The Great Depression 1931

Updated time

Last updated

09 January 2017

In January 1931 the Court reduced ‘all’ award wage rates, including the basic wage and margins, by 10 per cent, because of the depressed state of the economy in Australia and overseas[1]:

‘The evidence submitted by the applicants was to the effect that the fall in the national income had been so serious as to disturb completely the whole economic balance.  The primary cause of the present crisis was the rapid fall in prices received for exported surplus primary products admittedly to the extent of £40,000,000 per annum, and the world fall in general price levels. (p.8)


The Court refuses to make any variations in the basic wage ... but after much anxious thought it is forced to the conclusion that for a period of twelve months and thereafter until further order a general reduction of wages is necessary.  As stated in the Court’s judgement on the recent applications for cancellation of railway awards ‘an emergency has arisen which calls for immediate re-adjustment in all directions; re-adjustment of costs of government, costs of production and services, rents, dividends, interest, and other returns to capital, and costs of living’.  All must adapt themselves to the fundamental fall in national income and national wealth and to our changed trading relationships with other countries.’[2]

In 1934 the Court decided that ‘the 10 per cent reduction shall cease to operate except in some industries which are now in a critical condition or in which other special circumstances exist’, and abolished the ‘Powers 3 shillings’[3].  It decided to assess and adjust the basic wage from a ‘fresh starting point’[4].  It set an amount of 67 shillings for Sydney and 64 for Melbourne, with most other amounts for each capital city between those amounts[5]


[1] Basic Wage Inquiry (1930-1931) 30 CAR 21

[2] Ibid at 8 and 31

[3] Basic Wage Inquiry 1934 (1934) 33 CAR 144 at 148

[4] Ibid 153

[5] Ibid 154