Power And The Passion

Paul Keating’s economic reforms put today’s poll-driven politicians to shame, writes Richard Allsop.

Almost a decade ago, the IPA Review published a cover story about Paul Keating headlined ‘What we miss about Paul’. In the article, Greg Barns contended that politics in the 2000s lacked radical reformers like Margaret Thatcher, Roger Douglas, Jeff Kennett and Keating, and wished that there might once again be politicians who put aside ‘the short term needs of the media, voters and interest groups … while the long-term vision is crafted.’

The fact that the IPA was making this point in 2008 seems remarkably prescient. Hung parliaments, fractious Senates and the rise of social media have not helped, but these factors do not fully explain, or justify, what seems to be a paucity of contemporary politicians with sufficient conviction, courage and skill to build a reform narrative, and maintain their passion for a cause when the going gets tough.

An appreciation of Keating’s career is crucial to understanding how reform occurred in the 1980s and 1990s, and how it might again. Thus recent works on Keating by Kerry O’Brien and Troy Bramston are particularly welcome.

The two books have quite different formats. Former ABC journalist O’Brien has produced a book version of a television interview series he conducted with Keating in 2013. Each chapter in the book starts with a scene-setter from O’Brien before segueing into large slabs of Keating’s own words, interrupted with O’Brien’s occasional questions. Political commentator Bramston has produced a more conventional biography, a project he commenced without Keating’s co-operation before winning his subject’s trust.

These publications are the first to offer a one-stop-shop for learning about Keating. Previous biographies were published either in the middle of his career or in its immediate aftermath, lacking access to newly released papers and the historical context that comes with the passing of time. In Bramston’s case there is also an extensive range of interviews with other players, many of whom are now freer to speak their minds. Keating himself has not written memoirs, and a more recent biographical attempt by historian David Day had to be pulped after Keating took legal action about claims it made. The best-known book about Keating was written by his former speechwriter Don Watson, a self-described ‘bleeding heart’ in the Keating Prime Ministerial office; hardly the best source for a reader to gain an understanding of Keating’s economic reforms.

The ‘bleeding heart’ memory of Keating is all about the Redfern speech, Mabo, the republic and arts funding. But the real impact Keating had on Australia was in his handling of the economy. O’Brien and Bramston recognise the significance of Keating’s time as Treasurer by giving almost as many pages to it as to his period as Prime Minister, and then maintaining a firm focus on his economic decisions while in the top job.

Keating’s political boldness is a constant theme of both books. Of course boldness itself is not necessarily a political virtue. Gough Whitlam was as politically bold as Keating, but his boldness was generally in pursuit of misplaced causes with a fatal disregard for economic reality. Where Whitlam took economic growth as a given and focused on redistributing the pie, Keating wanted the right recipe for baking a bigger pie. As early as 1981, Keating was telling a journalist that his aim was ‘making everyone a middle-class success story’. Importantly, he understood it could only happen if he internationalised the Australian economy and reformed its internal markets.

AN APPRECIATION OF KEATING’S CAREER IS CRUCIAL TO UNDERSTANDING HOW REFORM OCCURRED IN THE 1980S AND 1990S, AND HOW IT MIGHT AGAIN.

The series of reforms initiated by the Hawke and Keating Governments from 1983 to 1996 demolished the old protected Australian economy. Their reform journey took off in 1983 with the floating of the Australian dollar and the subsequent entry of foreign banks, continuing into the 1990s with the development of a national competition policy, a degree of industrial relations reform and support for privatisation.

However, there are two important highlights in the Keating curriculum vitae. The first was as Treasurer, when he cut budget outlays from more than 30 per cent of GDP in the mid-1980s down to 24 per cent of GDP by the end of the decade. The second was his persistence with tariff cuts during the height of the recession of the early 1990s, sticking to his guns despite enormous pressure from all sorts of interest groups demanding that the removal of protection be delayed or abandoned.

These actions highlight just how much Keating despised the view of former NSW Premier Neville Wran that politicians should never get ‘too far ahead of the mob’. In contrast, Keating believed that, if something was good policy, it could be sold to anyone. Hence he went to the ALP national conference in 1984 and convinced them to support financial deregulation, while the following year he was at the Newcastle Workers Club convincing local unionists of the need for tax reform. As Keating described it, politicians should ‘believe in things and advocate them, and bring the public with you by talking up, not down to them’. He observed to O’Brien that today’s political system mainly talks down to people ‘but if you talk up to people, pay them the respect and courtesy that they’re intelligent enough to understand the central issues, then they will mostly come with you’.

THESE PUBLICATIONS ARE THE FIRST TO OFFER A ONE-STOP-SHOP FOR LEARNING ABOUT KEATING.

A key Keating skill has always been his ability to sum up situations with a pithy phrase, such as his explanation that ‘regulation was largely a set of rules for the rich, while deregulation meant a set of rules for the clever’. It was this combination of good policy with the art of political persuasion that made Keating so successful. There have been others with good, or even better, policy intentions than Keating, but they failed to achieve nearly as much as he did because they lacked the political clout or had not done the spade work. As Keating observes, ‘what you can never do is just announce this stuff in a budget’ without having done the appropriate preparation to build a narrative and lock in support.

Policy purists might wonder why there is so much detail in Bramston’s book about the voting numbers in caucus ballots. They might not care whether Keating voted for Whitlam or Hayden in the 1977 leadership ballot. But without the ability to do the politics, reform does not happen. Indeed, none of Keating’s successes as Treasurer would have been possible without his victory in the Blaxland pre-selection, a result achieved in sufficiently dubious circumstances that his opponent is still bitter about it to this day.

The story that Keating learnt how to gain and wield power from Jack Lang, and by having constant fights with the left in the NSW Labor Party, has been well documented. How he drew the right conclusions about the ends to which he would use that power remains a little less clear. Neither Bramston nor O’Brien makes any real attempt to place Keating in the intellectual movement that saw the revival of free-market ideas from the mid-1970s onwards. This is a significant oversight as Keating and those around him were not operating in an intellectual vacuum. Similarly, the fact that the opposition at times in this period was offering an even more radical proscription was clearly helpful, despite Keating’s denials.

Both Bramston and O’Brien are very sympathetic to their subject. Bramston’s strongest criticism of Keating is that in his later period as PM he stopped engaging with several crucial elements of the political world, noting that ‘the dominant politician of his generation was retreating from politics’. One aspect of this was Keating’s decision to try to reduce the number of days the Prime Minister had to take questions in the House of Representatives. With hindsight, this move attracted a rare Keating mea culpa when he told O’Brien, ‘I think I made the wrong judgement.’

WHILE THE HAWKE AND KEATING BICKERING WAS UNHELPFUL FOR LABOR, THE REAL TRAGEDY FOR THE NATION WAS THAT THE ALP DREW ALL THE WRONG CONCLUSIONS AFTER THE 1996 ELECTION AND CHOSE TO BACK AWAY FROM THE HAWKE-KEATING LEGACY.

Of course there were other wrong judgments and bad policy positions from Keating. A clear example of the latter was his failure to appreciate the need to reform Commonwealth-state taxing relations. There was also the Keating versus Hawke battle over their legacies, which has not helped either of their reputations. The changes were big enough that sharing the credit would have given a very decent serving of plaudits to both.

While the Hawke and Keating bickering was unhelpful for Labor, the real tragedy for the nation was that the ALP drew all the wrong conclusions after the 1996 election and chose to back away from the Hawke-Keating legacy. Nothing sums the situation up better than when Labor next formed a government in 2007 with Wayne Swan as the Treasurer. Bramston illustrates that Swan’s character was already apparent as a backbencher. In 1993, Swan led opportunistic caucus opposition to that year’s budget, and by 1995 he was leading a push to replace Keating as Prime Minister with Kim Beazley which, as Simon Crean told Bramston, was ‘poll-driven, of course’.

Both of these books are worthy additions to the literature on one of the key periods in Australian political history. Just as the Australian Settlement created in the decade after Federation was demolished and replaced with a new more open and competitive model, Keating led a monumental period of reform which would never have taken place if poll-driven politicians like Swan had the power that they subsequently acquired.