John Cain II

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John Cain (born 26 April 1931), Australian politician, was Labor Premier of the state of Victoria from 1982 to 1990.

Cain was born in Melbourne, the son of John Cain, leader of the Labor Party in Victoria from 1937 to 1957 and three times Premier. He was educated at state and private schools and at the University of Melbourne, where he graduated in law. He practised law in suburban Melbourne, and was Chairman of the Victorian Law Institute in 1971-72. He was also a member of the Law Council of Australia and a member of the Australian Law Reform Commission.

Cain was 24 at the time of the 1955 split in the Labor Party that brought down his father's last government. During the 1960s he was a member of the group, known as The Participants, which also included John Button, Richard McGarvie and Barry Jones, who opposed the left-wing group which controlled the Victorian Labor Party from 1955 onwards. In 1971 he supported the moves by supporters of Gough Whitlam, led by Bob Hawke and others, that in 1971 brought about federal intervention in the Victorian branch and ended left-wing control. He became Vice-Chairman of the Victorian Labor Party in 1973. That group of Participants later became known as the Independents faction which predominantly voted with the Socialist Left.

In 1976 Cain was elected to the Victorian Legislative Assembly as MP for Bundoora. He became shadow Attorney-General under the leadership of Frank Wilkes, but when Wilkes lost the 1979 election to the Liberal premier, Dick Hamer, Cain challenged him for the leadership, becoming leader in September 1981. In March 1982 Cain defeated the Liberals and formed the first Labor government in Victoria for 27 years.

During the first six years of his Premiership, Cain remained very popular with the Victorian electorate, and was easily elected to a second term in 1985. His government carried out many reforms to Victorian government, particularly in the areas of education, environment, law reform and public administration. Cain was a Keynesian, opposed to the doctrines of economic rationalism, and he increased government spending in the hope of stimulating growth and investment, particularly through the Victorian Economic Development Corporation. This worked so long as the national economy remained buoyant.

Cain was also responsible for the appointment as Governor of Davis McCaughey, then aged 71, who served from 1986 to 1992. A highly respected theologian, McCaughey was a popular choice after the controversy surrounding after the resignation of Rear Admiral Sir Brian Murray, following disputed accusations that he had improperly accepted free air travel.

During its second term Cain's government began to run into difficulties with the state budget. The stock market crash of 1987 created a crisis which forced the government to cut spending, alienating some trade union supporters. The State Bank of Victoria, in particular its merchant banking arm Tricontinental, ran up a huge portfolion of bad loans, without adequate fiduciary supervision.

The Cain government was narrowly re-elected to a third term in 1988, but immediately after the election a huge shortfall in the government's workers' compensation scheme, WorkCare, was revealed. This was followed by a budgetary crisis that the government was unable to deal with, partly because of the large spending programmes the government had previously instituted, partly because he was unable to obtain support from within his government for necessary spending reductions and also because the federal Government declined to "bail out" the Victorian government as they believed Cain's overspending was significantly to blame.

In February 1990 it was rumoured that Pyramid, a privately owned (but government regulated) building society, was in difficulties. Ministers in Cain's government accepted assurances from Pyramid directors that the society's position was sound, and passed these assurances on to the public. In fact the society was insolvent. When it failed, causing thousands of investors and depositors to lose their money, the government was blamed by investors and the media. This was followed shortly after by the collapse of Tricontinental, which threatened to bankrupt the State Bank, Victoria's largest financial institutions. The bank eventually had to be sold to the Commonwealth Bank, which was shortly after privatised by the federal government. These disasters permanently ruined Cain's reputation for financial management.

By this time Cain was becoming frustrated at the reluctance of his government's caucus members to approve his plans for tax rises and spending cuts to reduce the growing budget deficit. He issued an ultimatum at the Labor Party Conference to "back me or sack me." When the undermining of his position continued, he resigned in August 1990. He retired from Parliament in 1992, at the election at which his successor, Joan Kirner, led Labor to a massive defeat.

Cain became a Professorial Fellow in politics at the University of Melbourne in 1991, and has since completed three books. In 2004 he surfaced in the media with a damning critique of the University of Melbourne's experimentation with what he says are risky financial ventures and what he argues is its departure from its public mission. Off Course: From Public Place to Marketplace at Melbourne University attracted a range of critical commentary. He is a regular political commentator on local radio. He has remained active in the affairs of the Victorian Labor Party, and has recently been critical of what he sees as the dominance of factions in the party, particularly the Labor Right. He is one of the ALP's Dispute Tribunal members, a panel of three people from which one is selected randomly to adjudicate internal party disputes. Some members have expressed concern that his public statements on factions means that he has prejudged disputes that could appear before him.

[edit] Books

Cain, J. 1995. John Cain's years - power, parties and politics. Melbourne University Publishing.
Cain, J. 1998. On With the Show. Melbourne: Prowling Tiger Press. (on the entertainment industry in Australia)
Cain, J. and Hewitt, J. 2004. Off Course: From Public Place to Marketplace at Melbourne University. Melbourne: Scribe.