Week 6: World War 2 and its Economic Legacy Flashcards
What were the main policy changes in WW2?
1) For the first time, national fiscal and monetary management became possible
2) National government took control of income tax
3) Commonwealth Bank (central bank at the time) established
4) Expansion and introduction of social welfare programmes
5) Labour regulation and direction
6) Rationing
When was the Department of Post War reconstruction established and why?
– The Department of Post-War reconstruction was established in 1942, partly prompted by the desire to avoid another Great Depression (like after the first world war) and to see a positive/worthwhile result of the war.
What happened to employment in WW2?
Full employment, which had become a goal in and of itself, was achieved due to the allocation of labour. The rise of manufacturing absorbed a significant amount of labour.
Full employment and the increase in per capita income over the period resulted in increased disposable income and domestic demand, which may have been inflationary if not for rationing
How did the labour market change in WW2?
The government introduced labour controls to match people and jobs and better allocate labour. By 1943, people were being matched to civilian jobs to avoid a downturn when the war ended. Controls included the power to exclude people from enlisting or leaving their jobs, power to prevent employers removing people, restricting employment choice and redirecting labour.
Women’s participation rose dramatically, although their wages remained below a man’s.
What happened to exports WW2
Australian exports were strong, partly due to the proximity of the war. This increased demand for out products, particularly tetiles, food etc.
Following the war, they remained strong as competitors were damaged by the war of were on the losing side.
What happened to imports in WW2?
We could supply a lot more of our troops need, reducing shipping costs and improving the balance of payments.
Why was rationing introduced in WW2?
Given full employment, private savings were strong and inflation became a concern given the increase in disposable income.
Rationing was introduced largely to curb inflation and suppress demand.
How was WW2 financed?
Bonds absorbed private savings to finance the war and increased income taxes also provided revenue (the states no longer levied income taxation but were promised grants).
What sort of social welfare was introduced in/after WW2
The Federal Government also took responsibilities for unemployment benefits, widow’s pensions, and other welfare. Sickness and pharmaceutical benefits and child benefits.
What was agreed at the Bretton Woods conference?
The Bretton Woods Conference saw many key international changes, partly with the aim of ensuring that a similar war did not take place in the future.
The World Bank and IMF were established.
The Bretton Woods exchange-rate system saw all currencies linked to the dollar, and the dollar linked to gold. To prevent speculation against currency pegs, capital flows were severely restricted. In the end, it proved too inflexible.
What was the Snowy Hydro Scheme?
The Snowy Mountains Scheme was built predominately by migrants and was launched in 1949. Alter generated electricity for industrialisation and households but there were also defence and atomic ambitions for the project. It also provided irrigation of farmland.
The Scheme was a breakthrough in federal/state relations: it was primarily the states responsibility but the Defence power in the constitution allows the Federal Government to be involved. It is jointly owned by NSW, VIC and the Commonwealth.
What happened to education after WW2?
There was growing recognition of the importance of a skilled workforce, resulting in the Commonwealth reconstruction training scheme. Tertiary education expanded (ANU formed) along with the necessary infrastructure.
What happened to housing after WW2?
Housing became to be treated as a right with emphasis placed on public housing. However, it ran into the problem of a material and labour shortage and the use of asbestos.
