SUCCESSES and failures both helped create a business and economic legacy for Gough Whitlam that far outweighs his government's brief time in power.
Whitlam led Labor to its first federal election win in 23 years on December 2, 1972, and within days he had established full diplomatic relations with the People's Republic of China, now Australia's biggest trading partner.
His government also cut all tariffs on imports by 25 per cent in July 1973 and created a Trade Practices Act in 1974 that drew on US law as well as British law.
Both initiatives threatened a culture of protectionism and cronyism that had been building in the business world for generations. They could probably only have been delivered at the time by a Labor government that felt it owed no favours to the business sector.
Bob Baxt, Allan Fels and Graeme Samuel are former chairmen of the Trade Practices Commission and its current successor, the Australian Competition and Consumer Commission. They all say that the Trade Practices Act that Whitlam's attorney-general, Lionel Murphy, shepherded through Parliament ranks as one of the important pieces of economic and commercial law introduced in this country.
It replaced earlier competition law that had proved to be not only ineffective but a bureaucratic nightmare for companies. Its influence is so pervasive that even before the government's response to the current inquiry into its effectiveness and scope, it is impossible to imagine the business sector functioning fairly without it.
The decision to cut tariffs by 25 per cent and decisions in 1972 and 1973 to lift the value of the Australian dollar by the same percentage collectively were also policy seachanges, although they created problems for Whitlam.
Successive Coalition governments had resisted calls for reductions in industry protection as the Country Party and business backers of the Liberals argued that a high tariff wall was essential to foster the growth of industry and the agriculture sector.
In 1971, however, the Bretton Woods accord that pegged the value of the US dollar to the price of gold collapsed.
There was, by that time, already pressure for an increase in the Australian dollar to tame inflation that was being fed by the 1969-71 mining boom. It increased as the newly floating US dollar declined in value after the breakdown of Bretton Woods, but the same forces that opposed tariff cuts also opposed a revaluation of the Australian dollar and the McMahon government sat on its hands.
The Reserve Bank created a safety valve for the currency by printing money and buying US dollars, but that created inflationary pressure of its own. The Whitlam government's two exchange rate increases after its election helped, but they came too late, and the Whitlam government was paradoxically also creating inflation pressure of its own, with expansionary budgets in its first two years and public-sector wage rises that spread right through the economy courtesy of Australia's centralised wage-fixing system.
There was another factor in the period of "stagflation" - low growth and high inflation - that emerged while Whitlam was in power, significantly denting his government's reputation for economic management. In October 1973, the OPEC oil cartel had shocked the world by cutting supplies and announcing price increases that by March 1974 had tripled the price of oil, from about $US3 a barrel to almost $US12 a barrel.
The stagflation that the OPEC price increase triggered and the ripple effects of the breakdown of Bretton Woods were things all Western governments were struggling to respond to at the time, Bank of America Merrill Lynch economist Saul Eslake observes.
Whitlam's tariff cut is in any event most often remembered now as a definitive break from the protectionist culture that previous governments had defended. His new Trade Practices Act also "paved the way for business and the community to understand and accept the fundamental benefits of a competitive, open market economy", Samuel says.
It wasn't apparent until years later, but the Whitlam government's mistakes were also a wellspring of economic reform.
The scandals that engulfed the government and gave Malcolm Fraser a trigger to deny passage of budget supply bills in the Senate were born in Labor's left wing and Labor's drubbing in the election that followed Sir John Kerr's sacking of Whitlam on November 11, 1975, changed Labor's internal power lines.
By the time the Hawke government was elected in 1983, the right wing of the Labor Party had the upper hand, sound economic management was politically paramount and a young treasurer named Paul Keating was ready to unleash the biggest program of economic reform and deregulation since Federation.