After his election victory, Menzies returned to the office of prime minister on 19 December 1949.
Cold War and national security The spectre of
communism and the threat it was deemed to pose to national security became the dominant preoccupation of the new government in its first phase. Menzies introduced legislation in 1950 to ban the
Australian Communist Party, hoping that the Senate would reject it and give him a trigger for a
double dissolution election, but Labor let the bill pass. It was subsequently
ruled unconstitutional by the
High Court. But when the Senate rejected his banking bill, he
called a double dissolution election. At that election, the Coalition suffered a five-seat swing, winning 69 of 121 seats and 50.7 percent of the two-party vote. However, it won six seats in the Senate, giving it control of both chambers. Later in 1951 Menzies decided to hold a
referendum on the question of changing the Constitution to permit the parliament to make laws in respect of Communists and Communism where he said this was necessary for the security of the Commonwealth. If passed, this would have given a government the power to introduce a bill proposing to ban the Communist Party. Chifley died a few months after the
1951 election. The new Labor leader,
H. V. Evatt, campaigned against the referendum on civil liberties grounds, and it was narrowly defeated. Menzies sent Australian troops to the
Korean War. Economic conditions deteriorated in the early 1950s and Labor was confident of winning the
1954 election. Menzies engaged in
red-baiting of political opponents. Shortly before the election, Menzies announced that a Soviet diplomat in Australia
Vladimir Petrov, had defected, and that there was evidence of a Soviet spy ring in Australia, including members of Evatt's staff. Evatt felt compelled to state on the floor of Parliament that he'd personally written to Soviet Foreign Minister
Vyacheslav Molotov, who assured him there were no Soviet spy rings in Australia, bringing the House into silence momentarily before both sides of Parliament laughed at Evatt's naivety. This
Cold War scare was claimed by some to enable the Menzies government to win the election. The Menzies government won 64 of 121 seats and 49.3 percent of the two-party vote. Evatt accused Menzies of arranging Petrov's defection. The aftermath of the 1954 election caused a split in the Labor Party, with several anti-Communist members from
Victoria defecting to form the
Australian Labor Party (Anti-Communist). The new party directed its preferences to the Liberals, with the Menzies government re-elected with an increased majority at the
1955 election. Menzies was re-elected almost as easily at the
1958 election, again with the help of preferences from what had become the
Democratic Labor Party.
Foreign policy in 1961 The Menzies era saw immense regional changes, with post-war reconstruction and the withdrawal of the old European Powers and the British Empire from the
Far East (including independence for
Indonesia and
India, respectively). In response to these geopolitical developments, the Menzies government maintained strong ties with Australia's traditional allies such as Britain and the
United States while also reorienting Australia's foreign policy focus towards the
Asia Pacific. With his first Minister for External Affairs,
Percy Spender, the Menzies government signed the
ANZUS treaty in
San Francisco on 1 September 1951. Menzies later told parliament that this security pact between Australia,
New Zealand and the United States was 'based on the utmost good will, the utmost good faith and unqualified friendship' saying 'each of us will stand by it'. At the same time as strengthening the alliance with the United States, Menzies and Spender were committed to Australia being on 'good neighbour terms' with the countries of
South and
Southeast Asia. To help forge closer ties in the region, the Menzies government initiated the
Colombo Plan that would see almost 40,000 students from the region come to study in Australia over the four subsequent decades. Recognising the economic potential of a burgeoning postwar Japan, Menzies, together with Trade Minister Jack McEwan and his new minister for External Affairs, Richard Casey, negotiated the Commerce Agreement with Japan in 1957. This trade agreement was followed by bilateral agreements with
Malaya in 1958 and Indonesia in 1959. In 1951, the top marginal tax rate for incomes above £10,000 (equivalent to $487,272.73 in 2022) was 75 per cent under Menzies; from 1955 until the mid-1980s, the top marginal tax rate was 67 per cent.
Social reform In 1949, Parliament legislated to ensure that all
Aboriginal ex-servicemen should have
the right to vote. In 1961 a Parliamentary Committee was established to investigate and report to the Parliament on Aboriginal voting rights, and in 1962, Menzies's
Commonwealth Electoral Act provided that all Indigenous Australians should have the right to enrol and vote at federal elections. In 1960, the Menzies government introduced a new pharmaceutical benefits scheme, which expanded the range of prescribed medicines subsidised by the government. Other social welfare measures of the government included the extension of the Commonwealth Child Endowment scheme, the pensioner medical and free medicines service, the Aged Persons' Homes Assistance scheme, free provision of life-saving drugs; the provision of supplementary pensions to dependent pensioners paying rent; increased rates of pension, unemployment and sickness benefits, and rehabilitation allowances; and a substantial system of
tax incentives and rewards. In 1961, the
Matrimonial Causes Act introduced a uniform divorce law across Australia, provided funding for marriage counselling services and made allowances for a specified period of separation as sufficient grounds for a divorce. In response to the decision by the
Catholic Diocese of Goulburn in July 1962 to close its schools in protest at the lack of government assistance, the Menzies government announced a new package of state aid for independent and Catholic schools. Menzies promised five million pounds annually for the provision of buildings and equipment facilities for science teaching in secondary schools. Also promised were 10 000 scholarships to help students stay at school for the last two years with a further 2 500 scholarships for technical schools. Despite the historically firm Catholic support base of the Labor Party, the Opposition under
Arthur Calwell opposed state aid before eventually supporting it with the ascension of
Gough Whitlam as Labor leader. , 1955 In 1965, the Menzies government took the decision to end open discrimination against married women in the public service, by allowing them to become permanent public servants, and allowing female officers who were already permanent public servants to retain that status after marriage.
Immigration policy The Menzies government maintained and indeed expanded the Chifley Labor government's postwar immigration scheme established by Immigration Minister Arthur Calwell in 1947. Beginning in 1949, Immigration Minister Harold Holt decided to allow 800 non-European war refugees to remain in Australia, and Japanese war brides to be admitted to Australia. In 1950, External Affairs Minister Percy Spender instigated the Colombo Plan, under which students from Asian countries were admitted to study at Australian universities, then in 1957, non-Europeans with 15 years' residence in Australia were allowed to become citizens. In a watershed legal reform, a 1958 revision of the Migration Act introduced a simpler system for entry and abolished the "dictation test" which had permitted the exclusion of migrants on the basis of their ability to take down a dictation offered in any European language. Immigration Minister
Alick Downer announced that "distinguished and highly qualified Asians" might immigrate. Restrictions continued to be relaxed through the 1960s in the lead-up to the Holt government's watershed
Migration Act, 1966. This was despite a discussion with radio 2UE's Stewart Lamb in 1955, in which Menzies was a defender of the
White Australia policy: (Menzies) "I don't want to see reproduced in Australia the kind of problem they have in South Africa or in America or increasingly in Great Britain. I think it's been a very good policy and it's been of great value to us and most of the criticism of it that I've ever heard doesn't come from these oriental countries it comes from wandering Australians. (Lamb) "For these years of course in the past Sir Robert you have been described as a racist." (Menzies) "Have I?" (Lamb) "I have read this, yes." (Menzies) "Well if I were not described as a racist I'd be the only public man who hasn't been."
Higher education expansion The Menzies government extended Federal involvement in higher education and introduced the Commonwealth scholarship scheme in 1951, to cover fees and pay a generous means-tested allowance for promising students from lower socioeconomic groups. In 1956, a committee headed by Sir Keith Murray was established to inquire into the financial plight of Australia's universities, and Menzies's pumped funds into the sector under conditions which preserved the autonomy of universities. In its support for higher education, the Menzies government tripled Federal government funding and provided emergency grants, significant increases in academic salaries, extra funding for buildings, and the establishment of a permanent committee, from 1961, to oversee and make recommendations concerning higher education.
Development of Canberra The Menzies government developed the city of Canberra as the national capital. In 1957, the Menzies government established the National Capital Development Commission as independent statutory authority charged with overseeing the planning and development of Canberra. During Menzies's time in office, the great bulk of the federal public service moved from the state capitals to Canberra. ==Retirement and honours==