Federal treasurer of Australia (1983-1991) and Prime Minister (1991-1996), Paul John Keating (born 1944) was a dominant and powerful Australian Labour Party (ALP) politician, widely admired and equally widely vilified, who undeniably made his mark on the party.
Paul John Keating was born on January 18, 1944, in the working-class western suburbs of Sydney, Australia. The eldest child of Irish, solidly Labor-oriented parents, Keating absorbed politics from childhood. His father, Matt Keating, was a leading local Labor Party member.
Keating was educated at De La Salle College in Bankstown, Sydney. But academic qualifications were not of interest to the impatient young Keating, and he left school in November 1958 to enter the workforce, which he did in January 1959, two days after his 15th birthday. He continued studies at night school while working as a clerk with the Sydney Country Council.
By his late teens Keating was an enthusiastic member of Young Labor, an earnest group of young people who regularly met to discuss the political issues of the day. It was a good training ground for many who were later to become Labor politicians. On the lighter side, Keating's interest had been caught by a rock band, the Ramrods, whom he heard play in the western Sydney pubs. Keating the aspiring entrepreneur wanted to make the Ramrods into something more professional and became their promoter. Under Keating's stewardship the group cut two records, both flops. Keating went on to develop his interest in politics.
During those years he had been learning, although not following a formal course of education. From the age of 18 Keating regularly visited Jack Lang, an old Labor political warhorse, then in his mid-eighties and still editing his newspaper, the Century. Lang, a one-time Labor premier and treasurer of New South Wales, was a controversial Labor figure even then, hated by some, a hero to others. To the young Keating he was a living Labor legend. From Lang, Keating learned much of Labor history and mythology and valuable lessons about government, politics, and the art of vitriolic rhetoric. Years later, Keating was at the vanguard of a push to have Lang re-admitted to the ALP, a few years before he died, at age 98, in 1975.
By the late 1960s, Keating's life had taken on a single focus: politics. With typical single-mindedness he dropped evening classes, the rock band, and social life to concentrate on building his base. It was a tough and tense fight, but in October 1969 Keating, age 24, had won nomination for the safe Labor seat of Blaxland.
Despite campaigning in a safe Labor seat, Keating threw all his energy into the 1969 federal election campaign. Taking a line from the Kennedy-style campaigning in the United States, he bought a bus and a loud hailer and cruised through the streets of Bankstown. The efforts paid off: at 25, Keating became New South Wales' youngest member of Parliament.
Once into Canberra and federal parliament, Keating was an ambitious young man in a hurry. But he had to wait until 1975 before winning a seat in a ministry—and then only briefly. At 31 he became the youngest minister in Labor's history when he was appointed minister for Northern Australia. Keating's achievement was short-lived. A few weeks later, on November 11, 1975, the Whitlam government was sacked from office. Labor, after being in office for the first time in almost a quarter of a century, was again relegated to the opposition benches.
For the bulk of the following opposition years Keating held the post of shadow spokesman on minerals and energy. But in January 1983, weeks before a federal election, Keating was reluctantly drafted into the role of shadow treasurer. Keating, although lacking the economics background, was chosen for his toughness and selling skills—and he needed all of those when Labor won government in March 1983.
Keating, with the reputation as a political killer with a sharp tongue, made his mark as federal treasurer. Labor in office embraced the free markets philosophy it had earlier opposed and, instead of reversing moves to liberalize the financial system, it advanced the process of financial deregulation that had begun under the Liberal coalition government. By the end of his first year as treasurer Keating had overseen a move to float the Australian dollar and remove virtually all exchange controls and was pushing to allow foreign banks to operate in Australia. The following year the influential magazine Euromoney voted Keating its finance minister of the year at the 1984 annual International Monetary Fund/World Bank meeting in Washington.
Tough years followed this accolade. In July 1985 Keating experienced his first serious setback when, at an ill-fated tax summit, his cherished plan for tax reform, based on a consumption tax, was rejected. But Keating won some significant tax measures, including a fringe benefits tax, a capital gains tax, and a move to end "double taxation" of company dividends. Problems intensified for Keating in 1986: Australia faced a burgeoning deficit on its current account and growing volume of foreign debt, factors which sent the currency spiraling down. Keating delivered a colorful warning that the country was destined to become a "banana republic" if attitudes and policies were not adjusted.
Some improvement was made in the current account but foreign debt continued to rise, producing potentially crippling interest costs. Labor faced a tough election when it went to the polls in July 1987, but won a third term, albeit with the loss of some key seats. Keating had marketed his economic management well. He went on to consolidate the government's achievement in turning a budget deficit into a healthy surplus. The Labor government and Keating had made laudable progress in many areas under Prime Minister Robert Hawke. The progress included reforming the financial sector, the tax system, and superannuation and, through its wages accord with the unions, holding down wages. But by the end of the 1980s Australia, burdened with rising foreign debt, was confronting the threat of a real drop in living standards. Labor was praised for its achievements but criticized for relying too much on high interest rates to dampen demand for imports and for not succeeding in pushing through micro-economic reforms that would lift productivity, boost savings and investments, and improve international competitiveness.
But despite historically high interest rates that punished business and home buyers Labor was reelected for a record fourth term in March 1990, once again beating a weak Liberal opposition team. Keating, then treasurer for seven years, was also appointed deputy prime minister in April 1990. However, in 1991 he challenged Hawke for party leadership, lost, and was relegated to the "back bench" but won the post by year end. After serving as treasurer, Keating took on the position of Prime Minister in 1991. In September 1993, Keating formally notified Queen Elizabeth II of his proposal to create a federal republic in Australia to replace, by 2001, the long-standing constitutional monarchy. Keating remained Prime Minister until 1996 when he was defeated in the election by John Howard, thus ending the Labor Party's 13-year reign.
Further Reading on Paul John Keating
Who's Who in Australia carries a short biography of Keating; an unauthorized biography by E. Carew, Keating, a biography (1988); also P. Kelly's, The Hawke Ascendancy (1984); James Walsh wrote of Keating in "Destiny's Choice" Time (January 6, 1997).