The Constitution Alteration (Incomes) 1973 was a referendum proposed by the Australian Labor Party in December 1973 which sought to alter section 51 of the Australian Constitution to give the Commonwealth legislative power over incomes. The Whitlam government's most prominent reason for posing this amendment was the issue of inflation, as they argued that with government power over incomes, inflation would be better managed.

The proposal did not pass due to a majority "no" vote from all states. indicating a significant increase in the rate of inflation. In addition, a supply shock hit the Australian economy with the Organization of the Petroleum Exporting Countries (OPEC) strikes and "Oil Shock", which not only led to an increase in oil prices but an international recession. Significant pressure was placed on the Whitlam government to overcome these economic issues and restabilise the economy resulting in the 1973 Referendum (Incomes), Whitlam’s main attempt to control inflation. Whitlam’s government was prone to criticism over the number of policies his government tried to implement in a short period of time. Whitlam was also frequently criticised by some media, economists and the public for his management of the economy, especially in a time of economic crisis. believing he made positive impacts on Australia. Whilst others believed that he failed to effectively govern Australia, especially economically. ABC political journalist Annabel Crabb stated that it was Whitlam’s "irrepressible curiosity and quest for wisdom in his life" This overall controversy meant that there was no likely outcome for Whitlam’s 1973 Income referendum, especially considering the failed history of many Australian referendums.

Public opinion and polls

At the beginning of the campaign before any major press or debates surrounding the income referendum, public opinion polls revealed that three states (NSW, VIC, and SA) would potentially vote ‘Yes’. The general public confusion surrounding the referendum was emphasised by newspapers and journalists, such as Kenneth Davidson from The Australian, reporting that the parties themselves were confused about how income powers would be exercised.

  1. This power would advance equal pay for women and would create a more equitable income and wage system. The unions did not believe that the proposed powers would be effective in controlling inflation. They argued that the increasing price levels in Australia resulted in the Australian public demanding higher wages, thus, resulting in a "wage-price spiral". Both of these reforms aimed to give more equal opportunities to those with lower incomes, however, they could not manage inflation. This was due to the disproportionate impact that inflation, and particularly "stagflation", had on those with lower socio-economic statuses as unemployment increased along with the increase of prices. Furthermore, Robertson argued that a major reason that this referendum did not pass was due to the Labor government’s insistence on posing two referendum questions at once. Inflation levels peaked at 19 percent in 1974 and continued to remain at a high level for the next two decades. Economists, such as Richard Holden, in hindsight, view Whitlam’s increase in government spending after the failed referendum to be a large failing by the Labor government. Holden believed that Whitlam only served to worsen the inflation crisis and ‘wage price spiral’ The rejection of Whitlam's 1973 income referendum gave way to later policies that attempted to manage the Australian economy such as the 1975 Wage Indexation Policy.