The Dismissal

The Whitlam governments lasted scarcely three years. Australia's first Labor government since 1949, and its first modern social democratic government, was caught up in a series of crises caused by a combination of domestic and international factors. Domestically its failure to win control of the Senate was the key, as an Opposition, unwilling to accept Labor's legitimacy, held the new government hostage. Internationally, the long boom ended, and the Australian economy started to falter, as did every other economy in the western world. The appearance of ‘stagflation’, in which rising levels of unemployment are accompanied by rising inflation, showed that the usefulness of Keynesianism in managing national economies was over. The inexperienced Whitlam government became increasingly desperate and accident prone as the economy spun from its control, and at the end of 1975 the Opposition brought it down, as its belief in the new government's incompetence was given daily vindication by ministerial scandals and a deteriorating economy. The Liberal Party returned to government under a new leader, Malcolm Fraser, believing that now the right people were back in power, and that Whitlam had been revealed as arrogant and foolish and his government as an inexperienced rabble, all would be well. The economy would right itself, the Liberal Party would quickly re-establish the moral ascendancy it had held during Menzies' days, and it would be clear to all that the Whitlam government was nothing but an aberration.