Harold Holt - Holt As Prime Minister

Holt As Prime Minister

Holt was sworn in as Prime Minister on Australia Day, 26 January 1966. His original Cabinet included:

• John McEwen (CP) Deputy Prime Minister, leader of the Country Party, Minister for Trade and Industry
• William McMahon (LP), Treasurer
• Paul Hasluck (LP), Minister for External Affairs
• Allen Fairhall (LP), Minister for Defence
• Charles Adermann (CP) Minister for Primary Industry
• Charles Barnes (CP), Minister for Territories
• David Fairbairn (LP), Minister for National Development
• Senator John Gorton (LP), Minister for Works and Minister in Charge of Commonwealth Activities in Education and Research
• Senator Denham Henty (LP), Minister for Supply
• Alan Hulme (LP), Postmaster-General
• Les Bury (LP), Minister for Labour
• Malcolm Fraser (LP), Minister for the Army

Holt's term in office covered almost exactly the tumultuous calendar years of 1966–67. His short tenure meant that he had limited personal and political impact as Prime Minister, and he is mainly remembered for the dramatic circumstances of his disappearance and presumed death. This has tended to obscure the major events and political trends of his term in office, especially his role in maintaining and expanding Australia's military commitment to the Vietnam War.

Holt's tenure fell during one of the hottest periods of the Cold War era, and his government faced some unenviable foreign policy challenges. Global political, commercial and military alignments were rapidly reconfigured as the Soviets and the US vied for world domination in diverse theatres of conflict. Australia's ties with the UK dwindled rapidly as Britain closed foreign bases, disengaged from its former territories East of Suez and began courting the EEC, as a result of which American investment in Australia increased dramatically and Australia's onetime enemy Japan replaced the UK as Australia's major trading partner.

Strategically, the period was dominated by Lyndon Johnson's fateful decision to escalate the war in South East Asia. Australia's involvement in Vietnam increased significantly under Holt, with Australian troops fighting and dying in sometimes desperate battles like Long Tan. Growing community unrest about the draft, the rising tide of casualties and social debate about the moral rectitude of the war fuelled the first significant stirrings of organised domestic opposition, such as the influential community anti-conscription organisation Save Our Sons.

There was also considerable anxiety about the volatile situation in Indonesia, in which saw Sukarno was replaced by General Suharto, while the Chinese Communist Party launched the cataclysmic Cultural Revolution. The precarious international situation reached a crisis point in June 1967 when the Six Day War flared in the Middle East and six days later China tested its first H-bomb. As the Space Race gathered momentum, the continuing turmoil of decolonisation visited wars, coups, famine, armed uprisings and violent repression on countries across South and Central America, Africa and Asia.

The transfer of power from Menzies to Holt in February 1966 was smooth and unproblematic, and at the federal election later that year the electorate overwhelmingly endorsed Holt, giving the Holt-McEwen Coalition government a 41-seat majority, the largest in Australian history at the time. They also won 56% of the two party preferred vote, which is still the greatest winning margin at a federal election in Australian political history.

Behind the scenes, however, Menzies' retirement had created a power vacuum in the party, and internal divisions soon emerged. Menzies' domination of the party, and the fact that Holt's succession had been established for many years, meant that a secure second rank of leadership had not been developed. Holt's disappearance at the end of 1967 forced the party to choose a "wild card" successor from the Senate after the leading contender, deputy Liberal leader William McMahon, was unexpectedly eliminated from the contest due to a dispute with their Coalition partners, the Country Party.

Political historian James Jupp says that, in domestic policy, Holt identified with the reformist wing of Victorian Liberalism. One of his most notable achievements was to initiate the process of breaking down the preferential White Australia policy by ending the distinction between Asian and European migrants and by permitting skilled Asians to settle with their families. He also established the Australian Council for the Arts (later the Australia Council), which began the tradition of federal government support for Australian arts and artists, an initiative that was considerably expanded by Holt's successor John Gorton.

In the area of constitutional reform, undoubtedly the most significant event of Holt's time as Prime Minister was the 1967 referendum in which an overwhelming majority of Australians voted in favour of giving the Commonwealth power to legislate specifically for indigenous Australians and to include them in the Commonwealth census.

In economics, Holt's tenure began with the phasing in of Australia's new system of decimal currency, launched on 14 February 1966, and it was marked by a major realignment of commercial and military ties away from the UK and towards the US and Asia. Although all the preparatory work for the decimal changeover had been done while Menzies was Prime Minister, Holt had particular responsibility as Treasurer for currency matters, and he was centrally involved in both the decision to change and its implementation.

In 1967 the Holt government made the historic decision not to depreciate the Australian dollar in line with Britain's depreciation of the pound sterling, a custom that Australia had previously always followed, but this decision created considerable dissent within the Coalition; Country Party leader John McEwen was particularly angered by the move—he saw it as a threat to Australia's balance of payments and feared that it would lead to increased production costs for primary industry.

In terms of party politics, one of the most significant features of Holt's brief tenure as PM is that his unexpected death triggered the beginning of an unprecedented period of turmoil within the Liberal Party and a rapid decline in the Coalition's electoral fortunes. For twenty-two years, from its founding in 1944 to his retirement in 1966, the Liberal Party had had only one leader, Robert Menzies. After Menzies' retirement, the party had three leaders in six years--Holt, Gorton and William McMahon. In December 1969, the ALP under Gough Whitlam came within four seats of ending the Coalition's hold on power before winning a convincing victory in 1972.