Wayne Swan holds the fate of the economy, the Labor party and the Prime Minister in his hands, making the Treasurer Canberra’s, and Australia’s, most powerful person.

As Treasurer he has accumulated a record of economic management that is the envy of the world. And as Deputy Prime Minister and one of the most respected members of caucus, he can determine the parliamentary party’s immediate future. With growing speculation about how Julia Gillard can’t rescue Labor from the catastrophic circumstances it faces, it is Swan who will determine when a post-Gillard future arrives and, partly, what it will look like. Any other scenario will see Labor tearing itself apart.

That is why, with his fifth and most personally driven budget due next week, Swan now has more power than his beleaguered boss.

It helps that Swan has stepped up on the communications front. His assault on mining billionaires Andrew Forrest and Clive Palmer was a rare example of an effective communications campaign, with the billionaires reacting almost as scripted — weeks later, Forrest is still swinging at Swan, while Palmer is threatening to stand against him in Lilley, to collective eye-rolling in the Liberal-National Party. This was a defiantly Labor campaign from Swan. It may not have reversed Labor’s abysmal polling, but it sent a clear signal the government still possessed traditional Labor values.

His now infamous assault on Kevin Rudd in the lead-up to the ballot also showed his new-found communication skills.

Swan has, remarkably, held only two portfolios since he came into federal parliament in 1993: family and community services, and Treasury. He entered the shadow ministry in 1998 and, apart from a brief stint on the sidelines while allegations about breaches of the Electoral Act were investigated, he stayed in family and community services until 2004, when he became shadow Treasurer after Mark Latham’s defeat.

It may be coincidental but it reflects a certain, almost boring, steadiness about Swan that he’s brought to the Treasury portfolio.

Swan initially was an unlikely candidate for the gong he won last year, Euromoney‘s Finance Minister of the Year. His early period as Treasurer was nervous. There was constant chatter about whether Gillard or Lindsay Tanner would handle the role better; stories circulated in the private sector that he wasn’t across the basics. The Coalition peppered Swan with questions in parliament, although in the political equivalent of “whatever doesn’t kill me makes me stronger”, this hostile fire only served to harden him as a parliamentary performer.

But he deserved the award, and deserved it more than Paul Keating when he won it in 1984 (Keating’s best years were ahead of him at that point). Swan has endured a series of major economic challenges and so far handled them all. On his watch, we have an economy with low unemployment, low inflation, low interest rates, low debt, low bond rates and a triple-A credit rating from international agencies who specifically cite the government’s stewardship, an economy so well-regarded internationally that it currency appears bulletproof, to the chagrin of our trade-exposed sectors like manufacturing. All that plus a range of substantial reforms on carbon pricing, a mining tax, superannuation and workforce participation.

As other Western countries increasingly track growth paths similar to or worse than the 1930s, it’s an achievement apparently unnoticed by angry voters but one envied by policymakers overseas.

And Swan has maintained fiscal discipline. The Australian political benchmark is three or four budgets of rectitude before spending starts to get out of control. He goes into his fifth budget hell-bent on delivering his commitment to a surplus. He’s the only Treasurer in the modern era to be criticised by business for being too disciplined.

No matter how long it lasts, Swan’s period as Treasurer will be dominated by the financial crisis and its aftermath. And his personal political history is relevant here. Lurking deep within Labor’s DNA is the experience of another economic crisis — the early 1990s recession, a global recession exacerbated in Australia by mishandled monetary policy, state bank collapses, the Hawke government’s tariff reforms and a slow fiscal response from the Keating government.

There was a fierce determination on the part of policymakers in 2008 not to make the same mistakes again and see another generation of workers written off. Swan saw the political consequences of that recession first hand, as a first-term MP who arrived in Canberra in 1993. Swan had been a Brisbane academic who alternated stints as a lecturer with adviser roles to senior ALP figures Bill Hayden, Mick Young and later Kim Beazley, with whom he’d work again after he lost Lilley in 1996. A loyal deputy of the powerful AWU, he became Queensland party secretary in 1991 after overseeing Labor’s return to power in 1989.

In Canberra, the apparatchik from Queensland made a name for himself immediately by successfully (and ironically, given his current surplus determination) demanding John Dawkins’s 1993 budget be loosened. Swan later wrote

“… politicians and economists of all shades, including official bodies like the Treasury and the Reserve Bank, struggled to cope with the transition to a deregulated economy and its consequences. I sat on the back bench at the time. I saw the Australian people get out their baseball bats and wait quietly for the 1996 election so they could get even. And I was one of the casualties … Tragically, we also failed to do enough quickly enough to help those displaced by economic reform … by 1995, it was already too late to rescue many from the employment scrapheap …”

In 2009, the response of policymakers to the crisis worked. More than a 100,000 jobs were saved in Australia, while unemployment surged, sometimes to Depression-era levels, across western economies. Few of those workers are aware of what would have happened without the government’s stimulus programs and the RBA’s rapid intervention, but they will remain an enduring legacy of the Rudd government, and Swan’s Treasurership.

*Read the full profile at The Power Index