Having failed to win the referendum on constitutional change, Menzies stepped up the hunt for communists. People even stopped saying they were socialist for fear of being named as a communist and losing their job. The Australian Security Intelligence Organisation was taking advantage of its powers and watching people and politicians, tapping phones and confiscating passports from suspected communists. Spy rings had been discovered in Canada in the late 1940s and there was fear was that one would occur in Australia.
The Liberal Party, under Robert Menzies, continued to do all it could to increase those fears, as it was an effective way of keeping power. In 1954, there was a federal election ahead and Menzies needed another strategy to help him keep his party in government. In the election called for 1954, Evatts Labor Party appeared like they could win. Then, in April 1954, just before the election, Menzies announced the defection of Vladimir Petrov, Third Secretary of the Soviet Embassy??™s in Canberra. Petrov had been a code clerk the Soviet spy organisation, since 1933. In 1951, as a full agent, he had been sent to Australia under political cover, to make sure other Soviet citizens in Australia did not defect.
When he defected, Petrov brought with him documented evidence. Just two days before Parliament broke up for the election, Menzies made the announcement that a Soviet spy had defected to Australia and the country went into chaos. The Soviet officials tried to take his wife back to the USSR. They forced her on board a plane, but when the plane stopped at Darwin for refueling, the guards were arrested and Mrs. Petrov was freed. This was huge news at the time. Robert Menzies also announced there would be a royal commission investigation Petrov??™s claims that there was a Soviet Spy Ring operating in Australia.
Only ten days before the election, the royal commission began to hear evidence about the supposed spy ring in Australia. Rumours were circulating about communists close to the Labor leader, Bert Evatt. In the election, Labor won a majority of the votes, but Menzies conservative Coalition was able to win the House of Representatives by seven seats.