Other than Malcolm Turnbull, no retired Australian politician has devoted quite so much energy to the high art of the personal vendetta as Paul Keating. Three decades after losing office to John Howard in a humiliating landslide election, Keating remains gloriously, almost professionally, incapable of letting anything go.

This is not merely what his cabinet colleague Gareth Evans once called ‘relevance deprivation syndrome’ – the melancholy condition afflicting former leaders who miss the limelight. With Keating, it has evolved into something closer to a national performance art. He does not simply disagree with opponents. He lambasts them.

Howard, of course, remained Keating’s great white whale. Long after leaving office, he continued to brand his four-term successor ‘the little desiccated coconut’ – the cramped, suburban conservative hopelessly unequal to the larger historical currents reshaping Asia and Australia. Keating never quite reconciled himself to the possibility that the supposedly provincial ‘Little Johnny’ might actually have understood the country – and the region – better than he did.

During his extraordinary 2023 appearance at the National Press Club of Australia, Keating treated much of the Canberra press gallery and foreign-policy establishment with contempt. Journalists questioning his remarkably benign view of the Chinese Communist party were dismissed as provincial mediocrities parroting the strategic orthodoxies of Washington. The unmistakable implication was that only Keating truly understood China, while the rest of the country’s strategic class was trapped somewhere between ignorance and hysteria.

More recently, he accused Angus Taylor of indulging sentiments redolent of ‘1930s blood-and-soil nationalism’ over immigration policy. Former colleagues, journalists, strategic analysts and Liberal politicians have all periodically found themselves on the receiving end of Keating’s verbal artillery, usually delivered with the hauteur of a disappointed Bourbon monarch surveying the peasantry. Crikey, Keating once even described me as ‘a monkey who represents the jaundiced journalism that was part and parcel of the Howard years’.

Yet the most startling broadside came after the death of legendary editor and columnist P.P. McGuinness in 2008. Most public figures, upon hearing of the passing of a long-time adversary, summon up a few words about generosity of spirit or at the very least professional respect. Keating instead described Paddy as a ‘fraud’ and ‘a vitriolic liar with the morals of an alley cat’. It was less obituary than crime scene report. Even by Keating standards, jaws dropped.

Which is a pity. Because beneath the operatic insults and the verbal flamethrowers stood a once-substantial political figure – arguably the most consequential Labor treasurer of the modern era, and certainly a more formidable one than his self-described admirer, Jim Chalmers.

Keating’s role in floating the dollar, deregulating finance and dragging Australia away from its protected, clubby and interventionist economic model deserves far more acknowledgment than many of his critics are willing to concede. True, others – especially Bob Hawke and the outstanding finance minister Peter Walsh – deserve ample credit too. But it was Keating’s famous ‘banana republic’ warning 40 years ago, on 14 May, 1986, that entered the national lexicon because he was substantially right.

That moment marked the point at which the Hawke government, backed by a remarkably serious opposition led by Keating’s nemesis Howard, confronted a gathering economic crisis and pressed ahead with the kind of free-market reforms that upset the sensibilities of today’s Labor party. The anniversary deserves commemoration – not merely as history, but as a reminder of a style of political leadership now bordering on extinction in Canberra.

The backdrop was grim. By the mid-1980s Australia was overregulated, heavily protected, inflation-prone and chronically uncompetitive. The current account deficit ballooned, the dollar sagged and interest rates climbed sharply. Inflation hovered around ten per cent, unemployment near eight per cent. In Keating’s telling, the country had developed champagne tastes on a beer budget.

Then came the famous radio interview of 14 May. Keating abandoned the usual Treasury oatmeal and spoke with startling bluntness. Unless Australia changed course, he warned, it risked becoming a ‘banana republic’ – or, as he also put it – ‘a third-rate economy’. One struggles to imagine a contemporary treasurer speaking so candidly.

The warning was not theatrical garnish. It was preparation for pain. The subsequent budget delivered deep spending cuts, including in politically hazardous areas such as welfare. The medicine was unpleasant, but Keating believed voters would ultimately respect honesty over evasion – again, a touching faith almost entirely absent from modern politics.

The crisis accelerated a wider reform agenda already underway. Tariffs were slashed, finance liberalised, union power curbed and fiscal discipline strengthened – reforms later consolidated by Peter Costello, who paid off Labor’s debt and deficits. The pay-off was enormous: decades of growth, rising prosperity and a resilience that spared Australia the worst of subsequent global downturns.

Which raises the awkward question as this anniversary has coincided with this week’s federal budget: can today’s Labor leadership summon even a fraction of that reforming spirit?

Australia now faces a different, though no less serious, set of challenges. Productivity has stalled, living standards are slipping and government spending continues. Yet neither the Treasurer nor the Prime Minister appears willing to confront the scale of the problem. Despite the budget’s grandiloquent packaging, there is scant appetite for spending restraint, a reduction in the size of the state and the kind of tax reforms that create incentives to create wealth.

Instead, modern Labor seems increasingly animated by an almost theological faith in government activism – industrial intervention here, subsidies there, unaffordable and unreliable energy schemes everywhere. The result: persistent deficits, mounting debt and growing vulnerability to external shocks. This is wholly reckless and profoundly irresponsible – like a drunken man trying to sober up by pouring himself a large whisky. Chalmers and Anthony Albanese are in terminal denial and incapable of admitting to themselves the hideous scale of our national troubles.

Keating, for all his monumental vanity and volcanic temperament, understood something his disciples do not: prosperity cannot be endlessly borrowed, regulated or wished into existence. He was prepared to level with the electorate and risk political damage in pursuit of what he believed to be the national interest.

Chalmers wrote his doctoral thesis on Keating and, like his mentor, hails from Labor’s right faction. But to borrow and adapt Lloyd Bentsen’s immortal line to Dan Quayle: Treasurer, you’re no Paul Keating.