Australia's Treasurer Minces No Words And Aims to Win

PAUL KEATING, Australia's treasury secretary, wants to be the next prime minister. Most observers believe he will be. But current Prime Minister Bob Hawke dealt Keating a blow two weeks ago by accepting a competing minister's plan to privatize the country's telecommunications industry.

Mr. Keating has worked mightily to convince his own Labour Party that it should sell large government enterprises, including its airlines, bank, and telecommunications to private industry.

Time will tell if the political damage will keep Keating from moving up. Even with this setback, most political observers think Keating remains Mr. Hawke's heir apparent.

``He's the only thing the Labor Party has going for [it]. If Keating were to go, the whole show would collapse in six months,'' says Des Moore, acting director of the Institute of Public Affairs in Melbourne. Francis Castles, professor of political science at Australian National University (ANU), says Keating ``is the shrewdest politician in Australia.''

Keating has bounced back before. ``He's pushed his line strongly, lost, and then rolled with the punches,'' says Marion Simms, an ANU political science professor.

For example, in 1985 Keating advocated a consumption tax as part of a tax reform package. At the same time he was extolling the virtues of the tax to participants in a tax summit, the prime minister decided to scrap the idea.

Edna Carew, Keating's unofficial biographer, called it ``one of Keating's worst moments.''

Shortly after the tax fiasco, Keating was pummeled by the currency markets. In 1985, the Australian dollar lost 13 percent of its value, helping to increase inflation. Australia's Reserve Bank responded by raising interest rates.

Keating not only survived, but thrives on the political combat. ``He's got imaginative political invective,'' says Sen. Peter Walsh, a former finance minister.

Keating once described John Howard, then the opposition leader, as a man who ``would make a cat laugh.'' In the heat of debate, he once referred to the opposition as ``a bunch of nobodies going nowhere.''

The opposition has its own unflattering view of Keating. Peter Reith, Keating's opposite in the Liberal Party, calls Keating's economic approach ``the scorched-earth policy.''

And the latest Morgan Gallup Poll, published in the Bulletin newsmagazine, shows that only 3 percent of the 1,100 people surveyed considered Keating friendly, while 6 percent felt he was honest. But 30 percent considered him capable, compared with 33 percent for John Hewson, his Liberal Party rival.

If Keating becomes the next prime minister, it seems unlikely that he will have the same camaraderie with President Bush that Hawke does. In September 1986, he told the annual meeting of the International Monetary Fund and World Bank, ``I think we must face the fact that there is an absence of leadership in the United States at the administration and at the Congress level.''

Keating has also been blunt about Australia's problems. During a radio show in 1986, he warned that if the government could not develop a sensible economic policy, ``we will just end up being a third-rate economy ... a banana republic.''