During Menzies' second premiership, which coincided with the chilliest period of the Cold War, Australian troops were dispatched to participate in the Korean War (1950–1953) and then to Malaya, the Australia–New Zealand–United States (ANZUS) Pact and Southeast Asia Treaty Organization (SEATO) agreements were signed, and Australia's involvement in the Vietnam War began. Although Menzies' anticommunism was genuine and, at times, visceral, he skillfully exploited Cold War fears to advance his political agenda. In 1950 he introduced the controversial Communist Party Dissolution Bill. He disliked the illiberal idea of outlawing a political party but believed that the threat to liberalism posed by communism must be eliminated. The legislation was unparalleled in Australian political history, as it reversed the accepted judicial principle that an accused person was innocent until proven guilty. Despite the Australian High Court's subsequent ruling against the act's constitutionality, Menzies persisted in his efforts to stamp out indigenous communism.
In late 1950, with the Korean War raging, Menzies warned darkly of the likelihood of a third world war within three years. In this looming apocalyptic conflict, he prognosticated that the communists would become fifth columnists. In 1951, his government held a national referendum seeking constitutional power to ban the Communist Party and communist activities. The referendum was defeated by a narrow margin.
The issue of Cold War communism again exploded in 1954 when Soviet intelligence operative Vladimir Petrov defected and Menzies appointed a Royal Commission to investigate allegations of Soviet espionage. The Petrov Affair precipitated a split in the Labour Party and led to the formation of the staunchly anticommunist Democratic Labour Party in 1955, the electoral consequences of which kept Menzies' Liberal Party in power for the next seventeen years.
Menzies retired from politics in January 1966. He died on 15 May 1978 in Melbourne.
Lowe, David. Menzies and the 'Great World Struggle': Australia's Cold War, 1948–1954. Sydney: University of New South Wales Press, 1999.; Martin, A. W. Robert Menzies: A Life, Vol. 2, 1944–1978. Melbourne: Melbourne University Press, 1999.