Hawke–Keating Government

The Hawke–Keating Government refers to the Federal Government of Australia from 11 March 1983 to 11 March 1996. The Government was formed by the Australian Labor Party, and was led first by Bob Hawke as Prime Minister and then by Paul Keating. The Hawke–Keating Government began after the Fraser Government was defeated at the 1983 election, and ended with defeat at the 1996 election, which ushered in the Howard Government. Ministers who have served under Hawke or Keating but not both have often erroneously refer to as Hawke–Keating Government ministers.

Hawke Prime Ministership (1983–1991)

The Honourable Bob Hawke AC GCL
23rd Prime Minister of Australia
In office 11 March 1983 – 20 December 1991
Monarch	Elizabeth II
Governor-General	Ninian Stephen Bill Hayden
Deputy	Lionel Bowen Paul Keating Brian Howe
Preceded by	Malcolm Fraser
Succeeded by	Paul Keating

The inaugural days of the Hawke government were distinctly different from those of the Whitlam era. 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.^[1] Hawke convinced the Labor caucus to divide the ministry into two tiers, with only the most important Ministers attending regular cabinet meetings. This was to avoid what Hawke viewed as the unwieldy nature of the 27-member Whitlam cabinet. The caucus under Hawke exhibited a much more formalised system of parliamentary factions, which significantly altered the dynamics of caucus operations.

Hawke and Keating formed an effective political partnership despite their differences. Hawke was a Rhodes Scholar; Keating left high school early.^[2] Hawke's enthusiasms were cigars, horse racing and sport whereas Keating preferred classical architecture, Mahler symphonies, and antique collecting.^[3] Hawke was consensus-driven whereas Keating revelled in debate. Hawke was a lapsed Protestant and Keating was a practising Catholic. While the impetus for economic reform largely came from Keating, Hawke took the role of reaching consensus and providing political guidance on what was electorally feasible and how best to sell it to the public. In his first term, Hawke set the record for the highest approval rating on the ACNielsen Poll (a record which still stands as of 2008).^[4]

Economic reform included the floating of the Australian dollar, deregulation of the financial system, dismantling of the tariff system, privatised state sector industries, ended subsidisation of loss-making industries, and the sale of the state-owned Commonwealth Bank of Australia. A fringe benefits tax and a capital gains tax were implemented.

The government benefited from the disarray within the Liberal opposition after the resignation of Fraser. The Liberals were divided between supporters of John Howard and Andrew Peacock. The conservative Premier of Queensland, Sir Joh Bjelke-Petersen, also helped Hawke with his "Joh for Canberra" campaign in 1987, which proved highly damaging for the conservatives. Exploiting these divisions, Hawke led the Labor Party to comfortable election victories in 1984 and 1987.

Hawke's Prime Ministership saw friction between himself and the grassroots of the Labor Party, who were unhappy at what they viewed as Hawke's iconoclasm and willingness to co-operate with business interests. The Socialist Left faction, as well as prominent Labor figure Barry Jones, offered severe criticism of a number of government decisions. He has also received criticism for his 'confrontationalist style' in siding with the airlines in the 1989 Australian pilots' strike.^[5] The Hawke Government did, however, significantly increase the social wage^[6][7][8] as part of its Accord with the trade unions, a social democratic policy continued by the Keating Government. Improvements to the social wage included improved affordability of and access to key services such as child-care and health, together with large increases to payments for low-wage and jobless families with children.^[9] Indexation of child payments was also introduced, while coverage of occupational superannuation pensions was also widened significantly, from 46% of employees in 1985 to 79% in 1991.^[10]

1983 ABC news report on the first day of trading with a floating Australian dollar.

During the course of the Eighties and early Nineties, government benefits substantially improved the incomes of the bottom 20% of households, with rent assistance, family payments, and sole parent benefits all substantially boosted in real terms.^[11] According to some historians, when examining the economic reforms carried out during the Eighties in both Australia and New Zealand, “some modest case can be mounted for Labor in Australia as refurbisher of the welfare state”.^[9] From 1983 to 1996, improved service provision, higher government transfer payments, and changes to the taxation system “either entirely offset, or at the very least substantially moderated, the increase in inequality of market incomes over the period”.^[9] During the period 1983 to 1996, Australia was one of the leading OECD countries in terms of social expenditure growth, with total social spending increasing by more than four percentage points of GDP compared to an OECD average of around 2.5 percentage points.^[12]

“Active society” measures were also introduced in an attempt to limit the growth of poverty and inequality. From 1980 to 1994, financial assistance for low-income families in Australia increased from 60% of the OECD average in 1980 to 140% in 1994,^[9] and it is argued that the social and economic policies delivered under the government-trade union Accord had some substantial success in reducing family poverty,^[13] as characterised by reductions in child poverty from the early Eighties onwards.^[9] According to the OECD, the percentage of Australians living in poverty fell during the Hawke Government's time in office, from 11.6% of the population in 1985-86 to 9.3% in 1989-90.^[14] Child poverty also fell dramatically under the Hawke–Keating Government, with the percentage of children estimated to be living in poverty falling from nearly 16% in 1985 to around 11% by 1995.^[15] As noted by Brian Howe, social policy under Hawke was effective in reducing poverty and protecting those most vulnerable to massive social and economic change. According to some observers,

“improvements in government policies and programs in income support payments, and services such as education, health, public housing and child care, and the progressive nature of the income tax system, have all contributed to the result that Australia appears to have become a more equal society over the period from 1981-82 to 1993-94”.^[16]

The 1987 budget extended rental assistance to all Family Allowance Supplement recipients together with longer-term unemployment benefit beneficiaries. A family package was introduced that same year, designed not only to improve the adequacy of welfare payments for low-income families, but was also designed to ensure that participating in part-time work or full-time work didn’t lead to a loss in income support. The Hawke Government’s achievements in boosting financial support to low-income households were substantial, with the family assistance package bringing significant benefits to millions of low-income families in the years ahead. As noted by Ann Harding at the University of Canberra

“To appreciate the scale of these changes, let us look at the Browns, a hypothetical family. Mr Brown works for a low wage, Mrs Brown looks after two children, and they rent their home. In late 1982 the Browns received just under $13 a week in family allowance – about $25 per week in 1995-96 dollars. In contrast, in January 1996 a family like the Browns would receive $93.10 in family payment and up to $40 a week in rent assistance. You put this in perspective; such a family would have received assistance worth about 4 per cent of average weekly ordinary time earnings in November 1982, but 20 per cent of such earnings in early 1996. We are thus talking about very major changes in the amount of assistance available to low-income working families with children”.^[16]

A cheque for Ash Wednesday bushfire relief to South Australian Premier John Bannon is presented by Hawke in April 1983.

The Hawke Government carried out a series of other measures during its time in office. Upon taking office in 1983, a Community Employment Program was set up, providing a large number of work experience opportunities in the public and non-profit sectors. Together with smaller programs such as the Community Youth Support scheme, this played a major role in both alleviating and reversing the effects of the 1982 economic recession.^[16] A Home and Community Care Program was established to provide community-based services for frail aged people and people with disabilities,^[17] while to combat homelessness a Supported Accommodation Assistance program was introduced to assist those who are homeless, at risk of homelessness, or escaping domestic violence.^[18] A bereavement payment equivalent to fourteen weeks pension for the surviving member of a pensioner couple was also introduced,^[19] together with an Asylum Seeker Assistance scheme to provide help to applicants for refugee status in need.^[10] A wide range of measures were introduced to protect the environment,^[16] such a Landcare program, which was established to promote environmental conservation.^[20] In addition, spending on housing, education, and health was increased, while an anti-poverty trap package was introduced in the 1985 budget. That same year, rent assistance was extended to include ‘unemployed’ and low-income ‘working’ families.^[21] The 1985 Tax Summit led to a reduction of loopholes and distortions in the tax system, while the Family Assistance Package (introduced in 1987) significantly strengthened the amount of income support for hundreds of thousands of low-income families. Some sole parents and unemployed persons benefited from other measures designed to reduce barriers to workforce participation, deal with their housing costs, and increase their incomes. In addition, a new Child Support Agency was established, designed to provide a more efficient system of maintenance and tackle child poverty. Funding for public housing and disadvantaged students was also considerably increased.^[16] Various measures were also introduced which enhanced the rights of women in the workplace. The Sex Discrimination Act of 1984 prohibited sex discrimination in employment^[22] while the Affirmative Action (Equal Employment Opportunity for Women) Act of 1986 required all higher education institutions and all private companies with more than 100 employees to introduce affirmative action programmes on behalf of women.^[23] A year later, equal opportunity legislation for the Commonwealth Public Service was introduced.^[16] In 1986, a Disability Services Act was passed to expand opportunities for the participation of disabled persons in local communities.^[24]

A major cash benefit for low-income working households, known as the Family Allowance Supplement, was introduced which reduced poverty and provided a better-graduated system of family income support.^[25] This new benefit significantly boosted the level of income support for families principally dependent on social welfare benefits. The supplement was also made fully payable, tax-free, to low-income families who were principally reliant on wages, albeit for those who earned below a certain amount. Above that amount, the payment rate fell by 50 cents for every additional dollar of other income until it vanished entirely from families approaching the middle-income range. In addition, the social security rent allowance was extended to these families if they lived in private rental accommodation. The rates of payment were also index-linked to inflation, while additional benchmarks were fixed in order to help achieve and maintain relativities with community earnings levels. As a result of the FAS, major improvements were made in the financial position of working families on low incomes.^[16] In his memoirs, Hawke described this as “the greatest social reform of my Government, and perhaps of all Labor governments”.^[26]

In health, the Whitlam Government's universal health insurance system (Medibank), which had been dismantled by Fraser, was restored under a new name, Medicare while a Pharmaceutical Allowance was also introduced to help pay towards the cost of prescription medicines.^[27] The government's response to the AIDS concern is also considered to have been a success.^[28] In addition, nursing education was transferred from hospital-based programs to the tertiary education sector, while Australia’s first ever national mental health policy was proclaimed.^[16]

In the later years of Hawke's prime-ministership, 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.

In education, the Hawke Government sought to significantly widen educational opportunities for all Australians. Increased funds were made available for most schools, while both TAFE and higher education were expanded. Measures were taken to improve educational opportunities for Aborigines, as demonstrated by the government providing funding of almost $100 million from 1984 to 1992 for parental education, student support and tutorial assistance through its Aboriginal Education Direct Assistance Program. In addition, an Aboriginal and Torres Strait Islander Capital Grants Program was established to construct and renovate school buildings in remote area communalities. Government expenditure on education under Hawke also rose significantly. On a per-student basis, the increase in Commonwealth funding amounted to 136% for government schools and 71% for non-government schools. A Participation and Equity Program was also established which provided around $250 million mainly to schools with low retention to the end of secondary education from 1983 to 1987.^[16]

Student numbers in training and vocational education (mainly in TAFE colleges) rose by over 25% under Hawke. University enrolments rose by almost 57%, from 357,000 in 1984 to 559,000 in 1992. The percentage of students in secondary education rose substantially, from 35% in 1982 to 77% in 1992, partly as a result of greater financial assistance to students from low-income backgrounds.^[16]

To increase workforce participation, a Jobs, Education and Training Program (JET) for sole parents was launched, comprising a package of measures aimed at liberalising income tests measures, ensuring access to child care, and upgrading the skills of single parents. This reform (which haws introduced with the intention of combating high levels of poverty amongst single parents) helped to enable many single parents to take on part-time work and increase their earnings. Between 1986 and 1996, according to one estimate, the percentage of single parents receiving 90% or more of their income from benefits fell from 47% to less than 36%. Other important social security initiatives introduced for the unemployed included the introduction of the New Employment Entry payment, while some administrative obstacles and income tests were relaxed.^[16]

In its first months in office the Government stopped the construction of the Franklin Dam, on the Franklin River in Tasmania, responding to 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, and Hawke's last, in 1990. During Hawke’s last months in office, employment assistance programs were expanded, while a Building Better Cities program was launched, promising higher investment in transport and other infrastructure, mainly in outer urban and regional areas.^[16] In December 1991, Paul Keating replaced Hawke as Australian Labor Party leader and Prime Minister after winning a leadership ballot.

Keating Prime Ministership (1991–1996)

The Honourable Paul Keating
24th Prime Minister of Australia
In office 20 December 1991 – 11 March 1996
Monarch	Elizabeth II
Governor-General	Bill Hayden William Deane
Deputy	Brian Howe Kim Beazley
Preceded by	Bob Hawke
Succeeded by	John Howard

The Government introduced the Superannuation Guarantee in 1992 as part of a major reform package addressing Australia's retirement income policies. Since its introduction, employers have been required to make compulsory contributions to superannuation on behalf of most of their employees. This contribution was originally set at 3% of the employees' income, and has been incrementally increased.

The Keating government introduced mandatory detention for asylum seekers with bipartisan support in 1992.^[29] Mandatory detention would become increasingly controversial under the successive Howard coalition government.

In 1993 the Government passed the Native Title Act in response to the High Court's decision in Mabo v Queensland. It was Australia’s first national native title legislation.

Most commentators believed the 1993 election was "unwinnable" for Labor; the government had been in power for 10 years, the pace of economic recovery was slow, and there was an electorate perception of Keating as arrogant. However, the government under Keating's leadership succeeded in winning back the electorate with a strong campaign opposing Fightback and its GST, and a promised focus on creating jobs coming out of the recession. Keating led Labor to an unexpected election victory, and his "true believers" victory speech^[30][31] became famous.

In its second term of office Graham Richardson resigned involuntarily in March 1994.^[32] This was at the same time as the involuntary resignation of Ros Kelly over the Sports rorts affair.^[32] Following the resignation of treasurer John Dawkins former WA Premier Carmen Lawrence entered parliament and the ministry. However, she was unable to contribute as effectively as might have been expected due to controversy^[32] over the Royal Commission into the Easton affair.

The government's agenda under Keating included creating an Australian republic, reconciliation with Australia's indigenous population, and furthering economic and cultural ties with Asia. These issues came to be known as Keating's "big picture."^[33] Keating's embarked on a legislative program included establishing the Australian National Training Authority (ANTA), the establishment of the Creative Nation scheme (which significantly increased funding for the arts^[34]), a review of the Sex Discrimination Act, and native title rights of Australia's indigenous peoples following the "Mabo" High Court decision. A landmark workfare scheme known as "Working Nation" was implemented with the intention of providing work and training for the long-term unemployed,^[35] while the Industrial Relations Act of 1993 created a set of minimum entitlements in the workplace, relating to equal remuneration for work of equal value, unpaid parental leave, termination of employment (including unfair dismissal), and minimum wages.^[16] According to Bill Kelty, the industrial changes introduced by Keating government provided trade unions “with more rights to bargain and more protection than was afforded to unions in most other nations”.^[16] In addition, the Sex Discrimination and Affirmative Action Acts of 1986 were strengthened in 1992 by a series of amendments, with the SDA provisions extended to federal industrial awards and protections against sexual harassment in the workplace extended.^[16]

A number of improvements were made to the social wage during Keating's five years in office. These included the introduction of an Earnings Credit Scheme, which enabled pensioners to earn extra income without losing their pension payments,^[27] a nonincome-tested Child Care Cash Rebate and a Home Child Care Allowance, the latter of which was paid directly to full-time carers of children in the home,^[10] a maternity allowance,^[17] a Commonwealth Dental Health Program,^[36] the Mature Age Allowance (an early retirement scheme for unemployed disadvantaged Australians over the age of sixty),^[37] a Parenting Allowance (a payment for parents with children at home and with very little personal income), an Additional Parenting Allowance to the partners of unemployed workers.^[16] and a Seniors’ Health Card.^[38]

The system of rental assistance was made more generous, with the maximum rates of Rent Assistance rates increased in real terms between March 1993 and September 1994 by 138.9% for families with three or more children, by 109.2% for families with one or two children, by 90.5% for single recipients without children, and by 79.5 for couples without children. These increased rates were protected by inflation as the rates had been indexed twice yearly from March 1991 onwards. Students in receipt of the homeless rate of AUSTUDY or ABSTUDY were also made eligible for rental assistance.^[10] In addition, various schemes were introduced to assist farmers.^[39]

The Keating Government also made improvements to the family benefits system, continuing a major policy of Bob Hawke’s government. In 1987, the Hawke Government established benchmarks for the adequacy of maximum level family payments (i.e. payments to social security recipients and low-income working families) to ensure that they provided effective assistance to those in need. These benchmarks were set at percentages of the pension rate, and were therefore linked indirectly to Average Weekly Earnings. From a value of 11.9% of the combined married pension rate, the value of the Family Allowance Supplement was set to increase to 15% for children under 13 years old and to 20% for children aged between the ages of 13 and 15. These benchmarks were increased by the Keating Government in 1992 and again in 1995 to reach 16.6% and 21.6%, respectively.

In foreign policy, Keating developed bilateral links with Australia's neighbours, in particular with Indonesia, and took an active role in the establishment of the Asia-Pacific Economic Cooperation Forum (APEC), initiating the annual leaders' meeting.

The Keating Government was defeated by the Liberal-National Coalition led by John Howard at the Australian federal election, 1996.

See also

• First Hawke Ministry
• Second Hawke Ministry
• Third Hawke Ministry
• Fourth Hawke Ministry
• First Keating Ministry
• Second Keating Ministry

References

Bibliography

• Paul Kelly (1992). The End of Certainty: The story of the 1980s. Allen & Unwin. ISBN 1-86373-227-6.