Gough Whitlam : biography
By early 1972, Labor had established a clear lead in the polls. Unemployment was at a ten-year peak, rising to 2.14 percent in August (though the unemployment rate was calculated differently compared to the present, and did not include thousands of rural workers on Commonwealth-financed relief work). Inflation was also at its highest rate since the early 1950s. The government recovered slightly in the August Budget session of Parliament, proposing income tax cuts and increased spending. The Labor strategy for the run-up to the election was to sit back and allow the government to make mistakes. Whitlam controversially stated in March that "draft-dodging is not a crime" and that he would be open to a revaluation of the Australian dollar. McMahon called a general election for the House of Representatives for 2 December 1972. Whitlam noted that the polling day was the anniversary of the Battle of Austerlitz—at which another "ramshackle, reactionary coalition" had been given a "crushing defeat".
Labor campaigned under the slogan "It’s Time", an echo of Menzies’ successful 1949 slogan, "It’s Time for a Change". Surveys showed that even Liberal voters approved of the Labor slogan. Whitlam pledged an end to conscription and the release of individuals who had refused the draft, an income tax surcharge to pay for universal health insurance, free dental care for students, and renovation of aging urban infrastructure. The party was pledged to eliminate university tuition fees and to the establishment of a schools commission to evaluate educational needs. The party benefited from the support of the proprietor of News Limited, Rupert Murdoch, who preferred Whitlam over McMahon. Labor was so dominant in the campaign that some of Whitlam’s advisers urged him to stop joking about McMahon; people were feeling sorry for him. The election saw the ALP increase its tally by 12 seats, mostly in suburban Sydney and Melbourne, for a majority of nine in the House of Representatives. However, the ALP gained little beyond the suburban belts, losing a seat in South Australia and two in Western Australia.
In October 1975, the Opposition, led by Malcolm Fraser, determined to withhold supply by deferring consideration of appropriation bills. With Field on leave (his Senate appointment having been challenged), the Coalition had an effective majority of 30–29 in the Senate. The Coalition believed that if Whitlam could not deliver supply, and would not advise new elections, Kerr would have to dismiss him. Supply would run out on 30 November.
The stakes were raised in the conflict on 10 October, when the High Court declared valid the Act granting the territories two senators each. In a half-Senate election, most successful candidates would not take their places until 1 July 1976, but the territorys’ senators, and those filling Field’s and Bunton’s seats, would assume their seats at once. This gave Labor an outside chance of controlling the Senate, at least until 1 July 1976. On 14 October, Labor minister Rex Connor, mastermind of the loans scheme, was forced to resign when Khemlani released documents showing that Connor had made misleading statements. The continuing scandal confirmed the Coalition in their stance that they would not concede supply. Whitlam on the other hand, convinced that he would win the battle, was glad of the distraction from the Loans Affair, and believed that he would "smash" not only the Senate, but Fraser’s leadership as well.
Whitlam told the House of Representatives on 21 October, Whitlam and his ministers repeatedly warned that the Opposition was damaging not only the Constitution, but the economy as well. The Coalition senators tried to remain united, as several became increasingly concerned about the tactic of blocking supply. As the crisis dragged into November, Whitlam attempted to make arrangements for public servants and suppliers to be able to cash cheques at banks. These transactions would be temporary loans which the government would repay once supply was restored. This plan to prolong government without supply was presented to Kerr unsigned on 6 November, under the title "Draft Joint Opinion" (ostensibly of solicitor-general Maurice Byers and attorney-general Kep Enderby). It proposed that public employees, including members of the armed forces and police, "could assign arrears of pay by way of mortgage". The government’s refusal to formalise this and other "advice" was a factor justifying the governor-general’s fateful resort to alternative legal advice.Kerr, John Matters for Judgment, Macmillan 1978, pp 301-308