On this day, 14 March 1939, Menzies resigns as a Minister in the Lyons Government over the shelving of the National Health and Pensions Insurance Scheme. This was a highly principled move, as the scheme had been the UAP’s central promise at the 1937 election, and its abandonment involved caving in to the sectional pressuring of the Country Party. However, Lyons’s death less than a month later cast a shadow over Menzies’s actions, and Dame Enid Lyons would later go so far as to blame Menzies for contributing to her husband’s passing.

This was not the first, nor would it be the last time that Menzies resigned over a point of principle. In 1929 Menzies had resigned as Minister Without Portfolio in the McPherson Government of Victoria, over the underwriting of a bank guarantee for the Amalgamated Co-operative Freezing Works, which essentially amounted to an attempt to directly buy the support of the Country Party. Later, in 1941 he would resign as leader of the UAP when that party decided to continue the Coalition under Country Party Leader Arthur Fadden even after losing government.

There was certainly a pattern in the centrality of the Country Party to all three resignations; arguably its raison d’être of representing farmers amounted to lobbying for a sectional interest which, like Labor’s representation of the union movement, went against the liberal understanding of how politics was meant to function. Menzies was a great upholder of this liberal tradition, and he famously lamented that Australian politics had divided into sections which left his ‘forgotten people’ behind.

Menzies’s relationship with Joseph Lyons had grown somewhat strained in the months leading up to the resignation. There was a sense in which, as Deputy Leader of the UAP, he was waiting on the Prime Minister to retire so that he could take his turn in the top job, and much like the Howard-Costello dynamic many decades later, there were allegedly unfulfilled promises of a handover. Despite Lyons’s ill-health, he did not step aside in large part because he was tremendously electorally popular and the party wanted to keep him around as long as possible in order to win elections.

In October of 1938, after the government had failed in an attempt to get a conference of State Premiers to agree to a coordinated plan of defence preparations, Menzies gave a speech at the Constitution Club in Sydney in which he said that ‘democracies could not maintain their place in the world unless they were provided with leadership as inspiring as that of the dictator countries’. Though Menzies was having a go at the recalcitrant Premiers and failing Ministers who were refusing to take on responsibility while Lyons was sick, newspapers interpreted this speech as an attack on the Prime Minister. This was something that Menzies would explicitly deny, but this did little to stop Curtin who would use the speech as the basis for a censure motion against the government’s self-confessed ‘lack of leadership’.

The National Insurance Scheme was a system in which modest weekly contributions would provide workers and their dependents with ‘guaranteed benefits during sickness, medical treatment at all times, pensions for widows and orphans, and superannuation’. It was intended to be socially ameliorative, but it was also aimed at producing financial sustainability by limiting the number of people who would be collecting non-contributory pensions (much like the modern superannuation scheme).

In 1938 the Bill passed the Parliament, however its implementation was complex. The first contributions were due to be paid at the beginning of 1939, but the Country Party tried to secure the temporary exclusion of rural workers from the scheme in the interest of country employer groups. A compromise was reached where the collection of contributions would be delayed until September, but this did little more than to kick the can down the road.

In March 1939 the Cabinet voted to repeal the old age, widows’, and orphans’ pensions provisions of the Act to concentrate on a scheme of family medical benefits, and to arrange for a series of discussions between the interested parties to work out the details of what amounted to an entirely new proposal. The majority of the UAP’s senior figures had decided to bow to the Country Party using the justification that the pressing concern of defence spending meant that the scheme was too expensive for the time being, but not Menzies. When Cabinet reached its decision, he ‘walked out of the meeting, went to his room, called for a typist, and at once drafted a letter to Lyons tendering his resignation’.

Menzies’s stand won him widespread press acclamation. The Melbourne Herald reported that:

‘Admiration for Mr. Menzies will run high today. His work and his talents raised him to one of the highest posts in a successful political career. As deputy leader of his party, he stood in direct line of succession to the Prime Ministership. On grounds of principle and conviction he has deliberately and voluntarily stepped out of the line to easy success. Thereby, he has given new and welcome proof of his fitness for leadership in national affairs’

While the vast majority were positive, a handful of voices chided Menzies for his pretensions at a time when the global situation was so fraught and war preparations such a high priority. Lyons for his part reportedly held no grudge over the resignation, and may have even found it a relief when it came to leadership speculation. He sent Menzies a heartfelt reply, saying that ‘I shall look back on our association with feelings of great happiness’. Tragically, there would be no chance to look back, as Lyons became the first Prime Minister to die in office.

Further Reading:

A.W. Martin, Robert Menzies, A Life: Volume 1 1894-1943 (Melbourne University Press, 1993).

Troy Bramston, Robert Menzies: The Art of Politics (Scribe, 2019).