Australia's Labor Party may try to clip its prime minister's wings

Australia's Labor government faces a major challenge this week as the Labor Party holds its national conference. The party conference is the only real threat facing Prime Minister Robert Hawke and his government.

The government has a huge lead in public opinion polls, up to 5 percent above its standing when it defeated the Liberal-National Country coalition government in March 1983. Mr. Hawke has an unprecedented 70-percent personal popularity in the polls.

But the Labor Party requires its politicians to be responsive to the policies of its rank and file, and the national conference can set policies even extremely popular Labor governments must obey.

The Hawke government has managed to ignore some policies set by the last national conference in 1982, especially economi policy, as the government moved away from Labor's traditional view that a federal government should impose tight controls on ecomonic management.

Instead, Mr. Hawke and Treasurer Paul Keating have introduced a successful regime of deregulation that has gone much further than the previous free-enterprise Liberal Party government was prepared to go. They have allowed the Australian dollar to float freely, have greatly reduced controls on banks, and have foreshadowed the entry of foreign banks into the Australian system.

Mr. Keating will argue for more freedom for the government in setting policies, but the left wing of the party will be trying to rein in the government and stop it from allowing foreign banks to be established in Australia. The left wing, which calls itself the Socialist Left, also wants to reverse government policies on uranium development and foreign affairs.

The uranium issue is the one on which the Socialist Left is most confident - and on which the Hawke government has indirectly acknowledged it is in the most trouble.

Current Labor Party policy is to phase out uranium mining in Australia, except where uranium is a byproduct of other mineral development. This exception was designed to allow the development of the Roxby Downs mine in South Australia.

Roxby Downs will also produce gold and copper, but its uranium is so extensive that its development would mean Australia would greatly increase its role as a uranium producer, even if it were the only uranium mine in Australia.

The conference vote on this issue will be very close, observers say, because many anti-mining delegates have been elected to the 99-member conference.

On foreign policy, the two major issues at the conference will be the existence of United States bases in Australia and relations with Indonesia.

Last month, Hawke told the Federal Parliament the existing US bases in Australia are necessary for the Australia-New Zealand-US defense alliance. He said they contribute to nuclear control because some of them provide a way to monitor Soviet nuclear tests and any possible Soviet attacks. The Socialist Left wants to get rid of all US bases in Australia.

Foreign Minister William Hayden recently warned delegates not to ignore the realities of Australia's relations with Indonesia. He has also warned Indonesia not to ignore the problems of Labor Party policymaking.

The problem centers on East Timor, the former Portuguese territory which the Indonesians took over with military force in 1975. Labor has supported the right of the East Timorese to self-determination. But the Hawke government has indicated that good relations with such a close and large neighbor are paramount. Mr. Hayden is concerned that the Labor conference can tie him down to a more anti-Indonesian policy.