Bob Hawke, Australian Leader Who Unshackled Economy, Dies at 89

(Bloomberg) -- Bob Hawke, Australia’s longest-serving Labor prime minister who retooled the economy during the 1980s through financial deregulation and trade, has died. He was 89.

His death comes just days out from a general election that could see his party returned to office. Hawke was a signatory to an open letter released this week that endorsed the policy agenda of Opposition Leader Bill Shorten and urged support for him in Saturday’s vote.

"He foresaw the Asian Century and positioned Australia to take full advantage of it through a program of sweeping economic reforms," his wife Blanche d’Alpuget said in a statement that confirmed Hawke’s death at his Sydney home on Thursday.

Hawke ended Malcolm Fraser’s seven-year Liberal-National coalition government in 1983 and won four federal elections. Recording the nation’s third-longest tenure as prime minister, the one-time union leader held office until 1991, when he was ousted by his own party and former Treasurer Paul Keating.

Bob Hawke, Australian Leader Who Unshackled Economy, Dies at 89

During Hawke’s tenure, he and Keating deregulated the financial system, abolished direct controls on Australian interest rates and opened banks to foreign competition. During his first year in office, they also removed the currency’s exchange-rate peg, allowing market forces to determine the Australian dollar’s value, contrary to the advice of senior Treasury officials.

Exchange Rate

“The possibility of a float had been contemplated for years,” former Reserve Bank of Australia Governor Glenn Stevens said in a 2013 speech in Sydney. “When it was taken, the decision was a key part of a sequence of very important decisions that opened up the Australian economy and its financial system to international forces, and which changed it profoundly.”

His government lowered tariffs and industry subsidies and instituted a system of prices and income agreements between unions and employers. Known as accords, they were designed to boost productivity and keep wages and inflation low in return for social-welfare measures, such as access to health care through the Medicare program.

The Hawke administration is widely credited with initiating the economic changes that paved the way for decades of growth. Australia has avoided falling into a recession since 1991.

“Australians have become more economically literate and aware of the harsh competitive realities of the world in which they live,” Hawke wrote in his 1994 memoir. “More and more, we understand that the pursuit of our interests is inextricably related to working with, and not shutting ourselves off from, the rest of the world.”

Wage Gains

Hawke’s political skills and speech, laced with an occasional expletive, were honed as Australia’s top trade-union leader in the 1970s, when he secured wage gains for workers and negotiated with employers to end strikes.

Bob Hawke, Australian Leader Who Unshackled Economy, Dies at 89

Recognizable for a thick mane of silver hair, he was a prime minister known for giving Cabinet colleagues unusual freedom to shape their ministries’ agendas, while he ruled by consensus and wooed voters with his public image as a knockabout everyman.

“He genuinely shared his trade union colleagues’ enthusiasm for football, horses and beer,” Neal Blewett, a health minister under Hawke, wrote in “Australian Prime Ministers,” a book edited by Michelle Grattan. “He was a complete pragmatist, with only a few passions and less ideology.”

During his first term, Hawke’s popularity surged, helped by his fanatical interest in sports. When an Australian syndicate won the 1983 America’s Cup in Newport, Rhode Island, ending the New York Yacht Club’s 132-year winning streak, Hawke delighted Australians with his televised celebrations, saying, “Any boss who sacks anyone for not turning up today is a bum.”

Highest Rating

In November 1984, his approval rating in a Nielsen poll hit 75 percent, still the highest figure recorded for an Australian prime minister since the poll’s inception in 1972.

Hawke won elections in 1983, 1984, 1987 and 1990. A year later, the economy fell into a recession as the U.S. savings-and-loans crisis peaked and after Australian mortgage rates hit a record 17 percent. Unemployment reached 10.9 percent, the highest since the 1930s, with 1 million people out of work.

Bob Hawke, Australian Leader Who Unshackled Economy, Dies at 89

Support for the government collapsed and Hawke’s relationship with Keating deteriorated, as the treasurer felt the prime minister was planning to renege on a then-secret deal between the pair made in 1988. Known as the Kirribilli Agreement, named after the prime minister’s residence in Sydney, Hawke had pledged to hand over the leadership if he won the 1990 election. Keating challenged Hawke in party-room votes, winning on his second attempt in 1991.

Early Life

Robert James Lee Hawke was born Dec. 9, 1929, in Bordertown, a country hamlet in South Australia. His father, Clem, was a Congregational minister. His mother, Ellie, was a schoolteacher. After Hawke’s older brother, Neil, died of meningitis at age 18, the family moved to Perth.

Hawke joined the Labor party in 1947 and graduated with degrees in law and arts from the University of Western Australia.

Bob Hawke, Australian Leader Who Unshackled Economy, Dies at 89

Hawke married Hazel Masterson in 1956 and the couple moved to Canberra, where he studied at the Australian National University. He started working with the Australian Council of Trade Unions as a paid researcher in 1958, and was its president from 1969 to 1980. In 1973, he became federal president of the Australian Labor Party. Elected to parliament in 1980, Hawke was made opposition Labor leader less than three years later, after deposing Bill Hayden just one month before winning Labor’s biggest victory in 40 years.

After retiring from politics in 1992, Hawke became active in business, particularly in China. He divorced his wife, Hazel, in 1995 and married his biographer, d’Alpuget.

With his first wife, who died in 2013, Hawke had four children: Susan, Stephen, Rosslyn and another son, Robert, who only survived a few days after his birth.

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