The Money Men Read online

  This slow, steady and dependable approach to financial management made Turner a valuable political commodity for the new government. At Australia’s second federal election, Deakin campaigned on the virtues of Turner’s caution as a financial manager, telling voters that Turner was not a man ‘to be carried away by madcap schemes of visionaries or utopians’.37 The Deakin government prevailed in the December 1903 election but fell the following year when the Labor Party withdrew its parliamentary support. This led to the world’s first ever national Labor government being commissioned, with party leader John Christian Watson forming an administration.

  It has been asserted by some scholars, and by reportage at the time, that Watson asked Turner to stay on as treasurer in his government. But this alleged offer was never verified by Watson or Turner during their lifetimes. If it was made, it was not accepted, and Watson assumed the mantle of Australia’s first Labor treasurer, as well as its first Labor prime minister, while Turner joined his colleagues on the opposition benches.

  The Watson government was fairly short-lived, with Free Trade Party leader George Reid getting the parliamentary upper hand and forming the next government. Reid wanted his government to be constructed on broad anti-Labor lines and invited Turner to return to the Treasury. Turner’s health had by this time declined and he refused. However, Reid tried again a few months later and Turner, encouraged by Deakin, became the first of five treasurers (so far) to serve in the role more than once.

  This political continuity on Turner’s part was symptomatic of a couple of factors. Firstly, as has been established, the Treasury portfolio was largely a function of financial accounting rather than high economic policy—the fact that Reid and Turner had different views when it came to the big economic questions of the day was not a barrier to Turner’s continued occupancy of the Treasury portfolio. If Turner had been minister for customs, as opposed to treasurer, he would have found it much more difficult to retain his place in the government.

  Secondly, the fact that Turner and Reid felt comfortable working together was symbolic of an emerging political divide. The growing strength of the Labor Party meant that whether you were a Protectionist or a Free Trader would soon no longer be the defining question of Australian politics. Rather, it would be whether you were Labor or anti-Labor. Reid’s willingness to have Turner as treasurer and Turner’s willingness to serve in Reid’s administration were precursors to the amalgamation of the Protectionist and Free Trade parties into the Commonwealth Liberal Party, an event also known as the Fusion, in 1907. It is important to note that, as the Protectionist leader, Deakin, while not wishing to serve in Reid’s Cabinet himself, had no objections to Turner serving in the ministry. Indeed, Turner said at the time that Deakin had ‘pressed him’ into accepting the role.38 Turner’s ability and willingness to survive political transitions, however, was almost at end.

  Deakin was genuinely outraged by what he saw as the political interference in the High Court by the attorney-general in the Reid government, Sir Josiah Simon. (In an act of highly dubious probity by today’s standards, Barton, who had transitioned from the prime ministership to the High Court bench, had shown Deakin letters from the attorney-general to the chief justice.) More importantly, Deakin was worried that Reid might call an early election in an attempt to fuse the non-Labor parties under his own leadership, as opposed to Deakin’s. So on 24 June 1905, as a precursor to a move in parliament, Deakin gave a speech to his electors in Ballarat that was highly critical of Reid. Deakin told his audience that Reid ‘was asking those who sat with him in the House to give him a blank cheque, the details of which Mr Reid would fill in later’. Deakin said he was no longer prepared to write such a cheque.39

  This was clearly an ominous sign for the future of the Reid government, which relied on Protectionist support to stay in office. Turner, the most senior Protectionist minister in the government, was not consulted by Deakin and was hurt by his actions. As Manning Clark describes it, ‘George Turner could not understand why dear, kind Mr Deakin should stick a harpoon in his back.’40

  When Deakin moved a motion of no confidence in the government, every Protectionist member except for Turner and the other three Protectionist ministers voted for it. The motion was carried by forty-two votes to twenty-five, and Deakin subsequently assumed the prime ministership. Jaded by Deakin’s behaviour and still of poor health, Turner did not seek to continue as federal treasurer. And when Deakin called an election the following year, Turner did not contest it.

  Afterwards

  Turner was not particularly active after retiring from politics. He returned to being a solicitor in Collins Street, Melbourne, with his son George, who would tragically predecease his parents when he was killed in a railway accident in 1908. In 1907, Turner amalgamated his practice with Corr & Corr, which would grow into one of Australia’s largest legal firms (now Corrs Chambers Westgarth). From 1906, Turner was also chairman of commissioners of the State Savings Bank of Victoria, a job he was well suited to—Turner’s conservative approach and firm grasp of financial risk would have come in very handy for the bank eight decades later when it collapsed under the weight of imprudent lending.

  Turner’s health, which had not been good during the later years of his political career, improved considerably in the early years of his retirement. However, a decade after relinquishing politics, at the age of sixty-five, he died of a sudden heart attack in his home in Hawthorn and was buried in St Kilda.

  An Evaluation

  Sir George Turner was a substantial if unexciting figure who made a worthwhile contribution to the development of the Australian nation. He deserves to be better remembered than he is, and to be well remembered at that. Before he became the federal treasurer, he made decisive and positive contributions to the federation debates—his pragmatic demeanour allowed seemingly intractable disputes about the balance of power between the small and large jurisdictions to be resolved. If a less skilful or committed man had been premier of Victoria at the time, it is likely that Federation would not have occurred when it did. It is also possible to conclude that Australian history could have been altered by the choice of a different man as the country’s first prime minister if it hadn’t been for Turner’s resolute refusal to serve under Sir William Lyne, and his deft handling of this difficult situation.

  Some treasurers are remembered for their policy flair and imagination, but Turner is certainly not one of them. He did, however, take a prudent approach to managing the accounts of the new nation. He exemplified how important it is for a treasurer to understand the elements of the Budget in detail, although the complexity of the task has obviously increased exponentially from Turner’s day to now.

  The Australian Constitution was largely a blank canvas, which Barton and his ministers filled in during the early years of Federation. The role of treasurer could have developed in any number of ways. Under Turner, the Treasury became the government’s central accounting body, and the relationship between the federal and state treasurers was regarded as being of the utmost importance. This approach would remain influential throughout the first half of the twentieth century, before the Treasury became an economic policy body. It was largely due to Turner’s caution and attention to detail that treasurers came to be judged by the same standard.

  2

  WILLIAM ALEXANDER WATT

  A Treasurer in Conflict

  Born: november 1871, Barfold, Victoria

  Died: September 1946, Melbourne

  Treasurer: 27 March 1918 – 27 July 1920

  NO RELATIONSHIP IS more important to a government than that between the prime minister and the treasurer. They need not be friends. They may have previously been rivals, and may potentially be rivals again. But when in their respective offices, they must work in concert. They must have professional respect for each other’s role and authority. When a prime minister and treasurer do not share this level of respect, it will pose a mortal threat to the government, and the situation will norm
ally end with the departure of one or both of them.

  The treasurership of William Watt is a case study in the implications of a dysfunctional relationship between a government’s two most senior figures. Almost right from the start, prime minister William Morris Hughes and his treasurer William Watt had a tense coexistence. Each was headstrong, talented and determined to put his stamp on the government. Their relationship was predominantly a long-distance one, with Hughes spending seventeen months overseas while leaving Watt in charge of the day-to-day running of the government during his absence. It was when they were in different countries that their relationship reached its lowest point, with each feeling they should have more autonomy to make their own decisions.

  It was perhaps inevitable that Hughes and Watt would clash. Hughes was stubborn and difficult to work for. He was not a natural team player and would join six different political parties during his fifty-one years in the federal parliament. Watt would be one of six treasurers during Hughes’ seven years as prime minister. Indeed, Watt had not been entirely enthusiastic about joining Hughes’ Cabinet, having had a premonition that he would be very difficult to work with. He’d told colleagues, ‘You can do nothing with the little devil, he won’t listen to anybody.’1

  Watt himself was not universally popular with his colleagues either. He was regarded as the finest orator in the federal parliament at the time, and his occasional bent for cutting sarcasm did not always endear him to his contemporaries. His organisational ability and discipline were very strong, meaning that he was always highly likely to bristle against Hughes’ much more freewheeling ways. He was also not the type to lightly accept Hughes’ brusque management style. Despite a relatively modest upbringing, he had worked hard to educate himself and had fought doggedly to enter parliament—when he entered the Victorian Colonial Cabinet in 1899 at the age of twenty-eight, he was reported to be the youngest Cabinet minister in the British Empire. He worked his way up to being premier of Victoria and was then prevailed upon to transfer to the federal parliament, with pundits fully expecting him to become prime minister. He showed an independent streak throughout his career, refusing to toe the line of governments that he nominally supported when they did not live up to his high expectations.

  Watt carried considerable burdens during his time as federal treasurer. Government finances were pummelled by World War I, and after the war the economy had to adjust to the return of hundreds of thousands of service personnel. His burdens were increased by the extended absence of his prime minister. His caretaker role was made almost intolerable by Hughes insisting that Cabinet decisions be sent to him for approval in London before being finalised—this in the days when communications between Melbourne and London took days. Even worse, Hughes took positions in the peace treaty negotiations in London and Versailles that Watt and the Cabinet fundamentally disagreed with. When the tables were turned, with Hughes back in Melbourne and Watt representing the Australian Government in London, Hughes insisted on calling the shots even as Watt demanded more autonomy in the negotiations.

  Watt eventually quit his post in protest at what he saw as Hughes’ unwarranted interference in his prerogatives, tendering arguably the most spectacular of any treasurer’s resignation in the history of Federation. He had come close to becoming prime minister, but he would never return to executive office after resigning the Treasury portfolio, and his career would be seen as a tragically unfulfilled one.

  Beginnings

  William Alexander Watt was born in the Victorian rural town of Barfold, the eleventh and last child of Scottish immigrant James Mitchie Watt and his Irish wife Jane Douglas. When James died five months after William’s birth, Jane concluded it would be easier to raise her children single-handed in the city rather than the bush, and took her children to Melbourne. Watt was educated at Errol Street State School in North Melbourne until his family’s precarious financial position drove him to leave school at the age of fourteen. Despite being the last-born child, he eventually became the only breadwinner for his mother and an unmarried sister, working as a clerk, then an accountant, and eventually as a director of a hay and corn store.2 Watt took evening classes at the Working Men’s College in accountancy, grammar, logic and philosophy, an endeavour that was complemented by a ferocious reading habit. As was fairly common for young men of a working-class or lower-middle-class background with budding political ambitions, he also took three years of elocution lessons.

  Sometime before 1890, he joined the ANA, the federation-inclined body made up exclusively of Australian-born men that Samuel Lyons had helped to found. Watt was an enthusiastic participant in the organisation’s debates and lectures, using them to hone his public-speaking skills. It was through his involvement with the ANA that Watt came to meet the liberal orator and future prime minister Alfred Deakin, a man he would greatly admire (or, in his own words, ‘hero worship’). In 1894 he was elected to the executive of the Australasian Federation League of Victoria, and this lifted his profile as an advocate of federation.

  Like other future treasurers (most notably Page and to a lesser degree Chifley), Watt’s economic policies were very much influenced by what he saw during a time of crisis, in this case the bank crashes and depression of the 1890s. The economic misery he observed drove him to embrace a fairly radical brand of liberalism. Watt concluded that the social discontent was ‘the natural result of a social order where the few sit on the shoulders of the many and pick the pockets of the beasts of burden’.3

  Watt was not attracted to the Labor Party or to socialism, despite supporting many of their ideas, such as improved factory legislation and greater democratisation of the parliamentary processes. In late 1894 he conceded in a speech to the ANA that ‘socialism gains by comparison with the existing evil’, but he argued that socialism’s attraction to government ownership was misplaced. He thought society’s freedoms were too important to risk for a socialist system and that monopolies were the real evil, to be broken up by rigorous government action.4

  Watt married Florence Carringham in the same year as his ANA speech. Tragically, his wife died in childbirth in 1896, along with the child. Almost a decade later he would marry Emily Seismann, with whom he would have five children.

  In 1897, aged twenty-six, Watt was elected to the Victorian Legislative Assembly as the member for Melbourne North, defeating the leader of the Labor Party, George Prendergast. This was in the days before the development of hard and fast political parties, and Watt identified in ‘the Liberal interest’. After a short time in parliament, he joined a faction known as the Young Australia Group, which consisted of like-minded ANA members who were impatient with Victorian premier George Turner, feeling he should be even more radical in his liberalism and support for federation. In 1899, when the Turner government fell, largely as a result of agitation by Watt and the Young Australia Group, the new premier, Alan McLean, invited Watt to join the Cabinet as postmaster-general. Watt was an energetic minister but lost his seat at the next election as Prendergast fought his way back into the Victorian Parliament.

  Watt started a real estate business, but his political ambitions were far from satiated. He unsuccessfully ran for the Senate in the first federal election in 1900 as a member of Deakin’s Protectionist Party, and was twice more defeated in his attempts to return to the Legislative Assembly in by-elections. He eventually returned to the Victorian Parliament as the member for Melbourne East in 1902, and successfully ran as the member for Deakin’s old seat of Essendon in 1904. His anti-Labor views had by this time developed further, and he was now a firm supporter of the unity of the conservative parties. In the Legislative Assembly, he voted in favour of giving the franchise to women and supported reforms to make the Legislative Council more democratic, as well as factory legislation that gave more protection to vulnerable workers.

  When Watt’s friend and ally John Murray became Victorian premier in 1909, he asked Watt to join him as treasurer, a portfolio that Watt would retain until 1914, apart fr
om one week out of office—more on that below. Murray was twenty years older than Watt and had a reputation for laziness, which was not challenged by his relaxed approach to the premiership. Watt’s approach to the Treasury, in contrast, was energetic. Watt was ‘the government’s driving force, even before acting as Premier for six months in 1911’.5 The Murray–Watt government would prove to be a reformist one, despite facing considerable obstacles courtesy of the Legislative Council.

  Winning Respect

  In 1912 Murray retired and handed the premiership to Watt, who hit the ground running: ‘The 1912 session saw Watt drive himself and the Parliament hard. More than 90 Acts were passed.’6 His government introduced a rudimentary workers’ compensation system, the first state endowments to hospitals, electrification of the railways, and an ambitious irrigation system. Watt was a city-based premier in a government reliant on the support of rural members, but this did not dissuade him from attempting to reform the voting system to reduce the country-region gerrymander and increase the value of a city vote from 50 per cent of a rural vote to 60 per cent. This was too much for his rural supporters in the parliament, who staged a no-confidence vote in the Watt government on the presumption that one of their own would take over the premiership. Instead, the state’s lieutenant-governor sent for the leader of the Labor Party, George Elmslie, to form an administration, and Victoria got its first Labor government. However, it only took Watt one week to reunite his supporters, whereupon the Labor government fell on the floor of the parliament and Watt was back as the state’s premier and treasurer.

  Watt started winning respect for his work on the state’s finances. He travelled to England and, in the role of treasurer, ‘negotiated a large conversion loan of 3 million pounds in a difficult money market, leaving behind a favourable impression of Victoria and his own abilities’.7 He also successfully engineered the next Victorian Budget and access to finance to fund regional development—this in a state that had been suffering from depopulation of its rural areas for some years.