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Rethinking the Australian Dilemma

Economics and Foreign Policy, 1942-1957


Bill Apter

This book explains how and why, Australian governments shifted from their historical relationship with Britain to the beginning of a primary reliance on the United States between 1942 and 1957. It shows that, while the Curtin and Chifley ALP governments sought to maintain and strengthen Australia’s links with Britain, the Menzies administration took decisive steps towards this realignment.

There is broad acceptance that the end of British Australia only occurred in the 1960s and that the initiative for change came from Britain rather than Australia. This book rejects this consensus, which fundamentally rests on the idea of Australia remaining part of a British World until the UK attempts to join the European Community in the 1960s. Instead, it demonstrates that critical steps ending British Australia occurred in the 1950s and were initiated by Australia. These Australian actions were especially pronounced in the economic sphere, which has been largely overlooked in the current consensus. Australia’s understanding of its national self-interest outweighed its sense of Britishness. 

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4 “Recovering Our Lost Property,” 1943–44



“Recovering Our Lost Property,” 1943–44

“When Australia was in mortal danger, … Australia turned to the United States ‘without any pangs’ as to Australia’s traditional relations with the Commonwealth. … Mr. Curtin seems equally willing, now that imminent danger to Australia has passed, to turn away from the United States without any pangs.”1


Australia had seen America as its protector in 1942 but, as victory and the associated peace-process loomed, Australia’s Commonwealth links re-emerged. The Curtin government’s changing allegiance was driven by the realisation that Australia was safe from invasion. In mid-1943, Curtin claimed, “we are now able to contemplate a second phase which involves limited offensive action. We have established that the enemy cannot occupy this country.”2

The results of this “second phase” are discussed in this chapter. The Curtin government considered the prospects for peace, creating a Department of Post-War Reconstruction in December 1942 and, in the 1 October 1943 Cabinet decision, reduced armed forces manpower. Another consequence was a shift away from reliance upon America towards Britain and the Commonwealth.

The British World view puts race and tradition at the core of this Australian decision, claiming that it was a belief in their common Britishness that bound Australia to the Mother Country. The reality was that, in re-establishing ties with Britain, Australia was pursuing its national interests rather than ties of loyalty. The Curtin government chose a primary alignment with the United...

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