Governor Game at the opening Harbour Bridge, 1932
[Courtesy of News Ltd Photo Library]

The State’s Constitution defines the legislature as the monarch, the Legislative Council and the Legislative Assembly. The Governor is the monarch's representative. It defines the role and power of the Governor as:

" In the exercise of the powers and authorities vested in him, the Governor shall be guided by the advice of the Executive Council, but if in any case he shall see sufficient cause to dissent from the opinion of the said Council, he may act in the exercise of his said powers and authorities in opposition to the opinion of the Council, reporting the matter to Us without delay, with the reasons for his so acting."
The Royal Instructions, Clause 6

"The Governor may…..remove from his office, or suspend from the exercise of the same, any person exercising any office, or place, in the State…"
Clause 10

Under the New South Wales Constitution the Governor has considerable reserve powers. These powers can only be exercised within the constitutional framework.

In 1932, a State Governor:

1. was supreme guardian of the constitution
2. was expected to operate a responsible government
3. was expected to follow the restraints of the federal constitution in state matters
4. could dismiss a premier or ministers

The Dismissal of Premier Lang highlights the central place of the New South Wales Constitution as a framework for government. At the time, most people believed the government advised the Governor, and the ultimate power was with the people at the ballot box. The tensions surrounding the dismissal arose because of the confusion surrounding role and power of the three branches of government in relation to the Governor, as defined by the Constitution.

Lang wasn’t surprised when he was dismissed as the possibility of a dismissal had been canvassed for over a year in the newspapers. Lang was charged with having acted contrary to the law.

The Events of 1932

Lang was 53 when he became Premier of New South Wales on November 4, 1930. He was elected on a platform of reform. His reform platform included:

• the abolition of the Legislative Council
• a program of social and political reform
• compulsory unionism
• a return to the 44 hour working week.

Lang’s return alarmed the Nationalists in that his program of radical changes seemed inappropriate in the middle of the Great Depression. They believed it was a time to maintain and support orthodox politics. Lang appealed to trade unionists and others who regarded the depression as the collapse of capitalism.

From the time that Lang returned to office, many Nationalists, Country Party members and even Labor Party members opposed the program of reform. In August, 1930, when all other states had accepted Niemeyer’s economies as a weapon against the depression, Lang rejected them. In March 1931, Lang’s NSW branch of the Labor Party was expelled from the party. He formed his own Lang Labor party.

In NSW, Lang Labor polled better in 1931 than the ALP so Lang felt confident in continuing his conflict with Canberra especially over withholding interest payments to British bondholders. This course of action, however, led to his dismissal.

Under the Financial Agreement of 1928, NSW should have paid to the Commonwealth the interest due to be sent to the British bondholders. Lang had not made these payments since April, 1931 and the Commonwealth had paid up to avoid default. When Lang defaulted again on 29th January, 1932, the new Prime Minister, J. A. Lyons who had left the Labor Party to head the United Australia Party, decided to take strong action. The Commonwealth made itself directly responsible for all payments of interest. Further it asserted that it had the right to sue the states for recovery of any moneys outstanding. The Commonwealth Government passed an Act that authorised the Commonwealth Government to appropriate the money of a defaulting state. Lang challenged the validity of this Act in the High Court. The validity of the legislation was upheld.

Lang adopted a variety of ways to keep New South Wales money out of Commonwealth hands. The Commonwealth Government enforced the new Act through banks. It required banks to hand over NSW Government funds. The State Government withdrew heavily from its bank accounts; and Lang appealed to the High Court.

Whilst awaiting a decision, Lang persuaded cabinet to issue an important circular to NSW public servants. The circular dated April 12, 1932, directed them to:

1. refrain from meeting governmental expenditure by the drawing of cheques
2. hold all moneys collected and forward them to the Treasury instead of paying them into the banks (contrary to the Audit Act of 1902)
3. insist upon payments to the government in cash or by bearer cheques.

On the afternoon that the High Court brought down its decision that the Commonwealth could lawfully impound NSW funds, Game requested Lang to establish the legality of the circular. He specifically wanted to know about the apparent defiance by Lang of the Commonwealth law. Game also sought advice from the Dominions Office as to what action would be most appropriate. Game mentioned the pressure to dismiss Lang and his reluctance to do this.

Later in April, the Commonwealth took steps to authorise it to collect NSW taxes.

On May 5, the Commonwealth issued Proclamation No. 42 of 1932 ordering NSW public servants to deal with moneys received by them in the manner directed by the federal Treasurer. At this time, the NSW Government was in default to the Commonwealth Government for over 2 million pounds.

On May 10, the Lang government issued another circular in order, so the government stated, that the public servants might be paid.

The new circular defended the New South Wales Government’s decision to keep revenues out of the Commonwealth Government’s hands on the ground that, because slavery had been abolished in the British Empire, public servants should not be forced to work without pay. This would be their fate, the circular implied, if the Commonwealth seized all NSW funds, for either they would be working for the State which had no money to pay them, or for the Commonwealth which had or thought it had, no obligation to pay them.

When Game saw this circular, he thought it illegal and wrote to Lang at once. He said that the circular was obviously contrary to Proclamation No.42 issued by the Commonwealth Government and asked for proof by 11 a.m. the next day that the circular was lawful; otherwise he would require that it be withdrawn. The third alternative he hinted at was that Lang should resign or be dismissed as Game did not wish to be a part of an illegal act.

Lang declined to resign. Game then dismissed him. He called upon the Leader of the Opposition, Bertram Sydney Barnsdale Stevens, to form a government. Game’s constitutional grounds for dismissing Lang was that Game believed on good, though not official legal advice, that the circular of May 10 was illegal and that Lang was breaking Commonwealth law. This was never tested in the courts.

Nairn, B., 1986. The Big Fella: Jack Lang and the Australian Labor Party 1891-1949 Melbourne University Press, Melbourne.
Radi, H and Spearitt, P., (ed), 1977. Jack Lang , Hale and Ironmonger and Labour History, Neutral Bay, NSW