From its very beginning, the government of Gough Whitlam was destined to fail in economic terms. It was elected on 5 December 1972, during the world’s then greatest bubble in land prices. Once the Australian bubble topped out in the 1973 financial year, the Labor government was inextricably fixed Ahab-like to a sharply-diving Moby-Dick.
Many Australians had bought homes, or borrowed against their skyrocketing property values, from 1970 to 1973, so they were financially exposed in extremis when land values tumbled precipitously into recession in 1974. They weren’t happy.
Despite tradition that the Senate shouldn’t block supply, Malcolm Fraser seized the opportunity of an extremely disenchanted public to do so.
There had been ministerial scandals relating to Cairns, Connor and Cameron, so as the reformative Whitlam government seemed to be spending like there was no tomorrow at the same time as the Australian public was suffering, the die was cast, both for ‘The Dismissal’ on 11 November 1975 and the subsequent election of Malcolm Fraser to the Prime Ministership.
Curiously, whilst scandals and ‘financial mismanagement’ came to characterise the Whitlam government, the role of the burst property bubble was disregarded by mainstream media and in biographical and TV accounts of Gough Whitlam. Not a word of the real estate bubble is to be found, the recession commonly being blamed worldwide on the substantial but far lesser OPEC oil crisis.
It’s as though the gigantic real estate bubble didn’t occur.
Fortunately, we have the special supplement to TIME magazine dated 1 October 1973, entitled “The New American Land Rush” to confirm its existence. It commented that Land fever is not confined to the US. In England, the average price of a lot has doubled in two years ….
We also have the bubble documented here in Oz:
Maybe COVID-19’s terrible arrival will also make this property bubble disappear?