The 75-year-old, who first elected to federal parliament 50 years ago, said Labor risked losing the vote of working people unless the party was clear in how it proposed to help them.
“Working people … if they’re not sure about the economic framework, they think ‘hang on my job’s at risk’ and so they go and vote against you even though you’re actually trying to help them,” Mr Keating said.
“These are the two big issues I see, that is income inequality and the fact there is no trickle down means that working people are going to get poorer and poorer unless there’s a change in policy, and there’s only one party to do that, and that’s the Labor Party.”
He said “wealth was back” in Australia, but warned Australia was at risk of losing its mantle as “the great egalitarian society” without brave reform.
“The challenges are new and they are great, and it will always be only the Labor Party that tries to deal with them, earnestly, ambitiously,” he said.
Mr Keating took a swipe at the Liberal Party, who he said had to be dragged like “a ball and chain” towards reform.
“If I said this in the Liberal party room they’d think I was talking Swahili, truly.”
He said that Labor must work to educate a new generation for an interconnected world.
“Now everyone is connected to everyone else in the world…the task of education is to teach kids to swim in the big horizontal pond of the digital economy,” he said.
Lastly, Mr Keating said Australia must continue to work towards equality with its First Nations people.
“We’ll never be a nation of substance, until we’re a nation of equals,” he said, before a standing ovation.
The report on Labor’s election loss, released on Thursday, found the breadth and complexity of Labor’s “cluttered policy agenda” left the party vulnerable to attacks from the Coalition.
It said former leader Bill Shorten’s unpopularity contributed to the shock loss, but the tax policies he took to the election didn’t cost Labor victory.
The report, undertaken by former cabinet minister Craig Emerson and former South Australian premier Jay Weatherill, said there was no evidence the loss was an adverse reaction to Labor’s core values including working Australians, fairness, non-discrimination and care for the environment.
Policies borne out of those values, the report said, must be bold, but fewer in number and easily explainable to “making them less capable of misrepresentation”.
However, in his delivery of the first Paul Keating Lecture, shadow health minister Chris Bowen said Labor’s message didn’t need to get smaller. He said the party’s messaging needed to connect with their concerns and their hopes for the country.
He said Labor shouldn’t have been surprised by the May 18 election loss, and pointed to the rejection of progressive parties across the world, citing the rise of Donald Trump in the US and Brexit in the UK.
Mr Bowen said progressives were facing a “pandemic of populism,” with right wing parties providing simplistic “so-called solutions” to underemployment and growing inequality.
He described the current government as “policy pygmies,” adding that the Liberal scare campaign had worked in the lead-up to the election.
Tom Rabe is a journalist with The Sydney Morning Herald