page_title: Keating Government
section_title: Second term and 1996 election
hierarchical_section_title: Keating Government / Terms in office / Second term and 1996 election
caption_attribution_description: English: Newly sworn-in members of the second Keating Cabinet outisde Government House, Canberra, 25 March 1994. Back row: Robert Ray, Con Sciacca, Gary Johns, John Faulkner, Chris Schacht, Mary Crawford, Peter Baldwin. Front row: Arch Bevis, Gary Punch, Carmen Lawrence, Governor-General Bill Hayden, Prime Minister Paul Keating, Brian Howe, Peter Cook.
context_page_description: The Keating Government was the federal executive government of Australia led by Prime Minister Paul Keating of the Australian Labor Party from 1991 to 1996. The Government followed on from the Hawke Government after Paul Keating replaced Bob Hawke as Labor leader in an internal party leadership challenge in 1991. Together, these two governments are often collectively described as the Hawke-Keating Government. The Keating Government was defeated in the 1996 federal election and was succeeded by the Howard Coalition government.
context_section_description: A poorly performing economy, republicanism, indigenous title to land, and industrial relations policy were major issues of the Keating Government's second term.
  In July 1993, a budget deficit for 1992-3 was disclosed at $14.6 billion. Treasurer Dawkins outlined a 1993–1994 budget projection for a $16.8 billion deficit (3.8% of GDP) but promised to bring down the deficit to 1% of GDP by 1996–7. Unemployment remained at 11%. The current account of the balance of payments was in deficit at $15.4 billion and forecast to rise to $18 billion. Debt financing for public sector borrowing amounted to $20.3 billion in 1992-3 and was also projected to rise. The government had supplemented expenditure through asset sales, such as the sale of Qantas. Treasurer Dawkins resigned from Parliament in December 1993, citing a desire to spend more time with his family.
  In its second term of office, the Keating Government lost four senior ministers: Graham Richardson resigned involuntarily in March 1994. This was at the same time as the involuntary resignation of Ros Kelly over the Sports rorts affair. Following the resignation of treasurer John Dawkins former WA Premier Carmen Lawrence entered parliament and the ministry.  However she was unable to contribute as effectively as might have been expected due to controversy over the Royal Commission into the Easton affair.
  Following the 1993 election loss, the Liberal Opposition initially retained John Hewson as leader, but in 1994 elected the younger Alexander Downer as leader. Downer failed to make inroads against Keating and in 1995 the party turned to John Howard a former opposition leader, who had also been Treasurer in the Fraser Government which had been defeated by the Hawke-Keating Labor ticket in 1983. The veteran leader restored the Liberal's electoral fortunes and led the Coalition to defeat Paul Keating at the 1996 federal election.
  By the time of the 1996 election, unemployment was at a lower rate than at the previous 1993 election, and interest rates were lower than they had been in 1990, but foreign debt had been growing. The Keating Government was projecting a small budget surplus. Following the election, an $8 billion deficit was confirmed. In his 18 February 1996 Policy Launch Speech, Opposition Leader John Howard emphasised that Labor had been in office a long time, and cited high inflation, a poor current account deficit and high national debt as evidence of bad economic management. He called for industrial relations reform and proposed an increased spending on environmental challenges, to be in part funded by the partial sale of telstra. He also promised to restore the prime minister's attendance at question time in parliament (which Keating had reduced in his final term).
  The Coalition won government in a landslide – with the Liberal Party increasing its House of Representatives seats from 49 to 75 and the National Party, led by Tim Fischer, increasing its seats, from 16 to 19, giving the coalition a 55-seat majority to the Coalition. On 11 March 1996, John Howard became the 25th Prime Minister of Australia.
  The 13-year Hawke-Keating Government saw the longest period in office for the Australian Labor Party in its century of existence.
caption: Keating and his cabinet in 1994
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