Former prime minister Paul Keating - architect of some of the most profound economic reforms in the country's history during the 1980s - has launched a surprise critique of the liberal economic philosophy he once championed, declaring it has "run into a dead end".
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Mr Keating made his remarks in response to a speech delivered by the new leader of the ACTU, Sally McManus, at the National Press Club in Canberra on Wednesday.
Ms McManus declared that "neo-liberalism" had run its course, and that experiments in privatisation had failed, slamming the government over mooted penalty rate cuts, accusing many employers of adopting "wage theft" as a business model, and declaring war on growing inequality.
"We are not saying that the people who introduced some of the policies that you could name as being neo-liberal were bad people, we are saying the experiment has run its course," Ms McManus said, in response to questions.
Earlier in her speech she had declared that "the Keating years created vast wealth for Australia but it has not been shared".
While many saw her remarks as a partial slapdown of the economic reforms of the Hawke/Keating years, Mr Keating told Fairfax Media he supported some of her assessments.
"Liberal economics had [in the past] dramatically increased wealth around the world, as it had in Australia - for instance a 50 per cent increase in real wages and a huge lift in personal wealth," Mr Keating said.
"But since 2008, liberal economics has gone nowhere and to the extent that Sally McManus is saying this, she is right."
"We have a comatose world economy held together by debt and central bank money," Mr Keating added.
"Liberal economics has run into a dead end and has had no answer to the contemporary malaise."
Mr Keating's response will surprise many who have seen him as a hitherto staunch defender of open markets, and key force in modernising the Australian economy. He also presided over some of the federal government's earliest privatisations and the floating of the dollar.
His shift in rhetoric will be grist to union attacks on the government and the business community over growing job insecurity and flat-lining wages.
Despite being urged - by Labor leader Bill Shorten - to moderate her insistence that it was OK to break "unjust" laws, which curb the right to strike, Ms McManus didn't take a backward step on that either. The ACTU leader has come out all guns blazing - and doesn't look like she will be putting them away any time soon.
