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Patriotic saving in the Second World War
The Second World War applied extraordinary strains to Australia’s society, its economy and its institutions of government. The war represented the greatest risk to the nation’s security since Federation. Whilst the war was fought in the skies of Europe, the jungles of New Guinea and on the Indian and Pacific oceans, effective management of Australia’s ‘home front’ was also essential in maintaining the nation’s security and its capacity to support the broader allied war effort.
Introduction
The Second World War applied extraordinary strains to Australia’s society, its economy and its institutions of government.
The Spectre of Inflation
The dramatic reduction in unemployment and the scarcity of consumer goods during the war created a very real risk of inflation.
Rationing, Austerity and Black Markets
The government responded to the scarcity of goods with a rationing system, an austerity campaign and strict measures to counteract black marketing.
The Role of Dr H C Coombs
The formidable task of establishing Australia’s rationing system was given to Dr H C Coombs. It would prove to be a formative experience.
Arresting Spending Power
The federal government recognised the need to absorb and divert the population’s spending power in order to reduce the risk of inflation.
Keynesian Economics in Wartime
The Government’s response to the economic challenges presented by the war constituted the first major application of Keynesian economic theory in Australian public policy.
The Results
The loans campaign engaged an extraordinary proportion of the Australian population and raised crucial funds for the war effort.
The Role of the Central Bank
The war transformed the responsbilities of Australia’s central bank, and its role in Australia’s economy.