Paul Keating



Paul John Keating (born 18 January 1944) is an Australian politician who was the 24th Prime Minister of Australia and the Leader of the Labor Party from 1991 to 1996. Keating represented the division of Blaxland in the Australian House of Representatives and served as Minister for Northern Australia in the Whitlam government and as Treasurer of Australia and the 7th Deputy Prime Minister of Australia in the government of Bob Hawke.

Keating was appointed Treasurer by newly elected Prime Minister Hawke in 1983. Although lacking any formal education in economics, Keating went on to become arguably one of the most reforming Treasurers in Australian history. During his time as Treasurer, the Australian dollar was floated, the financial sector deregulated, certain state sector industries were privatised, a capital gains tax was introduced, and a Prices and Incomes Accord was struck. In 1990 he was elected Deputy Leader of the Labor Party and made Deputy Prime Minister.

Keating later challenged Hawke for the leadership in June 1991, and resigned from the ministry following defeat. Six months later he challenged Hawke again, this time successfully, and subsequently became Prime Minister. He would go on to deliver the Labor government a record fifth consecutive victory and a record 13 years in government at the 1993 election, defeating the opposition led by John Hewson and his 650-page Fightback! policy package, despite consistently poor government opinion polls following the effects of the early 1990s recession. The Keating Government introduced native title to Aborigines, greatly increased the social wage and the family benefits system, saw increased bilateral relations between Australia and countries in Asia, and vehemently promoted a vision of Australia as a republic. After being resoundingly defeated by John Howard at the 1996 election, Keating resigned as Prime Minister and retired from Parliament.

Early life and education
Keating grew up in Bankstown, a working-class suburb of Sydney. He was one of four children born to Matthew Keating, a boilermaker and trade union representative of Irish Catholic descent, and his wife Minnie. His siblings include Anne Keating, a company director and businesswoman. Leaving De La Salle College—now known as LaSalle Catholic College—at the age of 14, Keating left high school and decided not to pursue higher education, and instead worked as a pay clerk at the Sydney County Council (Electrical Supply Authority). He then worked as research assistant for a trade union, having joined the Labor Party as soon as he was eligible. In 1966, he became president of NSW Young Labor. In the 1960s, Keating also managed rock band "The Ramrods".

Member of Parliament, 1969–91
Through his contacts in the unions and the NSW Young Labor Council, Keating met future senior Labor figures such as Laurie Brereton, Graham Richardson and Bob Carr. He also developed a friendship with former New South Wales Premier Jack Lang. In 1971, he succeeded in having Lang re-admitted to the Labor Party. Using his extensive contacts, Keating eventually gained the Labor endorsement for the seat of Blaxland in the western suburbs of Sydney, and was elected to the House of Representatives in 1969 when he was 25 years old.

Keating was a backbencher for most of the Whitlam government, although he briefly served as a Minister for the Northern Territory in October 1975, before the government was controversially dismissed by the Governor-General that November. After Labor's defeat in the election one month later, Keating was promoted to become an opposition spokesman; as an opposition spokesman, his parliamentary style was that of an aggressive debater. In 1981, he was elected president of the New South Wales Labor Party, thus becoming the leader of the dominant right-wing faction in Labor. At this time, he initially supported Bill Hayden over Bob Hawke as leadership tensions between the two men began to mount; part of the reason for his support was that he privately hoped to succeed Hayden in the near future. However, by 1982, his faction had swung behind Hawke, and Keating endorsed his challenge. The formal announcement of Keating's support for Hawke was written by a fellow Labor politician, Gareth Evans. Although Hayden survived the challenge, pressure continued to mount on him, and he eventually resigned in February 1983 after a poor by-election result. Hawke was elected to replace him, and he subsequently led Labor to a landslide victory in the election just six weeks later.

Federal Treasurer (1983–91)
Following Labor's victory in the 1983 election, Keating was appointed Treasurer of Australia by Prime Minister Bob Hawke – he would go on to hold that post until 1991. Keating succeeded John Howard as treasurer and was able to use the size of the budget deficit that the Hawke government inherited to question the economic credibility of the Liberal–National Coalition. That the deficit had significantly increased in the lead up to the election had not been disclosed in pre-election documents released by the Fraser government. According to Hawke, the historically large $9.6 billion budget deficit left by the Coalition "became a stick with which we were justifiably able to beat the Liberal National Opposition for many years". Although Howard was widely regarded at this time as being "discredited" by the hidden deficit, he had in fact argued unsuccessfully against Fraser that the revised figures should be disclosed before the election.

Keating was one of the major driving forces behind the various extensive macro- and microeconomic reforms of the Hawke government. As Treasurer, Keating pursued economic policies such as floating the Australian dollar in 1983, reducing tariffs on imports, completely reforming the tax system, moving from centralised wage-fixing to enterprise bargaining, privatising publicly owned companies such as Qantas, CSL Limited and the Commonwealth Bank, and deregulating large parts of the banking system. Keating was also instrumental in the introduction of the Prices and Incomes Accord, an agreement between the Australian Council of Trade Unions (ACTU) and the government to negotiate wages. His management of the Accord, and close working relationship with ACTU President Bill Kelty, became a source of tremendous political power for Keating. Through the power given to him, Keating was often able to bypass the Cabinet altogether, notably in exercising monetary policy, and he was regularly referred to as "the most powerful Treasurer in modern times".

In 1985, Keating argued within the Cabinet for the introduction of a broad-based consumption tax, similar in nature to the goods and services tax that was later introduced by the Howard government. In the build-up to the 1984 election, Hawke had promised a policy paper on taxation reform to be discussed with all stakeholders at a tax summit. Three options – A, B and C – were presented in the Draft White Paper, with Keating and his Treasury colleagues fiercely advocating for C, which included a consumption tax of 15% on goods and services along with reductions in personal and company income tax, a fringe benefits tax and a capital gains tax. Although Keating was able to win the support of a reluctant Cabinet, Hawke believed that the opposition from the public, the ACTU, and the business community would be too great. He therefore decided to abandon any plans for a consumption tax, although the remainder of the reforms were adopted in the tax reform package. The loss of the consumption tax was seen a bitter defeat for Keating; he later joked about it at a press conference, saying, "It's a bit like Ben Hur. We've crossed the line with one wheel off, but we have crossed the line."

Keating's tenure as Treasurer was often criticised for high interest rates and the 1990s recession, which Keating referred to in an interview as "(the) recession we had to have". Through the 1980s, both the global and Australian economies grew quickly, and by the late 1980s inflation had grown to around 9%. By 1988, the Reserve Bank of Australia began tightening monetary policy, and household interest rates peaked at 18%. It is often said that the Bank was too slow in easing monetary policy, and that this ultimately led to a recession. In private, Keating had argued for rates to rise earlier than they did, and fall sooner, although his view was at odds with the Reserve Bank and his Treasury colleagues. Publicly, Hawke and Keating had said there would be no recession – or that there would be a "soft landing" – but this changed when Keating announced the country was indeed in recession in 1990. Claiming that the recession was something Australia "had to have" was referred to by Paul Kelly as "perhaps the most stupid remark of Keating's career, and it nearly cost him the Prime Ministership." Kelly did also concede that, "... however, it is largely true that the boom begat the recession." During the subsequent Howard government, Keating would often criticise Howard for taking credit for the good economic conditions Australia experienced without acknowledging that it had been the early 1990s recession that had ended the inflation problem.

Hawke led Labor to a third consecutive victory in the 1987 election, but by his fifth anniversary as prime minister a year later, he had begun to suffer from poor opinion polling. It was at this time that Keating privately began to put pressure on Hawke to stand down in his favour as soon as possible. The two men eventually met at Kirribilli House later that year to discuss the handover of the leadership to Keating. Eventually, Hawke agreed in front of two witnesses that he would resign in Keating's favour a short time after the 1990 election, which he convinced Keating he could win. Hawke subsequently won that election, and appointed Keating his Deputy Prime Minister to replace the retiring Lionel Bowen, in theory preparing Keating to assume the leadership. However, Keating quickly became dissatisfied with the lack of any indication from Hawke as to when he might stand down, and subsequently made a number of provocative speeches questioning the direction of the government. This caused tensions between the two men to grow very quickly, and Hawke told Keating that he would renege on the deal on the basis that Keating had been publicly disloyal. Keating eventually resigned from the Cabinet and challenged Hawke for the leadership in June 1991. Hawke won the ballot by 66 votes to 44, and in a press statement afterwards Keating declared that he had fired his "one shot". Publicly, at least, this seemed to spell the end of his leadership ambitions. Having failed to defeat Hawke, Keating realised that events would have to move very much in his favour for a second challenge to be even possible, and he strongly considered retiring from politics altogether.

Several factors over the coming months enabled Keating to mount a second challenge to Hawke. Over the remainder of 1991, the economy showed no signs of recovery from the recession, and unemployment continued to rise. Opinion polling for Labor was poor, some of Keating's supporters actively undermined the government, and, perhaps more significantly, Liberal Leader John Hewson introduced 'Fightback!', an economic policy package which, according to Keating's biographer, "appeared to astonish and stun Hawke's Cabinet". According to Edwards, "Hawke was unprepared to attack it and responded with windy rhetoric". Following Hawke's lacklustre response to 'Fightback!', many began to openly speculate that nearly nine years as prime minister had left Hawke "tired", and he began to lose the confidence of many in the Labor caucus. Keating was viewed as the only viable replacement for Hawke, and on 19 December 1991, Keating challenged Hawke for a second time, this time defeating him by 56 votes to 51.

Prime Minister (1991–96)
On 20 December 1991, following his successful leadership challenge, Keating was sworn in as the 24th Prime Minister of Australia by the Governor-General. Keating had an extensive legislative agenda upon taking office, which included reconciliation with Australia's indigenous population, furthering economic and cultural ties with Asia, and making Australia a republic. The addressing of these issues came to be known as Keating's "big picture." Keating's legislative program also included establishing the Australian National Training Authority (ANTA), a review of the Sex Discrimination Act, and the establishment of native title rights for Australia's indigenous peoples following the Mabo High Court decision. Throughout his time as prime minister, Keating took a number of steps to strengthen and develop bilateral links with Australia's closest neighbours; he frequently said that there was no country in the world that was more important to Australia than Indonesia. He also played a key role in the establishment of the Asia-Pacific Economic Cooperation Forum (APEC), initiating the annual leaders' meeting and ensuring that they continued thereafter. Arguably Keating's most far-reaching legislative achievement was the introduction of a national superannuation scheme, implemented to address the long-term problem of low national savings. This built on policies that Keating had introduced whilst Treasurer, and was aimed at ensuring that most Australians would have enough money to retire. Keating also moved to introduce mandatory detention for asylum seekers. On 10 December 1992, Keating delivered the Redfern Speech on Aboriginal reconciliation, a speech which has regularly been cited as among the greatest in Australian political history.

As Prime Minister, Keating maintained his aggressive debating style. When asked by Opposition Leader John Hewson why he would not call an early election after he had become prime minister, Keating replied, "because I want to do you slowly." He referred to the Liberal Party as "a motley, dishonest crew", and the National Party as "dummies and dimwits; desperadoes". During an opposition debate that sought to censure Keating, he described being attacked by Peter Costello as "like being flogged with warm lettuce". Despite a very busy legislative agenda, many commentators predicted that the upcoming 1993 election was "unwinnable" for Labor. The government had been in power for the previous decade, and the pace of economic recovery from the early 1990s recession was slow.

Such was the expectation that Labor would lose, many senior Labor figures openly told Keating that his job was to save as many seats as possible, so that their time in opposition would be short. Despite the overwhelming predictions that Labor would lose, Keating succeeded in winning over the electorate with a strong campaign opposing 'Fightback!' and a focus on creating jobs to reduce unemployment. In particular, Keating focused a great deal of his campaign on attacking the proposed goods and services tax, arguing that it would make unemployment worse and would prove "a dead weight" on the economy. He was helped in this by his opponent, John Hewson, struggling towards the end of the campaign to explain exactly which products would have the GST levied on them, and which would not. Having begun the campaign an average of ten points behind the Liberal/National Coalition, Keating led Labor to an unexpected and record-breaking fifth consecutive election victory on 13 March 1993. The speech Keating delivered at the victory celebration has been described as one of the great Labor speeches. Opening with "This is a victory for the true believers", the speech has been described as providing a source of inspiration for the party faithful, but also criticised as helping to create a perception that Keating's Labor government was not a government for all Australians. Having secured a mandate in his own right as prime minister, Keating immediately set about implementing as much of his "big picture" as possible, leading the consultation and introducing legislation that would eventually lead to a 1999 referendum on Australia becoming a republic. Keating also continued to pursue improved relations with countries throughout Asia, in particular Indo-China. In December 1993, he became involved in a diplomatic incident with Malaysia when he described Prime Minister Mahathir Mohamad as "recalcitrant". The incident occurred after Mahathir refused to attend the 1993 APEC summit. Keating said, "APEC is bigger than all of us – Australia, the U.S. and Malaysia, and Dr. Mahathir and any other recalcitrants." Mahathir demanded an apology from Keating, and threatened to reduce diplomatic ties and trade drastically with Australia, which became an enormous concern to Australian exporters. Some Malaysian officials talked of launching a "Buy Australian Last" campaign; Keating subsequently apologised to Mahathir over the remark. Keating dismantled the century-old protectionism that had been present in Australia, fuelling a productivity drive in the free market and increasing Australian living standards.

Keating's friendship with Indonesian President Suharto was criticised by human rights activists supportive of East Timorese independence, and by Nobel Peace Prize winner José Ramos-Horta, who would later go on to become East Timor's president and prime minister. The Keating government's cooperation with the Indonesian military, and the signing of the Timor Gap Treaty, were also strongly criticised by these same groups. It was alleged that Keating was overlooking alleged human rights abuses by the Indonesian government as part of his effort to dramatically increase Australia's cultural, diplomatic and economic ties with Asia.

Like Hawke before him, Keating benefited while prime minister from a split Liberal Party. Shortly after the 1993 election, John Hewson was replaced as Liberal Leader by Alexander Downer, whose leadership was quickly marred by gaffes and controversies within months. After continuous poor polling, Downer resigned in 1995 and was replaced by John Howard, who had previously led the Liberals from 1985 to 1989. Although at first showing no improvement, under Howard the Coalition soon regained momentum to move back ahead of Labor in opinion polls, and Keating was unable to wrest back the lead again. The first warning sign of a serious swing away from Labor came in March 1995, when Labor lost Canberra in a by-election. Later in 1995, the Queensland Labor Party barely held onto its majority at the state election, before losing it altogether in a 1996 by-election. That by-election took place a week after Keating had called the 1996 election; the very public defeat severely hampered the launch of the Labor campaign, and the campaign was never able to regain momentum.

Howard, determined to avoid a repeat of the 1993 election, adopted a "small target" strategy, publicly committing to keep Labor reforms such as Medicare, and defusing the republic issue by promising to hold a constitutional convention. Howard was therefore successfully able to focus the campaign on the longevity of the Labor government, which by 1996 had been in power for 13 years. The narrative of "time for a change" proved impossible to defend against, and on 2 March 1996 the Keating government was swept from power in a landslide, suffering a five percent two party preferred swing. Although this was not a large swing in and of itself, Labor lost 29 seats, including 13 in New South Wales and 11 in Queensland—in terms of seats lost, the second-worst defeat ever of a sitting government in Australian history. Keating tendered his resignation as prime minister on 11 March, 13 years to the day after Bob Hawke had first taken office, and stepped down from Parliament just over a month later on 23 April 1996.

Retirement and later life (1996–present)
Immediately after his defeat, Keating requested from Howard additional time to relocate his family from The Lodge to temporary rented accommodation at the former East German embassy in the Canberra suburb of Red Hill until his daughters finished secondary schooling. Concurrently, the Keating’s had purchased and were renovating the up-market ‘St Kevin’s’ mansion in the affluent eastern Sydney suburb of Woollahra for $2.2 million in 1995. Whilst vacating the Prime Minister’s office at Parliament House, Labor journalist Bob Ellis observed that: “With the power drained from him, (Keating) appeared two inches shorter, a sallow, strangely grinning, dull-eyed, not wholly trustworthy man, who had seemed but days before an immortal". Bob Hawke, who he had rolled as leader, later remarked that Keating "doesn't have the capacity to put things behind him" and that he “genuinely feel(s) sorry for Paul, (sic) he should be a happy, happy man and he's not."

Soon after leaving Parliament, Keating became a director of various companies and a senior adviser to Lazard, an investment banking firm. In 1997, Keating declined appointment as a Companion of the Order of Australia, an honour which has been offered to all former Prime Ministers since the modern Australian Honours System was introduced in 1975.

In 2000, he published his first book since leaving office, Engagement: Australia Faces the Asia-Pacific, which focused on foreign policy during his term as prime minister. In 2002, Keating's former speechwriter and adviser, Don Watson, published Recollections of a Bleeding Heart: A Portrait of Paul Keating PM. The book first drew criticism from Keating's estranged wife, Annita Keating, who said that it understated her contribution, a complaint Watson rejected. Keating himself was so unhappy with the book that it brought the two men's friendship to an abrupt end. Keating's primary complaint was about Watson's claim that he had authored the Redfern Speech, something Keating strenuously denied.



During John Howard's time as prime minister, Keating made occasional speeches strongly criticising his successor's social policies, and defending his own policies, such as those on East Timor. Keating described Howard as a "desiccated coconut" who was "Araldited to the seat", and described him as "... an old antediluvian 19th century person who wanted to stomp forever ... on ordinary people's rights to organise themselves at work ... he's a pre-Copernican obscurantist" when criticising Howard's controversial WorkChoices policy. He described Howard's deputy, Peter Costello, as being "all tip and no iceberg" when referring to an alleged pact made by Howard to hand the leadership over to Costello after two terms. After Labor's landslide victory at the 2007 election, Keating said that he was relieved, rather than happy, that the Howard government had been removed. He claimed that there was "relief that the nation had put itself back on course...relief that the toxicity of the Liberal social agenda, the active disparagement of particular classes and groups, that feeling of alienation in your own country, was over."

Keating was also publicly critical of the leadership team of Kevin Rudd. Just before the 2007 election, he criticised Rudd's deputy, Julia Gillard, saying that she lacked an understanding of principles such as enterprise-bargaining that had been set under the Hawke–Keating government in the late 1980s and early 1990s. He also attacked Rudd's chief of staff, David Epstein, and Gary Gray, who was at that time a candidate for Kim Beazley's former seat of Brand.

In May 2007, Keating suggested that Sydney, rather than Canberra, should be the capital of Australia, saying that, "John Howard has already effectively moved the Parliament there. Cabinet meets in Phillip Street in Sydney, and when they do go to Canberra, they fly down to the bush capital, and everybody flies out on Friday. There is an air of unreality about Canberra. If Parliament sat in Sydney, they would have a better understanding of the problems being faced by their constituents. These real things are camouflaged from Canberra."

In February 2008, Keating joined former Prime Ministers Gough Whitlam, Malcolm Fraser and Bob Hawke in Parliament House to witness Kevin Rudd deliver the apology to the Stolen Generations. In August 2008, he spoke at the book launch of Unfinished Business: Paul Keating's Interrupted Revolution, authored by economist David Love. Among the topics discussed during the launch were the need to increase compulsory superannuation contributions, as well as to restore incentives for people to receive their superannuation payments in annuities.

Keating is currently a Visiting Professor of Public Policy at the University of New South Wales. He has been awarded honorary doctorates in law from Keio University in Tokyo (1995), the National University of Singapore (1999), the University of New South Wales (2003) and Macquarie University (2012).

Personal life
In 1975, Keating married Annita van Iersel, a Dutch-born flight attendant for Alitalia. They had four children, who spent some of their teenage years in The Lodge, the Prime Minister's official residence in Canberra. The couple separated in November 1998. While they did not formally divorce until 2008, Annita had resumed her maiden name long before then. Since 1999, Keating's partner has been actress Julieanne Newbould. Keating's daughter, Katherine Keating, is a former adviser to former New South Wales minister Craig Knowles as well as former New South Wales Premier Bob Carr. Keating's interests include the music of Gustav Mahler and collecting French antique clocks. He currently resides in Potts Point, in inner-city Sydney and has a holiday home on the Hawkesbury River on Sydney's Upper North Shore.

Musical
In 2005, Keating!, a musical based on Keating's life and career, premiered at the Melbourne International Comedy Festival. It went on to run until 2010, winning a number of awards and eventually being broadcast on ABC2.