The Banana Republic: From Fraser to Keating (1975-1996)

The Banana Republic: From Fraser to Keating (1975-1996)
Lecture 9 History of Australia

Arse Full of Razor Blades

After his controversial rise to power, Malcolm Fraser was now Prime Minister of Australia, with a huge majority in both houses of Parliament and the gutted carcass of Labor, led in opposition by Gough Whitlam.

Fraser set out with his 'Razor Gang' to dismantle many Whitlam Government programs and slash the Commonwealth Public Sector and the 'left wing biased' ABC. Despite his 1975 election promise to maintain Medibank, the new universal health insurance system, he pulled it in two, Medibank Public and a Government owned private commercially competing insurance called Medibank Private. Even though they ruthlessly opposed it a year before in opposition, the Coalition maintained elements of the program and enacted the Medibank tax levy to help pay for it.

Malcolm and Tammy Fraser in 1975.

Fraser initially maintained the real level of taxes and spending under Whitlam, however it slowly increased. To the bewilderment of his enemies and the horror of some supporters, Fraser did not usher in an arch conservative agenda and was quite a moderate Liberal leader. His second Treasurer John Howard, a die hard conservative committed to Thatcherite monetarism, became frustrated with Fraser. The Fraser Government's economic credentials were marred with rising unemployment and to the embarrassment of then Treasurer John Howard, the highest interest rates since the War, at 21.4 in 1982. Inflation that same year peaked at 12.5.

Despite their ill feelings toward Fraser, many opponents acknowledge Fraser for not having a racist bone in his body and his commitment to social justice. On the world stage and abroad he continued many of Whitlam's policies and commitments. He added Australia's voice with the Commonwealth of Nations to campaign for the abolution of Apartheid in South Africa and continued to refuse the Springboks entry into the country. He also opposed minority white rule in Rhodesia and along with Nigerian counterpart convinced Margaret Thatcher to change her stance on recognizing Zimbabwe Rhodesia in 1979. Fraser also legislated some new moves forward for indigenous land rights.

Australia's worst Treasurer John Winston Howard, before his makeover in the '80s

Fraser supported the US and the boycott of the 1980 Olympics in Moscow. Despite criticism Fraser continued opening Australia to Asian immigration and admitting refugees from places from Vietnam to East Timor. Fraser was a genuine humanitarian to refugees from the aftermath of the Vietnam War which led him to conflict with the more conservative elements of his Party. Fraser claimed after a cabinet meeting in 1977 John Howard took him aside and said: "We don't want too many of these people. We're doing this just for show, aren't we?" Fraser was appaulled and rebuffed him: "You could have spoken in the cabinet room. You didn't, and what you say to me I didn't hear." The two men would clash again decades later on the issues of race and immigration.

One of Fraser's Ministers, Don Chipp broke away and tried to make a more socially liberal party called the Australian Democrats. For about 20 years the Democrats would be the dominant third party until finally eclipsed by the Greens in the 2000s. Democrats Senator Janine Haines became the first woman to lead a political party in 1986.

The Drover's Dog

On the other side of the House, Labor was still licking its wounds from the coup in 1975. Despite his best efforts Whitlam led Labor to another resounding defeat in 1977. On election night he announced his retirement and the former titan of Australian politics resigned from Parliament in 1978. After his passing the caucus elected his successor Bill Hayden, the former policeman and Whitlam Government Minister who started Medibank and wrote the '75 Budget.

Hayden went about rebuilding the Labor Party and started to make grounds on Fraser. Despite their losses, the Party still wanted Fraser's blood for the Dismissal and gave him a hard time when ever they could. One of the new rising stars was the young Paul Keating, an opposition frontbencher who was an aggressive debater. Keating took Fraser himself on in Parliament calling him: "An Easter Island statue with an arse full of razor blades."

Hayden's work paid off with Labor making gains in the 1980 election. Fraser lost his control of the Senate. Fraser still believed he could outdo Hayden. That election brought a new force into the game: Bob Hawke. Robert James Lee "Bob" Hawke was one of Australia's most popular men, trade unionist and former President of the ACTU. He won a seat in Parliament as a Labor MP and was known to have leadership ambitions.

The Coalition went into decline after a sharp recession struck in 1982 and a series of scandals over prominent Liberal MPs and tax avoidance schemes. A senior minister and international Liberal playboy (who had a brief fling with actress Shirley MacLaine) Andrew Peacock resigned and challenged Fraser for the leadership. Fraser survived but was politically wounded. His opposite Bill Hayden was having the same problem. It was clear by the end of 1982 that Hawke would soon be Labor leader, despite narrowly loosing a challenge to oust him. Hawke called Hayden "a lying cunt with a limited future." To capitalize on this Fraser planned a snap election to ensure it Hayden would still be his opponent.

The day Fraser called the snap election, to his surprise Hawke managed to force Hayden to resign in his favour. At an emotional press conference Hayden made a speech which would echo into Australian political folklore, saying that considering the way the economy and the country was going: "a drover's dog could lead the Labor Party to victory at the present time". The plan had backfired and now Hawke was Opposition Leader. Labor and Hawke launched their campaign and slogan: "Bringing Australia Together" and immediately made their mark. Fraser tried to scare people about Labor and the economy, saying it was safer to put your money under your bed than in a bank under Labor. Hawke cleverly turned that around when he publicly said: "You can't put your money under the bed. That's where the Commies are!"

Bob Hawke in 1983 clashing with reporter Richard Calton who claimed that he had Hayden's "blood on his hands".

On the 5th March 1983, the Fraser Government was massively defeated. For seven years Labor supporters had longed for vengeance for the Dismissal of Whitlam. Televised across the nation, Fraser burst into tears while making his concession speech. Bob Hawke, trade unionist, a man who entered the Guinness Book of Records for downing a yard of ale in just 11 seconds while attending Oxford University in 1963, was now the country's 23rd PM.

Fraser would continue his slide to the left, fighting for social justice around the world and even making a bid for UN Secretary-General. His most famous moment however is known as the 1986 "Memphis Trousers Incident" when he emerged in the lobby of a seedy hotel in Memphis, United States wearing a towel, confused about where his trousers were. There were rumours of prostitutes, but neither Fraser nor his wife Tammy commented on it. It is not known if Malcolm ever found his trousers again.

Hawke decided not to repeat the initial animosity of the Whitlam Government and focused on steady stewardship of the country. Many of Labor's commitments had to be postponed after Hawke publicly announced that Fraser has concealed before the election a 9 billion budget deficit which had to be immediately addressed. Hawke style was 'consensus' and began with economic summits of all groups to fix the economy. Before the election Hawke had formed an alliance known as 'The Accord' with the ACTU to ensure industrial peace if the unions had restraint with wage demands in return for the Labor Government keeping prices and inflation down and social goals.

Labor in Power

The Hawke Government brought about many changes. Its most popular promise in 1983 was "We will restore Medibank!" The idea of the universal public health scheme started by Whitlam and partially dismantled by Fraser was returned in the form of "Medicare" in 1984. The electoral system was reformed, the Australian Electoral Commission established and the Parliament was expanded to 148 seats in the House of Representatives and 76 in the Senate. UK citizens lost their right to vote in Australia in 1984. Hawke called an early election in December 1984 to take into account the changes and foolishly had a 10 week campaign which wore down their majority. His performance was not helped by his public breakdown into tears after hearing about his daughter's drug problem. As PM, Hawke's style and appeal as an 'Australian bloke' made him immensely popular and his first term holds one of the records for highest PM approval ratings. When the yacht 'Australia II' won the America's Cup boat race, the first non American team to win Hawke publicly said: "Any boss who sacks someone for not turning up today is a bum!"

With indigenous people, the process of land rights continued and the idea of an Aboriginal Treaty was raised but didn't eventuate. Hawke formed ATSIC (Aboriginal & Torres Strait Islander Commission) as chief representative and funding allocation body for indigenous people in 1990. His Government continued work to protect the environment. A big issue in '83 was the construction of the Franklin River Dam in Tasmania which would have damaged the pristine ecosystem. As promised Hawke intervened and immediately shut it down. They set out to give the federal Government power over World Heritage selection and protected Kakadu National Park, forests in North Queensland and Tasmania and banned Uranium mining at Jabiluka. Hawke, a great womanizer also fought for gender equality.

As a peace offering Hawke made his deposed rival Bill Hayden Foreign Minister, which he served till 1988 when Hawke nominated him as Governor-General. Following Hayden was Australia's best Foreign Minister since 'Doc' Evatt, Senator Gareth Evans. Evans is one of the last beards of Australian politics. On the world stage Hawke favoured a 'personal diplomacy' to raise Australia's international profile in the United States, Russia, China, Japan and Southeast Asia. He was active supporter of peace negotiations in the conflict between Palestine and Israel.

Despite disagreeing on social issue, a strong relationship was forged between Hawke and US President's Reagan and Bush (I). So much that Hawke let the US military blow things up in our countryside. The Alliance and trans-Tasman relations hit a low point when New Zealand elected Labour PM David Lange who made NZ a nuclear free zone, preventing US nuclear warships from entering. This led them to leave the ANZUS treaty and caused a rift between Hawke and Lange. Hawke addressed the US Congress in the late 1980s to explain the negative impact the US tariff war with Europe was having on their Australian ally's agriculture. When the first Gulf War began, the Hawke Government backed the UN sanctions on Iraq and committed troops and naval units.

Hawke at the Pentagon with US Defence Secretary Caspar Weinberger, June 1983.

Despite his warm relationship with Republican US Presidents, he openly hated Bush's VP Dan Quayle who he thought a moron and was offended that the man was a heartbeat from the Presidency. A cultural misunderstanding occurred in Japan when Hawke said the Japanese had to stop being 'silly buggers' regarding their trade policies. The Japanese didn't understand the Australian euphemism which the closest they could translate to was 'laughing homosexuals.'

The APEC (Asia Pacific Economic Cooperation) Forum was created by the Australian Government under Hawke in 1989. He called for an organisation to build a cooperative common liberalized market across the Pacific Rim and also build up political infrastructure in the region. The first APEC meeting was held in Canberra, but it would be Keating who finished the process. His Government however was the one the reintroduced fees for tertiary education, creating the HECS system. This drew criticisms from Gough Whitlam that Hawke, a Rhodes Scholar would remove the opportunities of many Australians. Whitlam also ridiculed Hawke, saying his, was "a Government about nothing."

Like Canada's patriation of its constitution in 1982, Hawke brought the Australia Act 1986 which formally cut all legislative and judicial ties to the United Kingdom and the Privy Council (Though not removing the monarchy). The Whitlam policy of abolishing imperial honours, briefly restored under Fraser was again reaffirmed. The last Australian knighthood was to John Smith, Kerr's Secretary that read the dismissal proclamation on 11 November 1975.

World's Greatest Treasurer

Hawke's Treasurer was Paul Keating and together implemented the largest economic structural reforms Australia had ever seen. Keating and Hawke provided a study in contrasts. Hawke was a Rhodes Scholar; Keating left school early. Hawke's enthusiasms were cigars, horse racing and all forms of sport; Keating preferred classical architecture, Mahler symphonies, Italian suits and collecting antique Swiss cuckoo clocks. Hawke was consensus-driven; Keating revelled in aggressive debate. Hawke was a lapsed Protestant; Keating was a practising Catholic. Despite their differences, the two formed an effective political partnership.

An anecdote about their relationship and Keating having to rein in Bob's excitement in Cabinet meetings: "Now listen mate," to John Browne, Minister of Sport, who was proposing a 110 per cent tax deduction for contributions to a Sports Foundation "you're not getting 110 per cent. You can forget it. This is a freaking Boulevard Hotel special, this is. The trouble is we are dealing with a sports junkie here gesturing towards Bob Hawke. I go out for a piss and they pull this one on me. Well that's the last time I leave you two alone. From now on, I'm sticking to you two like shit to a blanket."

The economic crisis also formed the basis behind their government policy, to the ire of the far left wing and the Liberals who were shocked Labor beat them to micro-economic reform. Hawke and Keating in their first years saw economic management vital to the success of their other social goals and also believed the only solution lay in finding a structural and policy path that accommodated both labour and business.

The Labor Government surprises everyone by floating the dollar in 1983.

Hawke and Keating together against the advise of the head of the Treasury John Stone, floated the Australian Dollar. Along with this they ended Australia's traditional protectionism and wiped the tariff wall and deregulate Australia's finance, industry and banking system. Keating who was working to bring the Budget back into surplus himself referred to tariffs as "economic racism." Australia's tax and welfare system was reformed as well. To the dislike of the Liberal Party new Capital Gains and Fringe Benefits Taxes were established. In income tax, the Labor Government lowered the highest margin from 61c down to 49c. Much criticized as well was the first privatisations of QANTAS and the Commonwealth Bank. Labor liberalized Australia's highly uncompetitive and heavily protected economy and vibrantly opened it to the world, laying down the foundations which have led to the economic prosperity that is now being felt.

Keating destroying all opposition within the Labor Party to back his banking policies.

In 1984 Euromoney Magazine named Keating 'Finance Minister of Year'. He took on the nickname in the Government as 'World's Greatest Treasurer. The previous winner however was Mexico's finance minister. In arguing his economic reforms Keating said famously: "If this Government cannot get the adjustment, get manufacturing going again, and keep moderate wage outcomes and a sensible economic policy, then Australia is basically done for. We will end up being a third rate economy... a banana republic."

Budget '88: Keating 'brings home the bacon' with Australia's largest budget surplus.

The Liberally Revolving Door

On the Opposition benches there was an identity crisis. After Fraser the Liberal Party was in disarray, divided between supporters of the dour, economically and socially conservative John Howard and the urbane Andrew Peacock. The Country Party changed its name to the National Party for more broader 'electoral appeal'. Peacock was the first leader who lost the 1984 election, shortly after Howard toppled him and contested and lost the 1987 election. Howard was lampooned by Labor after they discovered a massive inconsistancy in his tax policy which measured in billions of dollars and his often racist comments on Asian immigration.

The Great Debate '84, Max Gillies acting as both Bob Hawke and Andrew Peacock.

To make things worse for the federal Coalition, the mad and corrupt Queensland Premier, Sir Joh Bjelke-Petersen was still in power and began the 'Joh for Canberra' campaign in an attempt to make him Prime Minister. Financed by Gold Coast property developers who grew fat off his regime known as the 'White Shoe Brigade' he ended up causing a massive embarrassment and upheaval for the federal Liberal and National Parties who tried to distance themselves from him. To spite Howard, Peacock gave some support to Joh. The campaign was foolish as Joh has little appeal outside of Queensland and he have a seat nor the support of the federal parties. Labor exploited this divide, helping them win the election. Keating also attack Howard's record as Fraser's Treasurer: "He is the greatest job and investment destroyer since the bubonic plague." This was historic, Hawke became first Labor leader to win three elections. Queensland Labor Party Secretary Peter Beattie joked: "We couldn't have done it without Joh." Shortly after the loss, once again Peacock got the numbers and ousted Howard.

"Cassanoosa" the Gillies Report lampoons Bob Hawke, Andrew Peacock and others in a musical comedy. Making fun of Hawke's promise to stop drinking if elected PM 'I'm no longer on the piss."

1988 – (White) Australia turns 200

1988 was a landmark year – the Bicentennial celebrations of European settlement in Australia (a bit of slap in the face for the aborigines). Brisbane also played host to World Fair Expo '88, which saw the construction of 'South Bank' in its CBD. A year earlier Sir Joh had finally been ousted as Queensland Premier by his Party and the Fitzgerald Inquiry began to crack down on massive corruption in the State after the ABC made its famous 'Moonlight State' exposé. The nation organized massive celebrations and the Queen turned up to open the brand new Parliament House in Canberra. Hawke was the last PM to serve in the cramped and 'temporary' Old Parliament House building used since the 1920s. The new colossal structure was built behind it, mostly submerged beneath Capital Hill.

Kirribilli Pact – Hawke and Keating face off

Keating had grown tired of waiting in the wings and in 1988 made a secret deal at Kirribilli House with Hawke, who, in the presence of witnesses promised to step down as leader in favour of Keating some time after the 1990 election, in exchange for Keating's continuing partnership. In the 1990 campaign some evidence leaked about the Pact and the Opposition Leader Andrew Peacock planned his campaign strategy to be 'a vote for Bob Hawke is a vote for Paul Keating.' Keating devastatingly replied: "a vote for Andrew Peacock is a vote for Andrew Peacock. What you see is what you get, not much." He also ridiculed Peacock "I suppose that the Honourable Gentleman's hair, like his intellect, will recede into the darkness," and "You've been in the dye pot again, Andrew." In Parliament Keating taunted: "We're not interested in the views of painted, perfumed gigolos."

In 1987 the Black Monday stock market crash plunged the western world into another recession. Unemployment and interest rates went up. By 1991 economic problems had worsened. With unemployment as high as in the Depression 60 years earlier, Australia was in recession. Keating argued the recession was itself an economic lever that would correct problematic trends – 'the recession we had to have'. The public however were unhappy and Hawke's legendary popularity plummeted.

The economic downturn cost Labor in the polls, winning only 39 of the vote but still managed to win with Green and Democrat preferences. The poor result ended Peacock's run and caste a dim future of Hawke's despite winning a fourth term for Labor. Through 1990 the tension rose as Keating waited for Hawke to keep his end of the bargain. It became clear he wasn't going to and soon a leadership began.
The Liberal Party's new leader was economist Dr John Hewson and it finally got organized and created 'Fightback!' a broad platform of alternative policies to fight the next election on. It contained monetarist policies of slashing public funding, overhauling industrial relations and Medicare with its centre-piece a value added tax known as the GST (Goods and Services Tax). Hawke was now trailing in the polls and Labor was dumbstruck how to respond. Keating was one of the few to be able take Hewson head on describing him as a 'Feral Abacus' and ridiculing the GST as "15 on this, 15 on that."

Labor in Power. Documentary footage on the feud that brought Hawke down.

The leadership challenge began in earnest in December in an 'off the record' speech at the National Press Club now known as the 'Placido Domingo Speech'. He talked about leadership not about being popular but being right. He blasted Australian history for not having a single real leader like United States who had Washington, Lincoln and Roosevelt. He stepped on sacred Labor cows like Curtin and Chifley and subtly jibed Hawke saying leadership was not about 'tripping over TV crew chords at shopping centres.' He described himself as the Placido Domingo of Australian politics, with the leadership and the right mix of politics and economics. Word got out and Hawke was furious. In June 1991 Keating challenged for the leadership and lost. He then resigned and went to the backbench and watched Hawke and the Government collapse further. By December Keating had the numbers again and this time the Labor caucus voted to remove Labor's most successful PM and at last Paul Keating was new 47 year old ruler of the land.

Keating takes on John Hewson in Parliament, in Street Fighter format.

It's the Big Picture Scumbags!

Paul Keating left school at the age of 14 and started working. He joined the Labor Party the year after. In his youth he did everything from work in the local council, trade unions to even managing a rock band called the 'ramrods.' In 1969 he was elected federal MP for the seat of Blaxland, a working class Sydney area at the age of 25. In 1975 he was a junior Minister for two weeks before the Dismissal. As a Government MP visiting Europe he met Anita, a Dutch flight attendant who married over in Holland.

The new Keating Government wasn't in the best shape. Hewson and the Coalition were making more ground with their Fightback! Campaign and hit the government using the infamous 'recession we had to have' line. To most it was clear that Labor had no chance of winning the 1993 election. Commentators wrote Keating's future off saying the election was unwinnable. One close confidant Senator Graham Richardson told Keating the best he should aim for was to lessen the defeat so that "everyone would say nice things about you and we get back after one term." Keating's response matched his typical bravado: "Stuff that, I want to win!"

In early 1992 Hawke had planned to greet in Australia the Queen and the first state visit of a US President in decades. Now it was Keating's job to greet them. President Bush (the first) commented in Canberra that he thankful for the Presidential system when discussing the change of leadership in Australia. He called for greater US economic and political involvement in the Asia-Pacific and continued APEC's evolution building regional political infrastructure by calling for an APEC leaders summit where all regional heads of government would meet. The Americans, who were key to the process did not accept it at first, but Keating finally persuaded President Clinton who hosted the first meeting in Seattle in 1993.

Keating broke with the traditions calling for Australia to finally see itself economically, strategically and culturally apart of the Asia-Pacific region. He built stronger relations with Australia's largest neighbour Indonesia and focused on building closer ties with APEC nations. Australia worked to stop exploitation and economically and environmentally unsustainable practices plaguing many of the island nations of Oceania. There was one foreign rift though as Keating had a fallout with Malaysia's Prime Minister Dr Mahathir who he described as a 'recalcitrant'.

Keating immediately put his Government on a new direction that he called 'the Big Picture'. When the Queen visited he outraged conservatives and the British tabloids when he placed his hand on her back to help her along and told her that Australia was considering becoming a Republic. The 'Lizard of OZ' as UK tabloids called him made changing the flag and Australian Republic central political issues. On the flag issue his views were: "The Australian flag is as it has been all my lifetime. I have said—and I am quite happy to repeat it—I do not believe that the symbols and the expression of the full sovereignty of Australian nationhood can ever be complete while we have a flag with the flag of another country in the corner of it." In 1992 only 35 of Australians supported creating a republic. Because of Keating's political leadership by the time he left office around 60 favoured it. The Queen herself was not offended and thought his sentiments were honest and friendly and promised to agree with whatever the Australian people decided.

In 1992 the High Court passed the Mabo Decision, a landmark case for Aboriginal affairs. Eddie Mabo, the Torres Strait Islander landrights activist who started the case died of cancer months before the High Court's decision which historically overturned the legal state of terra nullius - ('no-mans land') which is a modern term applied to the attitude of the British towards land ownership on the continent of Australia. Keating responded to this in 1993 with the Native Title Act which was the first legislation to decide native title of traditional lands. Keating wanted to work towards greater reconcilliation with Indiginous people. In December 1992 he made his historic 'Redfern Address' which was the first time an Australian Prime Minister publicly acknowledged that Europeans had been the ones who had invaded and displaced Indigenous People. A famous excerpt of the speech:

It was we who did the dispossessing. We took the traditional lands and smashed the traditional way of life. We brought the diseases. The alcohol. We committed the murders. We took the children from their mothers. We practised discrimination and exclusion. It was our ignorance and our prejudice. And our failure to imagine these things being done to us. With some noble exceptions, we failed to make the most basic human response and enter into their hearts and minds. We failed to ask - how would I feel if this were done to me?

The full historic Redfern Address in 1992

At the end of February 1992, Keating released One Nation, an economic program for the creation of 800,000 jobs by 1996. With the unemployment rate continuing to climb throughout Keating's first year as Prime Minister, the government's responses included the Australian National Training Authority Act 1992, establishing an agency to coordinate training opportunities, increase workforce skills and provide for a youth training wage. The Disability Discrimination Act 1992 provided a uniform base for the elimination of employment discrimination against disabled people. The Government spent much of its first term dealing with the domestic economic crisis from the recession. At the end of 1992 unemployment peaked at its highest postwar level of 11.4.

The Late Show – making fun of Keating and the big issues. Quite funny.

Fightback! Keating dismembers Hewson

Opposition Leader Dr Hewson had a big lead over Keating and Labor. Yet Keating was determined to fight on and win the 'unwinnable' election. His main tactic was to psychologically break Hewson in Parliament which he did brutally and to fight the Liberals over the harm the Fightback! Program would cause ordinary people. One of Keating's taunts in Parliament: "This is the sort of little-boy, stamp your foot stuff which comes from a financial yuppie when you shoe him into parliament." It was Hewson's own GST consumption tax policy which shot him in foot. Australians hated the idea, especially as it would have taxed food. The famous 'Birthday Cake Interview" where Hewson failed in an interview to explain if birthday cake would cost more or less under the GST and made himself look like a fool.

Keating in Parliament cracking John Hewson.

At the election in March 1993, did the impossible and won Labor a historic fifth consecutive term in office. The results saw an improvement from 1990, winning 44.9 of the popular vote. Keating made his famous True Believers speech and remarked: "This is the sweetest victory of all!" Labor couldn't believe its luck and the Coalition were shell shocked that they lost the victory that had been laid out to them on a golden platter.

Labor's Last Lemon

Keating tried to use each parliamentary term to its full potential, he compared it to squeezing a lemon. He didn't get rid of it until he had squeezed it of all its potential. His second term was no exception. The Big Picture rolled relentlessly onward.

After 1993 the economic recovery started to take effect. Unemployment and interest rates while still high decreased. Keating saw strong economic conditions to be essential to completing his other social goals. The effect of the recession in the early 1990s left the Government with an enormous debt and forced Keating to space out its promised tax cuts in two lots. Through APEC the Government continued to pursue Asia-Pacific trade liberalization and to open the Australian economy up to the world market. He signed the Bogor Treaty for APEC regional goals and timetable in 1994 in Indonesia.

Keating's latest colossal micro-economic reform was in industrial relations, removing a century of industrial practice by ending centralised-wage fixing to a new system of Enterprise Bargaining. He managed this through the partnership of the ACTU and its President Bill Kelty. Labor legislated the protection of workers with the Unfair Dismissals Act. The recovery continued and Keating In May 1994 Keating presented Working Nation to parliament, the government's five-year program for expanding employment, particularly for the young unemployed, by creating two million jobs. The recovery was shaky but slowly the structural reforms were taking effect.

On the world stage Keating traveled extensively and improved Australia's relations with the world. Australian troops were committed as peace keepers in Cambodia and he tried to mend relations with Malaysia. Building security ties with South-east Asia and a friendship in Indonesia assured a strategic buffer for Australia from China, while at the same time more effort was made to opening China up and flogging our resources to them. A diplomatic incident occurred with France after Jacques Chirac was elected President and overturned Mitterand's Nuclear Testing moratorium. The French resumed nuclear testing in the South Pacific which caused outrage in Australia and the region. Keating protested against the French and was even urged to send the Navy in to stop it. In an article in Le Monde in 1995 Keating told the French that for the 15 nations of the South Pacific Forum: "the Pacific Ocean is our Europe." The pressure helped move France to ratify the Comprehensive Nuclear-Test Ban Treaty.

In April 1993 Keating appointed the Republic Advisory Committee to examine options for Australia's development as a republic. In June 1995 Keating made a speech to the House of Representatives outlining the Government's path to the republic. The chosen type of republic was known as the 'bipartisan appointment' model, a minimalist republic which retained Australia's Westminster system but replaced the Queen and Governor-General with an Australian Head of State, most likely a President. The method of appointment would be selected by the PM with the opposition's consultation and 2/3 majority appointment by the Parliament. The symbolic change was due to be made in 2001 for the centennial of Federation. A part of his speech:

"But the creation of an Australian republic is not an act of rejection. It is one of recognition: in making the change we will recognise that our deepest respect is for our Australian heritage, our deepest affection is for Australia, and our deepest responsibility is to Australia's future. Nothing in the creation of an Australian republic will alter the facts of our heritage and our affections. Indeed our relationship with Britain may well become the more thoroughly "modern relationship" which the British Prime Minister expressed a desire for two years ago. The development of a mature and modern relationship will certainly not be inhibited by recognition of the truth. We are friends with separate destinies to carve out in the world. We are not as we once were, in a parent-child relationship."

The Things that Batter

Once more the Coalition was in disarray. The Liberals voted out John Hewson and replaced him with a new younger leader Alexander Downer. Initially Downer, a well to do from a dynasty of conservative politicians from South Australia received record public support. Keating however shred him like tissue paper in Parliament and his support eroded after a series of public blunders. Keating dismissed him as "the idiot son of the Establishment." At a formal dinner, Downer made a speech to promote the Liberal's new slogan 'the Things that Matter.' Then he joked that the Party's domestic violence policy should be called 'the Things that Batter' referring to abusive husbands. That was Downer's undoing and after eight months as Opposition Leader he was dumped and the Liberals went back to their second hand bin and pulled back out John Howard.

The Downer Months – a TV show making fun of the desperate period which made John Howard look like a good alternative in comparison.

Keating in Parliament, tearing apart the Liberal Party platform in 1994.

As Opposition Leader again Howard attacked the Government over the recession and appealed to average Australians who were frightened by the size and scope of Keating's 'Big Picture' policies. Keating was a decade ahead of his time. Howard made comments earlier in the decade about his belief that Asian migration should be limited. He also clashed with Keating over the 'History Wars', the interpretation of European impact on Indigenous People since 1788. He claimed he did not support the 'Black Armband view' of history. Keating was also perceived as distant and arrogant to some of the public and his micro-economic reforms were not celebrated in the short term. The mood was summed up by a conversation with a journalist:

Reporter: You don't talk to ordinary people!
Keating: "Who says I don't ? Who says I don't ? I mean I see as many people as perhaps anyone in public life could..."
Reporter: How long is it since you've been to Fyshwick Markets?
Keating: "Not long, not long. In fact if you get down to woollies at Manuka on Saturday I'd probably run over you with a trolley as I did a journo recently."

Howard also soothed the fears of swing voters by changing his public stance to support Medicare and famously: "There's no way that GST will ever be part of our policy... Never ever. It's dead. It was killed by the voters in the last election." Many Labor voters who were at odds with Keating came over to Howard, known as the "Howard Battler's." He deliberately kept his policies to a minimum to avoid a Fightback! Like disaster and make grounds. While Keating's republicanism, reconciliation and integration with the Asia-Pacific galvanized urbane Labor electorates it wasn't enough. Howard called for the end of 'political correctness.' Other scandals rocked the Government as well, like Foreign Minister Gareth Evans' affair with Democrats leader Cheryl Kernot who moved over to Labor.

The Great Motion. John Howard moves a fiery no confidence motion in Parliament against Keating.

Keating responds to the motion and rips Howard to shreds.

Keating mocking Howard in Parliament in Question Time

The 1996 campaign went ahead and Keating fought for the Big Picture, while the mood of the electorate wanted the simpler more comfortable option of Howard who (appeared) to have clipped some of his Liberal tendencies. Keating still managed to beat him in Parliament and match him in the debates but the mood was against him. He had hoped that Labor would manage to 'bolt it home'. The election was held on March 2, one day short of the 13th anniversary of Bob Hawke's victory over Fraser. Labor was defeated with only 38.7 of the popular vote, loosing 31 seats. The Coalition led by Howard and Nationals leader Tim Fischer won a landslide and ended 13 years of Labor rule, the longest in the Party's history.

Paul Keating conceded defeat and a month later the Placido Domingo of Australian politics bowed out of Parliament and public life. The legacy that the Hawke-Keating Government left the country with was broad and bold. If Whitlam was the one who brought Australia into the 20th century, Hawke and Keating kicked it into the 21st. Tony Blair and Labour in the UK modeled their strategies and policies off the lessons of the Labor's time in Australia, however neither Hawke or Keating ever sank as low as Blair. Over a decade after he left power, his efforts are now starting to be acknowledged as the source of Australia's future economic success and retook the popular image after a musical comedy began in 2005 called Keating! The Country Soul Opera. The musical about his rise, fall, devastating tongue and national vision has continued to grow in popularity. After 1996, Australia went down a totally different direction.

'The Arse End of the Earth' a song from the Keating musical.