Background to the 1992 and 1993 Cabinet records

By Professor Nicholas Brown, The Australian National University

Political context

Paul Keating's second challenge against Bob Hawke for the leadership of the Labor Party succeeded on 19 December 1991, but by a narrow margin and at the end of a year that had seen the government's performance slump and its standings in the polls plummet. Becoming Prime Minister on 20 December, Keating promised a 'cohesive and comprehensive plan to get the country cracking'. The year 1992 promised to be an interesting one.

An extensive reshuffle of portfolios for ministers sworn in on 27 December suggested revival – and no recrimination against Hawke's supporters. But the challenge ahead seemed formidable. As Don Russell, Keating's principal private secretary, had remarked, the top job would only come to Keating when the government was a wreck. Don Watson, who joined Keating's staff as speechwriter, recalled a pervasive fatigue and a sense that, after nearly nine years in office, most of Labor's work had been done. As Treasurer, Keating had been charismatic, pushing an agenda of sustained challenge to orthodoxies. This role, by its very nature, had been unlikely to win popularity but at least had gained respect. Going into 1992 as Prime Minister with personal approval ratings at 25 per cent, the game was different.

The press closely watched a man who seemed to be 'playing himself in', initiating wide ranging consultations beyond government, with business and union leaders, about what was needed. The new year began with a slump in the dollar and unemployment levels tracking past 10 per cent – a figure not matched since the Great Depression. There was certainly pressure for action.

In his published diary, reflecting on Keating's first government, Neal Blewett (who moved from Health to Social Security in Keating's December reshuffle) noted the energy of the new Prime Minister but also the gloom of early Cabinet discussions. A first priority was the preparation of a major statement to demonstrate the government's commitment to turn the economy around, and to regain the political initiative. Since its launch in November 1991, Opposition leader Dr John Hewson's ambitious Fightback! agenda for tax reform and spending cuts had been largely untouched by Labor criticism. Cabinet first discussed what might comprise their own statement on 7 January, and considered 43 specific proposals on 28 January. Released on 26 February, Keating's One Nation began with this concession: 'After seven years of growth, Australians are now experiencing hard times. Nearly a million people are out work. Families are worried about the future.'

In promising to restore 'jobs and prosperity' over four years, One Nation argued for the kinds of stimulus the government had resisted as recession bit harder through 1991. While the emphasis remained on the long-term goals of workplace reform and boosting national productivity, the statement proposed 'a strategy of spending on substantial and necessary public investments now while private investment is weak'. The promise was to return the budget to surplus as soon as possible, but in the interim greater attention would be given to matters of 'social justice' and inclusion. Commentators regarded a projected 4 per cent growth rate as 'optimistic'. Measures ranging from income tax cuts scheduled for 1994 and 1996, a one-off family allowance payment of $125 and a $2.3 billion infrastructure program, were judged (according to the Financial Review) as 'clever but risky' at best, or 'pork-barrelling' at worst. A boost in popularity came with the statement, but did not last. And an election was at most 18 months away.

With its emphasis on micro-economic measures, One Nation was not the easiest 'nation-building' manifesto to sell. The discipline of deregulation would continue through 1992 and become increasingly formalised in the national competition policies recommended by the Hilmer report of August 1993. The national assets to be sold gained as much attention, and more controversy, than the national programs to be developed. But Keating now relished a freer hand to craft a more assertive nationalism as a part of these reformist aspirations. The visit of the Queen in February 1992 and Keating's first tour through Asia in April saw him openly reflect on the inevitability of Australian independence, and on a role in the region played 'not with ghost of empire about us, not as a vicar of Europe, but unambivalently'.

In May Keating stated that Australia would have a new flag by 2000. In his view, if the imperative of exposure to the international economy demanded new policy responses, then 'the character and the future of the nation' must be revitalised as well.

Yet as unemployment passed 11 per cent in June 1992, that synthesis became harder to manage. Keating had conceded in April that the goal of abolishing import protection by 2000 was too harsh for some labour-intensive industries, a concession unimaginable when, in 1991, he envisaged ending 'Australia's sorry association with the tariff'. Even in the Coalition, the certainties of Fightback! wavered, as National Party members demanded an end to the stripping of protection from the sugar industry in particular. By September major car manufacturers were calculating the job losses and investment freezes that would accompany unhindered international competition. For the first time in years the bold mantras of reform seemed to be fraying. Keating's promise to lock in more than $8 million in tax cuts three years down the track looked expedient, as did Hewson's revision of Fightback! in December to exclude food and childcare from the proposed goods and services tax (GST). Politics, and policy, were wobbling under pressure.

At the end of 1992, with an election in the air, the parties stood fairly evenly matched in polls but facing a volatile mood in the electorate. Cabinet had been routinely briefed on the worsening state of the deficit, and on what commitments needed to be reassessed. The election of the Kennett Liberal–National government in Victoria in October led to a sobering image of 'deficit reduction' in action. Keating's pledge in November that if Labor found itself in Opposition it would not oppose the introduction of the GST began the process of narrowing the impending campaign to an essentially negative warning of the 'big gamble' voters would take in letting the Liberals into government. With the election called for 13 March, support for the Coalition seemed to build. The state of the economy counted against Labor in what some called an 'unwinnable' contest. But many voters were taking their time to make up their minds. Channel Nine's 'worm' tracked their shifting sentiments during the televised debate between Hewson and Keating. On the day, much to the surprise of commentators, and probably also to many of Labor's ministers, the Keating government was re-elected. The party's vote actually increased by 5.4 per cent. It gained two seats to secure a 13-seat majority. The Liberals lost six seats, largely – commentators agree – because the scare of the GST worked. Keating had spoken fulsomely of offering 'more than a plan – we have a whole national change … born of national necessity, happening now'. But, he allowed, there were still problems to solve.

Now with greater authority in the caucus, Keating rejuvenated the ministry, replacing nine of 30 ministers with younger appointees and significantly increasing the dominance of his right-wing faction in Cabinet. In celebrating a victory for the 'true believers', Keating promised to look after those who had stuck to the tough message of reform through 'hard times', especially now 'we have turned the corner'. Economic recovery, however, still lacked the pace to address nagging concerns centring on unemployment (which stayed near 11 per cent, hitting an unprecedented high for the long-term unemployed in March 1993). The budget deficit stood at $14.6 billion for 1992–93, and was projected to rise to $16.8 billion by 1993–94. By July Labor's promised sequence of personal tax cuts was under 'reconsideration', with the second tranche being deferred 'to suit the needs of a slower economy'. To find money, the budget introduced a $2 billion reduction in outlays and a range of indirect tax increases – on unleaded petrol, wine and tobacco – and new tax imposts on leave payments and restrictions on access to some Medicare benefits.

Taken together, these seemed to hit the 'true believers' hard and in ways not easily distinguished from the regressive effects Keating had identified in Hewson's GST. Opinion polls showed a slump in support for the government from 47 per cent in July to 36 per cent in September, even as Keating declared that there would be no further cuts in outlays: to go further, he said, would be 'indecent' and 'unfair'. Difficulties in pushing budget measures through the Senate compounded this malaise. And through the final months of 1993 an increasingly divisive momentum developed around the government's response to the High Court's Mabo decision, which had been handed down in June 1992 and exemplified the challenges of holding a social justice agenda in balance with the strains of a society facing sustained change. A marathon sitting of Parliament seeking to resolve these issues in passing the Native Title Act 1993 brought the year to a dramatic close on 21 December.

The Cabinet papers surveyed here offer a perspective on the terms in which ministers were asked to determine policy priorities during two years of continuing national recalibration. They do not reflect the nature of debate around the Cabinet table (in July 1992 ministers affirmed a 50-year closure of the notebooks that captured that debate). But they do reflect something of the quality of the advice and information departments were feeding into those debates, and the frameworks within which policy choices were weighed.

Economic settings and priorities

Cabinet's first introduction to economic projections for 1992 in January had the deficit projection for 1991–92 at $5442 million, an increase of 12 per cent on calculations made in the previous year's budget. Ministers were told an increase in outlays and a slippage in asset sales accounted for the deterioration. There would be a steady sequence of such recalibrations. By May the estimate had risen to $9252 million, $2440 million higher than calculations in February. This was the framework within which One Nation was developed, and in which policies arising from it were managed. By May Ralph Willis, Minister for Finance, advised colleagues that 'the task of vetting new policy and savings to achieve a result that is consistent with One Nation commitments is indeed most formidable [given] weaker than expected' performance in most areas. A 'working target … of a zero net addition to outlays from Government decisions in the period between One Nation and the Budget for 1992–93 and the period to 1995–96' was recommended, and would guide the 'sifting' of proposals he would initiate with Keating and Treasurer John Dawkins.

While centred on stimulating economic activity, One Nation's micro-economic reforms inevitably advanced longer-term government objectives. In preparation for the statement, Cabinet was encouraged to 'stocktake the broad ranging reform achievements to date', with the priority of 'establishing credibility with industry that the Government is proceeding … in an even handed way'. Proposals for the statement included increasing competition in telecommunications; remodelling Australia Post on retail and self-services lines; relaxing restrictions on ownership and content in broadcasting; 'rationalisation' of land use restrictions in national parks and nature reserves; easing of mining industry access procedures and foreign investment guidelines; and a renewed privatisation program. Community service obligations, it was argued, could be specified and performed under contract within these market-oriented reforms. Many of these proposals – advanced by officials as much as from politicians – did not immediately go ahead. Ending the ban on new uranium mines, for example, adopted by the Labor Party in 1982, was among reforms offered as part of this 'stocktake'; it was not implemented until after the election of the Howard government in 1996. Some would wait much longer, such as a proposal to extend Medicare coverage to include dentistry. The priority was 'to enhance national productivity' and 'restore the structural integrity of the budget'.

As 1992 unfolded, the challenge was to pick the form and moment at which action should be taken. By August Cabinet was briefed on when specific privatisation projects were likely to gain the greatest financial benefit. There was 'no economic reason' to hold 70 per cent of the Commonwealth Bank, for example, when a sale of shares down to just over 50 per cent could yield about $1000 million. Offers were under consideration for the Federal Airports Corporation, Australian and Overseas Telecommunication Corporation, and Snowy Mountains Engineering Corporation. The Snowy Mountains Engineering Corporation had 'small sale receipts potential, but [was] a very logical candidate for privatisation'. Australian Defence Industries (ADI), Cabinet was advised, 'is well cashed up and has valuable land holdings. A return of capital of about $50 [million] should be possible in 1992–93'. But was the time ripe? ADI was eventually, in 1999, sold to Transfield Australia and Thompson-CSF.

Airline deregulation remained a central commitment, with the promise of lower fares and increased patronage. Again, the timing and form of the sale of Qantas – whether after taking over Australian Airlines or not – was debated given the 'less than impressive bids' that had been received for the international carrier by June 1992. Action was deferred on several occasions given the need to guarantee employees entitlements and (as even Treasury argued) to ensure that 'benefits to consumers, and the economy more broadly, remained the overriding consideration of the Government, not the bottom line revenue'. That reservation was amplified public disquiet about such proposed divestments.

Another priority was to match the momentum of tariff cuts to a range of micro-economic reforms, which had been less effective so far in reducing 'the cost impediments facing Australian industry'. Those targets included efficiencies to be won in the management and extension of major areas of national infrastructure. The corporatisation and  commercialisation of rail authorities were among the main targets, with an emphasis on the establishment of the National Rail Corporation (agreed between the federal government, New South Wales and Victoria in 1991) to create efficiencies in services, and extending to a projected standard-gauge mainline network between Brisbane and Perth.

In framing One Nation, care was taken to ensure that expectations of such new infrastructure were matched by commitments from states and relevant unions to achieving greater reliability, cost recovery and labour market reform, including workforce 'down-sizing'. Without such undertakings, there was the danger that largesse in improving physical assets would take pressure off the 'productivity improvements' to be gained from changing workplace cultures. Fine-grained calculations were made about what should be promised. It would cost $2 billion over 10 years to achieve a nine-hour transit time in freight services between Melbourne and Sydney. Would that investment secure a matching increase in the market share of rail services from road transport? 'Ministers may therefore wish to adopt a more modest, but nevertheless cost-effective, level of investment which accompanied by work practice reforms, will reduce transit times in the corridor to 12 hours by 1994.' Officials recommended a corresponding boost of investment in roads. Twelve hours was the figure that appeared in the February statement, along with a program 'for augmenting and rehabilitating the National Highway System', presented as both a job creation and regional development initiative.

Packaging One Nation's 'element of vision' required care, particularly if the government was looking for 'credibility'. Could the textile, clothing and footwear (TCF) sector, as an early target for the phasing-out of protection and 'adjustment', now feature prominently in a statement geared to job creation? Equally, there was the view that 'underwriting specific TCF ventures' might have a role in extending necessary stimulus to regional centres. By February that idea was quashed: 'there must surely be a query over any plan to attract – via subsidies – new entrants to an industry which has a demonstrated capacity for being unable to match international standards of competitiveness'. Instead One Nation opted for the modest middle course of helping such firms restructure.

This sifting of policy inevitably brought the government back to its core objectives. In February, Dawkins sought to defer the introduction of the superannuation guarantee levy – intended to encourage employers to provide a minimum level of superannuation support to employees – for six months. Despite being supported by central departments, the Treasurer lost in a Cabinet vote reflecting a concern that any delay threatened the government's pledge to support retirement incomes. The complexity of implementing that objective was revisited at several points over the next year, mapping a 'rational and equitable' superannuation system over the pre-existing arrangements, concessions and deductions. There were issues of prudential arrangements to 'ensure that superannuation fulfils its central role in retirement incomes policy and the mobilisation and investment of savings'. The consolidation of national superannuation as a supplement to retirement incomes was a matter of pride for the Keating government, and for the Prime Minister personally, although debates within and beyond Cabinet dealt with many 'sticky' issues in its design and implementation.

Other February initiatives included approval of a new Department of Tourism (the first such machinery of government change since 1987) – albeit with significant cuts to its requested funding. This move reflected the increasing importance of the sector, as well as its role in regional Australia and capacity to 'facilitate … micro-economic reform to ensure that the industry contributes fully to Australia's economic recovery'. Such a regional element figured in many reforms, if with the proviso that areas of assistance would be 'judiciously selected' on the basis both of entrenched disadvantage and potential for growth. For all that targeting, commentators were observing by September 1992 that One Nation had not achieved the expected 'kick-start',  calling for more direct industry assistance and a pause in deregulatory pressures in industries and regions where hardship and job losses had not abated. The government and the Opposition both conceded the need – as Dawkins put it – to moderate if not abandon the 'economic ideological passion' that had served them better in the good years of the 1980s. The challenge was what to put in its place that did not look like expedience or compromise.

Into 1993, the economic signals were mixed. In April Cabinet noted fiscal projections suggesting that three years down the track the government would still be dealing with a deficit 'well above our commitment to a target of one per cent of GDP and far in excess of the needs of sensible economic policy'. There were signs of recovery, but it was uneven. Concerted effort was required to increase national saving to drive business investment, which was in any case still hampered by 'excess capacity and demand weakness'. The Expenditure Review Committee noted Treasury's advice that 'Australia is likely to be one of many countries that will be characterised by only moderate growth, relatively high unemployment and low inflation' for several years to come. If Australian industries could not become more competitive, then 'living standards will have to fall to increase national saving'. By December 1993 the Treasurer joined the Minister for Finance in maintaining the refrain of discipline. The scope for new policy in the coming year, ministers were told, would be 'severely limited' given the continuing demands of deficit reduction and the likely call for 'significant additional outlays in high priority areas'. The latter included the seemingly intractable problem of unemployment and new, uncertain demands associated with policy responses to native title claims. This would be one of Dawkins' last submissions to Cabinet: he resigned the following February, one of the first of the senior survivors from the Hawke years to go, disillusioned with the political compromises that had eroded prospects of the return to surplus he promised.

Employment and industrial relations

In July 1992 Cabinet endorsed Peter Cook's proposal, as Minister for Industrial Relations, for the further 'streamlining' of a wages system to be 'built on the foundation of consistent minimum awards' and centred on 'certified agreements'. Cook's submission resolutely moved past the reluctant endorsement of enterprise bargaining by the Australian Industrial Relations Commission (AIRC) in October 1991. It consolidated a core element of reforms advanced since Labor's election in 1983. In February 1992 the government announced that it would soon introduce legislation 'to encourage the making of workplace agreements' as the next refinement of its Accord with the Australian Council of Trade Unions, further tightening the link between wages and productivity. As Cook explained to colleagues in July, workplace and single enterprise agreements would 'facilitate the parties to take increasing responsibility for their own industrial relations outcomes'. The award-based wages system might have become increasingly 'decentralised' over recent years, he argued, but it had also become 'unwieldy and increasing complex', as AIRC rulings on rates and conditions lacked flexibility and created 'flow-on pressures'. His proposals would leave the AIRC with only a 'safety-net role' in establishing minimum levels, and no role in arbitrating certified agreements above that base.

Cabinet agreed that in all areas except 'essential services critical to social order' the priority should be for procedures that encouraged 'greater self-regulation'. One Nation might have conceded the continuing role of the AIRC's National Wage Case hearings, but Cabinet emphasised the principle that 'economic circumstances' must be the key factor in determining the size and timing of any increases arising from such hearings. The role of such centralised determinations in 'protecting the weak' needed to be weighed against the larger objective of containing inflationary demands and building genuine 'competitive pressures' in workplaces. The Australian Public Service was to provide a laboratory for this next iteration, with budget cuts having a role in 'counterbalancing the lack of competitive pressures' in that sector. Legislation following this submission established a 'no disadvantage test' the AIRC might apply in the certification of agreements, taking into account 'the public interest'. The calculation of that threshold remained a matter of often-intense debate.

The policy and political challenge of increasing the productivity of those in work were more than matched by the challenge posed by the number of people out of it. In January 1992, Cabinet's Ad Hoc Committee was informed that, whatever the pace of recovery, the incidence of long-term unemployment was likely to continue to rise well after the general rate had peaked. For the younger cohort, the projection was that the incidence of unemployment would 'settle' at 30 per cent by mid-year, with little prospect of moving below that for some time. As part of a substantial investment in existing assistance, Jobstart wage subsidies were extended and proved relatively effective in keeping people in work for at least three months after support ended. A National Employment and Training Plan for Young Australians was developed from a meeting of business, trade union, government and community representatives in Canberra in June 1992. Yet at the same time, ministers were encouraged to carefully evaluate the priorities in assistance programs that might receive 'widespread public support' but provided only mixed effects on long-term trends. In mid-1992 it was noted that less than 22 per cent of the unemployed were being assisted by current labour market programs.

Cabinet-endorsed initiatives in the creation of small business ('self-employment assistance') and in targeting opportunities, as well as those targeting areas of particular disadvantage in regional Australia, were especially encouraged. The question remained, however: did such infrastructure spending really meet 'the criterion of contributing to long-term economic growth'? And did the 'very real speed limits' experienced in implementing such programs have the effect of 'unduly raising expectations' and increasing the probability of 'waste'? The 1993 election campaign highlighted the government's vulnerabilities in addressing these issues, and the need for more sustained and substantial progress on such questions. In response, the government commissioned a Green Paper (Restoring Full Employment, December 1993) which drew on a breadth of expertise in and outside government. That process culminated in Working Nation (May 1994), which offered a comprehensive approach to these issues linking industry and employment policy, seeking to break out of the compounding frustrations of the years under review.

A significant new dimension to Cabinet discussions of such issues was the more systematic attention given to women's experience of workplace participation amid social change. The 1992 Half Way to Equal Report of the Inquiry into Equal Opportunity and Equal Status for Women in Australia – chaired by Michael Lavarch – set the terms for much of this discussion. Momentum also came from the appointment in early 1992 of Anne Summers to the Prime Minister's personal staff as a political adviser on the status of women. Through 1992–93 several Cabinet papers directly addressed the impact of budget, education and welfare issues on women, but with a priority of increasing women's access to the labour market. Assessing the extent to which the economic efficiency priorities of decentralised bargaining arrangements might not address all areas of workplace reform, in September 1992 Cabinet agreed to amend the Sex Discrimination Act 1984 to enable complaints relating to direct discrimination against women in employment to be made directly to the Sex Discrimination Commissioner. If the complaint was found to relate to the conditions of an award, it then would be referred to the AIRC. These commitments were extended in a Cabinet agreement in November to make dismissal on the grounds of family responsibility unlawful, and to ensure that determinations from the Human Rights and Equal Opportunity Commission regarding a wide range of discriminative acts – including sexual harassment – were more enforceable in industrial awards.

By April 1993 Cabinet was supporting a range of measures to recognise that 'future growth in the economy will be highly dependent on women's participation'. The instrumentalism of that approach was leavened by support for provisions in education and training that would enable women to take those opportunities, and particularly to address 'the lack of affordable child care as the major barrier to workforce participation'. Along with measures to improve 'quality assurance' processes in relation to both public and private child care provision, Cabinet endorsed 'a commitment to meet full demand for work-related formal child care by 2000–01', overcoming 'the reluctance of some States to enter cost-sharing agreements' by entering into 'direct partnerships … with local government and community groups'. Central to this objective was the introduction by July 1994 of a cash rebate system to meet 30 per cent of reclaimable child care costs. The expansion of this sector – its mix of social justice and economic calculations, and increasing shift in the private market for the delivery of such services – reflected Keating's observation that child care was becoming a 'mainstream issue' about which the level and form of support would continue to be debated, but not the basic principle.

Immigration

Immigration was inevitably drawn into the trimming of government programs amid a wider discussion of the strains of population growth and concerns about the composition of new arrivals, again with a focus on efficiency and productivity. In May 1992 Cabinet supported Minister for Immigration Gerry Hand's case for reducing the annual intake for 1992–93 from a planned 92,000 places to 80,000, and to tailoring selection criteria more specifically to 'enhance labour market targeting'. In practice, that meant increasing 'the emphasis on English language proficiency and skills in line with more exacting workforce requirements arising from industry and award restructuring'. Since, as that submission argued, immigration was itself proving 'an ineffective macro-economic tool', the priority was to minimise the impact the program could have in destabilising economic recovery through 'significant fluctuation' in the categories of people admitted.

The destabilising potential of immigration – brooding in much of the politics of the last decades of the twentieth century – extended beyond economic calculations. Responding to a legal challenge in 1991 by the Hell's Angels Motor Cycle Club to the denial of visas on 'public interest' grounds, in October 1992 Hand secured an expansion of ministerial powers to exclude entry to, or deport from, Australia. Expanding from a 'good character' test, Cabinet endorsed the Minister having the discretion to assess whether a person posed a potential danger to the community, might engage in vilification, or incite 'discord'. In February 1993 this provision was used to deny entry to the Holocaust denier David Irving. Responding to very different pressures, in the previous month Hand had secured agreement to formally separate the humanitarian program from the overall immigration intake, and to increase the figure allocated to the former from 10,000 to 12,000. The 'presentational value' of such a change, he argued, would be to signal to a 'volatile region' that Australia was prepared to be responsive to crises, and to do so in ways that were not seen as purely economic in motive (even though, as the submission also proposed, the increase in humanitarian places should be subtracted from the overall migration program). The separation would also assist Australia to make the case that all countries should see humanitarian responses as a formal dimension of their international obligations.

In May 1993 a new Minister of Immigration, Nick Bolkus, returned to these obligations, noting that 'the current scale of mass and irregular movements is greater than at any previous time in the world's history' and was increasingly troubling the ethnic communities around Australia with whom he was consulting. In particular, Bolkus informed colleagues, 'there is now … much sharper focus on the plight of women and children who have become the victims of wars in Europe, Africa and the Middle East', and also on 'displaced people and former prisoners of war from the conflict in the former Yugoslavia'. Bolkus gained approval to double the number of places available to applicants in these categories. Paying for this expansion, however, was another matter. The Department of the Prime Minister and Cabinet questioned a confusion of purposes and perhaps of principles in funding humanitarian initiatives from an increase in the application fees levied on immigrants from $360 to $390. The majority of Cabinet did not agree.

More than in any other area, a tightening of policy was sought in relation to 'boat people'. In April 1992 Cabinet supported Hand's case 'as a matter of urgency' to amend the Migration Act 1958 'to enable all people who arrive by boat between 20 November 1989 and 1 December 1992 to be held in custody' until their claims to remain were resolved. Hand also gained approval to take into custody any persons who 'by virtue of … release by a court under existing law' were free in the community. Some 438 people, 'claiming to be from China or Indochina', were estimated to be liable for detention under these provisions. Beyond this specific group, Hand had a principle in mind. He was redoubling his efforts to ensure Australia did not succumb to the 'grave potential' of being 'an easy target' in the escalating industry of 'spontaneous mass movement', especially from China. A firm policy, he argued, required that the new legislative provisions should be 'inviolable from interference by the Courts'. While comments from the Department of the Prime Minister and Cabinet expressed concern that such a move amounted to depriving a person 'of a right to challenge the legality of his or her continued detention', and were likely to be 'the subject of intense public scrutiny', Cabinet found the measure acceptable as a last resort. The initial proposal was that the Migration Amendment Act 1992 would set a maximum period of 273 days for the mandatory detention of unauthorised boat arrivals. Indefinite detention, however, soon followed.

Through 1992 Hand also wrestled with the issue of the conditions under which welfare assistance might be provided to asylum seekers pending the determination of their status. There seemed little prospect of reducing processing times in the near future. And there was undeniable need among a group ('most of whom are illegals') who were unable to support themselves but whose claims to assistance should not be deemed equal to those of Australian citizens also facing hardship. There was also the problem of the 'magnet effect' of any government-funded payment, and the prospects of the abuse of any such provision. Hand sought to identify a charitable organisation that might dispense a new Asylum Seeker Relief Scheme (ASRS), thus removing any direct link to government support. His submission raised several concerns. 'The voluntary sector is unlikely to agree to an arrangement of the type proposed nor [be] prepared to administer a scheme with sufficient rigour'. More fundamentally, was this an appropriate way to provide for people still effectively under the government's care? In 1993 the Australian Red Cross began to administer the ASRS. Assistance under the scheme was set from the start at a lower rate than equivalent assistance provided to Australian citizens and subject to further reductions and qualifications over time.

Environmental policy

Cabinet had been deeply divided through the last years of Hawke's prime ministership, over the tension between economic development and environmental protection, in both policy priorities and political sensitivities. In 1990 and 1991, attempts at resolution had centred on developing guidelines to arbitrate opposing interests in terms of 'environmentally sustainable development' (ESD) and recourse to the 'objective' or 'scientific' methodologies associated with the Resource Assessment Commission (RAC, established in 1989) or the Regional Forest Agreement (RFA) process, which had begun to be developed in late 1990. As Treasurer, Keating was central to the group of finance and resource ministers whose dissatisfaction with the 'green' compromises tolerated or favoured by Hawke fed into leadership ructions. His decision as prime minister not to join 108 heads of state or government at the United Nations Conference on Environment and Development at Rio de Janeiro in June 1992 is often taken as indicative of disengagement. Cabinet records certainly suggest a repositioning on these issues.

In March 1992 Cabinet noted the progress of the Commonwealth–State Sustainable Development Working Group, established in late 1991 under the auspices of a special Premiers' Conference. So far the group had focused on developing 'baseline objectives' that would suffice 'to provide a credible initial government response', carefully avoiding 'initiatives with resource implications'. Within those parameters, the memorandum noted, 'departments have not been able to identify a worthwhile package'. Still, discussions were to continue, with Cabinet endorsing a 'no regrets' approach, explained as 'actions … which involve little or no additional cost, cause minimal disruption to industry or the community, and which also offer benefits other than greenhouse related'. By May, ministers were similarly informed that the states and territories were 'not strongly committed' to either ESD or greenhouse reduction strategies, and resented the pace with which the Commonwealth sought to settle policy positions that would have 'substantial financial and economic implications'.

Progress was being made in modifying performance standards for industrial equipment, monitoring energy use in commercial buildings and implementing design and energy efficiency standards for housing and domestic appliances. But as the year went on, the pickings remained few. By November Cabinet was advised that although the transport sector accounted for a large proportion of greenhouse gas emissions, the prospect of 'no-regrets actions in this area have … been difficult to identify'. Fuel efficiency was a laudable target, and increasing petrol tax, an excise on unleaded fuel, and the reduction of wholesale sales tax on newer vehicles, were all promising measures – they had been part of the One Nation strategy of encouraging investment in newer cars. But what of their impact on those unable to afford more efficient cars, on an economy seeking growth, and on a domestic motor vehicle industry that saw its only competitive advantage in the production of larger models?

With these reservations, and despite the states' recalcitrance, the principle of partnership became increasingly important. In May 1992 the establishment of an Intergovernmental Agreement on the Environment sought to reduce conflict over resource management by framing the issues around a consensus attuned to state interests, business influence and regional politics. This devolution was exemplified by RFA negotiations as they developed over coming years. Equally, the decision in 1993 to terminate the RAC – then concluding a major study of the management of the coastal zone – signalled a break with the centralised analysis of the Hawke years.

By June 1992 this favoured model was clear in Cabinet's approval of a National Forest Policy Statement (NFPS), which crafted a 'vision [to] ensure the community obtains a balanced and equitable return from all forest uses'. 'National goals' began with the 'conservation of a range of non-commercial forest values, including biological diversity, ecological processes, heritage, Aboriginal and other cultural values'. Then came 'the development of a dynamic, competitive, ecologically sustainable forest products industry which maximises efficient use of wood resources, and opportunities for value adding, productivity improvements and employment'. Support for plantations, research and 'effective public participation in decision making' followed, with the priority of building agreement on a sustainable timber industry and 'criteria and principles on which to base a fully representative reserve system'. Conceding that finding such a balance was likely to force the pace of 'structural adjustment' in vulnerable industries and communities, Cabinet agreed to seek '"in-principle" commitment by Governments to … assistance on a case by case basis' while carefully avoiding funding commitments. The language was polished: conflicts were to be essentially dispersed in an 'integration phase' of managed negotiations.

Those negotiations could prove long and complex. In December 1993 Cabinet was faced with a choice in relation to one of the most protracted and bitter forest conflicts, in southeast New South Wales. As Minister for Resources, Michael Lee argued that ministers could either stick to general NFPS processes for determining the preservation of a 'comprehensive, adequate and representative reserve system', or move to finally conclude an agreement on the southeast forests initially brokered with the NSW government in 1990. The latter was geared to bringing 'certainty to industry including wood chipping to facilitate investment and employment opportunities'. A central issue, however, was that the reserve boundaries in the 1990 agreement differed from those determined by the NFPS and would prove much less acceptable to conservationists. Lee made a strong case for honouring the agreement, as a matter of 'good faith' with New South Wales. Cabinet sought, if possible, a way to preserve the 'credibility' of NFPS processes, but opted for bringing to an end the 'debilitating' frustrations endured by the state government and industry in waiting for resolution. The Department of Environment, Sport and Territories – heavily invested in the NFPS – protested at the likely loss of areas of high conservation value and the 'regrettable lack of consultation on those matters in which this portfolio has a major interest and responsibility'. The Department of the Prime Minister and Cabinet instead counselled pragmatism, aware of the political costs under either option, particularly if New South Wales were to withdraw from the NFPS if the terms of the 1990 agreement were not kept. Such bargaining, clearly, was protracted: open conflict would erupt among ministers in 1994 over woodchip licences. But for the moment the issues were relatively contained with the priorities of resource security and the fact that devolved processes did little to address disparities in the political power of stakeholders.

International negotiations allowed more room for manoeuvre, with the routine caveat that Australia's commitments must not get ahead of domestic interests. In May 1992 Cabinet endorsed the principle of support for the United Nations Framework Convention on Climate Change, in particular by assisting developing countries in the Asia-Pacific region to develop capacities for adaptation. But there must be no commitment to firm, binding targets in advance of other developed nations. Ministers agreed in December 1992 that 'our capacity to continue to protect Australia's economic and trade interests' remained the priority, particularly in arguing against 'response actions' that would fall 'disproportionately' on Australian economic growth.

The terms of engagement were changing. The launch of the National Landcare Program in early 1992 provided the basis on which the government moved to integrate a range of programs within the overarching concept of Sustainable Natural Resource Management. The 'community participation' ethic of Landcare was coupled to a more extensive incorporation of 'stakeholder' interests, and an acceptance that 'greater responsibility for the development and implementation of responses to natural resource problems' needed to be managed at localised levels. In October 1992 Ros Kelly, as Minister for the Environment, gained support for a national framework on endangered species protection, first proposed in 1990, including legislative and administrative action. But agreement was hard won and achieved only after Cabinet insisted on ESD principles that would ensure that 'areas should not just be locked up', that economic and social costs be measured fully in any action, and that the ambit of ministerial initiative in declaring development off-limits be tightly restricted. In November Cabinet agreed to a national approach to water pricing, which recognised the need to manage allocations in ways that 'maintain ecological integrity and reflects water's cost of provision as well as the external impacts of its use on the environment generally'. By 1995 this initiative had led to an integrated program of reforms deploying a range of economic tools 'to provide clear incentives to users to revise their application of water to levels commensurate with its scarcity and the costs of supply and distribution'. This was one initiative, Cabinet was advised, 'likely to be supported by State Governments and by environmental groups', but perhaps not by rural communities. It was not too often in this period that conservationists were among those Cabinet judged would be on their side.

Urban and regional affairs

Strong on micro-economic objectives, the government's strategies of dealing with 'hard times' still wavered on questions of its role in more comprehensive social and economic support. Brian Howe, as Minister for Housing, had worked astutely to get commitments to such programs on the agenda, most particularly in his 'Building Better Cities' initiative of 1991, which focused on demonstration projects of integrated urban planning. Yet his proposal to encourage private investment in social housing was among those that did not get far in the preparation of One Nation. Howe might have become Keating's deputy, but the Prime Minister was not inclined to favour the 'indiscipline' that came with such broad policy goals. Cabinet agreed in February 1992 to confirm the $816 million funding over five years for 'Better Cities', but now sought to focus its priorities more specifically on infrastructure investment as the area in which public funds could be most efficiently allocated. Treasury's comments underscored the point that the 'economic criteria' of 'return' and 'efficiency' needed to be more evident in guiding future allocations through this program. In August 1992 Howe made the case for a comprehensive housing strategy 'to free up the existing stock and to better target housing assistance, and to encourage more effective strategic planning, integrated housing developments and aesthetics in urban design'. That vision was pruned back to endorsement of a range of specific rent assistance reforms and an in-principle encouragement to develop long-term policy guidelines, but certainly no engagement with the core proposal to establish a basic policy benchmark on affordability. Howe turned to a range of taskforces and research bodies, such as the Australian Housing and Research Institute, to keep momentum on these issues.

As evident already, Cabinet was aware – certainly politically – that the recession was having specifically regionalised effects, and that 'in particular, a number of regions in the southern states of Victoria, South Australia and Tasmania have suffered considerable hardship in recent times'. In 1993 a submission from the Department of the Prime Minister and Cabinet reassured ministers that 'the arguments for assisting such regions are not only social' but also economic, particularly since job creation and infrastructure development in such areas would be cheaper than in the cities. Nevertheless, ministers were cautioned that there was still the problem of the extent to which the 'definition of regions “in need” will always be arbitrary'. 'There is a danger in creating long term resource misallocation by attempting, Canute like, to prop up regions and companies which are inexorably in decline', and using public funds to subsidise private capital in the guise of job creation.

Some bids got through. Following a joint submission by John Button (Minister for Industry, Technology and Commerce) and Bob Collins (Minister for Shipping and Aviation), Cabinet allocated $10.3 million to establish an industrial development centre in Newcastle as a laboratory for regional growth. The model of the South Australian Centre for Manufacturing (SACFM) was cited as 'a genuine one-stop-shop for industry assistance' that would assist Newcastle-based businesses break out of 'a very traditional "jobbing" mentality using old technology and outdated management and work practices' in developing new partnerships with large companies such as UGL Rail or BHP. These links fitted with other priorities, including improvements in regional aviation services and tourism potential. In this instance, at least, ministers were persuaded by Button's assurance that 'this is not another "grand plan" … but a very soundly based concept to get inside local companies and literally help them to become internationally competitive, more outward looking and more confident'. There remained, however, deep reservation about 'picking winners': the clincher remained the Prime Minister's enthusiasm for a 'bigger spend' on infrastructure.

Health

As Prime Minister, Keating moved quickly to drop the Medicare co-payment introduced in 1991, but in August 1992 budgetary pressures saw Cabinet agree to increase the Medicare levy from 1.25 per cent of taxable income to 1.4 per cent. The context was a commitment to 'strengthen principles of accessibility, universality, simplicity, cost-efficiency and equity' that also saw moves to adjust hospital funding regimes to give 'a clear incentive for States to provide ready access for public patients'. The defence of public health was an area in which the government particularly sought to distance itself from Fightback! while also consolidating reforms in aged care. The imperative of containing escalating costs remained, however, and into 1993 a focus became 'reducing fraud and over-servicing under Medicare and the Pharmaceutical Benefits Scheme'. As Minister for Health, Brian Howe moderated an earlier more confrontational approach to doctors by seeking to 'carefully handle' the profession in gaining their cooperation in these investigations and other reforms. By August 1993 he informed colleagues of 'the efficiency of the Commonwealth Rehabilitation Service as it has been radically transformed in the last decade'. Client numbers had increased by 200 per cent, with only a 30 per cent increase in funding, and calculations showed that '$9.60 is returned to government from each $1.00 invested in CRS programs, chiefly from reduced Social Security outlays and increased tax revenue'.

Public health programs in late 1992 including the creation of 'an offence for the publication, display or broadcast of an advertisement for cigarettes and other tobacco products', although a year later the issue was revisited with a proposal to 're-examine the effects the ban is having on small sporting and cultural groups after the ban has been in operation for a short time'. The ban remained in place, with sponsorship coming instead from the state-based Health Promotion Funds, which were financed from an increased levy on tobacco licences.

Education

Labor's bold reforms in education belonged to the 1980s. To some extent the challenge was to now hold the line. In June 1992 Cabinet did not endorse a Finance proposal to impose an interest rate on un-paid Higher Education Contribution Scheme (HECS) debts. The Department of Employment, Education and Training argued that the burden would fall hardest on 'the financially vulnerable, who would probably take the longest time or may never repay the debt, [and] may be unduly anxious because it exists'. Several initiatives arose from recommendations of the 1991 report of the Australian Education Council Review Committee, Young People's Participation in Post-compulsory Education and Training, which centred on the need to increase the connections between schools – to focus on issues of employability – and vocational training providers, developing students' capacities to navigate a changing labour market. In October 1992 Cabinet noted that economic uncertainty was producing a 'significant decline in opportunities available to school leavers', and also a fall in the rates of progression from school to higher education to the lowest levels since 1979. In agreeing to create 2500 additional places in higher education by 1995, Cabinet noted the priority of providing more inclusive opportunities for students to gain the skills required for economic growth. Equally, there was agreement to establish a National Equity Program to systematically address areas of disadvantage in school education, including both 'gender-based disadvantage and the needs of gifted and talented children'.

With similar goals of inclusion as well as efficiency, in August 1992 Cabinet agreed to support Peter Baldwin's case, as Minister for Higher Education and Training, for an Open Learning initiative, to be established by organisations selected from a competitive tendering process. The objective was to provide open access to high-quality tertiary education courses, delivered off-campus in subjects in high demand, and geared to become 'totally self-funding within four years'. Cabinet was persuaded that unmet demand for higher education could be met without the costs of dealing with overcrowding at existing institutions, with a schedule that would make the most of down-time access to on-campus facilities, be less expensive to service than existing distance education programs, and 'increase the return on existing capital investment'. Framed explicitly as a 'stark contrast' to Fightback!'s proposal to offer full-fee tuition to students who did not gain funded places at universities, Open Learning was calculated at costing $2400 per student per full-time year, in contrast to the 'current average recurrent cost per undergraduate university place of at least $10,000'. Launched in 1993 with 5215 enrolments, but falling to 3512 by the end of 1994, Open Learning made a gradual but innovative entrance into Australian higher education.

International relations, defence and security

Keating's pledge to shed the 'baggage of our past' in deepening Australian engagement with the Asia-Pacific region was central to his 'big picture', with added colour provided by the symbolism of his April 1992 visit to Papua New Guinea and declaration that Kokoda should be considered at least, if not more, significant in the forging of national pride as Gallipoli. But strategic assessments indicated other ways in which PNG reflected aspects of Australian international engagement. By August the Minister for Trade and Overseas Development, John Kerin, gained agreement to reorient Australia's aid to PNG away from large-scale untied support, which tended to disappear in inefficient and unaccountable consumption, and towards specifically targeted program aid, the use and effectiveness of which could be closely monitored. This was a significant change in Australian practice, and also in relations with PNG. In targeting key sectors for assistance, Australia would need to increase the number of personnel sent to steer such projects. That presence need to be 'handled carefully', as it could be read as 'a substantial change in the general direction of our policy … which has … emphasised that Australia … cannot provide the solutions to PNG's problems'. By late 1993 the Minister for Foreign Affairs, Gareth Evans, updated Cabinet on a trend in Australian bilateral relations with PNG indicating exactly that resentment of what were seen as residual Australian 'colonialist modes'. Prime Minister Paias Wingti, Cabinet was advised, was pursuing a 'Look North' policy, seeking closer ties with rapidly developing economies in Asia but also authoritarian governments. This 'process of distancing' might be 'a natural one', but it still needed watching.

These trends were matched to concerns about over-arching strategic settings. The United States, ministers were told, was preoccupied with its own 'economic difficulties and post-Cold War restructuring', and focusing its regional interests towards North Asia. This turn was coupled to signs of heightened strategic competition between Japan, China and possibly India. In response, Australia should 'seize opportunities provided by the developing sense of regional community' in Southeast Asia 'to become a natural and fully involved partner in regional security'. It was also important 'to enhance unofficial relations with Taiwan in line with its growing trade and economic importance', including a relaxation in Australia's 'present ban on exports to Taiwan of inherently lethal, incapacitating and destructive items'. Along with trade and air links, the security undertones of regional cooperation were consolidating.

In this context, important new military capabilities were in train, with Cabinet being regularly briefed on the progress of the ANZAC frigate and Collins Class submarine projects. While schedules and costs were generally on track, the margins were getting tighter. For the frigates, 'price escalation owing to productivity-related enterprise wage bargaining was emerging as a contentious issue'. For the submarines, 'all available reserve capacity in the schedule has now been absorbed'. The opportunity to purchase 15 second-hand US Air Force F-111Gs at an 'attractive price' at least meant the issue of replacing that vital fleet could be delayed by five to 10 years. In response to advice that the United States was proposing to replace the Joint Defence Facility at Nurrungar, South Australia, with a single site in the United States, Cabinet's Security Committee urged that representations be made to the US government to negotiate, if possible, another base in Australia. It was important to 'preserve our access … to advances in early warning and other areas of space technology that may be relevant to Australia's defence needs, present or prospective, especially if ballistic missile technology proliferates in our region'.

The demands of international citizenship had relaxed since Australia's deployment to the First Gulf War (1990–91), and Cabinet was briefed on the effective ways in which Australia had coordinated its response to that operation, with lessons learnt for similar 'future crises'. In December 1993 Cabinet agreed to contribute an Australian Federal Police contingent to United Nations Peacekeeping operations to end civil war in Mozambique. For security at home, ministers were advised in late 1992 that while 'there is only a remote possibility that terrorist incidents in Australia would seriously endanger the Australian system of Government or society', there remained 'a high risk of a range of credible forms of politically motivated violence'. Attacks on diplomatic personnel, violent demonstrations against visiting dignitaries, or other such acts had the potential to 'adversely affect our international relations, with unwelcome consequences for overseas trade, and … tourism'. Such threats justified investment in new capacities, for example, to intercept the mobile phone devices that were seen as significantly redefining the conduct of subversive or organised criminal groups. Equally, ministers were reminded that while state-supported terrorism was receding as a prospect, 'new security priorities are emerging'. There were threats associated with 'ethnic and religious disputes in the Balkans, Armenia, the Middle East'; violence 'from, or motivated by, racist Australian nationalist groups'; and interference by 'the intelligence services and other agencies of a number of Asian governments'. Vigilance remained a priority.

But not all areas of a troubled world were of equal priority. If cuts to international engagement had to be made, Cabinet agreed to Evans' suggestion that posts in Lisbon, Prague and Berne might be closed, with Nicosia and Malta also possible. The Department of Finance suggested adding Caracas, Copenhagen, Port Louis and Kingston to the list.

Other forms of Australian presence overseas were cause for a different concern. In November 1993 the Attorney-General, Michael Lavarch, gained Cabinet agreement for the creation of new criminal offences to deal with the sexual exploitation of children under the age of 16 outside Australia, to prosecute 'inciting, organising or profiting from child sex tourism', and to establish provisions to enable a court to estimate the age of a child in the absence of documentary evidence. Lavarch argued:

Australia's international obligations and reputation require that strong legislative measures, capable of a powerful deterrent effect, be taken to prevent child sexual exploitation by Australians overseas. There is a groundswell of national and international support for the legislation.

Cabinet also noted that progress was being made in bringing Australian Indian Ocean territories such as Christmas Island up to levels at which their legal regimes could no longer be 'judicially criticised as unacceptable in terms of human rights' and their infrastructure improved to at least match 'minimum Australian health and safety standards'.

Redefining the nation

Amid these policy recalibrations, the Prime Minister's refashioning of Australian nationalism came before Cabinet in a number of initiatives. Ministers agreed in December 1992 to move forward with amendments to the Citizenship Act 1948, replacing an oath of allegiance to the sovereign with a pledge of commitment as a citizen of the Commonwealth of Australia. The change was presented as 'consistent with the Government's policies relating to strengthening the sense of national identity, citizenship and multiculturalism', and as avoiding the 'anachronism' and 'sterility' of the current form of words. The new pledge was finally adopted in 1994. In May 1993 Cabinet affirmed election commitments to establish a Republic Advisory Committee. Chaired by Malcolm Turnbull, this group reported on options by the end of the year, advising that 'a republic is achievable without threatening Australia's cherished democratic institutions'. And in June 1993 Keating moved to shape the terms in which the Centenary of Federation would be commemorated as 'a time of taking stock', and in ways that would 'contribute to our over-riding objective of building a better sense of national identity and purpose for the next century'. In pursuit of a similar kind of maturity, Cabinet also endorsed the amendment of the Racial Discrimination Act 1975 to include an offence of racial vilification encompassing acts that 'publicly incite others to hate, have serious contempt for, or severely ridicule a person or group of people because of their race, colour, nationality, ethnic or national origin'. As Minister for Justice, Michael Tate, explained in June 1992, the law had an educative role as much as an enforcement role, particularly in dealing with issues that were deeply shaped by social inequality:

By proscribing certain beliefs and acts as antisocial, warranting the imposition of legal sanctions for a breach of community standards in this regard, we would deny emphatically whatever legitimacy may have been afforded so far to racist views because of government inaction and community indifference.

Indigenous affairs and native title

Central to this refashioning, the Prime Minister's speech in Redfern Park, Sydney, on
10 December 1992, marked a watershed in relations between Black and White Australians, and was part of a fundamental shift in the terms in which Indigenous affairs were discussed in Australia. Earlier in the year, the government debated its response to the Royal Commission into Aboriginal Deaths in Custody, established in 1987. As the Minister for Aboriginal and Torres Strait Islander Affairs, Robert Tickner insisted that ministers should see the Commission's final report as 'a charter for change for a new generation of Aboriginal and Torres Strait Islander people who must be given the opportunity to contribute to Australian society and to share in its rewards'. Tickner's case was not easily made. In March he requested $540 million over five years to advance a broad agenda of services to end the marginalism identified by the Royal Commission. He got $150 million, with some major components of that agenda, such as a land acquisition fund, ruled out. Responding to the submission, Finance questioned whether any direct relationship could be made between the deaths of individuals and the areas of systemic disadvantage Tickner sought to address. Treasury questioned the need for additional funding based on the Commission's recommendations when many existing programs were already targeting issues such as Aboriginal unemployment. By May the road was harder still. Cabinet was informed of the states' resentment of the federal government's leadership on issues they had been wrestling with for years. Those governments were resisting providing definite information on their own programs. The issue of tactics arose, and of ramping up the power of leadership:

If Ministers do, however, propose that the Prime Minister go in hard [with the states], officials should note the experience that this rapidly degenerates into disputes about the facts and into claims and counter-claims about whether the Commonwealth has failed to live up to commitments – which in turn reduces the possibility of the real cooperation vital over the longer term in an area of shared responsibility.

By June there were signs of progress in a package of social and economic development measures with the Aboriginal and Torres Strait Islanders Commission (ATSIC), with a committee including Dawkins, Willis and Tickner assuring the Prime Minister of their 'serious effort' to focus on economic development, aimed at ending dependence but 'without raising unrealistic expectations', together with an attempt at a balance of 'initiatives of a more social and cultural nature'. If there was an imperative for action, and for visible commitment, there were also, already, many players on the stage.

The issues at stake, however, were changed dramatically when, on 3 June 1992, the High Court handed down its decision in Mabo v Queensland. In response, Cabinet agreed that:

… a committee of ministers consisting of the Prime Minister, the Attorney-General and the Minister for Aboriginal and Torres Strait Islander Affairs would report back … on the implications of the Mabo decision for the Commonwealth, in particular on ways in which continuing litigation by Aboriginal and Torres Strait Islander peoples seeking to establish title to particular land, with the uncertainty that would create, could reasonably be avoided.

Over the following year Cabinet received regular updates on the progress of negotiations. Cabinet submissions and memoranda did not themselves in any way capture the complexities of the debates underway. But they did indicate a determination to honour – amid many conflicting interests – several basic principles arising from the High Court's judgement.

In October 1992 Cabinet noted the 'inherent uncertainty contained in, and created by, the Mabo decision' and accepted that 'additional funding for test cases may be sought on a case-by-case basis' as answers were pursued. Even so, discussions should proceed on the basis of a 'Commonwealth position that is supportive of native title rights and on the need for State and Territory governments to give effect to the land recommendations of the Royal Commission into Aboriginal Deaths in Custody'. The momentum to these issues was building fast. 'It is far too crude, indeed incorrect, to see the problems posed by the Mabo decision in terms of existing land holders “losing their land”'. There was no doubt that deep conflicts would arise around uncertainties over which an Aboriginal group, or groups, were the legitimate holders of native title rights, and regarding the extent of co-existence of those rights with the rights of others such as miners, farmers and conservationists. Ministers were kept informed of the developing options for a government response. There were nine by the end of the year, all of which had merits and challenges:

We considered but rejected options relating to extinguishment of native title (it would lead to deep domestic divisions and strong international condemnation) and entrenchment (amending the Constitution to put land under native title beyond the control of Parliament raises very major issues).

The best course was to 'feel the way forward', with a sense of opportunities perhaps for legislated land rights, the establishment of a tribunal that might assess claims, and the prospect for negotiated settlements.

By June 1993 Cabinet was informed that the concept of a tribunal was gaining favour in negotiations as a forum that would be 'accessible, informal, non-adversarial and expeditious'. The government was predisposed to the principle that 'native title should be preserved to the maximum extent possible', including its co-existence with land grants and the prospect of its revival at the expiry of finite grants. There was also likely to be a need for a response that offered compensation for 'past dispossession', if within 'budget realities' and in terms related directly to the specifics of the Mabo decision rather than another round of social justice measures. Then, when the Wik people lodged their claim with the High Court at the end of the month, the issues became more complex still.

The Wik claim had, Cabinet was told, the potential to place major mining leases at risk, in particular Comalco's bauxite mine at Weipa. 'The opportunity costs to the nation if Comalco fails will be obvious and large'. The government's position was then revised, so that if such 'leases may be at risk of being rendered invalid by reason of the existence of native title and by any application of Commonwealth law, then the Commonwealth Government will act to ensure that this does not occur'. Such actions could include over-riding the Racial Discrimination Act 1975 to specifically limit the property rights of Indigenous claimants. This was not the preferred course, but 'what government should say is that certainty will be provided to the project'. Again, these submissions give no sense of the debate within or beyond the Cabinet Room regarding these issues. Robert Tickner's Taking a Stand: Land rights to reconciliation (Allen & Unwin, 2001) offers one recollection of those discussions. But these records do indicate the scale of the testing and learning of the times.

The government sought to bring resolution to many of these issues in preparing a Native Title Bill, which was negotiated strenuously and intensely through the last months of 1993. In October Cabinet was briefed on the elements of this legislation, which would recognise the principle of native title and establish a regime to ascertain where it existed, who held it and what it included, and determine compensation for acts affecting it. Particular attention was now given to a 'social justice and economic development package', designed to win as much consensus as possible from Indigenous Australians whose newly acknowledged rights as a sovereign people were being bartered in these political and legal processes. Among the elements proposed for that package were: constitutional recognition; a document of reconciliation; and a National Land Fund for those groups who would not benefit from native title claims but which would 'assist Aboriginal landowners to manage and maintain their land in a way which provides economic, environmental, social and cultural benefits'. Departments worried at some of these elements. Primary Industry and Energy wanted assurances that the transferred land would be kept productive. Treasury objected to the 'imperfect incentives' built into processes that empowered groups to 'extract benefits in negotiations with developers' over assets the value of which would be determined more by the decisions of governments than markets. And what precedents were being set? Cabinet agreed, however, that the limits of discussions among officials, and the navigation of resistances among a plethora of interests, had probably been reached. It was now up to the politicians. And in the last weeks of December the corridors of Parliament House were alive with those campaigns, culminating in the passing of the Native Title Act 1993 after the longest debate to have taken place in the Senate.

The passing of that legislation on 21 December 1993 neatly marks the end of the period under review. The politics of native title would prove corrosive – John Hewson declared that date 'a day of shame' – but encapsulated much that has been associated with this first period of the Keating government. The Sydney Morning Herald enthused that its stand on native title 'could yet be judged the most profound achievement of Paul Keating's political career': a break with a discredited past, and vision for a more just future. Labor's polling improved into early 1994, and unemployment began to fall. But it was not long before complaints that this was a government 'out of touch' with the realities of a nation tiring of change and uncertainty, and of policies yet to 'kick-in' – complaints coming even from within its own ranks – began to build.

Copyright National Archives of Australia 2017