Paul Keating

12 August 1989

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Published in The Age, Sydney Morning Herald, Courier Mail, Advertiser, West Australian, Mercury, NT News, Canberra Times and Courier-Mail

I'd not set eyes on Paul Keating in three years. My notes of our 1986 meeting include the entry: "K. did not smile once during the whole hour". He had at that time been urgent, intense, rushed - almost menacing. He clearly regarded those who were then standing in his way as a waste of food. I was certain that his smile, had it appeared, would have formed icicles.

Three years later, on the eve of his seventh Budget, Keating is both calmer and (though he would never admit it) humbler. He behaves like a man who has proven his point - and who has also, perhaps, copped the odd one behind the ear. He has, in short, changed remarkably. In our hour together last week, he was friendly, quietly confident, sometimes even magnanimous. When talking of Peacock, the Democrats or Labor's "lefties", he smiled indulgently: his voice held none of the tremulous loathing of past years. At the first sign of a joke he would grin from ear to ear: there was even the odd throaty laugh.

We began with Peacock. Was miffed that his approval ratings were down with those of the man he scarcely seems to regard as an intellectual giant?

"Oh, that's got nothing to do with approval ratings. You can run Wheel of Fortune thesedays and have a high approval rating. [The Liberals' Tony] Eggleston feeds this stuff out about me being unpopular. Some people in the Canberra Press Gallery swallow it hook, line and sinker. The best of them are cynical about it - but some you could sell the Town Hall clock to. The thing is, it's nonsense. I rate with Peacock, ahead of anyone else in the Opposition. And ahead of anyone in the Labor Party, bar Bob."

It's a wonder, in a way, because he has none of Hawke's ability to take the Australian people into his confidence - or at least seem to - on the electronic hustings. Where Hawke uses phrases like "the Australian community - all of us...", Keating will frequently refer to the same community as "they". 

Yet he really is very good one-to-one. His body language alternately evokes his present station and his origins. At times he sat erect, almost statesmanlike. At others, he hunched forward in his chair in a most ungainly fashion, like a brickie on his lunchbreak retailing some unsavory story. His rough and tumble diction, and his colorful, uniquely Australian turns of phrase, probably go all the way back to the Rocks Push. His frankness - on most things, anyway - was admirable, as was the clarity of his economic exposition. All this probably explains why he is revered by Caucus and the Canberra media, yet the wider public is more ambivalent.

Still, Keating, like all politicians, is compelled to jump through a certain number of publicity hoops. Does he enjoy it very much?

"I like it providing it's genuine. Providing it's not some sort of phoney, staged arrangement. I always perform uncomfortably in those circumstances."

Keating's working class Irish stock were nurtured in Mother Church - the womb which produced so many of Labor's heroes of the past. But Australian society has changed vastly since the days of Labor's great Irish Catholic politicians - men like Keating's early mentor, former NSW Premier Jack Lang. Keating now describes himself as "the last of the Mohicans".

Lang he describes as "a strong ideological Catholic, but not a strong Church-attending Catholic. He had abandoned the laws of the Church, but not the laws of Christ." Was this also true of himself?

"Oh, it is by and large. I still go to Church - but I'm not as regular as I used to be. But the Church is different today. It's become middle class. It doesn't have the same objectives. I had a group around here a week ago - one of the Church's social welfare units - arguing for higher support for higher income families. It's not the same kind of organisation which bred the social reformers who popped up in the Labor Party. Now - depending what suburb you're in - you could take an exit poll after Mass every Sunday morning, and you'd find a large part of them had supported the tories." He laughed aloud. "I mean, it's disgusting, but it's true!"

Keating is never slow in reminding people - even Catholics - of their shortcomings. What, I asked, was his own biggest fault?

He thought carefully. "I think in my early days, naivety. I probably saw too much good in most people - that their motivations are as good as your own. And this is one of the lessons of life - they're not. You've got to sort the wheat from the chaff." What of his equally remarkable claim that he is "sentimental to the last teardrop?"

"I'm chronically sentimental. You can't come from where I'm from and not be. It's just par for the course." Could he give an example? "Oh it's very hard to give an example. It's just a feature of one's character. One's more prone to be soft than to be anything else. But in this job you don't do it in a way that's obvious, in public."

That is something of an understatement, given that Keating has been more blunt and more pessimistic than any Treasurer since the Depression about Australia's structural economic flaws. Paul Kelly recently identified the Liberals' current electoral strategy: Peacock dispenses sweetness and light, whilst John Stone doles out the economic bad news. This, of course, is a model perfected long ago by Bob ("the greatest country in the world") Hawke and Paul ("banana republic") Keating. Because economic rationalisation is not possible without electoral success, such a double-act is probably inescapable. But being the regular bearer of grim tidings hasn't helped Keating's Prime Ministerial prospects.

There would seem to be three scenarios for these. One is that he will take over from Hawke during Labor's fourth term, if it wins next time. A second is that the Party will ask Hawke to fight a fifth election (if it wins its fourth), and Keating will be forced to wait till the mid-nineties for a crack at the top job. (This is far from unlikely, given Hawke's good health, and his peerless vote-winning ability.) A third possibility is that Labor will lose the next election, and Keating will be asked to take on the job of Opposition Leader.

It is an indication of the quality of the Government's media management - and to some extent its "contract" with the media - that none of these scenarios have been discussed publicly during 1989. Accordingly, Keating would not comment on any of them: indeed the Prime Ministership was taken off the agenda before the interview began. Keating feels that if the Australian media were more analytical, and less hooked on day-to-day sensations, such issues could be canvassed on the record. Without broaching the taboo per se, I put it another way: that we knew precious little of potential Prime Minister Keating's views on non-economic matters - like foreign policy and the environment. Could he venture an opinion on, for example, whether the US was moving fast enough on disarmament?

He was not keen. It was Gareth's area, not his. He thought deeply for a few moments - and then relented. "The Marxist economies - they are not failing, they have failed. The political development of Eastern Europe is up for grabs for the first time since the War... The Soviet Union is about dragging West Germany into a neutral-to-Eastern polarity. That's going to have profound consequences for NATO. I'm not really in a position to second guess the United States' strategic views about these things. You asked me whether they're moving quickly enough. Well, in a sense none of us can ever move quickly enough. They can do more. The Soviets are genuine about disarmament."

The Chinese, it appears, are feeling less amiable. What was his reaction to the Tiananmin Massacre?

"Well, I was in Beijing when the protests started. I saw a lot of these people - they were fresh-faced young people. My reaction was...well, it's hard to find the word for that. I suppose dismay. Appalled. I mean, any government which runs tanks over its young people has obviously lost any claims to being compassionate, understanding - reformist. It was the most horrible outcome one could have imagined... When I first heard about the massacre I was in Moscow, in the middle of their Congress of Peoples' Deputies - the first public debate in 70 years - where it was obvious that the Soviet Communist Party had put in place a mechanism for dealing with change. But this had not happened in China."

He shook his head. "The people of China are largely smiling and good-natured - pleased to be of some assistance to you. And when there's such a brutal response - such a brutal response..." He paused again, and wrestled with his feelings. "We can't seem to shake off, in this century, the violence which has come all the way through it. The monsters we've bred - Stalin, Hitler, Pol Pot, Idi Amin - and now the Government of the People's Republic of China turning tanks on their young people. It's appalling. I think, though, that economic change will continue. It must. And with it will come political change. The Government of China has won this battle, but it will lose the war."

Keating's feeling for the year's other big issue - the environment - is less passionate. "In 1976, when we opposed oil drilling in the Barrier Reef, I was principally responsible for that. That's that issue. All the others, since we've been in office, have been settled in the end with a cheque. It started with the Franklin, the rainforests of north Queensland, and the Tasmanian rainforests package."

It's very much an economist's view, and lends credence to the belief that the environment - for all the recent rhetoric - is still a footnote to the Government's basically economic world-view. Why did Keating think the ALP had suffered a big loss of "green" votes to the Democrats?

"I don't know why. We shouldn't be. We're the only party with a structured environmental policy. The Democrats are a party without structure, without disciplines. It's a party without policies."

This, of course, is not true. The Democrats have had a comprehensive - and uncompromising - set of environment policies in place for a decade. To deny that they exist would seem perverse. But it is not perverse, it is calculated. The ALP push to discredit the Democrats has been on in earnest in recent weeks - and Keating's remarks are almost certainly the result of a team decision. Environment Minister Graham Richardson has been tirelessly pushing the message that the Democrats are "disunited", and that the "better-organised" independent greens are "people we can work with" in Parliament. The reason for the alarm is that the truth is precisely the opposite: the Democrats have been sufficiently disciplined to impact on Government legislation in a range of areas. Senate independents, on the other hand, are less organised, and vote only infrequently. Little wonder Richardson describes them as "people we can work with" - and Keating dismisses the Democrats as a non-party. It is a classical bit of ALP disinformation, which would have done Jack Lang proud.

Keating disputed my suggestion that Lang was his political role model. "If I have to leave any credit behind for my views, it would be to my father." (Who was a union official and later a businessman.) Nevertheless, the Jack Lang connection is fascinating to explore. The teenage Keating virtually apprenticed himself to Lang in 1964, when the old man was putting out his newspaper, The Century. Keating got the 95-year-old Lang readmitted to the Party in 1971.

In 1986 Keating told me: "Having a discussion with Lang, you'd feel the power - the swamping power - of the personality. It would swamp you! Look, there has been no-one in our political time - in your lifetime or mine - like him. Nobody was near him in terms of the power, the force - the force of the personality."

The period with Lang must have been formative, to say the least. And the similarities between Keating and Lang are, on close inspection, remarkable. Like Lang, Keating has a strong didactic streak. He got his economic reforms through Caucus by persistently "encouraging people to views they wouldn't otherwise have held" - as he put it, without so much as a smile. He is always educating journalists ("it has a ceaseless quality about it") as to his economic vision. His speech is peppered with phrases like, "See?" "Understand?" and "This is what you've got to understand..."

Like Lang - who pioneered workers' compensation, child endowment and widows' pensions - Keating has left a permanent legislative memorial. This is, of course, his revolution in financial deregulation and taxation. Both Lang and Keating got into ALP politics in their teens. Both became skilful numbers men, and both perfected a Parliamentary style of what Keating calls "the big, fact-laden, extemporaneous speeches" - to say nothing of a withering contempt for opponents. Both gravitated to the Treasury. Even the smaller details compare: both men are associated with immaculate but conservative dress - and even for alternating "me" for "my". Neither will be remembered for his smiling visage.

Lang's vengefulness, when crossed, was legendary. He destroyed Jim Scullin's federal Labor Government for not endorsing "the Lang Plan" to fight the Depression: Keating's sacking of Moody's pales by comparison, but it shows the same spirit. Lang was a master of intimidation. In his first hour in office he greeted his "meddlesome" department head by tearing the buzzer connecting their offices from his desk - and throwing it, with all its wiring, into the man's arms. The hapless bureaucrat never saw the inside of Lang's office again. Here, too, Keating's style is less dramatic. However Laurie Oakes recently opined that the whole of the present Labor Caucus is intimidated by him.

Keating found this amusing: "Well, that's written by someone who intimidates politicians. He intimidates politicians, and he doesn't like being appropriately intimidated in return." He began to chuckle: "That's just called bad sportsmanship."

Oakes wrote that even Hawke is scared of Keating: "Oh, that's not true. That's not true. No no."

Not surprisingly, Keating is chary of many of Canberra's older journalists. "I've put more time into this Press Gallery over the years than perhaps anyone. They've been generally kind to me, and I've been kind to them. But I'm more interested in the newer, fresher, younger ones - who actually chase stories up, and who write about politics and economics in contemporary terms, and not in terms of a decade ago."

Is this why he is starting to go over the heads of the Canberra bureau chiefs, to the interstate media? "What does it matter to the public at large whether the bureau chief complains that the Treasurer goes over their head? I mean, so what? That's called special pleading."

Despite his claims (thankfully rare) to naivety and sentimentality, in-character, Keating often speaks of his admiration for "achievers". Conversely, he has little time for "wimps". Did this mean he was something of a social Darwinist?

He laughed again. "No, I don't think so. You've got to be on the side of the people who make the place change. Australia has been geographically and economically isolated for a very long time. And breaking out of that isolation - as the Whitlam Government did in foreign policy, and as we have done economically - means that the life of comfortable mediocrity has to be left behind. So I think we always have to support the people who are at the forefront of change. Sitting back and watching the system run - well, it'll run itself. The system runs itself. It's about the changes - that's what it's all about. That's all it has ever been about. The changes."

Like old Jack Lang (whose speeches were impossible to wind up) Keating emphasises and re-emphasises points he sees as important. (It is generally agreed, out of his earshot, that he could talk the leg off a wooden chair.)

It is telling that while Keating's colleagues in the Labor Youth Council were probably reading Silent Spring, and marching for peace and socialism, he was apprenticing himself to Labor's most ruthless party room operator of the century. Keating is very proud of his association with Lang, which he says gives him a direct link with the Labor Party's beginnings. Lang would tell him of seeing the father of federation, Sir Henry Parkes, on the hustings; and of life with the dissolute Henry Lawson - Lang's brother-in-law. His impeccable Labor Party credentials leave Keating little patience with ALP "lefties" who claim Labor has abandoned its tradition. That the ALP should embrace the "sixties notions of a European socialist party" he regards as absurd.

Those looking for reasons for the conservatism of 1980s Labor could do worse than study Paul Keating's political character: in most respects he himself is charmingly, articulately, firmly conservative. You can't say he has deserted the Labor tradition, because really there isn't one. The ALP's diversity has been so great that one could embrace just about anything and claim it was "in the Labor tradition". How the pendulum has swung, for example, since Labor's first Commonwealth platform in 1909. It stated the Party's two objectives to be "the cultivation of an Australian sentiment, based on racial purity", and "the collective ownership of monopolies, and the extension of the industrial and economic functions of the state."

For all its romanticisation, the Lang epoch was a break from all this. It is the pre-history of the kind of pragmatic vote-garnering, and brainy strategy, perfected in "the Wran Model", and emulated by the present federal Government. What Keating learned from Jack Lang, one suspects, were the secrets of power, not the glories of ideology.

The way Keating warmed to the broader, non-economic issues suggests that he may be more constrained by the Treasury than is generally believed. It would be surprising if so fine an intellect, and so healthy an ego, did not desire to leave their stamp on a wider range of policies than the economic. His mind is brimming with ideas - though all are defined by the parameters of "sensible Labor" it has taken him so many years to construct. A Keating Government may well display more panache than Hawke's, and would almost certainly take a few more risks - but nothing that would fracture the hard mould of Labor pragmatism.

1975 was a key year for Keating. Lang died, at 99, in September. Keating was elected to the Whitlam Ministry in October. A month later, in November, the Whitlam Government fell. (The first vice-regal dismissal since Lang's in 1932). Considering he is the quintessential "sensible Labor" man, Keating's unstinting praise for the Whitlam Government - which he says "refashioned the Australian debate" - is perhaps surprising.

One wonders whether Keating will accommodate the next "refashioning" which history, and a finite world, is to foist upon us: the limits to growth. Whether it is within the capacity of any of Australia's current breed of politicians to address the blindingly simple fact that industry and population cannot grow forever - will be the Australian political spectacle, and guessing game, of the nineties and beyond. In the new scenario, to avoid following his enemies into what he seems to think is the lowest circle of hell - "irrelevance" - Keating may need to draw on greater reserves flexibility than he has displayed hitherto.

For the moment, though, while the nation holds its breath in expectation of the most sustained fall in living standards in its history, Keating remains the most successful and, in his own dark way, the most flamboyant federal Treasurer since Labor's mastermind of the twenties - the man he describes as "a financial genius" - Ted Theodore. After Jack Lang had destroyed the Scullin Government, Theodore left Parliament and joined forces with Frank Packer to start The Australian Women's Weekly. It proved to be a goldmine. I wondered if Keating was tempted by the money, and the freedom, that private enterprise offered.

"We see people in the private sector all the time, so that thought does occur to you. This is a very limiting existence in that sense. But it's on the high side of the street. It's in the business called public service, and it has its own reward. We call it, around here, 'the psychic income'."

The equanimity, and the sense of calm, which Paul Keating's "psychic income" has conferred on him of late should bring his colleagues - and perhaps even the Opposition - some transient joy. You get the sense that because Keating's major initiatives as Treasurer are now behind him, he is biding his time. Though he still firmly holds the reins, he may be allowing the system to run itself for a bit, until the next cycle begins.

Keating spends his spare time on his hobbies of music, architecture and decoration. Sailing had to be abandoned when he moved from Sydney to Canberra. ("You can only paddle around here.") The move was suggested, to preserve both family and sanity, by John Howard, when Keating took over the Treasury from him in 1983. Their relationship deteriorated quickly when, after the move, Howard began attacking Keating for claiming the Parliamentary travel allowance: Keating saw this as a betrayal.

Keating's main "hobby" is his children - a son aged 13, and daughters of 3, 7 and 10. He takes the girls horse-riding, and his son to football, most Saturdays. "You can never have enough time with your family - not when they're young anyway. But you do what you can."

Outside Keating's office, a young man was hovering with a pile of Budget papers more than a foot high. Standing to leave, I asked the Treasurer if he wanted to say a few words about Tuesday's Budget.

"Just that it will have the seal of quality, like all the others. I mean, occasionally countries get lucky - and they end up with a government which puts its economic and budgetary policies together in a way which is of...of undiminished quality," he said. But then - in that immortal phrase of British politics - he would say that, wouldn't he?