Australian Premier Aims to Create Jobs, Boost Party Prospects

THE first task Australia's new prime minister, Paul Keating, faces is to jump start the Australian economy.Mr. Keating, who unseated Bob Hawke in a Dec. 19 leadership vote of the Australian Labor Party (ALP), promises to introduce job-creation programs early next year. Australian unemployment is now at 10.5 percent, the highest level in postwar history. The high jobless rate has hurt consumer and business confidence, a major reason Labor is suffering in the opinion polls. Keating hopes he can get the economy moving fast enough to give Labor another three years in office in the 1993 election. "Keating gives Labor some sort of a fighting chance," says ALP pollster Rod Cameron. In his role as treasurer, Keating engineered the slowdown in the economy in an attempt to prolong a period of growth. But the slowdown led to Australia's worst recession in more than a decade. "The policy was for a slowdown; we never wanted a recession," says Keating. Because of Keating's association with the downturn, the opposition Liberal Party believes it has a better chance of beating Keating than Mr. Hawke. "The electorate is very forgiving of Bob [Hawke], but it is not forgiving of Keating," opposition leader John Hewson told the Monitor. Fifty-three percent of Australian voters prefer Hawke as premier, according to a Sunday Telegraph poll conducted Friday; 39 percent favor Keating. The Liberals will have their hands full. Keating is considered to be the best parliamentary debater in Canberra. He will quickly attack the opposition, which recently introduced a change in the tax system. This change would impose a tax on goods and services while reducing income taxes. Hawke's inability to effectively criticize the plan was the final catalyst for his ouster. "If the government responded better to the Liberal's proposed goods and services tax, the opportunity for my being in this position would be remote," Keating said after defeating Hawke. Although Keating knows economics, he has little experience in foreign affairs, observers note. He must decide whether to keep Minister for Foreign Affairs and Trade Gareth Evans, a Hawke supporter who has broadened Australia's influence in the world. The US will get its first inkling of any shifts in policy when President Bush arrives in Australia on Dec. 31. Keating says he has met Mr. Bush several times since 1970. "You see the very good side of America in George Bush," he says. But Australia's support toward US policy may shift slightly. "The American president does not expect any nation to do anything that is considered against its own interest," Keating notes. Among Keating's challenges will be reuniting Labor. Since June, when Keating formally challenged Hawke and lost, the party has been fractured. The press has been full of rumors of the behind-the-scenes struggle. The tussle reached a climax two weeks ago when six of Hawke's cabinet members and supporters suggested he stand aside for the sake of the party. Instead, Hawke called for the Labor Caucus - the ALP members of Parliament and party leaders - to vote on the leadership issue. In a secret ballot, the caucus voted Hawke out by 56 to 51, the first time a prime minister had been removed by his own party. To create jobs, Keating is likely to press the central Reserve Bank to reduce interest rates. He is also likely to introduce some fiscal stimulus even though the recession has reduced government revenues. Hawke had already accelerated spending on some infrastructure programs to improve the rail and port sectors. The government might also take pressure off some Australian business by dragging its feet on announced tariff reductions. "The tariff cuts may be too soon," says a spokesman for the Business Council of Australia, a lobbying group. But Keating has indicated he would continue with the long-term internationalization of the Australian economy. Keating won't have much time to get results. Campaigning for the next election has started, and Mr. Hewson's opposition is already far ahead of Labor in the polls.