Notes for the Bill Kelty Tribute by Hon Paul Keating Sydney Convention Centre Wednesday 16 May 2012

–  I am very pleased to have been asked to say some things about Bill

–  Bill never wanted awards or accolades – he is the anti-Narcissist

In the most humble – but effective way he devoted his whole active working life to working people

– he was in the whole thing simply for the public good of it

– for his genuine and conscientious service to employers – to workers – unionist and non-unionist

– Bill had the qualifications to hit the high spots – on the other side of the fence – in corporate life

– he won the University medal for economics – he was in the same year at Monash as David Morgan, who became CEO at Westpac and Deputy Secretary to the Treasury.

– Bill is an exceptionally talented person

– But he is more than that:

– he also believes in things

– in justice and equity, for a start

– he has an image of the world he wants to inhabit – of the society he wants to live in


– he possesses the qualities of leadership to drive towards that vision

– Bill possesses that one quality that all effective leaders must have – he is persuasive

– a fair mind arrives at a considered balance in an issue – he then presses his point to a conclusion.

– He was devastating in discussion – whether in a small group or a large one – he knows how to round up the intellectual bits into a coherent story

– a compelling whole.

– The trade union movement produced many impressive leaders in the post-war years – but none better than Bill Kelty

–  Certainly none more prepared to take responsibility for necessary change – to strike out, in directions many would otherwise be fearful of

– At the end of the 1970s and in the early 1980s, Bill spotted the defects in the old National Economic Model

– the terms of trade back at post-Depression levels

– endemic stagflation – low growth and high inflation

– the mindless pursuit of nominal rather than real increases in wages

– with wage explosions in 1974-75 and 1979-80

– a dislocation of the profit share – and with it languishing private investment

– abysmal levels of productivity and falling competitiveness

– no ‘within sector’ wage flexibility – through National Wage Cases

– a seriously outdated Award structure – reflecting the complexities of a declining ‘craft’ age

– sclerotic financial markets

– a tariff structure which placed an enormous burden on working people – while promoting industrial sloth and uncompetitiveness

– Lesser union leaders would not have acknowledged these problems.  In fact, most didn’t.

–  Lesser union leaders would not have had a compelling urge to face up to these issues and to attempt resolving them.

But Bill Kelty’s fidelity to his base, his conscientious interest in the real circumstances of working Australians – compelled him to

This is what marks Bill as the standout figure.

As it turned out with the election of the new Labor government in 1983

– there was a nascent structure to deal with some of these issues – to at least discuss them – if not resolve them

– and that was ‘The Accord’

– The Accord was a skeleton without muscles and a beating heart

– that flesh and those organs had to be developed

– but Bill had the imagination and goodness of heart to try

– and as you know, over a decade and a half together – Bill and I did our best to make a success of it.

– in my role as Treasurer and later Prime Minister – I could not have found a more earnest interlocutor than Bill.

We had our disagreements – sometimes bad ones – but we always kept our eye on the main chance

– national advancement


– the realisation of the industrial agenda for Labor.

Few would realise – let alone – know – that at the heart of the anti-inflation constituency was Bill Kelty

– not a corporate wiz


– a Business Council supremo

– they didn’t have a clue what to do about it

But Bill Kelty knew that inflation put the biggest monkey on working people’s backs – as it tore away at their savings.

Only with a Labor Government, could inflation have been deflated – without scarifying the workforce in a way that is now happening in Greece and in Spain.

– Planned Accord-agreed restraint in nominal wages growth – in return for tax cuts flowing from reductions in government spending was effected , all to maintain – through employment, growth in disposable household income

– Coupled, of course, with a floating exchange rate – cushioning the external adjustment


– A monetary policy, through the Reserve Bank adopting a medium term – over the cycle, inflation target.

This is how inflation was defeated in Australia – this is why there has been a 36% real increase in wages since 1991.

The Liberals were completely defeated by inflation.  As Treasurer, Howard left us 11% inflation and 10% unemployment.

And the worst thing was we had to gift this great and engineered victory to the Liberals in 1996.  The next worst thing, of course, was that the Parliamentary Labor Opposition – forfeited  Labor’s ownership of this historic achievement – and with it Labor’s claims to the doubling of trend productivity and the consequent reduction in interest rates.

Bill pressed on with me in two other milestone reforms:

– The abolition of centralised wage fixing for a system of enterprise bargaining


– National superannuation.

He was also a great champion of Minimum Rates Awards – the champion – and another area where Bill and I and the Government, could find common cause.

Imagine the slaughter had Howard come to office with the old centralised wages system still intact.

Imagine Reith doing his best – or worst – with that.

The fact is, we let unions out of the straightjacket – just in the nick of time.

A lesser union official – an ACTU secretary – would have gone for the smother and hung on to the old system – like a familiar old blanket.

And does anybody think we would have national superannuation, unless one visionary Labor leader thought

– a structural trade off between nominal wages growth today –  for a compound dollar tomorrow – was not a Labor reform – in the highest tradition of Labor reforms?

The workforce has Bill Kelty to thank for that.

Bill is self-effacing – he hates all this.  He loathes awards, ceremony and pomp.

But there is a measure of justice in his commendation tonight.

He gave Australia leadership in its trade unions that few countries have ever enjoyed.

The modern Australian economy, with all of its flexibility and resilience, is part of his great work.

His name is certainly on the maker’s label, as perhaps Australia’s most exceptional trade unionist.