Divorce and immigration laws were liberalised, military conscription was abolished, money was poured into film, dance, opera and other cultural activities, university fees were abolished, British (or "Imperial") honours were replaced by Australian orders and archaic constitutional links with Britain were severed.
While Mr Whitlam carved out a new independent stance for Australia on the international scene, his ministers became embroiled in scandals.
The worst was the "loans crisis", a naive bid to borrow billions of Arab "petro-dollars" to develop Australia's vast natural resources. The episode unnerved the business community and provided the trigger for the opposition, led by Malcolm Fraser, to push Mr Whitlam from power by using their majority in the Senate to deny the government its money supply.
The drama came to a climax on 11 November 1975 when Sir John Kerr, the Governor-General, used his "reserve" powers to sack Mr Whitlam and install Mr Fraser as caretaker prime minister pending elections, which Mr Fraser won.
Although the rest of the world has forgotten about Mr Whitlam, his influence in Australia remains considerable. He continues to travel and give speeches. He was on television the other night, at 79 as acerbic as ever, offering his own version of the 1975 trauma. Mr Whitlam has never forgiven Sir John for failing to warn the Prime Minister that dismissal was likely unless the political deadlock was broken.
Sir John's friends say if he had done that Mr Whitlam would have gone to the Queen to have Sir John sacked, which would have dragged the Crown into the crisis. Mr Whitlam still describes the affair as a "coup".
Mr Whitlam, Mr Fraser and Australian democracy survived the 1975 crisis. Sir John did not. For years afterwards he was booed and heckled everywhere he went. In 1977 he stepped down and spent years in exile in Britain before his death in 1991.
Much as the crisis 20 years ago bitterly divided Australians, it also forced them to question whether their constitution, with the British monarch and her viceroy at its centre, needed overhauling. Mr Whitlamhas little doubt today where that process is leading. He said: "When we of the Labor Party commemorate the dismissal, we celebrate the coming Australian republic."
Robert MillikenReuse content