Australia dumps Keating and his 'vision thing'

THE sweeping defeat of Australia's ruling Labor Party in yesterday's general election was more than a rout. It was a historic bloodbath, from which the party will take years to recover.

Australia has closed the door resolutely on the longest era of Labor rule in its history, one which began in 1983 under Bob Hawke, the populist who promised to unite the country with "consensus politics", and then continued under Paul Keating, 52, the leader Australians loved to hate. After he unseated Mr Hawke as party leader, Australians flirted with Mr Keating's brand of iconoclasm and unpredictability for four years before dumping it yesterday with a force that has left the Labor Party stunned and deeply wounded.

The country has entered a new era under the Liberal Party and its leader, John Howard, 56, an incoming prime minister renowned for his dry economics and anti-republicanism, and who once described himself as the most conservative leader the Liberal Party has ever had. While Mr Keating campaigned talking about his vision of a new, republican Australia forging links with the emerging economic giants of Asia to the north, Mr Howard talked about families, small business and youth unemployment.

Australians decided that they'd had enough of the "vision thing". They wanted answers to why their country was no longer as prosperous as they remembered, why jobs were shrinking, why their children had trouble finding work and why Australia continued to chalk up record foreign debt. Explaining the landslide defeat last night, Barry Jones, the Labor Party president and one of its most senior figures, said: "There are times when a community feels courageous and times when it feels tired and timid."

Labor strategists and historians were reaching back to 1972, when Gough Whitlam's Labor government was mauled in a landslide coalition victory, to find a defeat of a comparable scale. They were still trying to come to grips with the full impact of yesterday's disaster: a nation-wide swing against Labor of 5 per cent, a loss of more than 30 seats, leaving Labor likely to hold just 49 seats in the 148-seat House of Representatives in Canberra, and six of Mr Keating's ministers either defeated or struggling to retain their constituencies.

The swing against Labor was most decisive in the populous eastern states of New South Wales and Queensland. It reflected a progressive decline of Labor's fortunes at state government level as well. In Queensland, the state Labor government headed by Wayne Goss lost power last month, leaving New South Wales alone among Australia's six states where Labor still rules, and then by a majority of one.

It is a far cry from the heady 1980s, when the Labor Party possessed its greatest stranglehold on political power in Australia since the party's founding 100 years ago. After Mr Hawke led Labor to power in Canberra in 1983, Labor administrations followed in New South Wales, Victoria, South Australia, Western Australia and Queensland.

Mr Hawke, with Mr Keating as his Treasurer (finance minister), embarked on a programme of economic reform, which involved shedding much of the party's traditional dogma on public ownership and state intervention. They deregulated the financial markets, opened the economy to international competition and negotiated a series of accords with the unions designed to deliver economic growth with low inflation in return for wage restraint.

Business learned to live with new Labor, and so did Australians. But the love affair could not last. It had already begun to sour by the time Mr Keating took over the party leadership in 1991, in the middle of a recession which he had described as "a recession Australia had to have". It proved to be the most infamous remark of his career.

As prime minister, Keating opened up new horizons to Australia in foreign policy and introduced historic legislation to give Aborigines native title to land for the first time in two centuries. His bid to turn the country into a republic, ending 200 years of Constitutional links with the British Crown, has majority support in opinion polls.

In the end, though, Mr Keating was forced to confront the fact that, after 13 years of accords with the unions, 8.5 per cent of working Australians are still unemployed. Australia's business leaders and overseas trading partners have grown exasperated that the government has failed to introduce tougher reforms to an industrial relations scene still marked by restrictive union practices.

Mr Keating won what was regarded as his "unwinnable" election in 1993, when unemployment was 11.3 per cent, largely because the coalition, then headed by John Hewson, ran an inept campaign promising to introduce an unpopular VAT-style consumption tax. Mr Howard's victory yesterday is the crowning achievement of his 22-year political career.

Mr Howard will be tougher than Mr Keating towards the unions, and Bill Kelty, head of the Australian Council of Trade Unions, has already warned that industrial chaos could follow. Mr Howard will also try to shelve Mr Keating's timetable to hold a referendum on becoming a republic by 2001, the centenary of Australia's federation. Labor has already generated enough momentum on the issue, however, to ensure that it will remain on the national agenda.