Unfinished Buisness by David Love

Unfinished Business: Paul Keating’s Interrupted Revolution,

by David Love;

Scribe, 2008, $32.95.

Following the recent screening of Keating! The Musical on ABC2, David Barnett wondered in the Canberra Times at the production’s sheer “malevolence, and the hatred from which it arises”. The eponymous hero of the show is portrayed as a wronged and tragic figure who saved Australia from an evil gnome called Bob Hawke. Now, in the Keating version of history as brought to us by David Love, we go one better. Here the principal anti-hero to emerge is not Bob Hawke (who in Love’s book is made to disappear pretty much altogether), but Bernie Fraser, the former Treasury official who Keating appointed Governor of the Reserve Bank.

Love tells us that Keating wanted an “independent” Reserve Bank—but one with a “Labor protégé” at its head. This was Fraser, who according to the Love version, treacherously destroyed his benefactor Keating by unnecessarily raising interest rates before the 1996 election, thereby causing Keating to lose to Howard. Keating emerges from this as, “for all his faults, a Promethean figure”. We’ll come back to that after looking at the principal argument of the book.

In the late 1970s, before I left Australia until the mid-1980s as a US correspondent for the Australian, I was reasonably familiar with the Syntec financial newsletter that Love used to produce. This was a well-regarded, hard-headed production. Running through his present book is a strongly argued technocratic case in the Syntec mould for raising the compulsory superannuation payment level in Australia from 9 per cent to 15 per cent. This was Keating’s original target (as recommended by his Treasury advisers) when he launched compulsory super in the 1980s. Needless to say, John Howard and Peter Costello are identified as the culprits who aborted this super “revolution”.

Given that Love identifies with Keating (whom he has interviewed many times over the years), and that Keating on his own account is talking to the Rudd people these days, the fact that Love is “fairly certain” that the Rudd government will engineer the increases in pension fund contributions from 9 to 15 per cent is of some interest in itself.

The foundation of the Keating/Love argument is that compulsory super at 15 per cent would provide Australians with a comfortable retirement, and at the same time lift Australian superannuation funds under management from the present level of around $1 trillion to more like $1.5 trillion. The existence of this huge savings pool would create what Keating calls a “golden circle”: it would protect Australian institutions from contamination by international credit market crises such as the present sub-prime mortgage crisis in the USA; and it would make Australia into a global investment powerhouse.

The argument is certainly worth consideration. Unfortunately however, the strength of the Keating/ Love argument is compromised by ignoring more or less entirely the existence of contrary arguments. A quick look at the relevant literature indicates, for example, that it cannot be simply assumed that compulsory savings for superannuation will necessarily increase overall national savings. The usual level of voluntary savings tends to fall off; people tend to borrow more for other purposes; and so on.

More significantly, who is Paul Keating or anyone else to say that people must be forced to save enough for a “comfortable” retirement? Many people would be prepared to risk sacrificing a certain degree of comfort in their old age for all sorts of other perfectly legitimate purposes: to better educate their children, say; or to use their savings to start a business; or write a best-seller; and so on. There are other arguments against compulsory super, but that is a start. Providing tax breaks for super up to 15 per cent of salary may well be advisable—but on an optional, not compulsory, basis from here on would be the preferred liberal option. The Keating/Love argument doesn’t address any of these relevant issues.

Love’s case is also compromised by his adulation of Keating. He actually does mean us to take the Promethean metaphor for his hero seriously. He even explains in detail what he means by this: how Zeus had Prometheus shackled to a mountain crag and then sent an eagle to torment him forever by tearing at the flesh around his liver. The flesh would heal overnight and next day the eagle would start again. In the same way, Keating “delivered the Australian people a considerable package of gifts … But before he had finished his work, the metaphorical eagle was upon him.” Out of parliament following Fraser’s treachery at the Reserve Bank and his defeat by John Howard, Keating was “chained to a Promethean rock … daily, his enemies pecked at his vitals”.

Napoleon makes an appearance also. Love tells us that even before the age of forty, Keating “had an intelligence and craft only given to great generals. At the very least, he must have begun to feel he had Napoleonic powers.” Well, like Abbott and Costello, Napoleon and Prometheus have always gone together, it’s true. In nineteenth-century France, Napoleon was often pictured as Prometheus—a suffering, exiled Romantic hero fettered to the rock of St Helena, with an English eagle gnawing at his entrails. Now, in twenty-first-century Australia, Love gives us a sepulchral Paul Keating, brooding on the edge of Sydney in a Kings Cross office stuffed with clocks and classical busts, with the likes of Bernie Fraser gnawing away on his liver. Love seems to believe that this is a sympathetic portrait, and it is indeed horrifying to imagine that there are places where it may indeed be seen as such.

However, not even the Napoleon metaphor will finally suffice for Love. He actually writes that by spoiling Keating’s re-election chances, Bernie Fraser’s Reserve Bank “deserves as much contumely as Pontius Pilate”. The only conclusion we can draw from this is that Keating must be … the Messiah.

Of course, Bernie Fraser should have sensed (and perhaps did) where his old political alliance with Keating would end up. Keating himself told Parliament back in 1991: “The fact is that it is the Labor Party that makes the political heroes of this country. When people cross the Labor Party they wear the crosses it puts on them … That is the truth of it.” By actually behaving as the independent bank governor he was supposed to be, Bernie must forever bear the terrible cross of the Keating evil eye.

It is fortunate indeed that this kind of thing has been going out of fashion for some years now in Australia, but Love’s book and the Keating musical suggest that the political market for it has not entirely died away. Intoxication with the potential of state power always has the potential for awakening dark and unhealthy leader-worship instincts, even in otherwise intelligent and apparently sceptical Australian commentators. How quickly we forget.