He said Mr Keating wanted to preside over a revolution of the Australian economy to ensure it was internationally competitive with a focus on low protective tariffs, low inflation and debt stabilisation.

At the same time, the Labor government wanted to achieve this goal within a social-democratic philosophy that supplied a safety net for the under-privileged.

Mr Keating also wanted to successfully sell Australia to the Asia-Pacific community and sell the idea of Asia-Pacific integration at home.

A large part of this outward-looking strategy would be vigorous diplomatic relations with Indonesia, China and Japan.

Mr Kelly said he expected Mr Keating to lay the foundation for an Australian republic as the country recognised the need to control its own destiny and decide its own fate.

Another goal would be to establish formal reconciliation between indigenous and European Australians with the implementation of a formal instrument this decade.

To fuel economic growth, Mr Kelly said Mr Keating would probably have to break some of his election promises because the platform he espoused during the campaign was not sustainable in the current economic environment.

Among the most logical moves, he said, were the scrapping of a proposed A$8 billion (about HK$44.63 billion) personal income tax cut and a plan to reduce corporate taxes to 33 per cent from 36 per cent.

While Mr Keating's opponent, Dr John Hewson, lost the election by vowing to introduce 15 per cent tax on most goods and services, Mr Kelly expected the government to attack the deficit by introducing a larger, broader-based indirect tax.

He is confident an economic recovery is coming although it will be a slow process.

The biggest danger, he said, was that any improvement would mask critical problems the country must resolve to move ahead. The most pressing was the fact that Australian's save did not save or invest enough.