The Whitlam government stands out as the most significant reforming Labor government in Australian history. The introduction of free tertiary education, Medicare and increased age pensions. An end to conscription. The formal burial of White Australia and the first moves towards multiculturalism. The drafting of land rights legislation in the Northern Territory. The introduction of no-fault divorce and sole parent pensions. Marked improvements in conditions for public servants as well as a big increase in their number. All of these are Australian reform milestones.

The raw figures are impressive. In the 1973 budget alone, federal spending on health was increased by 20 percent, education outlays doubled and spending on housing quadrupled. There were problems with this program – the outlays were in part funded by higher taxes on beer and cigarettes and entry to university was still dominated by the middle class. But in an era when all we hear about from both major parties is “economic realism” and attacks on the “age of entitlement”, Whitlam’s reforms stand out as a shining light.

This historic memory of the Whitlam government is precisely what the political right loathe. For 40 years they have lambasted the Whitlam government – its alleged “chaos”, “economic incompetence” and “corruption” – in an attempt to discredit the notion that any government might introduce measures to benefit the working class and oppressed. How they must have squirmed when callers inundated talkback radio on the day his death was announced to recall fondly the Whitlam reforms. When Whitlam is buried, the right wing will be wishing that every last memory of his government will also be interred.

And while the Labor frontbenchers will be sobbing, they too will be hoping that no one suggest they take up the torch of reform. The “lesson” that every Labor leader has drawn from the Whitlam era is the need to be economically “responsible” – that is, to serve the capitalist masters without demur.

Contradictions

But simply to see the Whitlam as progressive and every other subsequent Labor leader as a sharp break with his record overlooks the fact that Whitlamism was a contradictory phenomenon. On the one hand, there were the tremendous reforms. On the other, the Whitlam government paved the way for the rottenness that is the ALP today.

When countless reviews of the inner workings of the ALP conclude that the party needs to be “modernised”, they are reaching back to a process started in the 1960s and driven by Whitlam before he became leader. “Modernisation”, then as now, is simply shorthand for ditching the working class identity of the party and adopting an outright pro-capitalist image.

Whitlam made his name campaigning against union control of the party and for more power in the hands of the parliamentary leadership. He wasn’t altogether successful in this, but changes in 1967 did give the party leadership more sway.

In 1970, “modernisation” meant smashing left wing control of the Victorian branch, which Whitlam, now leader, argued was essential to make the party electable. A bright, shiny, middle class and professional “with-it” media-friendly image was what would win, not association with working class politics or socialism.

When progressive people today bemoan the triumph of style over substance in politics, the domination of media spin and focus group policy formation in the ALP, they can thank Whitlam for starting this process.

Even more corrupting to the ALP was the abandonment by Whitlam of his own reform program in his last year in office and his adoption of economic measures so beloved by the capitalists today.

The Whitlam government’s 1972 election program and first 18 months of reforms were premised on the continuation of the long postwar economic boom and the steady flow of tax revenue to pay for them. This is just what happened: in its first year in office, the government actually ran a budget surplus.

It was not that the capitalist class objected to Whitlam’s reforms; indeed, Rupert Murdoch backed Labor’s election in 1972, and Whitlam went out of his way to reassure the bosses of his government’s pro-market credentials. The more far-sighted capitalists could see the benefit of the tariff reductions, the ending of White Australia, the measures taken to curb monopolies, the expansion of public health and education and drawing women into the workforce. Corporate profits rose by 16 percent in Labor’s first year in office. It seemed for a period that the interests of both the capitalists and working class could be met.

Crisis

But in 1974, as the world economy crashed, Australia, and with it the project of satisfying both capitalists and workers, also fell into crisis. Growth shrivelled, inflation soared, unemployment rose, profits wilted and the stock market plunged.

The government’s first reaction, under the reforming treasurer Jim Cairns, was to spend more money. But as tax revenue fell, the budget deficit grew rapidly. The Liberal Party, business groups and media began to clamour for sharp spending cuts and an attack on the working class.

Faced with the ruling class offensive, the ALP capitulated. Industrial relations minister Clyde Cameron denounced militant trade unions and accused them of “pricing workers out of jobs”. Government ministers began to pepper their speeches with references to “dole bludgers”.

Over the summer of 1975 the government cut business taxes and handed out big subsidies to companies threatening to sack workers.

In February 1975 at the party’s Terrigal conference, the ALP leadership, Cairns included, confirmed the retreat. Retrenchment was now the way to go. Private enterprise had to be promoted. The restoration of profits became the government’s central goal.

The government now began to attack the working class in earnest. Wages were frozen, while the Prices Justification Tribunal, sold to workers as a way to keep a lid on price hikes, allowed BHP to raise its prices by 14 percent. Working class support for the government began to sink.

By the time of the August budget, the new ruling class economic program, then known as monetarism (now, neoliberalism), had been adopted by the Whitlam government. Cairns and Cameron, regarded as too close to the unions, were dumped. New treasurer Bill Hayden used the budget to send Labor’s early reform program into reverse. Welfare spending was cut and sweeteners handed out to the capitalists.

Whitlam’s problem was that, try as he might, he could not move fast enough to keep big business happy. The working class offensive was too recent and pressure by the unions too strong to allow him to scrap all of his earlier reforms. The ruling class drew the conclusion that Whitlam had to go; the governor general did the job for it, sacking the government on 11 November.

Labor fought the 1975 election not on the basis of extending its earlier reforms but on its commitment to budget restraint, and this, as part of the broader project of pleasing the capitalists, became central to Labor’s manifesto at every subsequent election and the program of every Labor government to this day. It was also this commitment to “sound finance” that wrecked any chance Whitlam had of winning the 1975 election, with the biggest swings against Labor being registered in the suburban seats and working class areas.

If Whitlam is to be remembered as a significant reformer, he also should be recalled as the man who paved the way for every grubby Labor government that followed him and the degeneration of the party that has resulted.