Bob Hawke - Prime Minister

Prime Minister

The inaugural days of the Hawke Government were distinctly different from those of the Whitlam Government. Rather than immediately initiating extensive reform programmes, Hawke announced that Fraser's pre-election concealment of the budget deficit meant that many of Labor's election commitments would have to be deferred. Hawke managed to persuade Labor MPs to divide the Government into two tiers, with only the most important ministers attending regular meetings of the Cabinet. Caucus still selected the full ministry, but allowed Hawke to select which ministers would comprise the 13-strong Cabinet. This was to avoid what Hawke viewed as the unwieldy nature of the 27-member Whitlam Cabinet. The caucus under Hawke also exhibited a much more formalised system of parliamentary factions, which significantly altered the dynamics of caucus operations.

Hawke used his authority within the Labor Party to carry out a substantial set of policy changes. Accounts from ministers indicate that while Hawke was not usually the driving force for economic reform, that impetus instead coming from Treasurer Paul Keating and Industry Minister John Button, he took on the role of achieving consensus and providing political guidance on what was electorally feasible and how best to sell it to the public, at which he was highly successful. Hawke proved to be incredibly popular with the Australian electorate, and continues to hold the highest ever AC Nielsen approval rating.

Hawke and Keating provided a study in contrasts: Hawke was a Rhodes Scholar; Keating left high school early. Hawke's enthusiasms were cigars, horse racing and all forms of sport; Keating preferred classical architecture, Mahler symphonies, and collecting English Regency and French Empire antiques. Hawke was consensus-driven; Keating revelled in aggressive debate. Hawke was a lapsed Protestant; Keating was a practising Catholic. Despite their differences, however, the two formed an effective political partnership.

According to political commentator Paul Kelly, "the most influential economic decisions of the 1980s were the floating of the Australian Dollar and the deregulation of the financial system". Although the Fraser Government had played a part in the process of financial deregulation by commissioning the Campbell Report, – published in 1981, opposition from Fraser himself stalled the deregulation process. When the Hawke Government implemented a comprehensive program of financial deregulation and reform, it "transformed economics and politics in Australia". The Australian economy became significantly more integrated with the global economy as a result. Both Hawke and Keating would claim the credit for being the driving force behind the Australian Dollar float.

Among other reforms, the Hawke Government dismantled the tariff system, privatised state sector industries, ended subsidisation of loss-making industries, and sold off the state-owned Commonwealth Bank of Australia. The tax system was reformed, with the introduction of fringe benefits tax and a capital gains tax, a reform strongly opposed by the Liberal Party at the time, but not one they reversed when they eventually returned to office. Partially offsetting these imposts upon the business community – the 'main loser' from the 1985 Tax Summit, according to Paul Kelly – was the introduction of full dividend imputation, a reform insisted upon by Keating. Funding for schools was considerably increased, while financial assistance was provided for students to enable them to stay at school longer. Considerable progress was also made in directing assistance "to the most disadvantaged recipients over the whole range of welfare benefits."

Hawke benefited greatly from the disarray into which the Liberal Party fell after the resignation of Malcolm Fraser. The Liberals were divided between supporters of the dour, socially conservative John Howard and the urbane Andrew Peacock. The arch-conservative Premier of Queensland, Joh Bjelke-Petersen, added to the Liberals' problems with his "Joh for Canberra" campaign in 1987, which proved highly damaging. Exploiting these divisions, Hawke led the Labor Party to comfortable election victories in a snap 1984 federal election and the 1987 federal election.

Hawke's time as Prime Minister saw considerable friction between himself and the grassroots of the Labor Party, who were unhappy at what they viewed as Hawke's iconoclasm and willingness to cooperate with business interests. All Labor Prime Ministers have at times engendered the hostility of the organisational wing of the party, but none more so than Hawke, who expressed his willingness to cull Labor's "sacred cows". The Socialist Left faction, as well as prominent Labor figure Barry Jones, offered severe criticism of a number of government decisions. He also received criticism for his 'confrontationalist style' in siding with the airlines in the 1989 Australian pilots' strike.

In spite of the criticisms levelled against the Hawke Government, it succeeded in enacting a wide range of social reforms during its time in office. Deflecting arguments that the Hawke Government had failed as a reform government, Neville Wran, John Dawkins, Bill Hayden, and Paul Keating made a number of speeches during the Eighties arguing that the Hawke Government had been a recognisably reformist government, drawing attention to Hawke's achievements as Prime Minister during his first five years in office. As well as the reintroduction of Medibank, under the name Medicare, these included a doubling of child care places, the introduction of occupational superannuation, a boost in school retention rates, a focus on young people's job skills, a doubling of subsidised home care services, the elimination of poverty traps in the welfare system, a 50% increase in public housing funds, an increase in the real value of the old-age pension, the development of a new youth support program, the re-introduction of six-monthly indexation of single adult unemployment benefits, and significant improvements in social security provisions. As pointed out by John Dawkins, the proportion of total government outlays allocated to families, the sick, single parents, widows, the handicapped, and veterans had been higher under the Hawke Government than under the Whitlam Government.

Another notable success for which Hawke's response is given considerable credit was Australia's public health campaign about AIDS. In the later years of the Hawke Government, Aboriginal affairs also saw considerable attention, with an investigation of the idea of a treaty between Aborigines and the Government, though this idea was overtaken by events, notably including the Mabo court decision.

The Hawke Government also made some notable environmental decisions. In its first months in office it stopped the construction of the Franklin Dam, on the Franklin River in Tasmania, responding to a groundswell of protest about the issue. In 1990, a looming tight election saw a tough political operator, Graham Richardson, appointed Environment Minister, whose task it was to attract second-preference votes from the Australian Democrats and other environmental parties. Richardson claimed this as a major factor in the government's narrow re-election at the 1990 federal election, Hawke's last triumph.

Richardson felt that the importance of his contribution to Labor's victory would automatically entitle him to the ministerial portfolio of his choice – Transport and Communications. He was shocked, however, at what he perceived as Hawke's ingratitude in allocating him Social Security instead. He vowed – in a telephone conversation with Peter Barron, a former Hawke political staffer – to do 'whatever it takes' to 'get' Hawke. He immediately transferred his allegiance to Keating and subsequently claimed credit for playing a vital role in Keating's campaign for the leadership as a numbers man.

The late 1980s recession and high interest rates saw the government in considerable electoral trouble. Although Keating was the main architect of the government's economic policies, he took advantage of Hawke's declining popularity to plan a leadership challenge. In 1988 Hawke had responded to pressure from Keating to step down by making a secret agreement (the so-called "Kirribilli agreement" or "Kirribilli accord") to resign in favour of Keating some time after winning the 1990 election. After Keating made a speech to the Federal Parliamentary Press Gallery that Hawke considered disloyal, Hawke indicated to Keating that he would renege on the agreement.

In June 1991, Keating responded by resigning from the Cabinet and challenging for the leadership. Hawke defeated Keating's leadership challenge, but he was thereafter seen as a wounded leader. Hawke swore himself in as Treasurer for one day while he decided between the rival claims of Ralph Willis and John Kerin to replace Keating. Hawke eventually chose Kerin, who proved to be unequal to the job.

Hawke's leadership was further damaged as a consequence of the new Liberal Leader, John Hewson, releasing Fightback!, a detailed proposal for sweeping economic change, including a goods and services tax and deep cuts to government spending and personal income tax in November 1991. Hawke's response to this challenge was judged to be ineffective, and a rattled Labor Party turned to Keating. At a second leadership challenge on 19 December 1991, Keating defeated Hawke by 56 votes to 51. Hawke briefly returned to the backbenches before resigning from Parliament on 20 February 1992, sparking a by-election which was won by independent Phil Cleary from a record field of 22 candidates.

Hawke had few regrets, although his bitterness towards Keating surfaced in his memoirs. Hawke now claims to have buried his differences and considers Keating a friend.

By July 1990, Hawke had overtaken Malcolm Fraser to become Australia's second-longest serving Prime Minister. This record has since been overtaken by John Howard, making Hawke Australia's third-longest serving Prime Minister. He remains to this day the Labor Party's longest-serving Prime Minister.

It is also said by a former Tony Blair staffer that Blair learnt from the Hawke Government in the 1980s on how to govern when they took power in the UK.