Great Depression in Australia

Australia was affected badly during the period of the Great Depression of the 1930s. The Depression began with the Wall Street crash of 1929 and rapidly spread worldwide. As in other nations, Australia had years of high unemployment, poverty, low profits, deflation, plunging incomes, and lost opportunities for economic growth and personal advancement. Australian finance had long relied on foreign investment and borrowing on the London banks; that window closed. Government policies were ineffective, and recovery came when the rest of the world recovered.

The Australian economy rested upon its place as a primary producer within the British Empire. Australia's vital export industries crashed. The price for wool and wheat fell in half, dragging down the entire national economy. Unemployment soared to a record high of around 30% in 1932. and gross domestic product declined by 10% between 1929 and 1931.

There were a few small incidents of civil unrest, particularly in Sydney. Australian Communist and far right movements were active in the Depression, but they remained on the periphery of Australian politics. They failed to achieve the power shifts obtained in Europe, as the democratic political system of the young Australian Federation survived.

The Scullin Ministry of the Australian Labor Party under James Scullin had just assumed power on 22 October thanks to success in the 1929 federal election. Three days later, "Black Thursday" would mark the start of the Wall Street crash of 1929 and the global onset of the Great Depression. The government was overwhelmed. Labor Party began to split apart. Treasurer Ted Theodore failed to implement his Keynesian inflationary plans. New South Wales Premier Jack Lang lost office over his plans to boost the budget through a temporary cessation of interest repayments. Labor defector Joseph Lyons helped shut down the Nationalist Party of Australia and form the new United Australia Party. He ousted Scullin and was Prime Minister of Australia from the 1931 federal election until his death in 1939.

Thus Australia, unlike the United States, did not embark on a significant Keynesian program of massive spending to recover from the Depression. Nevertheless, the Australian recovery began around 1932. Australians took consolation from sporting achievements through the Depression, with cricketer Don Bradman and race horse Phar Lap achieving long-lasting fame.