Premier of Queensland
Under Gair’s premiership, reforms were carried out in worker’s compensation, sick leave, and annual leave. Long-service leave was also introduced, while the government’s price controls enabled workers in Queensland to enjoy the highest real wages (adjusted for prices) in Australia.
Gair came into conflict with Bukowski when the AWU in 1955 began making allegations that there was corruption in the process of granting and extending pastoral leases in the state. In July of that year, members of the AWU executive met Gair. According to an account they gave later, Gair promised them an inquiry, although Gair denied ever having promised any such thing. Bukowski publicly expressed a desire to appear before the Bar of Parliament to detail his allegations, in which he was supported by Frank Nicklin, then leader of the Opposition; but Gair defeated his motion in parliament. In February 1956, Ian Wood, a Liberal Party Senator for Queensland, alleged that the government had demanded payments from pastoralists in order to ensure the extension of pastoral leases, and that these payments had been diverted to Labor Party funds. Gair immediately set up a royal commission, which resulted in the laying of criminal charges against Lands Minister Tom Foley. Foley was acquitted of the specific charges laid against him, but was found by the Royal Commission's report to be responsible for the improper solicitation of party donations, for which he was dismissed from cabinet and expelled from the Labor Party.
Gair discovered that the AWU had gained its information about the scandal from a senior public official, Vivian Creighton. Gair pressed for Creighton's resignation on the grounds of official misconduct. Creighton was summoned to appear before the Bar of Parliament to explain his actions but was later dismissed by cabinet. Nevertheless, Gair easily won the elections of May 1956.
When the AWU uncharacteristically endorsed strike action by shearers, Gair raised the union movement's ire by negotiating with the federal government in order to secure the export of wool shorn by non-union labour. Gair was ultimately successful in a negotiated end to the strike, but the effect was to cement an unlikely anti-Gair alliance between the militants of the Queensland Trades and Labour Council (TLC) (represented by Boilermaker's Union secretary Jack Egerton) and the AWU.
Out of the several issues over which Gair and the union movement came into conflict, the most severe was the introduction of three weeks' paid leave to workers under state industrial awards. This had been part of the party's election platform since 1953. Gair announced in 1955 that although the state's finances did not permit the extension of annual leave, the government would extend entitlements to long service leave. This compromise was regarded as insufficient by both the TLC and the AWU, and in November they moved in the Queensland Branch's Central Executive that legislation introducing the leave be introduced by the parliamentary party.
The majority of Gair's Cabinet refused to accept what it saw as direction from the Central Executive, and in February 1956, Bukowski and Egerton organised the numbers at the next Labor Party convention to vote in favour of a leave increase. After private discussions it was revealed that Gair would introduce the leave sometime over the course of the year. After the election, however, State Treasurer Ted Walsh revealed that Queensland's budget was in deficit and Gair claimed that extending leave would be financially irresponsible.
The parliamentary ALP found itself in deadlock with the organisational wing and the trade unions, with the TLC and the Central Executive maintaining pressure on Gair throughout early 1957. Gair still refused to budge, thinking that the executive would not dare to expel him. For its part, the QCE did not believe that Gair would take many of his caucus with him. The QCE finally expelled Gair on 24 April. He took a total of 25 defectors from the ALP Caucus with him, including all the Cabinet except Deputy Premier Jack Duggan, to form the Queensland Labor Party (QLP). Gair tried to gain Country Party support, but talks with Nicklin broke down when federal Country Party leader Arthur Fadden told Nicklin that he had a chance to become Premier himself. On 12 June, the ALP, now led by Duggan, voted to deny "supply" (that is, the money needed to govern) to what was left of the Gair government. The Country-Liberal Coalition moved to block supply as well and brought the government down.
An election was called for 3 August, in which both the QLP and the ALP lost ground, although Gair was re-elected at South Brisbane as a QLP candidate. Nicklin became Premier and for the first time in 25 years, a Labor Government was out of office in Queensland. The ALP would not return to power in Queensland until 1989.
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