World War II

In the autumn of 1938, an internal memorandum was circulated among Reichsbank officials about the dire economic situation of Nazi Germany as a result of the frenzied rearmament policy through central bank monetary expansion. Warning against its inflationary effects, the memo suggested a “smooth landing” from a war to a peacetime economy. In the following months, seeing that instead of restraint there was a further acceleration of the armament race, Reichsbank President Hjalmar Schacht and the banks’ directorate decided to issue an official memorandum, which Schacht delivered directly to Hitler’s hands. Emphasizing that the Fuhrer himself had always “rejected inflation as stupid and senseless”, the letter stressed that “Reichsbank gold and foreign exchange reserves were ‘no longer available’”, that the trade deficit was “rising sharply” and that “price and wage controls were no longer working effectively”. With the volume of notes in circulation accelerating, state finances were bluntly described as “close to collapse”.

As Australia begins to plot a recovery strategy from the first recession in the country in decades, the Morrison government needs to examine what has worked well in the past.

Crises require strong leadership, national cohesion and a framework for carrying out recovery efforts on a grand scale.

As such, there is a case to be made for a new Commonwealth agency to lead the recovery effort, built on the model of the Department of Post-War Reconstruction that helped Australia emerge from the turmoil of the second world war.

In December 1942, Prime Minister John Curtin established the Department of Post-War Reconstruction. Even though the war was still raging, its task was to begin planning and coordinating Australia’s transition to a peacetime economy. 

Prime Minister Winston Churchill announced a 12-year plan for the building industry when peace came.

The Ministry of Works had come up with Emergency Factory Made Houses, or EFMs.

They devised an ideal floor plan of a one-storey bungalow with two bedrooms, inside toilets, a fitted kitchen, a bathroom and a living room.

The homes would be detached and surrounded by a garden to encourage householders to grow fruit and vegetables, and would have a coal shed.

Soon better known as prefabs than EFMs, the homes were cheap to produce and, for many, an improvement on their previous living conditions.

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In the first decade after the war, nearly 500,000 homes were built using some form of prefabrication.

Originally intended as an interim solution until the country could return to building permanent homes with traditional materials, 156,623 prefab bungalows were built between 1945 and 1949.

Each was expected to last for a decade. About 8,000 remain today.