Liberal Movement (Australia) - Split

Split

Despite the LCL's defeat, the failure of the LM to gain internal supremacy over the conservatives was seen as the latter as a vindication of their policies. Pressure from the LCL's leader, Bruce Eastick, who called on the LM to disband, and the conservative wing of the party, saw machinations against the LM. Hall reiterated the LM's intention to continue, but Millhouse was removed as the LCL deputy leader in 1973, and pressure began to be mounted on the faction, which did not have any members on the frontbench; Hall did not pursue a position in the shadow ministry. Tension continued as rumours spread claiming that the LCCL State Council was contemplating the forbidding and vetoing of LM members from representing the party in elections. While Hall and Martin Cameron responded by publicly vowing to stand firm, several of their LM colleagues were ambivalent when asked about the intentions if the LM were no longer tolerated within the LCL. However, Heini Becker left the LM.

On 23 March, a motion was passed at the state council that allowed it to deny membership to those who belonged to "outside political organisations", and the LM was subsequently declared to be one. Strangely, an LCL member could also be a member of the Communist Party of Australia, but not the LM. A motion by LM members to also declare the League of Rights an outside political organisation failed. The LCL conservatives were confident the LM would capitulate and reintegrate, as third parties had never been successful in South Australia. At first, LM members tried to have their banning from the LCL deemed illegal, but this failed.

It was not expected that the LM would split to form a separate party. But before it was established, Hall promptly resigned from the LCL, declaring it "hypocritical and decadent". Martin Cameron quickly followed, and Robin Millhouse consulted with members from his constituency before agreeing to resign from the LCL. Ian Wilson, who had earlier managed to convince Hall not to form a separate party, tried in vain to sway him to remain with the LCL and focus on reforming it from within. He wanted to shut down the LM in an attempt to limit the damage to the party, believing that "political groups come and go, but the ideals we aim for will never change". All other LCL-LM members did not follow; three lower house members including Tonkin and Brown, Wilson in the federal parliament, and two MLCs all stayed in the LCL. David Tonkin stated that "every one of those Liberals who resign from the League is making it more and more certain that the League will remain just as it is".

A number of LCL branches remained with the LM, and there were mass resignations from the LCL on the whole. Eastick was relatively unconcerned: the LCL had a massive membership of over 30,000 and the LM's split did little to dent it—Eastick admitted 200 individual resignations. In the meantime, the LCL tried to introduce a requirement for members to make "pledge" that they were not aligned with "an outside political body". This prompted a second wave of resignations, notably from sections of the Young Liberal Movement. Despite its leader's show of confidence, many in the LCL were concerned that they expulsion of LM elements had apparently backfired; it also prompted some disillusioned parliamentarians to suggest that rural and urban elements in the LCL could not coexist.

The new party was formally announced on 2 April after an LM convention. As the LM had already begun establishing an infrastructure while in the LCL, it able to pick up momentum readily, presenting itself as a centrist moderate party, but it was never able to shed its reliance on Hall.

As Hall and Millhouse were both competent parliamentary performers, it was widely acknowledged in the media that they outperformed the LCL in providing an effective opposition. In one parliamentary division, with the entirety of the ALP and LCL on one side of the house and the LM members on the other, Millhouse took one of many opportunities to taunt Eastick and damage the LCL, labelling him "Dunstan lover!" The South Australian media, which had earlier warmed to Premier Dunstan, then focused their attention on the LM and gave the fledgling party much-needed publicity.

The primary instigator for the creation of the LM in 1972 had been based around the lack of electoral reform. The electoral system had been expected to continue to return rural LCL members in the Legislative Council, yet at the 1973 elections Labor had, through the mass registration of new voters for the council vote, managed to gain two seats, giving a 14–6 split in the council. As half the council was elected at each election, Labor only had to retain their vote to gain an additional two seats at the next election, and a minor rise in it would see additional council seats fall to them. It was increasingly plausible that Labor would be able to gain a majority in the Legislative Council within a decade and then carry through their goal of abolishing it, and push through any electoral legislation it so wished.

To the LCL, this was a dangerous situation, and seeing a need to avoid it, compromised: their position abruptly changed to being in favour of wholesale reform of the Legislative Council. When Dunstan put forward bills to reform it, the LCL relented, and Eastick convinced the LCL councillors to let them pass, conditional on amendments to the legislation. These were, a minor change to the particular proportional system used to elect the councillors, and that it remained non compulsory to vote in the council. The new council would eventually have 22 members, with half elected each election from a multi-member constituency covering the entirety of the state. Hall attacked the LCL for its sudden change in stance on reform, and managed to see the first LM policy become law with the lowering of the council suffrage age to 18.

The reform legislation for the Legislative Council was not to take effect until the next election, and the death of LCL MLC Harold Kemp necessitated a by-election for the council district of Southern on 11 August. Southern was an ultra-safe rural LCL seat, and Labor declined to stand in the by-election. It was contested by the LCL, the LM, the Country Party and the Australia Party. The three non-LCL parties agreed on favourable preference deals in the hope of one of them displacing the LCL. The LM gained 29 per cent of the vote, and the LCL candidate won by a 4 per cent margin once preferences had been distributed.

At the start of 1974, the LCL had undertaken some progressive reforms. They brought in a less conservative membership at the grassroots level, although the old guard was still prominent in parliamentary roles. They tried to broach the possibility of reintegrating the LM. Wilson and the new executive director of the LCL, John Vial were at the forefront, but the LM was optimistic about its future and refused unless the LCL changed leaders and allowed for explicitly separate urban and rural factions, which did not happen.