Background to the 1984 and 1985 Cabinet records

The following text is a transcript of a presentation given by Susan Ryan at the 1984 and 1985 Cabinet records release media briefing held at the National Archives of Australia in Canberra on 4 December 2012. 

An audio presentation of this paper is available.

Well, thanks and good morning. One thing that is very evident to me about how times change is that if we were back in '84/'85 I would know everyone sitting in this room and I probably would have had a few robust exchanges. Not as robust as Treasurer Keating had, but still. Now of course there are very few familiar faces, but it's good to see them.

I think we are indebted to Jim for his very thorough overview of the period, the big issues, so I will respond to what seemed to be things that really mattered that we did at that time, or the things that mattered that we weren't able to do at that time. Let me remind you, of course, what the electoral climate was. I am not setting out to raise the envy of current incumbents but, as Jim reminded us, we did start 1984 with a Prime Minister of immense, immensely high personal popularity ratings and an unpopular and insecure Opposition leader, a healthy two-party preferred vote of 54 per cent and the Opposition trailing and miserable at 40 per cent. Despite this enviable electorate support, we were not on Easy Street as the Cabinet records will show you.

My personal position as you have been reminded, was Minister for Education and Youth Affairs, and Minister Assisting the Prime Minister on the Status on Women. If you have a look at the photographs around the room, you will see I was not only the first but the only woman in Cabinet, and that remained the case for some time, in a Labor Cabinet. Margaret Guilfoyle had been in Fraser's Cabinet and had done a terrific job. I was a member of the relatively newly formed Centre-Left faction and I had been Senator for the ACT since 1975. That was the first year when the territories got Senate representation. So I, along with Liberal Senator John Knight, were the first senators elected.

At the end of 1984 we were elected for a second term, and I can assure you that that election campaign was quite different in mood from '83. The '83 election campaign was fantastic because we knew from the moment we switched to Bob Hawke up in a Shadow Executive meeting in Brisbane – that and Malcolm Fraser had conveniently gone over to Yarralumla to ask for a dissolution of the Parliament – we knew we were going to win. There was no doubt about it. Everywhere we went, people were throwing money at us, kissing Bob Hawke, hugging Bob Hawke, you know, it was very clear we were going to win.

By '84 we started off thinking, 'Well, it'll just be a re-run of '83'. It was not a re-run of '83, it was quite tough, things didn't go so well. Bob was distracted by a big family problem and Andrew Peacock did perform very well. I can remember sitting in a B&B in Launceston with my staff watching the TV debate of Hawke and Peacock. It was extremely hot. The B&B happened to be run by Jocelyn Newman who subsequently became a Liberal Senator – that is what a small place Australia is. We sat there watching in this hot little pokey room and realised that Peacock was winning the debate, or appeared to be – if you print that on 1 January, I will get a phone call from my former leader! – but so it appeared. Anyway, it showed how quickly the electoral mood can change and I mean that's something that you write about every day. So we did get back quite well, but it was quite a scary episode.

However, we did not pull back at all on our program of reform and it did not make us more risk averse or more cautious. The biggest challenge was we needed to reform the tax system and Prime Minister Hawke had promised the Tax Summit. The economic climate, as you have been reminded, was bad – very high unemployment and going up, inflation high and going up, costs of living kept going up, the economy could not stand the wage increases to cover the costs. Despite that very brave decision to float the dollar in '83, in '84 and going into '85 the balance of trade was bad and getting worse. It's important to remember that the performance of the dollar – the newly freed dollar floating around the place – was really quite a shock psychologically after we'd lived our whole lifetime with a dollar whose value had been decided and we knew what it was going to be.

Our dollar went down which was as it should be, but Treasurer Keating used to come into the Cabinet with some little electronic device, quite an early one in those days, which showed where the dollar was in relation to the US dollar at any moment. So he would keep interrupting Cabinet with, 'God we've gone down to 60 per cent', and we'd all go, 'Oh my God!' We should have known better. We went on as if it was our champion runner coming last in a race, but the psychological effect of the small dollar was quite negative. And that was on us the Cabinet, so imagine how the punters reacted to what was happening to the dollar.

Anyway, despite those sorts of uncertainties and the very, very tough environment, we did have big ideas and we did implement most of them. The Prices and Incomes Accord with the trade union movement was a big idea. It was implemented. And even though there has been controversy about it ever since, I'm a person who is really supportive of the Accord and remain so to this day.

First of all, it gave us a very high measure of industrial peace, but its main purpose was a better way of controlling the economy. And the Accord lead to the fact that the union movement, lead by the ACTU, accepted the tough deal – one in fact that the people would not have accepted – and that was not to take the wage rise of 3 per cent, which under current industrial relations arrangements all award workers were entitled to, but to take that increase as superannuation instead of wages. This agreement, of course, stopped inflation rising further and was the first step to the great national savings scheme and compulsory superannuation, which grew out of this initial deal. But at the time it was a very controversial thing for a Labor government to be doing, much less in a formal arrangement with the trade union movement.

One of the reasons I was a strong supporter of the Accord, of course, was it contained the social wage element, in addition to the 3 per cent super deal. The Labor government's part in the Accord was to ensure increased support for areas of great importance to the trade union movement like education, welfare, family support and so on, and all that happened. It was the social wage element that helped me get increased budget allocations for education, especially school education. Through this increased funding for example, I was able to fund programs to deal with the really shocking performance of our education system in terms of how many kids finished secondary school. For the younger members here today, it's probably something you are not aware of, but when we came into office only one-third of Australian students finished high school, which put us around the bottom of the OECD in school completion rates – appalling. Because of the extra funding coming from the Accord arrangements, we were able to fund special programs which even in my term as Minister lifted that shocking one-third up to a very respectable two-thirds completion. So you can understand why I was a supporter of the Accord.

There was also the opportunity to get increased TAFE places. That was also very important because our deregulation activities, our removal of tariffs and so forth, while the correct approach from a macroeconomic point of view, did lead to a collapse of a lot of Australian manufacturing, a lot of factories, a lot of white goods, textiles, all of those sorts of things collapsed. Blue-collar workers – men and women – were thrown out of work with really no other opportunities. They couldn't suddenly transform themselves into computer programmers for the newly burgeoning IT industry. So the growth in TAFE places where such workers had a chance of getting some skills to make them employable again was very important, and again I put my capacity to get those funds in a very tight environment down to the Accord.

I think the tax reform period in Cabinet when we discussed the White Paper – all 414 pages of it – was really one of the most exciting periods of Cabinet in my time. The discussions sometimes went all night. They were at a very high level of intensity because there was a diversity of views.

I was a supporter of option C, which was Keating's preferred option. Option C was tax reform based on a 12.5 per cent goods and services tax which was to go on everything, no exemptions. The compensating factors were very, very big improvements in pensions, welfare benefits and the like. In my view a very well-balanced way of getting more efficiency and fairness into the tax system by taxing everything and thus avoiding the situation that prevailed then – which was that many people paid much less than they should have in tax because the income tax, corporate tax, negative gearing, all of those things, allowed people with resources to avoid what should have been their tax responsibilities. So I was a supporter of option C.

Not everyone in the Cabinet was a supporter of option C but Keating really lead the charge, really instructed us all. He was at his best, he was fantastic. He'd explain all these complex things, he'd be very dramatic. He'd always stand up, his arms would be flailing, he'd draw graphs and diagrams about what would happen. I actually found it totally persuasive, though as I said, not every member of Cabinet did. But he did educate the Cabinet, he educated the community at that time about tax, how it worked and why it had to be reformed. He even educated those highly educated members of Cabinet who were Rhodes Scholars and the like; except of course Prime Minister Hawke – a Rhodes Scholar who did know as much as Paul did about it.

We had the Tax Summit. Option C was abandoned as a result of the Tax Summit and what that meant is we did not proceed with the consumption tax. We did a variety of other taxes, which Jim has referred to – wholesale sales tax, capital gains tax, a few tidyings up, services tax. Services taxes came in, which did improve the revenue but our big idea of getting this great big broad-based consumption tax, which could then fund all the things we wanted to do in social policy, didn't happen and it didn't happen really because in Hawke's judgement we couldn't get the major stakeholders to agree. The Business Council in Australia didn't want it. The welfare sector – ACCOS – didn't want it and the ACTU was not at all convinced it was the way to go. So with those three big institutional outfits not supporting it, Hawke's view was that we shouldn't proceed with it and Cabinet took decisions that confirmed that judgement. Although you would have to say that Treasurer Keating was not happy with that outcome.

What were the Cabinet meetings like? Well I have to say and you've all heard this now a lot of times, that they were very well chaired by Prime Minister Hawke. He was always in control of the agenda and he usually achieved his preferred outcome, even if it took marathon meetings to arrive at that point. The meetings were formal, they were conducted in a highly formal way, they were numerous, we seemed to be forever running across at Old Parliament House from the Senate, running across to more Cabinet meetings. They started on time, all ministers attended, unless you were out of the country – that was really the only reason you couldn't attend. Senior officials attended but only as note-takers.

The Cabinet 10-day rule, where you had to have your submissions in 10 days in advance, was usually honoured. There were very few exceptions. As a result of this, we were all pretty well prepared. Hawke was on top of every submission and details of the submission. All ministers read all submissions. If you indicated by one of your remarks that you hadn't completely read another minister's submission, this failure was pointed out to you in no uncertain terms.

And of course the three coordinating departments – Prime Minister's, Treasury and Finance – always put coordination comments on your submissions before they came to Cabinet so you knew where you stood with the coordinating departments – in my case sometimes in quite a weak place because the coordinating departments did not like so much expenditure on education. Debate was robust but we hardly ever took a vote. Hawke's style was consensus and it worked.

We did have a sense of history. I mean not every working minute in Cabinet, but we did from the beginning have a sense that it was a big opportunity for us as a Labor government to do big things. Some of our ministers, of course, had been in the Whitlam government and had been quite scarred by the short and tumultuous term of that government, coming so long after 23 years and then short lived. As it turned out many of the Whitlam reforms are still with us and flourished, but at the time it seemed to have been too risky, too adventurous, perhaps not well prepared enough. We didn't want to be like that, but nonetheless we wanted to do big things.

We did have the sense that some things we did would only have been done in our Cabinet – that not any Cabinet that happened to come along might have done them. I even had that sense about some of the decisions I was able to make, that it was my job to make them because no one else would have made them. And that sense of doing something, that really adds value and is unique in the group of people you are working with, and is quite sustaining through very big fights and very long nights.

We all had highs and lows. Quite a nice personal high for me, Jim has referred to, was getting agreement to the Green Paper on a working party for affirmative action, which was a program designed to get systematic improvements to employment opportunities for women throughout the private sector and through universities. It had already come in in the public sector. Hawke gave leadership on the initiative. With his leadership we were able to get 27 CEOs, all the vice-chancellors, the ACTU, women's groups and the Opposition Ian Macphee and Peter Baume sitting on the working party.

We developed a system which facilitated the corporations working out where their female employees were, whether they had enough, if they didn't why they didn't, what promotion opportunities were there and so on. It was quite a moderate, quite a modest program, but an important one at a time when we still had a very deep gender divide, a female ghetto in the work force and very little movement of women up to senior positions.

So I expected a lot of controversy with this program because when I introduced the sex discrimination bill in 1983 we had extraordinary controversy of a kind that – if you didn't see it, you'd think I was exaggerating to tell you about it – but the whole of the conservative forces throughout Australia leapt up to try to stop a law that said you shouldn't be sacked because you are a woman, or you shouldn't be sacked because you are pregnant, that it was a communist revolution, the destruction of the family, of Christianity and so forth. It turned out not to be. Anyway I was expecting another big fight but I think particularly because of Hawke's leadership and the cooperative working party we didn't have a big fight. We introduced the legislation and we set up an agency to implement the decisions. I thought that was quite a good thing to do, and it was one of those things that I thought if I hadn't have done it no one else in Cabinet would have done it, so that was good too.

Low point for me – tuition fees for university students. I was a great supporter of the policy that Whitlam brought in, no tuition fees and it was also Labor Party policy. In those days I think we were very much guided by Labor Party policy, in fact in the period when we were shadow ministers, we participated in the national conference and were identified with policy positions, so we took that pretty seriously. My unreconstructed Whitlamite position on fees was not shared in Cabinet. The economic rationalists considered my position to be that not only of a dinosaur but an innumerate dinosaur. In these papers now about to released, you see reference to the move from some coordinating departments, supported by some ministers – and I must name Senator Peter Walsh who was really on the warpath with this one – to introduce fees in that budget, which would have been $1400 per year, quite a lot in '84 values. A decision was not taken for a number of reasons and there doesn't seem to be a record of a lot of Cabinet discussion, but once the debate had started it never went away.

I won a couple of battles in the following two years. I lost the war. In 1987 some innocent little thing called the admin charge of $250 for all tertiary students was introduced, it was the thin end of the wedge. After the '87 election I also lost the portfolio and Education Minister Dawkins very enthusiastically embraced the university fees system and set up HECS. So that's what happened.

Anyway that was a genuine policy difference but I think the really sad discussions in Cabinet were those concerning Lionel Murphy and The Age tapes saga. Jim's reminded you of those. Lionel was very highly regarded by all of us in Cabinet and I think throughout the Labor Party generally. He had been a great reforming attorney-general and was a man of immense intellect, empathy, bravery and so forth, so we were very distraught to have to be a part of the events that ultimately lead to his prosecution. Findings of wrong-doing against him were subsequently overturned but it went on and on and on. During that time Lionel became very ill with cancer and as you know, even though he was ultimately acquitted he died shortly after that. So that was one of the really sad and distressing things that we had to deal with.

Another big moment of history that we didn't quite make was Aboriginal land rights. We were conscious that it was the opportune time to do it, and we wanted to do it. Why didn't we get there? Western Australia was the main reason. The Western Australian Labor government lead by Brian Burke was totally opposed and his views and the views of the state government did affect our Western Australian Cabinet ministers. Some of the states had started to legislate, some of them hadn't. There was no sense that there was going to be a fair, major, sustainable reform coming out of this bits and pieces of states stuff. Clyde Holding developed a preferred model with a lot of consultation, but that preferred model was not preferred by the Aboriginal leadership, nor was it supported by the mining interests and not by the states, so we couldn't proceed with it.

But we did do one very, very good and proper thing. We did hand over Ayers Rock, now Uluru, to the traditional owners and we had a great big ceremony. I don't know if any of you were there out at Uluru. Indigenous people came in from the desert from everywhere, thousands of them you know, really tribal people with their body paint and so forth. It was a fantastic time and it was, despite our inability to get a national land rights regime in place, it was a very strong signal to the first Australians that we accepted their claims to land. So that was really a high point.

If you revisit the decisions and the memoranda of this period, I think one aspect of the business of making public policy does emerge very clearly. Many policies are made and put in place at a particular time, but it turns out that that's not the end of the story. They return, they need further action and this can happen again and again. The lists for this period contain quite a few of these resonances, tax reform for starters. Despite the decisions from the Tax Summit and the White Paper and the Howard government's GST, we hear every day, particularly from those who write for the financial press, calls for a reform of the tax system and indeed the consumption tax even though neither the government nor the coalition say they have it on their agenda. It is certainly a part of that wider debate going on out there by those who want tax reform, so it seems we are not in a very different place now with tax reform as we were when we did the White Paper. Maybe if we had option C we would be in a better place, who knows?

Now affirmative action. As I said we got a law and an agency going, after a little while it went right on the back burner. Nothing much happened in terms of the progress of women into senior positions in employment. However just last week an Act was secured in Parliament – the Workplace Gender Equality Act – which is the grand-daughter of the Affirmative Action Act of 1986 with a few more teeth, and the original affirmative action agency is now reborn as the Workplace Gender Equality Agency. So that thing that we started that didn't go very far has come back to life, and I am hopeful I will see a lot more action.

New funding for schools, that was a very big decision of the '84/'85 period. I certainly had my Gonski moment at that time. The whole issue is back again, the last sitting week, as you would be aware, the Bill for the first stage of Gonski implementation was introduced. Now it's the same debate as '84, the same objectives, a similar approach, very different dollars – we'll see what happens. And note that we reviewed the overseas students policy in 1984. We did as a result of that put in place fee-paying overseas places for overseas students. We did that for a number of economic rationalist reasons, but that program grew I think much larger than anyone expected and became a $16–17 billion export earner. It's still in place. It got a bit knocked around by the global financial crisis and by the very ugly incidents involving some Indian students, particularly in Melbourne, but it's back on track. A decision that seemed to be quite a modest decision not of great consequence did turn into one of our big export earners.

So some things continue but we still haven't got a Bill of Rights, despite the efforts of some people and we are still talking about a second airport for Sydney. So they are the issues as I see them.

Thank you.

Copyright National Archives of Australia 2014