The Ballance Government (1890-93)
The Liberal Party quickly consolidated its hold on power and, from the 1892 election, would hold a majority in the House of Representatives. The new Senate President and Postmaster General was Sir William Lyne (NSW). Senator John Quick of Victoria became the new Attorney General. Robert Stout was named as External Affairs Minister, Frederick Holder as Treasurer; and Sir Edward Braddon as Home Affairs Minister. In Trade and Customs was the new powerbroker of the Liberal Party, George Reid. In Defence came the new Victorian giant, Alfred Deakin. Julius Vogel retained a position as Minister without Portfolio and Vice President of the Council. The Cabinet was made solely of Liberal Party members, but many others outside the Party had deeply-involved sympathies with the cause of liberalism.
Ballance immediately recognised the emerging economic challenge created by trade unionism and sought to contain the problem by adding a Department of Labour and Industry. H B Higgins of Victoria took on the role. Higgins was authorised to inspect and examine working conditions and his efforts gave rise to the Industrial Conciliation and Arbitration Commission, a pseudo-judicial body which would attempt to negotiate industrial disputes and, failing to do so, impose orders on employers and unions. The new minister was the dominant face of the Government over the next few years as he sought to build a modern industrial relations system. New working conditions relating to safety, protection of children and accident compensation were all key successes for the Commission prior to its better-known “fair wage” case of 1896.
Ballance’s industrial policy saw off two major threatened strikes. The first, in August 1890, was brought by the Mercantile Marine Officers Association, which had recently joined up to the then-new National Trades Hall Council (later, the Australasian Council of Trade Unions, or “ACTU”) and was calling for a pay rise of £1 each for their workers. Following arbitration by the Commission, employers eventually conceded that the increase in pay was overdue and well justified.
The second was a challenge from the National Union of Shearers, with wool being Australasia’s largest export and industry at the time. In January 1891, an attempt at anti-union action by some pastoral stations in Queensland resulted in union retaliation before the Commission intervened, upholding the right of employers to hire non-union labour but not their right to exclude union labour. It also wholly supported the right of trade unions to organise. However, the Commission ruled that there was no “right to strike” and there was disagreement over this issue within the Liberal Government. The difference of opinion would widen over the coming years until the eventual split of the Liberal Party, with union rights being a key issue in that split.
The Ballance Government oversaw a period of growing economic instability in Australasia. The previous decade had been an economic boom, with Melbourne becoming the second largest city in the Empire, and it had largely been based on foreign speculation in the Australasian property market. There was no central bank and no deposit guarantees, with a completely free banking environment. The influx of capital had given Australasians the highest per capita income in the world and commercial banks lent heavily, but by 1889, asset prices had begun to fall. By the time Ballance took government, the first small banks were already beginning to leak money and the threat of strikes by the maritime union were causing uncertainty.
The following year, the discovery of gold in Western Australia managed to temporarily boost confidence in the Australasian market and returns in New Munster were continuing to pay off. Western Australia even renamed itself Auralia, as the gold continued to be uncovered. However, the eastern mainland’s growth had become decidedly sluggish and, in 1891, the first banks began to fail. The rate of the collapse worsened over 1892, but Ballance survived the election of that year with his parliamentary leadership intact.
The 1892 election was concurrent with the first referendum to amend the Australasian Constitution, extending the power of the Commonwealth to take over the troublesome emerging state debts. A similar independent referendum was held in 1894 to increase the Federal Government’s authority over corporations and trusts, confirming the power over intra-state industrial disputes involving railways and granting permission to nationalise monopolies. All propositions were carried in New South Wales, Victoria, Tasmania and New Ulster, with New Munster and South Australia making out the majority in individual cases. In Queensland and Auralia, every single referendum proposition was rejected.
However, by 1893, the world was in the grips of a financial crisis and collapsing financial institutions became the centre of focus. The largest institution to fail, the Federal Bank of Australasia, toppled in February of that year and many companies and financial institutions simply ceased to trade. The economy was not the only thing in ill health; the Prime Minister passed away in late April after surgery on his intestine at the age of 54. He was thus the first Australasian Prime Minister to die in office.
