Labour Australia

Bob Hawke, by Rennie Ellis, n.d.

State Library of Victoria, 49300286

Robert James Lee Hawke, born on December 9, 1929, was the 23rd prime minister of Australia, serving in that office from March 1983 to December 1991. He is the longest serving Labor prime minister in Australian history and the third longest serving overall after Sir Robert Menzies and John Howard. He had exceptional political qualities, enjoying high popularity for a long period, and sound judgment that saw him lead a uniquely reformist Labor government.

Hawke won four general elections and invested the Labor Party with a governing ethos that it had rarely displayed before in national politics. The beneficiary of a talented Labor cabinet, Hawke presided over a historic shift in Australia from a protectionist to a free-trade economy and the embrace of market-based reforms that reshaped the economy and increased national prosperity. In office he had an abiding interest in global events and ran a foreign policy that deepened ties with Asia, notably China, and renewed the US alliance.

His arrival and departure from the Labor leadership were filled with drama — in February 1983 after a protracted power struggle, the party leader, Bill Hayden, resigned in Hawke’s favour, and in December 1991 after a prolonged internal struggle, Paul Keating defeated Hawke in a leadership ballot. Hawke was never rejected by the people. His impressive record is four elections for four victories. He is often linked with John Curtin as the two most successful Labor prime ministers though they faced widely different challenges.

Celebrity narrative
The foundations of Hawke’s career were his long involvement with the trade union movement and his rapport with the public that was often branded by commentators as a “love affair”. He enjoyed some notoriety from his larrikin image of earlier times. Hawke served as president of the ACTU from 1969 to 1980 and at the same time became the most recognisable non-parliamentary personality in the country. He was a high-profile media personality whose life resembled a celebrity narrative and whose highly Australian personal strengths and flaws, notably his drinking, became well known to the public.

Hawke was born in South Australia, raised in Western Australia, lived in Victoria as a union official, occupied the Lodge in Canberra as prime minister and retired to Sydney. He is the only prime minister to have been born in SA and the only prime minister to have been raised in WA. His initial overtures to the Labor Party to make him leader were based on his popularity and his claim to be an election winner for a party that still carried an electoral handicap from the Whitlam era. However in the decade before ascending to the leadership Hawke was often seen as a deeply polarising figure creating loyal friends and resentful enemies across the party.

Born in Bordertown on the brink of the Great Depression, the second son to Ellie and Clem Hawke, he was raised in a religious home. Ellie was a retired schoolteacher and Clem was a Congregationalist pastor. Their first son, Neil, was nine years old when Bob was born. His biographer, Blanche d’Alpuget, said “heaven lay around Hawke in his infancy”. Clem told young Bob: “Belief in the fatherhood of God necessarily involves believing in the brotherhood of man.”

In February 1939 Neil, who had been dux of King’s College, Adelaide, died of meningitis. Clem and Ellie prayed by his bedside, exhausted and denied. Bob became the focus of their hopes. The bereaved family moved to Perth where Clem took up a ministry at the Leederville Congregational Church. Young Bob was thrilled at the train trip to the West where he discovered Perth, the city he would love and where he would be educated.

Hawke won a scholarship to Perth Modern School where he met contemporaries such as John Stone, John Wheeldon and Maxwell Newton, and developed as a cricket batsman. The family lore evolved that one day Hawke would become prime minister, a comment his mother would make, sometimes half joking, and that Hawke repeated at school. Clem’s brother Albert, Bob’s uncle, a minister in the WA government and later the state’s premier, had become a catalyst for Hawke’s interest in politics.

He matriculated in 1946 and moved to study law at the University of Western Australia, which Hawke described as an “unlimited joy” and where he became active in the Labor Club. But in his first year riding home on his motor bike Hawke felt unwell, careered off the road and landed in agony. He was taken to hospital in intense pain and had his spleen removed. Hawke said for several days he hovered “between life and death”. His mother saw his survival as a sign of special providence. Hawke said: “I firmly believed that God had spared my life.” He resolved not to waste the “new life” he had been granted but to realise “the full extent of my abilities”.

After completing his law degree Hawke studied some arts subjects, plunged into student politics and became president of the guild. He was a first-grade cricketer, a delegate to the ALP state conference and had also begun to drink. In the beer garden he was a boisterous figure. At this time he met Hazel Masterson, the younger daughter of an accountant. They got engaged but the engagement would last six years.

Hawke visited India for the World Conference of Christian Youth, where he was appalled by the contrast between the comfort of the Christians and the poverty of the people. This marked the beginning of the end of his belief in organised Christian religion, a decisive step given his parents.

In 1952 Hawke was awarded the Rhodes Scholarship, arriving at Oxford the following year. He was taken neither by Oxford’s tradition nor by the British. Graham Freudenberg said Hawke learned “to patronise the English” and only became more Australian. But his chosen study — the concept of the basic wage in Australia’s system of conciliation and arbitration — proved to be prophetic.

While at Oxford he achieved notoriety for an event that would be publicised down the years — he downed a pewter pot of beer in 11 seconds, an effort that entered the Guinness Book of Records and endeared Hawke to many Australians. After completing his Bachelor of Letters on Australia’s wage-fixation system he returned home, married Hazel in Perth in March 1956 and went to the Australian National University in Canberra to write a doctoral thesis on the basic wage.

But Hawke was quickly drawn into the world of practical action and was inducted into ACTU events, leading its president, Albert Monk, to invite him to abandon his doctorate and become research officer and advocate. Hawke accepted and the Hawkes moved to Melbourne where they would live for the next 25 years.

Melbourne in the late 1950s was the epicentre of the convulsions that had torn apart the ALP during the Split. Hawke became friends with a range of tough and able union leaders and radicals. He had an immediate impact on the Arbitration Commission and its chief judge, Sir Richard Kirby. In his first case Hawke won over the court and secured a substantial increase in the basic wage. He was hailed by the unions as a giant killer who could turn the court.

Yet he created controversy nearly everywhere he went. Hawke, now an agnostic, put his arguments with religious fervour. He was a radical who associated himself with the causes of the Left, behaved badly at social events and had become a prominent public figure. After Menzies called a snap 1963 election Hawke became the ALP candidate for the government-held seat of Corio, southwest of Melbourne. He secured a swing but failed to win the seat — it was the best outcome for Hawke with Labor doomed to another decade in opposition.

Factional contest
He returned to advocacy before the bench with success in the 1964 wage case, only to suffer a major defeat in the 1965 wage case with his aggression in court now a liability. Hawke’s opening presentation in the 1966 wage case occupied three weeks and it culminated in victory — the bench restored the principle that wages should be set according to prices and productivity, the Hawke submission. Hawke now decided to seek the ACTU presidency though he was an outsider who had never been a blue-collar worker.

His struggle against Harold Souter for the post became a robust factional contest with Hawke backed by the Left and relying upon the federal secretary of the Miscellaneous Workers’ Union, Ray Geitzelt. At Paddington Town Hall in Sydney in September 1969 Hawke prevailed 399 votes to 350. He had ascended the apex of union power.

Hawke offered the union movement a series of departures. He took the ACTU into commercial ventures, notably Bourkes ACTU store in Melbourne, pioneered the notion of political strikes and, while a champion of worker interests, he developed a reputation for settling major industrial disputes. He aroused suspicion because of the close links he formed with prominent business figures, the most notable being with Sir Peter Abeles, who became a father figure to him.

Hawke’s obsession with the media became central to his presidency. His face and voice became wired into the brain cells of the public. But Hawke paid a price: his life had become public property. Blanche d’Alpuget said: “At home, the telephone never stopped ringing for he had set out to make himself available to the news media at any hour of the day or night, drunk or sober, clothed or undressed.” There was a magic thread in his connection with people with NSW union leader John Ducker noting the “mystical touching of Hawke’s clothes” when he was in public.

One of Hawke’s most public successes was his attack on resale price maintenance under which manufacturers used their power of supply to dictate high retail prices. In co-operation with Lionel Revelman, part owner of Bourkes store, Hawke imposed a union ban on the Dunlop company, the arch defender of the practice. Dunlop capitulated. Hawke’s tactics and success, unprecedented for a union leader, excited public opinion and alarmed the Coalition government of Billy McMahon.

Hawke’s use of union power became contentious when he led the ACTU into a campaign of direct action against the 1971 Springbok rugby union tour, having told the SA government the trade unions would only accept teams chosen on a non-discriminatory basis. The matches required a vast police presence to manage the protests. Meanwhile Hawke’s political involvement intensified with the reform of the Labor Party under Gough Whitlam. He campaigned strongly for Labor at its December 1972 election victory with Whitlam forming the first ALP government for 23 years.

From the start there was tension between Hawke and the new prime minister. In mid-1973 Hawke sought and won the post of ALP president, setting up the party for a clash of egos. “I was ambitious for it,” Hawke said of the office. Hawke was now leader of both the industrial movement and Labor’s organisational wing while Whitlam led the parliamentary wing. When criticised for seeking both roles, Hawke replied with a phrase that became famous: “If you can’t ride two horses at once, you shouldn’t be in the bloody circus.”

Tensions deepened
Relations between the Whitlam government and the ACTU quickly deteriorated, fanned by the government’s 25 per cent tariff cut. After Whitlam’s re-election in 1974 the tensions deepened with Hawke becoming a major critic of Whitlam’s policy and political priorities, the backdrop being rising unemployment and inflation. During these years resentment towards Hawke from the parliamentary Labor Party was seeded and destined only to grow. After Hawke admitted on national television he had a drinking problem, Whitlam was openly satirical, declaring future ALP executive meetings could now become “like gatherings of Alcoholics Anonymous”. Tensions were exacerbated by a new development in Hawke’s life — his passionate embrace of the cause of Israel. He formed close bonds with many Jewish leaders and campaigned fiercely for the Soviet Union to allow the immigration of Jews to Israel, to end a situation he saw as a grave injustice.

By 1975 Hawke had reached the zenith of his authority as ACTU president yet the Whitlam government was beyond salvation. When the 1975 constitutional crisis culminated with the government’s dismissal on November 11, Hawke opposed demands for a national strike. Whitlam called upon people to “maintain your rage” but Hawke sought to calm the nation. The radical became a peacemaker.

The day after Labor’s defeat at the December 13 election Whitlam summoned Hawke to the Lodge, said he had spoken to Bill Hayden, who had no inclination to become leader and, given this situation, Hawke should lead the party. Whitlam’s statement was premature but testified to Hawke’s unique status. But an excited Hawke mismanaged the situation and provoked a caucus backlash. Whitlam remained leader but the defeated party sank into a crisis.

It was revealed that during the campaign Whitlam and ALP national secretary David Combe had negotiated to secure a $US500,000 donation from Iraq’s Baath Socialist Party. The money had never arrived. When informed, Hawke was appalled by Labor’s dealing with such a repugnant regime. As party president, however, he played a critical role in managing the ALP through the crisis and chairing the federal executive meeting that settled for those involved to be severely reprimanded.

The Labor Party now entered a troubling phase as Malcolm Fraser became a dominating prime minister facing a diminished Whitlam. Hawke was the subject of repeated speculation about when he would enter parliament. While his character as an ambitious pragmatist became more apparent, his reckless behaviour when drunk was a liability. D’Alpuget wrote: “He was and had been for years a loathsome drunk, poisoned, savage, a man possessed.” Many Labor figures felt his personal behaviour meant he would never lead the party.

‘Sense of destiny’
After Labor’s 1977 election defeat Bill Hayden became leader. Hawke recognised the pivotal decision of his life — whether to enter parliament — was approaching. He said: “The truth is that I felt a sense of destiny.” Referring to his relationship with the people, Hawke felt “the rapport between us”. In September 1979 he announced he would be a candidate for the seat of Wills and he won ALP preselection the next month.

Hawke approached political life with a deep conviction — that he could bring people together. In 1979 he delivered the annual Boyer Lectures under the title “The Resolution of Conflict.” In May 1980 Hawke decided to give up drinking. His challenge was described by d’Alpuget: the need “to smash up the old Bob Hawke and create a new one”. Hawke did not touch alcohol for the next 13 years.

At the 1980 election Hayden improved Labor’s position but fell short. With Hawke having entered parliament the scene was set for their power struggle. In mid-1982 with Hawke pressing him, Hayden initiated a partyroom vote. This forced the NSW Right and its leading figure, Paul Keating, who had hoped to succeed Hayden as leader, into a critical decision. Keating accepted the logic of right-wing politics — he supported Hawke, aware this would terminate his own prospects of succeeding Hayden. In the ballot Hayden prevailed 42-37 but the narrow margin left him more vulnerable.

Labor’s disappointing performance in the December 1982 Flinders by-election — with Fraser retaining the government-held seat — sent waves of pessimism through the ALP. The upshot came on February 3, 1983, the most dramatic day since Whitlam’s dismissal, when Hayden stood down in Hawke’s favour. The vital negotiator had been ALP Senate leader John Button. Meanwhile Fraser, intent upon an election, had left for Yarralumla to see the governor-general about 25 minutes before Hayden made his resignation announcement in Brisbane.

New direction
Liberal strategists were stunned to find their opponent was Hawke, not Hayden. And Hawke, having taken the leadership, was thrilled, controlled and supremely confident. “I was certain we would win,” he said. Hawke had his campaign theme prepared: reconciliation, recovery and reconstruction.

Australia was coming to the end of an era — it was in recession with an annual inflation rate of 11 per cent and unemployment at just over 10 per cent. Hawke tapped the mood for hope and change. He offered a new direction from the Fraser era with spending and tax cuts to break the recession. Labor’s campaign slogan was: “Bob Hawke — Bringing Australia Together.” Hawke’s quasi-spiritual message of reconciliation addressed the emotional condition of the country.

Hawke won the March 5, 1983 election with a 25-seat majority, bigger than Whitlam’s 1972 victory. The two-party-preferred result was Labor 53.5 per cent to the Coalition’s 46.5 per cent. The ALP’s primary vote was 49.5 per cent, reflecting Hawke’s success in winning “Middle Australia”.

During his first term Hawke demonstrated he would be a prime minister of substance and longevity. His performance in office surprised many of his supporters who knew his popularity but doubted his governing capacity. Hawke set the strategic direction of his government and enshrined communications with the public at its heart. Six months after winning his personal approval rating hit 70 per cent and remained high.

Hawke’s incomparable skill was to project both as a strong leader and an ordinary bloke. He remained Bob to most friends. Blessed with an impressive personal office and a talented cabinet — with treasurer Keating the pivotal cabinet minister — Hawke delegated to his ministers but retained oversight through the cabinet process. He mastered his briefs, kept a clean desk, exuded a personal discipline, camped in the centre of Australian politics and put into action his “consensus” philosophy.

This was on display at the April 1983 National Economic Summit — a gathering of business, union and community leaders — in the House of Representatives at which Hawke won support for Labor’s approach of tackling inflation and unemployment simultaneously. Hawke used his authority to change the nation’s psychology, persuading business and unions to accept concessions to find a middle path. It signalled his corporatist method as PM — to negotiate outcomes via peak groups.

The opening year revealed the two forces that would guide the Hawke government. The first was the ALP-ACTU Prices and ­Incomes Accord, a decision-making compact between the government and union leadership. For the entire period of the Hawke government (and the Keating government) there was an Accord with the trade union movement. This was fundamental to its nature. The Accord would underwrite many economic reforms as well as solidify the institutional base of the party.

The second force was the December 9, 1983, decision to float the Australian dollar, the single most important economic decision in decades, accompanied by deregulation of the financial system. It meant the market would set domestic interest rates and the exchange rate while exchange controls on the movement of capital inside and outside Australia would be abolished. This transformed the economics and politics of Australia. It signified the demise of the old Australia — regulated, protective and introspective.

These decisions revealed a Labor government that would convert its union ties into a decision-making plus and exposed Hawke and Keating as almost revolutionary Labor figures defying their party’s history by embracing market forces and international capital as the allies in Labor’s governance. This became widely known as the Hawke-Keating model. It meant that financial markets operated on market forces and the labour market operated on political agreement. The Accord and the float underpinned the reform agenda during 13 years of Hawke and Keating prime ministerships.

Financial deregulation generated a sharemarket and investment boom, locked Australia into the disciplines and excesses of global markets and stimulated the eruption of new and sometimes reckless entrepreneurs. The government used the Accord to secure wage restraint, personal income tax cuts and government social programs. When Hawke sought re-election in late 1984, the inflation rate had been halved and was heading towards 5 per cent and 270,000 jobs had been created.

The first term was conspicuous for the creation of Medicare as a universal health insurance system, a refurbished Medibank from the Whitlam era. This was the single most important social reform of the Hawke era. It guaranteed all Australians access to hospital care and to medical consultations in the form of bulk billing. The government won a decision in the High Court upholding the Commonwealth’s external affairs power to halt the Gordon-below-Franklin dam in Tasmania, the decisive environmental issue of the time. It also introduced a limited form of assets test on the pension.

Breakdown
Hawke was re-elected in late 1984 with a majority reduced from 25 to 16 seats, a clear victory that fell short of the expectations the party and Hawke had held earlier. Hawke, in fact, had been destabilised on emotional grounds when he discovered one of his daughters, Rosslyn, was a drug addict, prompting his breakdown at a meeting with the Malaysian prime minister, Mahathir Mohamad. He wept at a press conference before startled journalists. The election campaign was too long, Hawke was below his best and he underestimated the Opposition Leader, Andrew Peacock. While his vulnerability had been exposed, Hawke’s recuperative ability would be impressive.

Hawke’s second term was dominated by two epic events — a bitterly contested tax reform package and a loss of international confidence in the Australian economy that resulted in the cabinet’s embrace of tough fiscal reforms. The political drama was provided by the Hawke-Keating relationship that fluctuated between concord and hostility.

Hawke called a National Taxation Summit for mid-1985 but the pre-summit events were shaped by Keating, who campaigned for a broad-based consumption tax. Keating wanted to force a once-in-a-generation reform to indirect taxation but faced the problem that Hawke’s summit required a consensus outcome. Hawke stayed watchful and sceptical.

The summit opened on July 1, 1985, and by the third day Hawke moved — he visited the ACTU leaders, Simon Crean and Bill Kelty, and then vetoed Keating’s position on the grounds it lacked sufficient support from either unions or business. In public Hawke and Keating praised each other but in private the seeds of discord were sown. Keating devised a Plan B and it was authorised at a full ministry meeting ordered by Hawke in September 1985.

The historic package saw the top marginal rate cut from 60 to 49 per cent and for average wage earners from 46 to 40 per cent. New progressive taxes on capital gains and fringe benefits were introduced along with the closing of tax loopholes. Double taxation of company dividends was abolished with a lift in the company rate to help finance the reform. There was opposition to the package from business and employers but it was legislated and in place for the 1987 election. The Liberal Party believed the tax package would help secure its victory.

The government was shaken by the 40 per cent depreciation in the Australian dollar during 1985 and 1986, climaxing with Keating’s declaration of May 1986 that Australia risked becoming a “banana republic”. The dollar fell US3c and Hawke was alarmed at Keating’s remarks. The current account deficit had risen to around 6 per cent of GDP, revealing Australia’s structural economic weakness and its reliance on foreign borrowings to sustain living standards. The nation was living beyond its means.

The crisis deepened on July 28, 1986 when the dollar experienced a further sharp decline. Facing an emergency the government reopened budget decisions, sought more real wage restraint, imposed tough new spending cuts and a hefty reduction in the budget deficit. The decisions of Hawke, Keating and cabinet’s expenditure review committee meant a sharp recasting of policy — a new era of spending restraint to return the budget to surplus and restore financial market confidence. Under the Accord real wages would fall by more than 7 per cent in five years, making wages policy a powerful instrument.

The government survived what could have become its termination point. Hawke and Keating had persuaded the caucus and unions to accept policies once anathema to the Labor faithful. Hawke’s consensus assumed a new meaning — to help Australia make the transition to a competitive economy. With the government battered in political terms Hawke returned to a vigorous campaign phase to restore its fortunes.

Over the next year the government recovered sufficiently for Hawke to take the calculated risk of an early election in July 1987. His decision was based on two foundations: a crisis among his opponents triggered by a campaign by Queensland National Party premier Joh Bjelke-Petersen to make himself prime minister, leading to the severing of the Liberal-National Coalition in April 1987; and the well-received Keating mini-budget of May 1987 that continued the government’s tough-minded economic reforms.

The mini-budget strategy affirmed the government’s credibility as responsible manager during an era of economic adversity. It involved more public-sector savings and asset sales. While opposition leader John Howard campaigned effectively he was burdened by the “Joh for Canberra” push that damaged the Liberal Party. At this point the government’s ability to turn harsh economic reform into political credibility reached its zenith.

The election was the first to be shaped by Australia’s transition to an open economy. The result was tight with the two-party-preferred vote showing Labor at 50.8 per cent to the Coalition’s 49.2 per cent. But Labor increased its majority from 16 to 24 seats. Hawke felt vindicated after his disappointing 1984 effort. He became the first Labor prime minister to win three elections. Labor’s success was shaped by Hawke’s popular appeal and Keating’s demolition skills. This was a more impressive effort by Hawke than his 1983 and 1984 wins given Labor had been re-elected after a current account deficit crisis and a harsh regime of wage restraint and spending reductions.

Hawke’s third term was dominated by the late 1980s consumption and investment boom, high interest rates and miscalculations in monetary policy that would lead eventually to recession. It saw the Hawke-Keating partnership enter a flashpoint of danger. But Hawke now invested foreign policy with renewed zeal.

Since coming to office Hawke had established effective relations with United States Republican president Ronald Reagan assisted by his personal relationship with secretary of state George Schultz. His ability as a Labor leader to enjoy friendly ties with a Republican president was conspicuous. He made five visits to the US while Reagan was president. From the start Hawke sought to strengthen the ANZUS alliance within a framework of greater Australian defence self-­reliance. It fell to defence minister Kim Beazley to implement this policy and, in robust exchanges with the Reagan administration, to persuade them it would enhance the alliance.

Hawke faced two crises with the Americans in his early years — their testing in the Pacific of the MX intercontinental missile and the nuclear warships ban imposed by New Zealand leader, David Lange. The Labor Party revolted against any Australian co-operation on the MX test and Hawke chose the tactic of retreat rather than risk greater damage to the alliance. The Americans, led by Schultz, did not press the issue — evidence of mutual trust.

Hawke opposed Lange’s “no nuclear ships” policy and reported that Lange had told him the Left had imposed the policy on his party and there was nothing he could do about it. Hawke’s assessment of his New Zealand counterpart soon verged on contempt. The US terminated defence ties with New Zealand, fracturing the trilateral compact under ANZUS. Under Hawke, Australia kept separate bilateral defence ties with both countries. At the same time his government displayed its independent approach through initiatives on regional and global arms control, support for the idea of a South Pacific Nuclear-Free Zone and its initiative to secure a Cambodian peace settlement.

In 1985 the Commonwealth leaders accepted Hawke’s initiative to create a small group to encourage a non-racial government in South Africa. The chair became former prime minister Malcolm Fraser, nominated by Hawke. In the face of complete intransigence by South Africa the Commonwealth backed stronger international sanctions and Hawke played an instrument role in sponsoring investment and bank restrictions in order to break the apartheid system. The dam wall cracked in 1990 when president F.W. de Klerk announced the African National Congress would become a legitimate political party and Nelson Mandela would be freed from prison after 27 years. Mandela visited Australia in October 1990. In Hawke’s memoirs he said Mandela told him: “I want you to know Bob, that I am here today, at this time, because of you.”

Global trade
From the start Hawke, influenced by his economics adviser, Ross Garnaut, supported a new round of multilateral trade liberalisation talks and, in this cause, his government instigated the formation of the Cairns Group of agricultural trading nations. In Seoul in 1989 he launched an initiative to create an Asia Pacific Economic Co-operation forum to achieve faster regional trade liberalisation and become a catalyst for freer global trade. The first APEC meeting was held in Canberra in late 1989 and the concept was further developed by Keating when he became prime minister.

But Hawke’s most significant impact came in relations with China. Its new economic policy pioneered by Deng Xiaoping was bearing fruit and an economic complementarity was apparent between Australia and China. Hawke visited China in 1984 and 1986 and developed personal relationships over many hours of conversation with premier Zhao Ziyang and Communist Party secretary Hu Yaobang, though both men would later face their own demise within the system. At home Hawke used the phrase “enmeshment with Asia” to convey his vision.

He began by raising with China’s leaders bilateral co-operation in the iron and steel sectors which led to a joint venture in WA. Hawke appointed Garnaut as ambassador to China, raised the possibility of Chinese students coming to Australia to study and promoted the expanding trade relationship. But after the Chinese leadership unleashed violence in Tiananmen Square in June 1989 Hawke was distraught and relations collapsed. He took a unilateral decision to extend the visas of 30,000 Chinese students in Australia, much to the alarm of the Immigration Department. Hawke wept at a service for the victims and had no further contact with the leadership while in office.

In 1988 Hawke presided over the move of the parliament to its new and permanent building on Capital Hill with its opening by the Queen. The government transformed university policy the same year by creating a system of income-contingent loans with repayments when individuals entered the workforce. Known as the Higher Education Contribution Scheme it provided an equitable means of financing higher education based upon a major expansion in numbers. Over the decades many countries adopted this Australian model.

The Hawke government launched a new agenda for multicultural Australia that kept the balance between unity and diversity but cast multiculturalism as a social and economic plus. Hawke was a sustained advocate for a non-discriminatory immigration intake and saw diversity as a source of “richness, vitality and strength”. The government lifted the tempo of environmental commitments — protecting North Queensland rainforests, expanding Kakadu National Park and denying mining at Coronation Hill in the Kakadu area.

The August 1988 budget, the first in the new building, had a healthy surplus as its centrepiece. An ebullient treasurer said it was “bringing home the bacon”. Keating’s determination to replace Hawke during the term was widely known and he speculated about leaving politics if he was denied. Within hours there was a Hawke-Keating firestorm. They met at the Lodge the following Sunday with Keating arguing for a transition and Hawke saying he would stay to fight the next election. While Keating had significant support in the caucus, Hawke still held the majority.

Keating subsequently visited Hawke and asked for an arrangement. They met at Kirribilli House on November 25, 1988 with two witnesses, Sir Peter Abeles and Bill Kelty. The agreement was that Hawke would lead the government to the fourth election and, if he won, he would stand down in Keating’s favour during the next term. The deal was to be secret; it meant the Hawke-Keating team was in place for the 1990 election.

Restore stability
The nation was on a long party that was coming to an end. At the peak of the boom in 1989, unemployment fell to 5.6 per cent compared with 10.4 per cent in 1983. But the government and Reserve Bank of Australia were operating in unknown terrain — how far to increase interest rates in a de-­regulated economy to restore stability but avoid recession. In January 1990 the government began to ease rates to ensure they were on a downward trajectory for the election.

But Hawke’s fortunes were assisted by the May 1989 revolt in the Liberal Party that saw Howard ­depose for Peacock, setting Labor’s hopes racing. By early 1990 polls confirmed the transition had not succeeded. Facing the most dangerous pre-election situation of his career Hawke called a March 1990 election, aware that defeat was a serious possibility.

Hawke was disciplined and effective in the campaign, outperforming Peacock, exploiting Liberal divisions and benefiting from Labor’s environmental record designed to secure a high level of Green preferences. Labor was returned with its notional seats on the new boundaries reduced from 18 to eight seats. The national two-party-preferred swing to the Coalition was only 0.9 per cent, a poor result given interest rates had been around 17 per cent. Labor was convinced the Liberal leadership change had been a blunder for the Coalition. Labor’s victory was built on minor-party preferences in a validation of its pro-green strategy backed by Hawke and environment minister Graham Richardson.

The result was a triumph for Hawke — his fourth election victory, a Labor record that may never be broken. But history would show Labor had sneaked backed into office just ahead of the recession.

In April 1990 Hawke, accompanied by ageing veterans, visited Gallipoli for the 75th anniversary of the ANZAC campaign and, visibly moved, walked the battlefield. In early 1991 after Saddam Hussein’s invasion of Kuwait and his defiance of United Nations Security Council resolutions, Hawke authorised Australia’s most important military commitment since Vietnam. For Hawke, the argument was irrefutable — it was a repelling aggression; it involved support for the alliance since US President George H W Bush was spearheading the action; but, more decisively, it meant support for the UN authorised position. In November 1990 the Security Council passed its “war resolution” approving “all necessary means” to reverse the invasion.

Australia’s contribution was a modest three ships; Hawke had considered five but, worried about casualties, opted for caution. For the Labor Party and the Left — still shaped by the Vietnam experience — this was a turning point. Many feared a disaster but the war was short and successful. While Australia’s contribution was small, the significance of the decision was great — the nation had moved beyond the psychology of Vietnam.

On November 29, 1990 the national accounts showed two quarters of negative growth: the country was in recession. Keating said “this is a recession that Australia had to have”. The “no recession” promises made by Hawke and Keating at the election were violated. The government’s fortunes were sinking. Hawke apologised for the recession.

Keating precipitated a showdown with Hawke a week later when he made a series of critical remarks at the annual Press Gallery dinner on 7 December 1990. Their relationship was on the brink of termination.

They met on January 31, 1991 and Hawke told Keating he had decided to remain prime minister for the full fourth term — a breach of the Kirribilli agreement. Hawke said he believed he had a better chance of winning the next election than Keating.

The major policy achievement in Hawke’s fourth term was his March 1991 industry statement that built upon the May 1988 statement and, in effect, dismantled the remaining tariff wall.

Hawke said the decision would help to keep inflation low, create more jobs and make Australia internationally competitive. It ended the century of Australian protectionism and brought to a high tide the Hawke-Keating mission to remake Australia as an open economy.

Keating broke with Hawke on May 30. At the subsequent leadership ballot Hawke prevailed 66-44. Hawke survived but he was wounded and discredited by the revelation of the broken Kirribilli pact. Labor was a house divided against itself. Keating went to the backbench to prepare for a second challenge, leaving a weakened government.

Despite the trauma significant decisions were taken. In April 1991 the Industrial Relations Commission rejected a Keating-Kelty agreement to lift the superannuation contribution from wages from 3 to 6 per cent. Their fallback had been that the government, if necessary, would legislate the higher superannuation contribution and include a future target of 9 per cent. When Keating went to the backbench Kelty asked Hawke to honour the arrangement. Hawke agreed and the 1991 budget brought down by new treasurer John Kerin involved a mandatory superannuation scheme, one of the far-reaching structural changes of the era.

The recession had a strange political legacy — it damaged Keating’s reputation yet it damaged Hawke, as incumbent, even more. But Hawke’s crucial mistake was his ineffective response in parliament to the November release by opposition leader John Hewson of the Fightback! manifesto. The Hawke government, perhaps for the first time, seemed lost and immobilised.

Under intense pressure from senior ministers to resign with dignity, Hawke refused. He decided he would force the party to accept its own responsibility. Statistics released at the time showed unemployment had climbed to 10.5 per cent, the highest since the Depression. Hawke initiated a leadership ballot on December 19 and lost narrowly, 51 votes to 56.

In defeat Hawke gave a superb nationally televised media conference with Hazel sitting at one side. He said he hoped he would be remembered “as a bloke who loves his country, still does, and loves Australians”. He said the caucus vote was a decision “my colleagues will have to live with”.

Hawke resigned from parliament in February 1992. He had to create a new life for himself. In 1993 he revisited China and played a seminal role in helping to establish the Boao Forum for Asia. He developed close business ties in China and made more than 100 visits. He travelled to the Middle East and held talks in pursuit of peace. In retirement Hawke was active in a range of business and consultancy roles. In 1998 the University of South Australia established the Bob Hawke Centre.

The marriage of Bob and Hazel finally ended; it had been unstable for many years. They separated in 1994 and Hawke married Blanche d’Alpuget the next year. They had first met in 1970 and, in d’Alpuget’s words, “had been lovers on and off for almost 20 years”. They lived at Northbridge in Sydney. Over the past decade Hawke was active in supporting many Labor campaigns.

In retirement he periodically saw Paul Keating and they fully reconciled before his death. In 2009 the Labor Party gave Hawke life membership.