and reconstituting the department as an autonomous statutory authority. The announcement by Britain’s Wilson Labour government in 1966 that the General Post Office (the UK’s PMG) was to become a statutory authority energised the union and the following year it took some well-timed resolutions to this effect to Labor’s federal conference. Whitlam had just become party leader and was on the lookout for modern, pragmatic and politically appealing policies.
The APWU offered a ready-made policy position that was consistent with Whitlam’s own long-held views and objectives. He was contemptuous of what he considered the atrophy of Australia’s administrative structures after two decades of Coalition government. In early 1968, he said of the PMG: ‘Technically there is no field of government in Australia which is so advanced as the Post Office [as the PMG was often called]. Structurally there is no field of government in Australia that is so archaic as the Post Office. What substantial business in Australia would have changed its structure so little as the Australian Post Office?’
Whitlam had long believed that the PMG’s chronic dependence on Commonwealth funding and its inability to satisfy demand for telecommunications services was due principally to the Coalition’s direct intrusion into its operations. He saw government enterprise inefficiency as a symptom of political interference rather than being due to any inherent weakness in public administration.
Whitlam wanted an end to direct political intervention in telecommunications service delivery and for service provision to be guided by what we now call user-pays principles. His view was that ‘the persons who use the service should pay for them. They should pay for the capital and pay for the running’.
So though Whitlam did not initiate Labor’s policy shift on telecommunications, his rise to the party leadership threw open the door to new policy ideas. At the 1967 Labor conference, the party accepted a proposal from its Economic Planning Committee, which included new leader Whitlam and an ambitious young unionist, Bob Hawke, to adopt as policy the ‘severance of the Postmaster-General’s Department from the Public Service Board and the Department to be controlled by a Corporation’.
Labor considered that releasing the PMG from the Public Service Board’s ‘heavy hand’ would enable it to be ‘run as a business undertaking, on business lines’. By this it meant freeing the PMG to employ more staff in response to surging demand for telephone services and permitting direct industrial negotiations between PMG officials and unions.
Labor’s rationale was that better telephone (and postal) services would flow directly from industrial harmony. This relied on some wishful thinking that the PMG and unions, despite operating an essential-services monopoly, would reach amicable and responsible agreements that would not simply see inflated costs passed on to Australian households and businesses. While PMG officials broadly welcomed Labor’s new policy, they worried about dealing with freshly empowered unions.
Although Labor’s 1967 policy reflected its union and industrial origins, by the following year, as the government and opposition debated the Coalition’s proposed incremental changes to the PMG’s financial controls, Labor’s advocacy for releasing the PMG from Public Service Board jurisdiction revealed a broader perspective. The Whitlam-led opposition was grappling directly with the strategic issues undermining Australia’s ability to provide telecommunications services in a financially sustainable way. Industrial concerns remained central, but Labor also focused on problems with the PMG’s exposure to direct political interference, the web of opaque and substantially unaccountable subsidies that this spawned, and the need for greater nimbleness in the sector at a time of rapid technological change.
The opposition argued that an autonomous statutory authority would deliver telecommunications services in a more commercially rational manner. This was consistent with Whitlam’s convictions that government enterprises could be just as efficient as private-sector companies and that telecommunications pricing should be set so that it more closely matched underlying provisioning costs. The bipartisan objective of ensuring affordable universal services was not in question, but Labor argued that where commercially unviable services were provided in fulfilment of public policy, such as those supplied to rural areas, they should be funded through direct, explicit government subvention.
To this end, Whitlam asserted in parliament that a statutory authority would be less vulnerable to ‘direct political manipulation [and] could begin to follow a pricing policy geared to international criteria and to insist that where communication subsidies are judged desirable they should be provided by open rather than covert means’. He mocked the Coalition for ‘betray[ing] its professed loyalty to the values of enterprise and efficiency by hesitating and procrastinating’, proclaiming that even ‘Britain’s socialist government has recognised the futility of administering the Post Office as a department of the Crown and has re-established it instead as an independent statutory corporation’.
In May 1968, the Labor opposition sought the government’s agreement to establish a joint select parliamentary committee with wide-ranging terms of reference and a mandate to call expert witnesses to ‘inquire into the desirability of removing the Australian Post Office from the administrative influence of the Public Service Board and of establishing a public corporation to control the business of the Post Office’.
This was a genuinely bipartisan plan, consistent with Whitlam’s call for an ‘analytical approach to the problems of the Post Office’. Labor explicitly pointed out that Coalition MPs would have a majority on the committee, and acknowledged the significant policy, administrative and logistical complexities that would be involved. But the government was resolutely opposed to opening this Pandora’s box and for the next four years, Labor pushed consistently but unsuccessfully for a bipartisan inquiry, sometimes attacking the government for intransigence and at other times bending over backwards to be conciliatory.
During 1970–71, the opposition developed further its policy position, suggesting that it might be more effective and efficient if telecommunications services, which were technologically advanced and commercially viable, and postal services, which were labour-intensive and loss-making, were delivered by different organisations. Labor also sought to wedge the Coalition, with some success, by arguing that a profitable stand-alone telecommunications enterprise would be better able to hold down prices and realise the Country Party’s key aspiration of concessional telephone rates in rural areas.
In his campaigns for the 1969 and 1972 elections, Whitlam presented the PMG as a key exhibit in Labor’s case against the Coalition government’s poor industrial relations performance and, by extension, its poor economic management. It also featured in Whitlam’s drive to attract greater Labor support from white-collar middle-class professionals. In 1969, he asserted that ‘most industrial unrest over the last two years has been among the higher skilled and government employees’ and that ‘continuing provocation and consequent disruption has occurred in Australia’s largest business undertaking, the Post Office’. In 1972, Whitlam promised that ‘Australia’s largest employer—the Post Office—will be severed from the control of the Public Service Board.’
Within a few weeks of winning office, the Whitlam government moved to set-up a wide-ranging royal commission into the PMG. To chair it, Whitlam appointed James Vernon, a pillar of Australian business previously engaged by the Menzies government to head its committee of economic inquiry. This act was the first step along a reformist path that led, many steps later, to the establishment in July 1975 of Telecom (predecessor of today’s Telstra), just four months before the Dismissal.
 Frank Bongiorno, ‘The Liberal Party is in a dire state across Australia right now. That should worry us all’, The Conversation, 10 October 2022, https://theconversation.com/the-liberal-party-is-in-a-dire-state-across-australia-right-now-that-should-worry-us-all-191851.
 Tony Maiden, ‘Managing a giant with clouded responsibilities’, Australian Financial Review, 19 December 1972; Roger Wettenhall, ‘The Post Office’, Current Affairs Bulletin, 45/9 (23 March 1970), 137.
 Task Force to Inquire into the Continuing Expenditure Policies of the Previous Government, Review of the Continuing Expenditure Policies of the Previous Government (AGPS, Canberra, 1973), 131-2.
 Frank Waters, Postal Unions and Politics: A History of the Amalgamated Postal Workers’ Union of Australia (University of Queensland Press, St Lucia, 1978), 239.
 Gough Whitlam in Commonwealth Parliamentary Debates (CPD) (House of Representatives (Reps)) (2 May 1968), 1066.
 Gough Whitlam, The Whitlam Government, 1972-1975 (Viking, Melbourne, 1985), 215.
 Whitlam in CPD (19 August 1965), 233-6.
 Australian Labor Party, Official Records of the 27th Commonwealth Conference and Special Conference and the 28th Commonwealth Conference (Melbourne, 1969), 22, 85-6.
 Harry Webb in CPD (Reps) (10 May 1967), 1951.
 Whitlam in CPD (19 August 1965), 233-6; Whitlam, Whitlam Government, 215.
 Whitlam in CPD (2 May 1968), 1066.
 Webb in CPD (1 May 1968), 1000.
 Whitlam in CPD (2 May 1968), 1066.
 See CPD (Reps) (23 September 1970), 1509-19, 1528-32; (8 September 1971), 913-14; (13 September 1971), 1163-94, 1203, 1215.
 Gough Whitlam, ‘Into the Seventies with Labor’, 1969 election policy speech (Sydney, 1 October 1969).
 Gough Whitlam, ‘It’s time for leadership’, 1972 election policy speech (Sydney, 13 November 1972).
Cover image: Worker on telegraph poles. Photographer Henry Talbot via State Library of Victoria.