A plane delay prevented McMahon from arriving in time for the second race of the America’s Cup on 17 September, but it was cancelled ‘for lack of a dependable breeze’ and re-scheduled. Australia’s ambassador, Jim Plimsoll, picked McMahon up at Boston airport and, the next day, watched as McMahon and Sonia joined Packer aboard Pearl Necklace, Sir Frank’s chartered ship, to observe the race.74 But that, too, was not an ideal day for yachting. Rain and fog led to cancellation of the race after the third mark, and that night McMahon, Sonia, and Kim Jones departed Newport for New York. Sonia returned to Newport the next evening, and was there to see Gretel II finally defeat the American-crewed Intrepid on 20 September. Her return was lucky — it was the sole victory that Gretel II enjoyed in its overall unsuccessful challenge.
McMahon spent four days in New York, meeting with the US secretary of state, William Rogers, and the British foreign secretary, Sir Alec Douglas-Home.75 Between calls home to Howson to enquire about domestic politics, he spoke at a luncheon of the American Australian Association and addressed the United Nations General Assembly, where he criticised the UN for its failure to debate the Vietnam War and argued that Asia received far less attention than its due in world deliberations.76 The next day, on 24 September, he travelled to Washington by train. Plimsoll had arranged a black-tie dinner to be held in McMahon’s honour at the ambassador’s residence, and invited high-ranking government officials to attend. New Zealand’s ambassador, the US undersecretary for political affairs, the director of the Arms Control and Disarmament Agency, the assistant secretary of state for near eastern and south Asian affairs, and the wives of all were in attendance.77
The evening ran smoothly until just after the dessert. With guests still sitting at the table, McMahon stood up and left the room. Plimsoll followed to find out where he was going. To McMahon’s explanation that he was tired and going to bed, Plimsoll reminded him that the guests were important people who had deliberately come to meet and speak with him. This did not cause McMahon to change his mind. ‘Some other time,’ he said, and turned to go. Plimsoll had to do what Sonia might normally have done: he grabbed his minister by the back of his coat and prevented him from going any further. ‘All right,’ cried McMahon, ‘I’ll stay.’78
BY the time McMahon returned to Australia on 5 October, Gorton had decided upon the next test: a half-Senate election would take place on 21 November.79 With five seats at stake in each of the six states, and two further seats contested in New South Wales and Victoria, thanks to deaths of two senators, it was not to be an election that favoured the government. Nor was it a particularly auspicious time to be out campaigning. A by-election in the Liberal-held seat of Chisholm, in Victoria, to replace the deceased Sir Wilfrid Kent Hughes, augured no great fortune. Quarrels with the states were still making headlines in the press. Bury’s 18 August budget had been received with a mix of praise and damnation, the latter focusing particularly on its paltry 50c per week raise in the pension. Whitlam had harnessed the energies and goodwill of a party that believed itself set to make government, and successfully pushed for reform of the intransigent Victorian and New South Wales branches of the ALP, ensuring that they were modernised and integrated to follow the policy platform of the federal party — including, most crucially, support for state aid to independent schools.80
The government had its answer to these issues, but persistent protest action had encouraged it to focus on questions of law and order before anything else. Though there was justification for this — protesters had demonstrated outside the home of attorney-general Tom Hughes in August81 — the situation was overheated, and inflammatory comments, like those of Billy Snedden, who had described the organisers of protests as ‘political bikies who pack rape democracy’, were not helpful.82 In October, cabinet retreated from rushing into legislation, but specifically noted that Gorton would continue to discuss law and order issues in the campaign.83
The possibility that the Senate election might prompt unrest in the party had to have been a consideration for McMahon. Gossip about it was everywhere. On 13 October, Howson heard, from a third-hand source, that Snedden had suggested the possibility of a ‘palace revolution’ if the government’s vote took a hit.84
Where he might stand in the event of such a revolution would have occupied some of McMahon’s thinking. He would not have been too concerned by Fairbairn: the former minister for national development had garnered much esteem for his resignation and challenge of Gorton, and for his opposition to Gorton within the party room, but Fairbairn had also been damaged by the debate over the offshore legislation. There was also widespread suspicion that Fairbairn’s assertive and ambitious wife, Ruth, wielded too much power in their relationship.
McMahon would, however, have had reason to be concerned by the growing regard for Malcolm Fraser. In spite of his youth, the minister for defence was increasingly mentioned as an imminent contender for the leadership. His work in the defence portfolio, dealing with the F-111 and Australia’s commitments in Vietnam, had caused his stocks to rise. That his relationship with Gorton had very obviously deteroriated — especially after an episode of civil unrest in Papua New Guinea — had, remarkably, broadened his appeal, to the point that Howson told Bert Kelly that McMahon and Fraser could well be the leadership team to ‘unite the various factions that are all dissatisfied with the present leadership’.85
To what extent McMahon was concerned by Fraser’s increasing stature is unknown; nonetheless, following McMahon’s return from the United States, he and Gorton both concentrated their fire on Fraser during the course of an evening cabinet meeting. At issue was a proposal that Fraser had submitted in May to establish a single academy for the education of officer cadets in all three armed services. The proposal ostensibly enjoyed the support of the ministers for air, the army, and the navy, as well as their respective chiefs of staff. But by the time the matter was finally considered, in October, Gorton had become aware that this support was not necessarily sound; moreover, he questioned whether the proposal would divert resources from officer training. Following his department’s advice, McMahon likewise expressed serious reservations about the proposal. Both he and Gorton questioned the stated costs and their efficacy, and in the cabinet meeting on 13 October the weight of their criticism was sufficient to see the proposal set aside. Fraser was told to come back with answers to the questions that they had raised, and the resulting cabinet minute summarily deferred any further discussion of the proposal until he had done so.86 News of the rebuff quickly made its way into the press, with many observers linking it to leadership tensions and personal rivalries.87
Gorton’s critics, meanwhile, watched the government’s falling popularity with a glee that was tempered by awareness of Labor’s potential to post a strong vote at the Senate election. When McMahon discussed a late-October Gallup poll with Howson, he was mindful of the dangers that a poor Senate result could present: ‘We could well find ourselves with an election in a year’s time,’ Howson recorded of their conversation.88 The up-and-down polling in the weeks leading up to 21 November gave critics like Howson moments of panic. On 12 November, thinking that Gorton might use a good result as a pretext to move against McMahon, Howson asked Alan Reid to speak with Frank Packer about persuading McMahon to stay in the Parliament, even if he was sent to the backbench.89
If Gorton had been considering this, the result put the kybosh on any such move. The government had an especially poor showing. Its primary vote fell dramatically, from the 43.4 per cent it had recorded a year before, at the 1969 election, to 38.9 per cent. The DLP, meanwhile, took 11.1 per cent of the vote, and held two seats and won another, for a total of five Senate seats. It was the minor party’s best-ever performance, and one of the Liberal Party’s worst.90 Gorton’s critics were gloating. ‘Overall, it’s been a disaster for the government,’ wrote Howson.91
After campaigning widely himself, McMahon was keen to pin the blame on Gorton. On 22 November,
he claimed to have urged Gorton to ‘unite the factions in the party’ and that ‘big changes’ were necessary if the government was to win another term in office.92 Five days later, he was telling Howson that the cabinet’s discussion of the campaign had been little more than a ‘mass of sycophantic adulation of Gorton’, with no one — not even McMahon, it would seem — prepared to tell the prime minister that he alone should supposedly bear the brunt of the criticism.93
If there had been any abatement of the tension between McMahon and Gorton, it was short-lived. Four days before the Senate election — that is, 17 November — the British prime minister, Edward Heath, had confirmed that the British government would resume arms sales to South Africa, in accordance with an agreement it had struck for use of a naval base at Simonstown. Opposition to resumption of sales immediately materialised in the form of the presidents of Zambia, Tanzania, and Uganda. In Australia, the Department of Foreign Affairs, as External Affairs was now known, prepared advice that Gorton and McMahon should express opposition to the arms sales at the next Commonwealth Heads of Government meeting to be held in Singapore in January. McMahon was receptive to the advice, but Gorton was not. Long a sceptic of the Commonwealth, he believed that it was not its business to tell another government what to do.94 The argument was uneasily echoed within the prime minister’s office and public service, all of whom could anticipate the line that the prime minister of Lesotho, among others, would model in two month’s time in Singapore: while the British government might well have the right to make its own decisions on what it saw as a matter that affected British interests, the decision to sell arms was also ‘an unprincipled act in support of South Africa and its apartheid policy’.95
There were other issues to be dealt with. Late in October, before the Senate election, John McEwen finally confirmed what had long been rumoured: that he would retire early in 1971. Now aged seventy, with thirty-six years in politics behind him, McEwen invoked the Roman senator Cincinnatus to declare that he would return to his humble Sabine farm.96 Colleagues lauded his contributions to Australia’s prosperity, particularly his advocacy for the trade treaty he had forged with Japan in 1957, and they noted his personal stature and convictions. But McEwen was not yet a spent force, and in the short time left before his departure, the aged Country Party leader set himself for one last battle — on tariffs.
Concerned by the Tariff Board’s adoption of new principles for its decisions on tariff-making; worried by the confirmation, via a legal opinion, that the board could carry out reviews without government approval or references; and determined both to stop these and ensure continuation of the tariff policies he had spent the entirety of his career advocating, McEwen worked in secret to devise a cabinet submission that would all but eviscerate the Tariff Board as it existed under Alf Rattigan.97
The submission declared that the Tariff Board as it operated was not appropriate: the board, McEwen argued, was playing ‘the role of an economic planning agency with the task of allocating resources within the economy’, and was putting at risk investments totalling over $3,000m and the employment of 600,000 people. To prevent it doing so, McEwen’s submission recommended that the government prepare a set of guidelines that the Tariff Board would be required to follow at all times when it considered tariff reviews. Those guidelines would include requirements that the board compare the cost of production in an Australian industry with the cost of production in another country of similar living standards — that is, a Western country — and that the board recommend levels of protection whereby the industry would be ‘secure against damage from import competition’. Notably, the submission also proposed that the Tariff Board rely for information and expertise on the Departments of Trade and Industry, Customs and Excise, and Labour and National Service.98
But when the submission came up on 15 December, cabinet unexpectedly decided to postpone its consideration. McEwen would have been surprised: his office had intimated to journalists that a statement on the Tariff Board would be issued that day after the cabinet meeting.99 In the new time between the submission’s circulation and its consideration, McEwen’s opponents went to work. A copy was given to economics journalist Kenneth Davidson, of The Australian, who understood the landscape of tariff debates, the politics of that debate, and the likely effects of McEwen’s proposal, should it be approved. Whoever leaked it knew what they were doing. Calling the submission one of the ‘crudest economic arguments’ he had ever seen, Davidson published a story on it on 18 December, and suggested that the public exposure meant the submission’s chances of receiving approval were slim.100
The outcry that greeted news of McEwen’s submission was loud. Financial journalists were scathing about the proposals, and industry groups mobilised to defend the Tariff Board. During the Christmas holidays and into January 1971, opponents and critics worked to see it defeated. The president of the Associated Chambers of Commerce said it was ‘gravely concerned’ at the threat to the Tariff Board’s independence, and, like Bert Kelly, pressed cabinet to knock back the proposal.101 McEwen’s own statements raised the stakes. Arguing that 1.6 million people depended on the income of the 600,000 workers who would supposedly be affected by the Tariff Board, he dismissed criticism that his approach was hamfisted and inappropriate. ‘To put under question, or in jeopardy, the livelihood of more than one fifth of the Australian population is certainly not a matter to be left light-heartedly to the Tariff Board.’102
‘There is something almost heroic in the posture of that grand old warrior, Sir John McEwen, rising on the eve of his retirement to strike out against the Tariff Board,’ The Age editorialised, on 26 January. But, however admiring it might have sounded, McEwen was, to many, completely in the wrong: ‘His struggle to subdue the Tariff Board looks like being Sir John McEwen’s last great battle. Sadly he deserves to lose it.’103
Duly, he did. When cabinet considered the matter on 27 January, it decided that there would be a ‘progressive review’ of tariffs, as McEwen had recommended — but the question of criteria and guidelines would be ‘the subject of further examination’ by the government. When would that occur? The cabinet decision did not say.104 McEwen left the cabinet meeting ‘visibly upset’. The circumstances of the defeat were humiliating. Undoubtedly, publication of the submission was the cause of the opprobrium and outcry; without it, as one journalist suggested, cabinet would likely have approved it without rancour. Who leaked it, then? ‘The material came from the enemies of McEwen and McEwenism and they were myriad in the government,’ Davidson said later. ‘You can be fairly sure they came from the Liberal side of politics … It was somebody who was highly placed in the government.’105
Nine days later, McEwen tendered his resignation as deputy prime minister, as minister for trade and industry, as leader of the Country Party, and as the member for Murray. Farewelling him, the press could not help but note that his time was over. ‘A great many of the things he held to be natural truths have come to be questioned with increasing frequency and growing effect,’ wrote one journalist.106 Colleagues thought his views were outdated. Hearing that cabinet had ‘knocked out’ McEwen’s ‘final flutter to hobble the Tariff Board’ and that he was now soon to be gone, Bert Kelly was simply and completely relieved. ‘If only he had been thoroughly done a long while ago by more courageous Prime Ministers or Cabinets, Australia would have been a lot better off.’107
ENSURING that he was better off had also motivated McMahon to restructure the Department of External Affairs, a process that culminated as 1970 ended. The afflictions Tange had diagnosed in 1969 had been largely confirmed in a subsequent departmental review, and since then McMahon had begun looking for ways to address them. He had made his views well known throughout 1970: since January, the journalist Bruce Juddery had been writing of McMahon’s preference that the department be restructured to include a policy planning group that could study options for Australian foreign policy.108
On 6 April 1
970, barely days after Waller commenced his tenure as secretary, McMahon wrote to him to outline the deficiencies of the department as he saw them.109 Noting that his experience indicated that ‘the lack of co-ordination is little short of alarming,’ he told Waller that a deputy secretary who could co-ordinate the policy of the department’s various divisions needed to be appointed. Next, he argued that there was clear need for two deputy secretaries: the first, with responsibilities for policy; the second, to oversee administration, defence, consular relations, aid, and other matters. The functions of the department needed to be allocated among the department’s divisions ‘on a more logical basis’. A ‘critically important’ matter was on policy itself. ‘I have been informed that former Ministers have taken the view that it is not the function of officers to initiate policy or policy changes,’ McMahon wrote. ‘I do not agree with this. They have every right to do so and should be encouraged.’110
Moreover, cross that there had been no more than ‘one or two occasions’ when he had been advised to make a statement on television or the radio, McMahon told Waller that he wanted ‘a different approach to public relations’. He wanted first assistant secretaries to discuss important matters with him, in person or over the telephone, rather than by minutes and memos. He wanted co-operation and goodwill with other departments — without, of course, ‘subordinating the Department to the whims of others’ — and he wanted the amount of administrative work that crossed his desk to be reduced. Some of these echoed recommendations that Waller had already made, in March; nonetheless, they soon saw results.
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