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Paul John Keating (born 18 January 1944), Australian politician and 24th Prime Minister of Australia, took Australian politics by storm first as the reforming Treasurer in the Hawke government, then as the Prime Minister who pulled off an upset victory in the "unwinnable" election of 1993. But in his second term his "big picture" failed to impress an electorate increasingly concerned about economic issues, and he was defeated in a landslide in 1996.

Rising star

Keating grew up in Bankstown, a working-class suburb of Sydney. He was one of four children of Matt Keating, a boilermaker and trade union representative of Irish-Catholic descent. Keating was educated at Catholic schools: he was the first practising Catholic to lead the Labor Party since James Scullin retired in 1935. Leaving school at 14, Keating worked as a clerk and then as a research assistant for a trade union. He joined the Labor Party as soon as he was eligible.

Through the unions Keating met influential figures such as Laurie Brereton, Graeme Richardson and Bob Carr, and also developed a friendship with former New South Wales Labor Premier Jack Lang, then in his 90s. Keating met Lang to discuss politics on a weekly basis for some time, and in 1972 succeeded in having Lang's Labor Party membership restored. Using his extensive contacts, Keating gained Labor endorsement for the seat of Blaxland in the western suburbs of Sydney, and was elected to the House of Representatives at the 1969 election, at the age of 25.

Keating was a backbencher for most of the Whitlam Labor government, but briefly became Minister for Northern Australia in 1975, one of the youngest ministers in Australian history. In the same year, he married Annita van Iersal, a Dutch flight attendant for Alitalia. The Keatings had four children, who spent some of their teenage years in The Lodge, the Prime Minister's official residence in Canberra.

After Labor's defeat in 1975, Keating became an opposition frontbencher, and in 1981 he became president of the New South Wales branch of the party and thus leader of the dominant right-wing faction. As opposition spokesperson on energy, he made a name as an aggressive debater. He initially supported Bill Hayden against Bob Hawke's leadership challenges, partly because he hoped to succeed Hayden himself, but by the end of 1982 he accepted that Hawke would become leader.

Reforming Treasurer

When Hawke won the March 1983 elections, Keating became Treasurer (finance minister), a post which he held until 1991. After a shaky start Keating mastered economic policy and was soon acknowledged as the driving political force behind many of the macroeconomic reforms of the Hawke government, including floating the Australian dollar, substantial cuts in tariffs, and reforms of taxation. In 1985, Keating proposed a value-added tax (known in Australia as the goods and services tax or GST), an option seriously debated before being dropped by Hawke, in the belief that the idea would be highly unpopular in the electorate.

Hawke and Keating worked as a a successful partnership during the first two terms of the Labor government (1983-87), with Hawke playing the statesman and populist leader while Keating was the political attack dog. His range of parliamentary invective was legendary, and successive Liberal Opposition leaders Andrew Peacock and John Howard were unable to get the better of him. After the 1987 election, however, Keating began to feel that it was for Hawke to make way for him.

In 1988, in a famous meeting at Kirribilli House, Hawke and Keating discussed the handover of the leadership to Keating. Hawke agreed in front of witnesses that after the 1990 election he would resign in Keating's favour. In 1991, when Hawke reneged on the deal, Keating challenged him for the leadership, but lost. He resigned as Treasurer. Throughout the rest of 1991, the position of the Hawke government deteriorated under pressure from the poor economy, attacks from the Opposition and constant sniping from Keating and his supporters. In December 1991 Keating defeated Hawke in a second leadership challenge, and became Prime Minister.

Prime Minister

Hawke's undoing had been the policy package unveiled by the new Liberal leader, Dr John Hewson, which involved a GST, sweeping cuts in personal income tax and cuts to government spending. Hawke and his new Treasurer, John Kerin, had been unable to counter the electoral appeal of this package. Keating, however, severely damaged Hewson's credibility in a series of set-piece parliamentary encounters.

Nevertheless, the view of most commentators was that the 1993 election was "unwinnable" for Labor. The government had been in power for ten years, the economy was in poor shape, the voters did not like Keating's arrogant style, and Hewson was offering a coherent economic policy. Despite all these factors, Keating succeeded in winning back the electorate with a fear campaign on the GST, and led Labor to an unexpected election victory.

As Prime Minister, Keating's interests and public perception widened from those of the narrowly focused technocrat he had seemed to be as Treasurer. His agenda included items such as making Australia a republic, achieving reconciliation with Australia's indigenous population, and further economic and cultural engagement with Asia. These issues, which came to be known as Keating's "big picture," were highly popular with the tertiary-educated middle class, but failed to capture the aspirations of rural and outer-suburban voters.

Keating interpreted his 1993 election win as a mandate to pursue his "big picture" agenda, and was encouraged in this by the intellectual classes of Sydney and Melbourne, who adopted Keating as a hero. But Keating failed to notice that the working-class and regional voters were more concerned about the sluggish economy, and were also reacting badly to Keating's stress on Australian involvement with Asia.

Defeat

So long as the Liberals lacked a credible alternative Prime Minister, Keating seemed secure. Hewson was deposed in 1994 and replaced by Alexander Downer, who failed to make any impression on Keating's standing. But when John Howard regained the Liberal leadership in early 1995, many voters responded to his message of social conservatism. A warning signal was the loss of a by-election in Canberra in 1995, but Keating failed to change his course.

At the March 1996 election Howard led to the Liberals to a sweeping victory, ending the longest period of Labor government in Australia's federal history. Keating immediately resigned from Parliament, and kept a low profile as a director of various companies. His marriage ended in divorce not long after he left politics. During the Howard years Keating made occasional speeches bitterly criticising his successor's social policies, but stayed out of Labor Party affairs.

Further reading

• Edna Carew, Paul Keating Prime Minister, Allen and Unwin, 1991
• Paul Keating, Advancing Australia, Big Picture, 1995
• John Edwards, Keating: The Inside Story, Viking, 1996
• Don Watson, Recollections of a Bleeding Heart: A Portrait of Paul Keating, Knopf, 2002