Resumption of hostilities

PAUL Keating has aimed a volley at Bob Hawke.

Bob Hawke and Paul Keating as prime minister and treasurer in May 1991, just months before Keating unseated Hawke.

PAUL Keating has aimed a volley at Bob Hawke.

YOU could bet, London to a brick, as the inveterately colloquial Paul Keating might say, that as soon as Bob Hawke's new biography was dropped into the public space Labor's legacy wars would be reignited. Should anyone be surprised that words are bullets or that a brutal character assessment by a rival's wife can reach the power of a H-bomb? Did anyone expect the cocksure Bankstown brawler, now in dignified maturity, to turn the other cheek when his record was questioned, his ardour challenged and what he sees as a skewed version of history hits the shelves?

Political leaders are different to you and me, argues Blanche d'Alpuget, author of the incendiary Hawke: The Prime Minister and wife of the subject. She describes the two ex-Labor leaders, prime ministers 23 and 24, as "two bulls in one paddock". "They are born to fight," she told ABC TV's Kerry O'Brien the other night. "They will fight until their legs and arms come off."

Hawke and Keating famously tussled in government, the latter toppling his senior for the prime ministership in December 1991.

After a truce of sorts in public, following the publication of Hawke's memoirs in 1994 and the almost dozen years that Labor spent in the wilderness until November 2007, they are fighting again. "You treated me shamefully while attempting to diminish my motivation and larger schematic," Keating wrote in a letter to Hawke on Monday about the 80-year-old's memoir. "Yet I did not upbraid you for it." Until now. "Enough is enough," Keating declares in the letter written before he had read the book. "It is as if, Narcissus-like, you cannot find enough praise to heap upon yourself."

Their former colleagues are aghast that the old wounds have opened up again in sight of a federal election. Says Peter Walsh - one-time resources and finance minister and no stranger to the gentle art of political sledging and bomb throwing, and a close observer of these two vast egos - "I'd rather they weren't publicly attacking each other again, it does Labor no good."

The resumption of hostilities is due to the initial news reports and serialised extracts of d'Alpuget's book in this newspaper that Keating read at the weekend, especially the implication that the former treasurer was a vacillator when it came to the float of the dollar in December 1983.

"You (or Blanche) wilfully misrepresent my role in the float of the exchange rate," Keating argues in the letter. "The book apparently quotes Bill Hayden saying 'he wanted me to be on side with him to oppose it'. This, of course, is totally untrue, as my real mission with Hayden at that time was to bring him on side as he was one of the few people in cabinet able to upend or delay it. But to give Hayden his due, he always saw the sense of it. Or at least from May 1983, when it became apparent that the managed system was on its last legs."

Some of those most intimately involved in the float - Reserve Bank of Australia and Treasury officials - are siding with Keating. "When it comes to the events surrounding the decision to float in December 1983, d'Alpuget's version is largely a work of fiction," says a key former official.

After the 1983 election, Keating was new to the treasury portfolio but was rapidly gaining confidence. In her book, d'Alpuget presents Keating as a ditherer on the exchange rate, beholden to the formidable Treasury secretary John Stone. She quotes Hawke's economics adviser Ross Garnaut, who says Stone was against a float, and then describes the to-ing and fro-ing by the then treasurer about the move to deregulate.

But the official saw a more determined Keating. "It was very clear from the first meetings about how to respond to a series of crises in financial markets that Keating was on side before Hawke," he says. "[Keating] wanted to float the dollar, even though Treasury was arguing the other way. But in the end, if Hawke couldn't convince his cabinet colleagues [the float] would not have happened."

Recalls Chris Hurford, former immigration minister and assistant treasurer in the Hawke era: "After the first six months of the government, Keating got on top of the Treasury portfolio. It was not surprising that it took him a little while to settle down. I admired his courage in keeping John Stone as his secretary, because it would be unpopular in Labor circles."

Like the official, Hurford saw Hawke and Keating as an effective partnership. One could not succeed without the other. "I was surprised to read the implication that Bob was driving the economic reforms," Hurford says. "Bob was the chairman of the board and he was very lucky to have a very smart, determined and effective treasurer driving the process of reform across many fronts. Bob and Paul were a very good team. But Bob stayed too long."

Walsh also praises Hawke's leadership and makes a note of Keating's ambition from about 1984 onwards. "Keating was always ambitious, but over time he became obsessive and thought he was God.

"Keating used to say harsh things about Hawke. It was [Keating], not me, who came up with the term 'old jellyback' to describe Hawke's supposed weakness to take on hard reforms.

"Hawke did an excellent job at running cabinet. God knows how Keating would have coped with Kevin Rudd."

But in d'Alpuget's telling, Keating craved adulation and credit, most notably shown in his 1990 "Placido Domingo" speech, which sent the prime minister into a frenzy. "As Hawke interpreted it," she writes, "not only did Keating lust for his job, he was also attempting to destroy Hawke's place in history by rewriting it, inserting his own name into reforms that had been Hawke's. There was plenty of evidence for Hawke to point to about Keating's rewriting of history."

After getting a copy of d'Alpuget's book, Keating yesterday described it as "a book without repute". "Not only is it a bad history, it's a bad read," he tells The Australian. "The whole tenor of the book is an attempt to smother the inglorious parts of Hawke's record in glory, and doing all possible to destroy my record."

Perhaps the part that has most offended Keating is in the portrayal of his education and the patronising treatment of his intelligence. He referred to a section in which d'Alpuget writes that Keating, whom she describes as coming from "a working-class suburb that struggled enviously to become middle class", had "frightening strengths and equally frightening weaknesses".

"With little formal education, his intellect led him to hobbies, one after another, all his life: car engines; budgerigars; the life of Winston Churchill; rock music and, as his taste matured, classical music and its visible sister, architecture," she writes.

For Keating, this is deeply insulting. "The book is even stooping so low as to say that because I had no university education, I was incapable of absorbing complex documents, and that I did not even read them. The preposterousness of it is faint-making.

"How would anyone at the top of public life deal with 30-plus cabinet submissions a week, plus hundreds of other issues, for 1 1/2 decades, without a speedy comprehension of matters?" Keating asks. "This shows the depth to which Blanche d'Alpuget stoops in her misplaced attempts to uplift Bob."

Former Hawke adviser Craig Emerson, now federal minister for small business, argues the two "shared the philosophy of creating an open, competitive economy. Those deregulatory policies were pursued jointly, though sometimes one took the lead. Bob led the China push and the Asian engagement more generally through trade and investment policy.

"Paul was active in financial market deregulation after the float of the dollar that Bob led.

"Bob took the lead with John Button in reducing tariffs and quotas. Both Bob and Paul did a lot of the advocacy to accelerate the move to an open, competitive economy. Superannuation was more of a Keating initiative and in the early 1990s, Keating picked up the reins on national competition policy. They both did the driving on reform, it depended on the time and the issue. But Bob Hawke provided the clarity and the direction of a government committed to reform."

In his letter to Hawke, Keating says that he effectively carried Hawke during the 1984-87 parliamentary term, with the prime minister immobilised by personal trauma. "The book will fail to make clear that your emotional and intellectual malaise lasted for years," Keating writes, adding that the reason he did not agree to being interviewed for the book was that he could not be faithful to their years together "without dealing honestly and fully with your long years of depression and executive incapacity".

Colleagues such as Hurford and Walsh don't remember those difficult years in that way. "It's true that Hawke's mind wasn't the same during 1984, and we all know why," says Walsh. "But if he was missing in action, as Keating claims, then it was for no more than six months."

Hurford, who was promoted to cabinet in 1984, says: "Hawke was a wonderful chairman of the board. As ministers, he let us do our own thing. It was the best way to get people to perform in their areas. I didn't want to stir him up."

For Emerson, who has the perspective of an adviser, then Queensland bureaucrat and now a minister in the Rudd-Gillard government, Hawke remains the gold standard of stewardship and popular assent. "Bob was a consensus builder," he says. "Once something was decided, he wanted to cement the reform by building support for it in the community. He wanted to avoid the old Whitlam crash-or-crash-through way.

"He wanted to proceed at a digestible pace, not to move at a speed that would leave a large lump in your throat. We have in this country enduring economic reforms and it is a tribute to Bob and his leadership style.

"The prime minister and treasurer have two different roles. The prime minister has an overall responsibility to manage both the policy and political outcomes. A treasurer might want to go faster because you have a Treasury that is constantly saying these reforms needed to be done yesterday, but on a number of reforms Bob did the pushing. You saw the same things occurring when Peter Costello was treasurer and John Howard was prime minister. It's a creative tension."

After Hawke and Keating launched their missiles this week, they've shown they are brutal, forceful and endlessly creative in perpetuating the tension.

With reporting by Ean Higgins