Labor In Power

The bacon Paul Keating prophesied he would bring home with the 1988 budget turned out to be charred gristle. In the lead-up to the October 19, 1987, stockmarket crash, the economy was virtually on fire. The Reserve Bank had resisted raising interest rates until April 1988, and by then it was too late. Australia was headed for a classic "boom and bust". Thus was ensured "the recession that Australia had to have" - Treasurer Keating's lamented phrase of November, 1990.

By 1987, the Hawke government was fighting for its life. Bob Hawke craved something no other Labor Prime Minister had ever achieved - three terms in government. A miracle, preferably more than one, was needed to prevent the government being wiped out by angry voters. But out of the wilderness came great political opportunities - the environment rose to the fore, to rekindle Labor's electoral fortunes.

It was during the disastrous 1984 election campaign that Bob Hawke siezed on the idea of a Taxation Summit rather than put forward definite tax reforms. Recalling his earlier success with the National Economic Summit, the Prime Minister reached for community census. Paul Keating was furious. He could think of nothing worse than thrashing out tax in public.

Two men have dominated Australian political life for more than a decade - Bob Hawke and Paul Keating. Through the 1980s and the early 1990s, Hawke as Prime Minister and Keating as Treasurer formed one of the greatest partnerships in Australian political history. But they were also rivals, and both wanted the top job. Eventually, Paul Keating would take over - but it would take the best part of a decade.