John Howard had come to office as prime minister in 1996 promising that by 2000 he would return Australia to being “comfortable and relaxed” about its history, the present and its future.
The 2000 cabinet papers, released by the National Archives of Australia on Friday, reveal that he was well advanced in his mission to turn Australia into the place he promised.
Howard had won a comfortable 14-seat majority in parliament and as the 2000 cabinet papers confirm, he was steadily implementing the policies that had brought the Coalition to office.
“With the accumulated experience of being halfway through its second term in office, the Howard government proceeded with its conservative re-engineering of Australia at a politically prudent pace,” wrote Dr Chris Wallace, cabinet historian for this year’s release.
“2000 was the year before the ‘year that changed everything’: 2001, when al-Qaida attacked the United States on 11 September, and the Howard government created its ‘Pacific Solution’ asylum seeker deterrent – prisms through which Australian politics would be refracted for many years to come.
“His Liberal and National coalition government’s concerns in 2000 were overwhelmingly domestic, and the approach to issues with international ramifications was heavily weighted toward local implications over international obligations.”
The cabinet papers show a government preoccupied with implementing its major tax reform, the GST, with policies that would deliver to rural Australia and issues associated with aged care.
“2000 was the last year of normality,” said the former deputy prime minister John Anderson, who was invited by the archives to put the cabinet papers in context.
“It was only 10 years after the collapse of the Berlin Wall. As Francis Fukuyama wrote in his book The End of History, it was assumed that liberal democracy, supported by free enterprise or mixed economies, had won out and that totalitarianism and dictatorships and other various forms of authoritarian governments would wither away, that democracy would be on permanent advance.
“Well, that dream didn’t last very long. 2001 was a very dramatic shock.”
With a 1 July start date looming, Howard’s cabinet knuckled down to the task of implementing the most significant tax reform in a decade.
Howard had come to power promising a broad-based consumption tax and cuts to income tax. The details had been announced in 1998 and following negotiations with the Australian Democrats, the goods and services tax became law. But actually introducing it was complex.
Howard later noted, of all the big economic reforms since 1980, this was “the most complex and had the potential to cause the most dislocation”.
In February cabinet committed to a $20m “tax reform education package” – an advertising campaign that was designed to overcome the perception that everything was going to rise by 10%. Cabinet noted that the public and businesses did not seem to appreciate that some wholesale taxes would no longer be charged on inputs.
One of the greatest fears of the government was the impact on petrol prices.
In February the then-treasurer, Peter Costello, briefed cabinet without submission on petrol prices, and agreed that Treasury would prepare options – with input from the Department of Prime Minister and Cabinet (PM&C) and Anderson’s Department of Transport and Regional Services – for how the promise that petrol prices would not rise because of the GST could be met. Excise was cut to ensure GST did not push up prices. But it turned out not to be sufficient to prevent a price rise.
In her analysis of the cabinet papers, Wallace wrote that Howard’s political antenna was slower to pick up on the storm brewing in late 2000 over petrol prices – an issue evident on the ground to the Nationals but absent from the late 2000 cabinet papers.
Early in 2001 Howard joined Costello and Treasury in opposition to Anderson’s push for a further petrol excise cut.
“John Anderson was right, and Peter Costello and I were wrong,” Howard declared in his memoirs. “I would fully realise this some weeks later” – at which point Anderson’s proposal was adopted.
The cabinet papers show the powerful Australian Hotels Association was worried about the impact of the GST on the price of beer. Cabinet rejected its pleas for special treatment, though concessions were made for mid-strength beer.
Then there was the question of what businesses like nightclubs, hotels or supermarkets would do once the clock struck midnight on 1 July.
Cabinet determined they would be able to trade until their normal closing time on 1 July, before having to reset their tills.
Climate change remained a major issue for the Howard government as it had been in previous years – and would continue to be.
The 2000 cabinet papers show the Australian Greenhouse Office was working on an emissions trading scheme in early 2000, and sought funding for it in the May budget.
But there remained big divisions between the approach of the then-environment minister, Robert Hill, and his cabinet colleagues over what the government should do to meet the commitments Australia had made under the Kyoto protocol.
In May Hill brought a submission to cabinet suggesting that the federal government may like to scrutinise two major greenhouse gas intensive projects and consider imposing conditions on the projects, including requiring abatement of the carbon they would produce.
The cabinet submission noted that together the coal-fired Kogan Creek power station in Queensland and Comalco Alumina would account for 25% of the emissions growth that Australia was permitted under Kyoto. The Kogan Creek power station would be half as efficient as a gas-fired plant, Hill said.
But the idea of conditions was roundly rejected by the prime minister’s department, Treasury and the Department of Finance.
PM&C said it was “desirable to clarify future greenhouse policies as soon as possible to reduce the uncertainty faced by investors in projects such as these.”
But it said a broad policy was better than a project-by-project approach.
As 2000 drew to a close Australia was again under pressure to outline how it would meet its Kyoto pledges when it attended the sixth meeting of the conference of parties, known as COP 6, at The Hague.
The cabinet papers reveal that Hill was told to push for Australia to be given credits for reducing land clearing and to argue for additional carbon sinks beyond those already approved under Kyoto.
He was told to “minimise the cost of implementing Kyoto and the impact on Australian trade competitiveness”.
If the outcome of the COP 6 climate talks would impose disproportionate costs, Hill was “to work with like-minded countries to block consensus or failing this, make a statement of Australia’s position”.
Howard was to be kept informed of progress.
Another cabinet note of discussions in December said the prime minister should write to the US administration – it was the lame duck days of the Clinton administration – to convey that Australia was “disturbed” at reports that the US may be contemplating substantial concessions to the EU, and that Australia would not support such a deal.
It noted “the possibility of a better outcome under the new US administration” of George W Bush.
Hill would go on to take an emissions trading scheme to cabinet in 2003. But Howard, following intense lobbying by the mining industry and the Murdoch press, ensured its defeat. Instead Howard unveiled his new climate and energy plan in a white paper in 2004.
Marian Wilkinson wrote in her book, The Carbon Club: “It was a clear signal to the world that Australia would not be seriously reducing its large greenhouse footprint any time soon.”
In 2007, faced with political annihilation, Howard revived the idea of an ETS. But this too may have been another example of Howard’s trademark pragmatism.
In a 2019 speech to the mining industry, Howard described himself as an “agnostic” on climate change.
“I don’t think we’ve got the balance right,” Howard explained. He said climate change had become a “substitute religion” and the Australian government had erred in its policy in providing “too many incentives for renewable energy”.
Pragmatism tempering ideology
The papers also confirm that Howard brought to his cabinet a sharp political nose and this often tempered the economic rationalist ideological leanings of his government.
In early 2000, his then-employment minister, Tony Abbott, proposed closing Employment National, the last remaining government employment agency in a market that had been privatised.
The proposal on paper had support from most ministers, but Howard, sensing that it would play badly in rural Australia, turned the decision around.
The bush wins big
The coalition between the Liberals and Nationals was working smoothly in 2000 despite the political pressure that One Nation was exerting in Queensland.
Speaking at the cabinet papers briefing, Anderson, also the Nationals’ leader at the time, said his party publicly backed the government’s policies and in return its voice was heard in cabinet.
Many cabinet submissions at the time included a rural impact statement and the Nationals made significant gains in areas such as road spending, with the establishment of the Roads to Recovery program.
Cabinet also considered ways to get more doctors into rural areas and to boost services in the regions.
Salinity and the Murray Darling
The year 2000 also marked a national attempt to tackle degrading natural resources and dry land salinity caused by land clearing and over-extraction from the nation’s river systems.
In August, cabinet received a briefing from Prof Peter Cullen on the problems facing the nation’s major river systems. The government had already established the Natural Heritage Trust and resolved to take national leadership through the Council of Australian Governments.
The debate over the need to act was couched heavily in economic terms. The problem was one of “market failure” and “Australia’s reputation as a green food and fibre producer was at risk”. It warned that in 20 years Adelaide’s drinking water would fail World Health Organization standards two days out of five.
The discussion would eventually lead to the development of the Murray-Darling Basin plan.
International questions were largely viewed through the prism of domestic politics. In 2000, the government was pursuing a bilateral trade agreement with the US.
The major international concerns preoccupying cabinet were Australia’s involvement in East Timor (now Timor-Leste), and the problems that were besetting Pacific nations, including coups in Fiji and the Solomon Islands.
A review of Australia’s policy on Papua New Guinea, considered early in the year, and another on Australia’s policy toward the South Pacific later in 2000, were both withheld in their entirety by the archives because release would “cause damage to security, defence or international relations”.
Aged care and an ageing population
Residential aged care, in which more of Australia’s ageing population was increasingly living, attracted intense public scrutiny in early 2000 when it emerged that residents at Riverside Home in Melbourne were being subjected to kerosene baths, with lethal consequences. Other stories of maltreatment at residential care homes quickly emerged.
The then-aged care minister, Bronwyn Bishop’s, submission in response was considered by cabinet in August.
On the one hand, it trumpeted the Howard government’s Aged Care Act 1997 as “the basis for a sound and sustainable aged care system” and “the most significant change for the industry in its history”, said historian Wallace.
But Wallace also noted that Bishop grudgingly conceded there had been 4,000 complaints since the legislation’s introduction and that the commonwealth ombudsman had found that the scheme lacked clarity and timeliness.
A new complaints handling process was put in place but the government baulked at a return to staff ratios, because it “would return the industry to detailed input regulation and reduce its efficiency”.
Cabinet also considered issues arising from Australia’s ageing population and worried about the falling birth rate. A paper on population commissioned in April 2000 noted that fertility had fallen from 3.5 children per woman in 1961 to 1.75 in 1999 and was expected to fall further.
The paper warned that a fall below 1.6 would be a cause for economic and social concern and was a “plausible possibility”.
Skilled migration would make up some of skills needed in the workforce but the paper suggested measures were also needed to encourage older Australians to work longer and boost the birth rate.
The memorandum recommended against a formal population policy but its findings would inform the Howard government’s family policy in years to come.
In the 2002 budget it introduced the baby bonus and followed up with policies to facilitate more mothers staying home with children.
It was an important step along the path of Howard returning Australia to the country he desired it to be: relaxed and comfortable.