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World War II
When war came again in Europe in 1939, Australia dispatched its small armed forces to assist in Britain's defense. After the Pacific war between Japan and the United States broke out in 1941 and Britain was unable to provide sufficient support for Australia's defense, the new Labor government of John Curtin sought alliance with the United States. Until the liberation of the Philippines, U.S. General Douglas MacArthur and his staff used Australia for their base of operations. Although casualties were lighter than in World War I, Australians were more psychologically affected because of their fears of a Japanese invasion. Again Australian industry was transformed by the needs of war. The economy was redirected toward manufacturing, and heavy industries ringed the capital cities. Postwar development built further on the foundations established during the war.
Prime Minister Curtin died in 1945, but the new Labor government under Joseph B. Chifley strengthened Australia's relationship with the United States in the ANZUS pact for mutual assistance (with New Zealand as a third partner). As a charter member of the United Nations, Australia also agreed to the decolonization of the islands in the Pacific, including the preparation of Papua New Guinea for independence (achieved in 1975).