The "Placido Domingo of Australian
politics." Prime Minister Paul Keating was famous for his mental
dexterity and his acid wit. His vision of Australia was based on a
redefinition of its role within the Pacific, capitalising on its
proximity to Asia.
As treasurer for eight years Keating
implemented the most far-reaching economic reforms in Australia's
postwar history with progressive deregulation of the financial sector
and float of the dollar. After winning an historic fifth-term victory
for the Labor Party in 1993, Keating pursued his micro-economic reform
agenda, committing himself to high productivity growth, greater
efficiency in transport industries and improving Australia's
international competitiveness. As a passionate advocate of an Australian
cultural identity, Keating rekindled the republican debate and launched
a far-reaching arts industry program entitled "Creative
Paul Keating was born in Sydney on
January 18, 1944. He left school at 14, studied for his Higher School
Certificate at night, managed rock band the Ramrods, and worked for a
Hong Kong trading company and with the Electricity Commission of New
South Wales. Interested in politics from an early age, he joined the
Labor Party when he was 15 and in 1966 became president of the New South
Wales Youth Council (now called Young Labor).
Elected to the seat of Blaxland at age
25, he was appointed Minister for Northern Australia in the Whitlam
Cabinet two months before the dramatic November 1975 sacking of Gough
Whitlam. He married Anna Johanna Maria von Iersel (Annita) in 1975. They
have four children, joining the ranks of Joseph Lyons and William
McMahon as prime ministers with young children.
In the Labor opposition Ministry from
1976 to 1983 Keating served as shadow Minister for Agriculture, Minerals
and Energy, Resources and Energy and finally as treasurer. When the
Labor Party regained government in March 1983 he became treasurer, the
post in which he won recognition for his far-reaching economic reforms.
In his eight years as treasurer Keating delivered 14 major economic
Among the most significant of these
reforms were the progressive deregulation of the financial sector,
removing interest rate ceilings, the float of the Australian dollar
(December 1983), entry of foreign banks and extensive changes to the
taxation system. In 1984 Keating was named "Finance Minister of the
Year" by the financial/economic journal Euromoney for his
achievement of a budget surplus and his far-sighted economic strategies.
The 1985 budget saw a growing deficit.
Keating described the budget as being based "on the two great goals
of economic growth and a fairer society." By the beginning of 1986
the Australian dollar had lost parity by 30 per cent against the
American dollar, and there were even more drastic drops against other
currencies, notably against the Japanese yen and the Deutschmark. With
falling commodity prices farmers staged angry rallies outside Parliament
House. Interest rates soared to over 20 per cent.
In spite of the lower value of the
dollar, many areas of the manufacturing sector were not competitive with
more technologically advanced industries in Asia, especially South Korea
and Taiwan. Imports continued to rise. By 1986 foreign debt was higher
than anticipated. Treasurer Keating warned that if Australia did not
"get manufacturing going again and keep moderate wage outcomes and
a sensible economic policy, it would end up being a third-rate economy .
. . a banana republic." The boom was about to bust. The credit
explosion that accompanied deregulation could not be sustained. The
world recession deepened and with it, "the recession that Australia
had to have."
Labor was re-elected for an historic
fourth term in 1990. When Keating first challenged Bob Hawke for the
leadership in June 1991 he did not have the numbers in Caucus and
resigned as treasurer. The next time he challenged Hawke, in December
1991, he was successful.
In March 1993 Keating led the Labor Party
to an historic fifth term in power. As prime minister he pursued his
economic reform agenda, including deregulation of the airline and
telecommunications industries. "Investing in the Nation," a
white paper on developing Australia's infrastructure, promised a
national standard-gauge rail highway and the establishment of a National
Electricity Grid Corporation.
Achievement in other areas included the
introduction of legislation to ensure the protection of endangered
species, a major review of the Sex Discrimination Act, the revision of
the classification of TV violence, plus plans for an international
conference on children's television and the adoption of recommendations
of the Royal Commission into Aboriginal Deaths in Custody. Keating also
showed a commitment to women's issues with policies to provide family
financial assistance and childcare aid. The Aboriginal Land Fund and
Native Title Act consolidated Keating's support of the High Court
decision on Mabo.
Pledging to reduce unemployment in May
1994, Keating launched a $6.5 billion plan, "Working Nation,"
designed to halve the unemployment rate by the end of the decade.
Keating believed strongly in an
independent Australian identity. He continued the trend of turning
Australia's focus away from traditional Western ties and towards Asia,
its nearest neighbours and the fastest-growing region in the world.
Allied with Keating's focus on a new cultural shift was the debate on
republicanism and strong support for the arts, demonstrated by the
"Creative Nation" statement of October 1994.
In the March 1996 elections, the Keating
government was resoundingly defeated by the Liberal/National Coalition
under John Howard. Opinion polls cited the main reasons as a perception
by voters that the Labor Party had been in power for too long and had
lost touch with the electorate, as well as financial concerns about the
size of the national account deficit. The polls showed that approval of
Keating as prime minister, as opposed to support for the Labor Party,
had remained relatively high. Keating resigned as Labor leader, and from
parliament, soon after the election.