Harold Holt - Ministerial Career

Ministerial Career

After eight years in opposition, the Coalition won the federal election of December 1949 and Menzies began his record-setting second term as Prime Minister. At this election, Holt saw his majority in Fawkner nearly disappear in the redistribution. He transferred to Higgins, one of several new seats created in the 1949 redistribution. The seat was created as a safe Liberal seat, and Holt won it easily. He was appointed to the prestigious portfolios of Minister for Labour and National Service (1949–1958; he had previously served in this portfolio 1940–41) and Minister for Immigration (1949–1956), by which time he was being touted in the press as a "certain successor to Menzies and a potential Prime Minister". In Immigration, Holt continued and expanded the massive immigration program initiated by his ALP predecessor, Arthur Calwell. However, he displayed a more flexible and caring attitude than Calwell, who was a strong advocate of the White Australia policy.

Holt excelled in the Labour portfolio and has been described as one of the best Labour ministers since Federation. Although the conditions were ripe for industrial unrest—Communist influence in the union movement was then at its peak, and the right-wing faction in Cabinet was openly agitating for a showdown with the unions—the combination of strong economic growth and Holt's enlightened approach to industrial relations saw the number of working hours lost to strikes fall dramatically, from over two million in 1949 to just 439,000 in 1958.

Holt fostered greater collaboration between the government, the courts, employers and trade unions. He enjoyed good relationships with union leaders like Albert Monk, President of the Australian Council of Trade Unions, and Jim Healy, leader of the radical Waterside Workers Federation and he gained a reputation for tolerance, restraint and a willingness to compromise, although his controversial decision to use troops to take control of cargo facilities during a waterside dispute in Bowen, Queensland in September 1953 provoked bitter criticism.

Holt's personal profile and political standing grew through the 1950s. He served on numerous committees and overseas delegations, he was appointed a Privy Counsellor in 1953, and in 1954 he was named one of Australia's six best-dressed men. In 1956 he was elected Deputy Leader of the Liberal Party and became Leader of the House, and from this point on he was generally acknowledged as Menzies' heir apparent.

In December 1958, following the retirement of Arthur Fadden, Holt was appointed Treasurer. He delivered his first Budget in August 1959 and his achievements included major reforms to the banking system (originated by Fadden) – including the establishment of the Reserve Bank of Australia – and the planning and preparation for the introduction of decimal currency.

However, in November 1960, Holt made one of the few major missteps of his career. He brought down a mini-budget in an attempt to slow consumption, control inflation and reduce the deficit, but it triggered the worst credit squeeze since 1945—the economy was driven into recession, the stock market slumped, private investment, housing activity and motor vehicle sales fell, unemployment rose to almost 2 percent (the highest rate since the Depression) and several major companies collapsed.

Holt's blunder damaged his career and brought the Coalition dangerously close to losing the 1961 election. For much of the night, it looked like Labor might bring down the Menzies government, but a narrow win by Liberal Billy Snedden in Bruce ended any realistic chance of opposition leader Arthur Calwell becoming Prime Minister. However, the Coalition was only assured of another term in government when Moreton was called for Liberal Jim Killen, giving the Coalition a precarious one-seat majority. Holt was roundly criticised, his public profile was damaged, and he later described 1960–61 as "my most difficult year in public life". But his political stock, like the economy, soon recovered.

He continued as federal Treasurer until January 1966, when Menzies finally retired. With Menzies' support, Holt was elected leader of the Liberal Party, thus becoming Prime Minister. By this time he had been an MP for almost 31 years—the longest wait of any non-caretaker Australian Prime Minister.