During the second half of World War One, the First Australian Imperial Force experienced a shortage of men as the number of men volunteering to fight overseas declined and the casualty rate increased. At the time, military service within the Commonwealth of Australia and its territories was compulsory for Australian men, but that requirement did not extend to conflict outside of Australia. In 1916, Prime Minister Billy Hughes called a plebiscite to determine public support for extending conscription to include military service outside the Commonwealth for the duration of the war. The referendum, held on 28 October 1916, narrowly rejected the proposal. A second plebiscite, held a year later on 20 December 1917, also failed (by a slightly larger margin) to gain a majority.
The referenda caused significant debate and division in Australian society, and within the government. Hughes called the first referendum against the advice of his own Labor government, which led to the Labor party splitting, with Hughes and others forming a new National Labor Party.
On 1 January 1911, the Commonwealth Defence Act 1911 (Cth) was passed. This meant that all males aged 12 to 26 years of age would receive compulsory military training. This, however, did not force them to participate in the war itself when the time came. The actual conscription debate began in 1916 when Prime Minister Billy Hughes visited the war front himself. On his return to Australia, he then voiced his thoughts of conscription as his view was that Australia needed more soldiers. Due to this during 1916 and 1917 a referendum was held to discuss the matters and hand it over to the public. Although three states voted "yes" and three "no", the majority of the population was against the amendment of the original law. This was duly rejected, if only by a small margin of 72 476 votes. As a result, recruiting was stronger than ever and intensified campaigns were popping up in every city. Some of the arguments against conscription were that enough lives had been lost and that farmers need more men to work the land for food. There were two things needed for the war more than anything: men and money.