ABOVE: Queen Elizabeth II, prime minister Bob Hawke, artist Michael Nelson Jagamara and the Duke of Edinburgh at the official opening of new Parliament House, Canberra, 1988. LEFT: The Prince and Princess of Wales attend a Bicentenary event, Sydney , 1988.
ABOVE: Queen Elizabeth II, prime minister Bob Hawke, artist Michael Nelson Jagamara and the Duke of Edinburgh at the official opening of new Parliament House, Canberra, 1988. LEFT: The Prince and Princess of Wales attend a Bicentenary event, Sydney , 1988.

Secret cabinet papers show a time of debilitating change

OLDER homeowners would remember the almost crippling interest rates of 1988-89, perhaps the most prominent sign of an economy and nation undergoing a rapid and more debilitating phase of economic change than ever previously imagined.

Governing the nation, prime minister Bob Hawke entered 1988 cemented in the top job after a third victory, at the July 1987 election, with Labor continuing in Canberra on a promise of seeing through the wave of economic reforms it had begun in its previous two terms.

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While the economy was top of the domestic agenda, the Silver Bodgie was also strutting the world stage, meeting foreign players such as the last leader of the Soviet Union, Mikhail Gorbachev, and United States president George Bush.

At home, the new Parliament House was opened, and Australians were preparing for the biggest celebration of the nation in its short 200-year history - the 1988 Bicentennial.

The events attracted royalty with thousands flocking to see Queen Elizabeth and the Duke of Edinburgh making the journey for the Parliament House opening, and the popular Prince and Princess of Wales, in Sydney to celebrate the Bicentenary.

Closer to home, foreign minister Gareth Evans signed the Timor Gap Treaty with Indonesian foreign minister Ali Atalas in 1989 - a landmark agreement which would eventually lead to the independence of Timor-Leste from Indonesia.

Bringing legitimacy to the Hawke government's agendas, both domestic and global, was a largely unchanged Cabinet team.

But changes were afoot, with then rising stars Graham Richardson and Robert Ray elevated to Cabinet in 1988, bringing with them new factional rivalries and heated debate within the core Hawke team.

The dominant story revealed in both years of Cabinet papers released today by the National Archives of Australia, was that of adjusting to a newly deregulated economy, and finishing the job.

A determined treasurer Paul Keating focussed on completing vast economic reforms which had dominated spending despite a growing tendency towards Hawke's stated social justice strategy of working "towards a fairer Australia".

It was Keating's March 1989 Cabinet submission that best summed up the battle the government was fighting in its oft-conflicting social and economic agendas: "In a nutshell, our task is to avoid a wages blowout".

The earlier wages accords between unions, government and business were not enough and the government was trying to build recovery from the global October 1987 stock market crash, while inflation and demand rose.

ON SHOW: Expo 88.
ON SHOW: Expo 88. Contributed

The corporatisation of major government-owned assets also began, if not outright privatisation, with the opening of Qantas, Australian Airlines and Australian National Railways and Telecom to market competition.

The moves to open Australia to ever-increasing market competition were key to the Keating's economic agenda, but were slowed by public fears of open markets and long-standing protectionist tendencies within the Labor Party.

National Archives visiting Cabinet historian Dr Nicholas Brown said, in his essay on the economic and political challenges, that despite government efforts, the nation was still built "on foundations that still showed the weaknesses of the 'old Australia' - living beyond its means - more than the gains of the 'new Australia', lean and efficient".

But as the fundamentals of a tight fiscal environment underwrote Cabinet debates, various new and old players fought their corner - from new environmental and immigration programs to higher education reforms and making the health system sustainable.

These tensions within the government, capitalised on by Hawke in opposition, were beginning to divide the government, and as Dr Brown wrote; "strains within his own Cabinet were emerging over compromises and power-plays, spilling into questions over direction, coherence and - for the first time - his own leadership".

University fees

THE enduring importance of higher education, a highly contentious topic today, was shown in the wide-ranging reforms of 1987-89, led by Hawke's capable education minister John Dawkins.

With growing control over national education and training policy in a huge new department created in 1987, Dawkins advocated a national system, increasingly putting the onus on students to pay a fair share of their fees.

Under a new HECS scheme, domestic students would pay part of their way, with government contributions, and overseas students would pay full fees for the opportunity to study in Australia, while low-income students would get extra help to meet their costs.

In stark contrast to current reforms driven by the Abbott Government, the Hawke government was backed by polling showing widespread support for the scheme as long as it helped Australia's most disadvantaged.


Rising Asia

WHILE former prime minister Gough Whitlam helped break the ice with China, the now-accepted role of Asia as central to Australia's prosperity was guided in the Hawke government by the growing influence of adviser Ross Garnaut.

Backed by a Cabinet determined to lend further weight to its economic agenda, Garnaut's 1989 paper on the "ascendancy" of north-east Asia, particularly Japan and South Korea, became, as Dr Brown put it, a "manifesto" for micro-economic reform.

It was the first strong acknowledgement of the importance of Asia's still-growing middle class to Australia's future.


Universal healthcare

AN ENDURING image of the health success for the Hawke government was the "Grim Reaper" HIV-AIDS advertising, a 1987 campaign that shocked many and led to the disease being labelled Australia's "biggest public health risk".

While the campaign led to a $13 million trust fund for those infected, it was short-lived, and Treasury and Finance argued the government should not be held responsible for people's sexual habits.

The health system was already suffering from rising costs, with health minister Neal Blewitt arguing for a new funding model to avoid massive cost blowouts; based on universal aged-based healthcare, which was ultimately approved by Cabinet, despite protests from Treasury, Finance and the Prime Minister's Department.


Indigenous affairs

IN THE final month of 1987, then aboriginal affairs minister Gerry Hand made a decision that would change the shape of indigenous politics by creating a new national voice for First Australians, despite its slow decline and eventual abolition less than 20 years later.

But Hand's influence in the prime minister's office on Aboriginal issues would guide policy for several years, leading to the creation of the Aboriginal and Torres Strait Islander Commission, as part of the government's push for "self-determination".

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