Cabinet papers 1990: leadership scrutiny distracts from historic Hawke reforms

We have become accustomed to the corrosion leadership uncertainty brings to Australian politics. Selected key cabinet records for 1990 and 1991, released today by the National Archives of Australia, highlight the enduring tensions generated by perhaps the first in the modern cycle of such contests, and also reveal the distortions they introduce into our sense of government.

At a December 2015 media briefing before the release of those records, Bob Hawke urged reporters of the need

to destroy the myth that has been peddled in some quarters that this was a period of do-nothing government.

Hawke dismisses arguments that his government was paralysed in the period from its re-election in March 1990 and Paul Keating’s second, successful leadership challenge on December 19, 1991.

That “myth”, however, is well entrenched, especially in the biographies and autobiographies that have increasingly shadowed the recent past of Australian politics.

Behind the Punch and Judy show

There is, no doubt, an interdependence between the appetites fed by the itch of leadership unrest and the bullish market for personalised accounts of politics.

But those appetites can foster a disconnect between the public narrative of a government’s performance and the policy agenda that fundamentally shapes the life of the nation. This disconnect is particularly marked in relation to the events of 1990-91.

As Hawke reminded journalists, in those years his government passed more legislation - 144 acts in 1990, 204 in 1991 – than any other since federation. While the press focused on what Keating called “the Punch and Judy show”, this government was working at an astonishing pace on reforms that are still felt today: cutting tariffs, privatising state assets, reforming telcos, breaking industrial orthodoxies in moving to enterprise bargaining, introducing the “activity tests” of Newstart, ramping up targeted policies on child care and aged care, and much else.

In May 1990, Keating as treasurer congratulated colleagues on returning to their offices “unencumbered by costly and unnecessary campaign promises”. Many ministers might have doubted their prospects of re-election, but now was the opportunity to press harder into the reconstruction agenda the government had pursued since 1983.

More than ever, the government’s mantra was micro-economic reform: broad-brush deregulation of financial and industrial sectors was to be focused down onto the workers, employers and institutions that had increasingly to play their part in transforming the world of work in Australia. Bargains were struck over workforce participation, workplace culture, occupational transformation and flexibility and investment.

Cabinet submissions emphasised that the pressure of market exposure should be increased and public spending restrained. Even with the first signs of recession, the drive was to break through the last barriers to efficiency.

Car manufacturers needed the discipline of “more than gradual adjustment pressure”. Clothing manufacturers, proving resistant to regimes of “restructuring pressure”, needed “accelerated” strategies.

Hawke’s drive to recast federalism around a more co-operative approach to providing services gained early support and bureaucratic action. The Building Better Cities agenda of 1991 coupled a fresh approach to the spatial dimensions of disadvantage while emphasising the micro-economic goals of “enhancement of access to employment, education and training”.

Unforgiving leadership scrutiny

But critics outside the government found the focus on process in such policies less interesting than the programs with which the government had once held their attention. Economic downturn also sapped these initiatives of resources and strained administrative systems. As leadership divisions deepened within the government, these elements were readily seized upon by those wanting change at the top.

In this context, some changes, such as the introduction of a Medicare co-payment for visits to the doctor, played into intensifying factional jockeying as much as they challenged Labor Party principles.

And, with a fix on economic outcomes, there was less tolerance for the values of special interests, as Hawke found when he effectively staked his leadership on preventing mining on a site sacred to the Jawoyn people in Kakadu National Park.

The coupling of the government’s micro-economic agenda with this leadership scrutiny was unforgiving. But that agenda was integral – and these years perhaps decisive – to consolidating the transformations we are told made Australia more resilient through the economic crises to come.

However unguarded, Keating’s reference to the “recession we had to have” runs through much of the government’s actions through 1990 and even well into 1991. The decision was made not to “throw money at the problem” by stimulating recovery through public investment.

The treasurer assured cabinet in May 1991 that his intent was not “keeping the economy comatosed” by maintaining restraint, but guaranteeing that when business picked up it would be on better foundations for the future.

A changing world

By then, however, cabinet submissions were reflecting an awareness that the recession of 1990-91 was not only forcing through necessary changes. It was also hitting a society – and especially a labour market – that had not fully recovered from the 1982-83 recession and was less able to adapt to change.

Cabinet papers began to document a world that was being lost as much as promises of a world to come. Soon after becoming treasurer with Keating’s departure to the backbench in July 1991, John Kerin delivered a budget conceding that the past year had been one of “lost jobs, squeezed profits, and dashed hopes”. Kerin, too, would quickly become a victim of the disconnect between reality and message.

And in ushering in elements of the revolution in telecommunications, this period of government was also on the cusp of an age in which leaders are judged on their performance in an unforgiving 24-hour media environment as much as by their longer-term policy outcomes.