The New South Wales Labor Party and the Proposal to Nationalise the Iron and Steel Industry, 1890-1918

Abstract

At the beginning of the twentieth century government was strongly supportive of private business activity, and this relationship was generally accepted by private interests. This relationship manifested itself most prominently in the provision of marketable goods and services by the government.1 An array of large scale public enterprises provided a variety of goods and services necessary for the development of the private sector. At the State level, traditional areas of state enterprise included the railways and tramways, port and harbour facilities, regional water and sewerage authorities, and irrigation schemes. Private business interests desired these public additions to infrastructure, and public authorities provided them with little sense of competitive conflict, as the goods and services supplemented, rather than displaced, private sector activity. In the immediate years before the First World War, however, there arose a different type of public enterprise in New South Wales. The Labor Government (1910-16) in New South Wales was not only interested in traditional areas of public activity like railways and irrigation schemes, but also in the establishment of state-run brick and lime works, metal quarries, timber yards and a clothing factory, all of which were designed to displace rather then support private enterprise. The most important projected state enterprise of all was the establishment by the New South Wales Government of a state-run iron and steel works. Right from its origins in the 1890s the Labor Party of New South Wales was interested in the creation of a government-owned and operated iron and steel industry.2 To many in the Labor Party this industry was perceived as being basic to the industrial development of Australia, and therefore it was important to promote its establishment. However, many feared that it was also an industry that, because of its large scale units of production, would probably be organised as a monopoly. This monopoly would then be able to wield great economic and political power. Therefore Labor members argued that this industry should be operated under government ownership. Despite Labor's electoral successes in the 1910s, the state iron and steel works was never established. Unlike the traditional areas of public enterprise the plan for a state iron and steel works ran into the opposition of private business interests, conservative political groups and elements within the labour movement. The Labor Party's plan was never carried out and gives an excellent example of the very real limits of active state intervention within the Australian economy. The plan went beyond traditional, acceptable forms