LEIGH SALES, PRESENTER: Well with me now in the studio is the former Prime Minister Paul Keating.

Thanks for being here, Mr Keating.

PAUL KEATING, FORMER PRIME MINISTER: Good, Leigh, glad to be here.

LEIGH SALES: What were your thoughts on hearing this news this morning?

PAUL KEATING: Well I'd hoped he'd make the ton, you know I thought he'd make the hundred. Because he was, he has a tremendous constitution, he was as strong as an ox. And I... so, you know, one hopes, but of course when you start... when you remember he was born during the First World War, you know, we're obviously on the long stretch at 98.

But there's a point of sadness. Obviously there's a change occurs, you know, someone who's been central and important in your life goes, it's the ultimate wrench, they're not there anymore. You don't see them anymore.

LEIGH SALES: Do you consider that he has been important in your life?

PAUL KEATING: He front run the system. I mean, you know, I had a couple of people in my political life I was interested in. Lang was one, Whitlam was another.

I mean Australia was a post imperial outpost, effectively, in the post war years. In the years of the Menzies torpor, it was like sort of wading in molasses, you know. And to shock the system and change it, to change Australia's idea of itself is what Whitlam did.

And the Labor Party used to trot along in the bilateralism of Australian public life. It was never quite sure what it ought to be doing and all of a sudden he used all the power of the Commonwealth to actually shift things.

So one, he changed the country's idea of itself, he changed destiny, he changed the direction.

LEIGH SALES: We heard Phillip Ruddock say in that story that if he had just had a little bit longer or taken it a little bit more slowly with the changes he wanted to introduce, that things might have ended differently, what do you think?

PAUL KEATING: They may have. But he was also very unlucky. I mean the post war, the years of the post war growth and the economic textbooks now, sort of 1947 to 1974, you know, and from '74 to '83 there was a low period of growth. Including - that's in the Whitlam and Fraser years.

So he was decidedly unlucky about the nature of growth just turning up. It stopped turning up and frankly he, and most everyone else, didn't know what to do about that.

LEIGH SALES: Nonetheless there is a skill involved in knowing how to manage those situations, which he perhaps did not do very well.

PAUL KEATING: No. He was a grenade thrower. I used to often say, well I'm the grenade throwing business, occasionally I drop one beside my foot but I get many direct hits. He was in the direct hit business. He wanted to make Australia fairer, more decent, more open, more confident, more exciting, you know. And he did, you know.

Reorientate the country in foreign policy terms, he wanted to make Australia, take Australia from an outpost to a bridge. We were a post imperial outpost. With all the glue of the Anglosphere hanging on us. We missed the sort of, by getting out of white Australia, we missed the marginalisation that South Africa had, we missed it by seconds in time and that change in orientation and the shift in policies and domestically in the big social programs like Medicare, you know, the health of any one of us is important to all of us. The right to get yourself a secondary education and a tertiary one, and further and technical and further education, these things.

But the whole range like, you know, fault free divorce, rights for women. It was all compressed into two years and nine months. That's tough.

LEIGH SALES: Did it leave an economic mess, frankly, for the Fraser government and then for the Hawke/Keating government to repair?

PAUL KEATING: Basically wages blew out and inflation blew out. Inflation went to, I think, correct me if I'm wrong, but I think 13 or 14 per cent by 1974, because wages had been exploding, there was no wages policy, we had central wage fixing, the unions were strong, he didn't know what to do about any of that. He had no real help from the Treasury, treasurers until Bill Hayden arrived.

If he'd had had another term you would have seen a different government. There was mortar returning to that cabinet process.

LEIGH SALES: When Labor returned to power in 1983, had the Whitlam government given you and Bob Hawke and idea of what you had to do, but more importantly not what to? do?

PAUL KEATING: It gave us... I mean I don't think you can compare the way the Cabinet operated in the Whitlam years with the Hawke years or my years. I mean the Cabinet craft, the specialisation, the common ownership by each cabinet minister in the whole program, or of each stage of cabinet discussion or each issue, was profoundly different in my experience between the two.

But partly this is not simply attributable to Whitlam, to Gough Whitlam himself, but the fact that the Labor Party was out of office from 1949 to 1972, they had a whole lot of inexperienced but ambitious people wanting to change things.

LEIGH SALES: So they'd forgotten how to do it?

PAUL KEATING: They'd forgotten how to do it, yes. They had forgotten how to do it and they had the bureaucracy broadly offside. There wasn't a collegiate quality and of course when the wealth stopped being produced naturally in the world downturn, it was the government was sort of floundering trying to work out how to restart the motor.

LEIGH SALES: It's impossible not to look at the Whitlam government through the prism of how it ended in the dismissal. Does that event still have implications today, do you think, beyond just being a historical fascination?

PAUL KEATING: It definitely soured the system and that remains true today.

I mean when I went to the House of Representatives when Gough nearly won in 1969, that was his great big election victory really, he didn't quite get a majority and you still had, you know, the opening of Parliament Hall and we'd all turn up. There'd be goings on at the Kurrajong Hotel and the Hotel Canberra and we'd all roll over and there was a certain good will about it. All the good will disappeared after 1975, you know, because you've got to remember that not only did Malcolm Fraser's Opposition try and bring the government down in '75, Bill Snedden Opposition had tried to do it in '74. So after 23 years in office the Coalition didn't have the presence of mind to give the Labor government two years, you know, and of course that drains the good will from the system and it's been drained and it's been the same ever since.

LEIGH SALES: So even 40 years on the current political environment, you think that the bitterness and the rancour is due back to 1975?

PAUL KEATING: Yes, the schism, split is 1975.

And the thing is, you see, this is why the Senate still has the power, technically has the power to refuse budgetary bills and the Coalition has never given that power up. There's been no... this is not like the House of Lords and the House of Commons in 1913. This is an unrepentant Coalition view about the right to use the Senate to obstruct the money bills of the House of Representatives.

LEIGH SALES: What is your lasting memory, not of Gough Whitlam the prime minister, but of Gough Whitlam the man?

PAUL KEATING: He... there's always a sort of a disassembly and kindliness about Gough and thoughtful, he would look at current events and provide commentary to you. It was also a wide view. Often self deprecatory. He was sort of softer in private than you would see him in public. But the key thing is he made a difference. He was around and we all know that he's been around.

LEIGH SALES: Paul Keating, thank you very much.

PAUL KEATING: Thank you, Leigh.