The Great Depression hit Australia harder than almost any other developed nation. By 1932 nearly a third of the workforce was unemployed. The crisis tested the economy, the political system and the idea of the "fair go" to breaking point.
Causes
Australia was acutely vulnerable: heavy dependence on commodity exports (wool and wheat) whose prices collapsed; massive overseas debt, especially to Britain; and falling investment. When world trade contracted after 1929, Australia's export income and ability to service its debt collapsed together.
Impact on different groups
- Social classes — mass unemployment, evictions, "susso" (sustenance) queues and shanty camps.
- Women and children — hardship in the home; women's paid work attacked as taking "men's jobs."
- Aboriginal and Torres Strait Islander Peoples — already marginalised, hit hardest and excluded from much relief.
Political responses and division
Two rival approaches divided the Labor movement: PM Scullin's federal government, pressured toward orthodox austerity (the Premiers' Plan), versus NSW Premier Jack Lang's radical refusal to pay British interest. The clash produced the 1931 Labor Split, destroying the Scullin government. Political extremes stirred — the right-wing paramilitary New Guard and a more visible Communist Party. Recovery came slowly under the Lyons government from 1932.
Let's build the "responses and effectiveness" table students will need for Task 1.
| Response | Who | Approach | Effectiveness |
|---|---|---|---|
| Premiers' Plan | Scullin (fed.) | Austerity: cut spending and wages | Shared the pain; slow, deepened hardship |
| The "Lang Plan" | Lang (NSW) | Repudiate overseas interest, spend | Politically explosive; led to his dismissal |
| Recovery phase | Lyons (UAP) | Cautious orthodoxy + improving world prices | Gradual recovery from 1932 |
Discuss: how should we measure "effectiveness" of a Depression response — speed of recovery, fairness of burden, or political stability? The criterion changes the verdict.
Q1. Identify two reasons the Depression hit Australia particularly hard.
Q2. Explain the disagreement between Scullin and Lang over how to respond to the Depression.
Q3. Explain the political responses to the Great Depression in Australia and assess their effectiveness. (Practice for Task 1.)