Jack Lang, NSW’s most tumultuous Premier

David Clune in Jack Lang, NSW's most tumultuous Premier in Australian Business Executive

Jack Lang is one of the best known of New South Wales Premiers, leaving a legend of mythical proportions. He was also one of the most damaging in terms of his impact on the economy, politics and social cohesion of New South Wales.

John Thomas Lang was born on 21 December 1876, the sixth of the ten children of James, a watchmaker from Edinburgh, and his Irish wife, Mary. Jack had an impoverished upbringing in the slums of inner Sydney.

Lang had an unusual early career for someone who became a Labor messiah. Initially working at unskilled jobs, he aspired to white collar ones. In 1893 he was a junior in an accountant’s office and three years later a real estate agent’s clerk at Auburn. In 1901, Lang established an estate agency and auctioneering business. He prospered as Auburn grew. 

Lang joined the Labor Party at the turn of the century and rose steadily to local prominence. In December 1913, he won the local State electorate of Granville. He was to represent the area until 1946. Lang was a hard-working MLA who took parliament seriously and mastered its forms and procedures. However, his remarks often featured unpleasant insinuations and personal attacks.

In 1916, Lang became Caucus Secretary and the following year Opposition Whip. He was developing a canny understanding of the Labor Party and the Caucus and how to manipulate both to his advantage.

Lang used his business experience to build a reputation as an expert on public finance which led to his appointment as Treasurer in the 1920-22 Labor Government, a position in which he performed competently. 

After Labor lost office, Lang was elected Opposition Leader on 31 July 1923 by 21 votes to 11. His bullying, authoritarian manner quickly alienated many of his colleagues. Just over 12 months later he narrowly survived a leadership challenge, 18 votes to 17. 

At the 1925 election, Lang campaigned on an attractive program: widows’ pensions, increased assistance for the unemployed, more expenditure on public works. Labor won 46 of the 90 seats and Lang became Premier and Treasurer on 17 June 1925.

The first Lang Government passed beneficial measures in areas such as fair rents, workers’ compensation, widows’ pensions, and child endowment.  Although much of the hard work had been done by his ministers, Lang took the credit and used it to bolster his heroic image. The unions and branches responded with adulation. Lang realised that he could use his fanatical following to dominate the labour movement.

Lang’s increasingly vindictive, devious, domineering leadership style resulted in vicious infighting which destroyed his Government. At the election held on 8 October 1927, a conservative Ministry under Tom Bavin took office.

It was Bavin’s misfortune to become Premier as the Great Depression started to bite. He relied on orthodox financial policy to combat the growing crisis: balancing the budget, cutting public expenditure and reducing wages. It was a perfect situation for Lang to exploit. He styled himself as the selfless servant of the labour movement – a sturdy warrior doing battle for the workers. Most fell into line behind their champion.

In the 1930 election campaign, Lang unscrupulously promised to maintain the standard of living, reduce working hours, and increase unemployment relief and social security payments, without any real idea of how he could achieve this. A Labor advertisement unsubtly said: ‘Gloom under the Bavin Nationalist Government. Joy if you vote for the Lang Labor Government. For brighter times change the Government’.  Labor won a landslide victory at the 25 October 1930 election, with 55 seats to the Coalition’s 35.

New South Wales was particularly vulnerable when the Depression hit as it had a high level of overseas debt and a heavy reliance on exports of primary products. The debt could not now be serviced by new borrowing and the value of exports declined, as did government reserves and revenue. 

In June 1931, the Commonwealth and all State Premiers adopted a deflationary plan to combat the economic crisis. The chief elements of what became known as the Premiers’ Plan were cuts in government expenditure, increased taxation, and reduction of interest rates.

Lang countered with his own plan. The main features were suspension of interest payments to British bondholders and replacing the gold standard with a nebulous ‘goods standard’ based upon the wealth of Australia. It was a theoretically and practically defective propaganda stunt. 

Lang was between a rock and a hard place: he could not implement the wage and expenditure cuts in the Premiers’ Plan without alienating his base; his much-touted alternative plan was unworkable. The inability to raise loan funds, the sharp decline in revenue and Lang’s failure to reduce expenditure meant that the financial position of New South Wales became increasingly critical. The budget deficit for 1931/32 was a massive £14.2 million. Unemployment in New South Wales reached 32 per cent in 1932.

The Government Savings Bank of New South Wales failed on 22 April 1931 after a run on its funds, with a calamitous effect on many small depositors. On 6 August, 23,000 New South Wales public servants were not paid their fortnightly salary. Government cheques for unemployment relief and other payments were not honoured.

Lang’s solution was debt repudiation. On 1 April 1931, he defaulted on interest repayments to British banks. In February 1932, Lang again defaulted. Joe Lyons’ conservative Federal Government was determined to recoup the money owed by New South Wales and destroy Lang in the process. It legislated to allow the Commonwealth to recover directly from a state funds owed to it for interest repayments. Banks were required to pay to the Federal Government any funds belonging to New South Wales. All State revenue was also to be paid to the Commonwealth. In a pre-emptive move, Lang ordered that New South Wales assets be withdrawn from the banks and kept in the Treasury vaults. The public service was instructed to forward revenue to the Treasury which became a de facto bank. 

This slide into financial chaos was accompanied by growing civil unrest.  The inflammatory, populist rhetoric that Lang increasingly resorted to in an attempt to preserve the support of the Labor faithful exacerbated an already tense situation. Fears of class warfare and ‘Red revolution’ became widespread among the middle and upper classes. Ordinary workers, the unemployed and the destitute became increasingly radicalised.

A Labour Army was formed to defend the Lang Government. Far more formidable were the conservative secret armies. Eric Campbell’s New Guard was a fascist-leaning, paramilitary organisation. It had a membership in 1931 of 36,000 in Sydney and 3,000 in the country. Its effective military strength has been estimated at just under 11,000.

More powerful and secretive was the Old Guard, established by prominent figures in business, the professions and the pastoral industry. Unlike the New Guard, its main strength was in the country, where it had an estimated 25,000 members across all regions, compared to 5,000 in Sydney.

By May 1932, the situation had reached flashpoint. Large parts of rural New South Wales were threatening to secede unilaterally. The defence forces were mobilising for a possible confrontation with Lang. The Old Guard was committed to throwing its resources behind the Commonwealth. The New Guard was plotting to seize Parliament House and forcibly overthrow the Lang Government. The New South Wales Police Force was ready to act as a military force to resist any attempted coup against Lang. The Labour Army was spoiling for a fight. New South Wales was dangerously close to civil war.

It was at this stage that Governor Sir Philip Game intervened. He had become increasingly concerned as the situation threatened to spin out of control and was under enormous pressure to act. On 13 May 1932, he used his reserve powers to dismiss Lang. His justification was the illegality of the instructions Lang had issued to circumvent the Commonwealth’s legislation to seize New South Wales revenue. Unlike Sir John Kerr in 1975, Game warned Lang that if he was not prepared to rescind the offending instructions or resign he would be dismissed. Lang accepted his dismissal and departed office peacefully.

Some have argued that Game’s action was improper as the alleged illegality of Lang’s actions could have been resolved by the courts. Others argue that more attention should be paid to the realities than the legalities in assessing the Governor’s action. New South Wales was close to being ungovernable. The economic situation was catastrophic. Bloodshed in the streets seemed imminent. In the circumstances, Game had to act quickly.

The Governor commissioned Opposition Leader Bertie Stevens to form an interim government, pending an election on 11 June 1932. It one of the most hotly contested in New South Wales history. Stevens claimed that Lang would further impoverish the State and lead it towards socialism and Communism. Lang branded Stevens a ruthless exploiter of the workers and agent of the bankers. 

The result was a decisive repudiation of Lang. Labor won 24 seats compared to 55 in 1930. The primary vote dropped from 56 per cent to 40 per cent.

After this, Lang was a spent force politically and electorally. However, he clung to the Labor leadership with all the destructiveness and ruthlessness he was capable of. The electorally damaging divisions in New South Wales finally forced the Federal Executive to intervene. The supporters and opponents of Lang came together at a conference controlled by Federal officials to determine who was to rule in New South Wales. The unity conference, which met on 26 August 1939, was a rout for the Langites. It was a victory for those who wanted to restore Labor’s heritage as a democratic organisation committed to moderate reform through the parliamentary process. 

The moderate, experienced Bill McKell replaced Lang as leader in a Caucus ballot on 5 September 1939. McKell decisively won the May 1941 election, initiating a record-breaking 24 years in office for Labor.

Lang devoted the rest of his long life to defending and embellishing his record. Egotistical self-justification and the pursuit of grudges were much in evidence. He produced a series of memoirs, almost certainly not written by him, notable for self-aggrandisement and inaccuracy. In person, Lang harangued any person or group prepared to listen about his achievements.

Jack Lang died on 27 September 1975, just short of his 99th birthday.

Dr David Clune is an Honorary Associate In Government and International Relations at the University of Sydney, and the author of Jack Lang, published by Connor Court: www.connorcourtpublishing.com.au.


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