Lucky country enters the age of anxiety: Robert Milliken reports from Sydney on the difficult choices offered to voters in Australia

THERE was more than a hint of desperation in the sign sprayed on a wall on the road from Sydney airport, Australia's international gateway: 'Call a Federal Election. We're Going Bankrupt.'

Paul Keating, the Australian Prime Minister, has obliged the graffiti artist by calling an election for 13 March in a political landscape which mirrors the uncertainty of the place where the sign was sprayed: a building site still vacant after its planned grand edifice fell victim to the crash after the Eighties boom.

Opinion polls are volatile in the campaign, in which Mr Keating is seeking to return the ruling Labor Party to an unprecedented fifth term after 10 years in power. When he caught everyone off guard by calling the election a fortnight ago, federal Labor was running neck-and-neck with the opposition conservative Liberal- National coalition led by John Hewson. A poll published today, taken after the first week of campaigning, puts the opposition six points ahead of Labor. The number of swing voters is said to be 30 per cent, the highest ever.

Mr Keating and Mr Hewson are campaigning against a national mood of confusion, anxiety and a sense that Australia's economic malaise is unlikely to be resolved whoever wins. That perception is reinforced by polls which show that fewer than half the voters prefer either man as their leader with a quarter still undecided.

Australians have always been cynical about politics, but few people can remember a time when cynicism was more ingrained. It has been fed by wider concerns, principally an attempt to come to grips with profound changes over the past decade that have forced Australians to question their identity and to confront the fact that they no longer inhabit what used to be called the lucky country.

When Labor, led by Bob Hawke, took office in 1983, Australia's economy was still protected and largely insulated from the outside world, the way it had been for almost a century. Ten years later, tariffs have come down and the economy has been pushed into global competition. Gross foreign debt has increased six times to almost 19bn Australian dollars ( pounds 9bn) and unemployment has passed 1 million for the first time.

In trade, immigration and foreign policy, Australia's focus has shifted to Asia. A trickle of Japanese tourists in 1983 grew to more than 630,000 last year. Immigrant numbers from Britain have fallen and are now fewer than those from Hong Kong and Vietnam combined. The relevance of the monarchy to Australia, hardly discussed during the boom years of the Eighties, is now a live issue, with predictions that the country will become a republic by the end of the decade.

Two recent books by respected authors chart the upheavals which form the backdrop to the election campaign. In The End of Certainty, Paul Kelly, a political journalist and newspaper editor, describes how the 1980s saw the rapid collapse of the ideas Australia adopted as the basis for nationhood when it formed a federation in 1901, and which largely guided Australian life for the next eight decades. These were protection of industry, national wage regulation, 'White Australia', state intervention and shelter under an imperial wing, first Britain's then America's. Under this order, Kelly argues, Australia progressively declined, failing to maintain its high standard of living compared with other nations: 'Australia is a paradox - a young nation with geriatric arteries.'

The second book, Reinventing Australia, sold out within days of its publication last week. Its author, Hugh Mackay, a psychologist and social researcher, mirrors the turmoil in their personal lives that Australians are facing in the restructuring of their economy and national institutions. He concludes that the country has lost its bearings. Mackay portrays a nation undergoing 'pain and anxiety' as a result of changes in the roles of men and women, insecurity of jobs, greater gaps in wealth, a rapid shift towards a multi- cultural society and declining faith in banks, marriage, the law, parliament and other institutions. The breakdown of family life has produced a swelling army of children selling themselves on the streets of Sydney and Melbourne, escaping homes unable or unwilling to support them. 'Australians are embarrassed by this,' said Mackay.

Some of these may be familiar themes elsewhere, but in Australia their combined impact has been more destabilising and confusing, Mackay argues, because never before has the country had to cope with so many changes happening on so many fronts at once.

'There is almost too much readjusting going on for one generation to handle,' he said. 'Although two-thirds of Australians polled indicate . . . qualified support for a republic, no one really knows what we're letting ourselves in for. We're faced with ditching old certainties for unknown new structures of our own.'

As they prepare to vote in three weeks, it is hardly surprising that Australians are looking for steadiness. But more change seems exactly what they will get under either Labor or the coalition. Of all issues, the stark figure of 1 million unemployed, or 11 per cent, should head the agenda. But it is as if Australians have already accepted that neither party is capable of returning the country to full employment in the foreseeable future.

Mr Keating has done more than any other leader to produce the Australia of 1993. As treasurer (or finance minister) for eight years under Bob Hawke, he engineered Australia's integration into the global economy by deregulating the financial system, floating the dollar and calling on Australians to compete and export more.

Now fighting his first election in his own right as Prime Minister, he is gambling for survival by asking Australians to resist more change. He is doing so by attacking the centrepiece of Mr Hewson's policies, a proposed 15 per cent VAT-type goods and services tax, which he describes as 'the biggest life-style changing tax in Australian history'.

Mr Keating, 49, and Mr Hewson, 46, share similar backgrounds. Both grew up after the Second World War in working- class Sydney families, which they have spent their lives transcending - Mr Keating by climbing to the top of the new-look Labor Party and Mr Hewson by becoming an academic economist and consultant. The campaign has accentuated their differences.

For a political street-fighter of such renown, Mr Keating has performed poorly and falteringly so far, allowing Mr Hewson to make much of the case that, after 10 years, the government has run out of steam. Mr Hewson campaigns by jogging and walking through shopping centres, exposing himself to abuse such as that from hecklers who pelted him with tomatoes in Tasmania on Saturday.

Mr Keating initially scorned such a glad-handing style: 'Wandering up and down beaches waving to people proves nothing in Australian politics.' He chose old-fashioned set-piece speeches until the polls turned against him and his advisers began to panic. In recent days he, too, has begun appearing in shopping malls.

If the Liberal-National coalition wins, there will be little difference in Australia's economic direction, except that the changes will happen more quickly. Driven by Labor's reforms, the conservative coalition has moved further to the right. Wherever they may be taking Australia, the new ground rules - dismantled tariffs, open economy, integration with Asia - are now bi-partisan, and each side agrees there is no turning back.

(Photograph omitted)

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