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The following paper has been prepared by Dr Jim Stokes, National Archives historian. It is also available in audio format, below.

‘Fraser’s stern manner and rhetoric have misled both adversaries and followers. Far from being ruthless and decisive, his leadership is very much a construction of the style of Liberal prime ministers since Menzies. It is a slow, flexible, compromising leadership, seeking out the middle ground of politics.’ Peter Samuel, Bulletin, 5 November 1977

The year 1977 was expected to be the middle of Malcolm Fraser’s first term as Prime Minister. However an election for half the Senate was due by May 1978, leaving the Government with a difficult choice between an early election for both Houses or holding separate Representatives and half Senate elections during 1978. In the first half of 1977, when it sometimes trailed the Australian Labor Party (ALP) in the opinion polls, the Government was inclined to avoid a premature election. The establishment of the Australian Democrats by former Liberal minister Don Chipp on 15 May was an additional complication, although opinion was divided over how long the party might last. The Government took some heart in June when the ALP decided narrowly to retain its existing leadership, with Gough Whitlam defeating Bill Hayden 32–30 and Tom Uren defeating Paul Keating 34–28 for the deputy. Even so, a Morgan poll in late August gave the ALP 45 per cent of the primary vote, compared with 41 per cent for the Government, and 7 per cent each for the Democrats and other minor parties.

Later in the year an election became more attractive. The ALP national conference in July and the ACTU congress in September revealed deep policy divisions on uranium, East Timor and industrial relations. A September quarter CPI increase of only 2 per cent and public concern over a long power strike in Victoria were also pluses, while doubts over the longer-term economic outlook strengthened the case to go to the polls soon. Less helpful was the resignation of the Attorney-General, Robert Ellicott, on 6 September because of his opposition to the Government’s decision to end the long-running Sankey versus Whitlam prosecution over the Loans Affair. He was replaced by Senator Peter Durack.

Fraser announced on 27 October that the election would be held on 10 December. The campaign suffered a major upset on 18 November when Phillip Lynch resigned as Treasurer pending resolution of personal financial issues. He was replaced by John Howard. Nevertheless the Government gradually drew ahead in the polls, with advertising focused on the billion dollars of tax cuts (the so-called ‘fistful of dollars’) foreshadowed in the budget. The Sydney Morning Herald called it a lacklustre campaign,with both sides stumbling along the election trail, contradicting themselves and abusingeach other. The outcome was little different from 1975, with the Liberals gaining 67 seats,the National Country Party 19 and the ALP 38. The Government retained control of theSenate, but the election of Australian Democrat Senators Don Chipp and Colin Mason was a sign of things to come.

Lynch and his departments of Treasury and Finance waged a constant campaign to rein in the budget deficit. This inevitably brought them into conflict with the big-spending and constituency-aware industry, defence and welfare departments. Treasury submissions repeatedly urged Cabinet to hold its nerve on unemployment levels and to restore prosperity by holding the line on expenditure, wage increases and the value of the dollar. One of Treasury’s most reliable weapons was to frighten ministers with alarming estimates of the budget deficit for the coming year. On 22 March Lynch told Cabinet that the estimated 1977–78 deficit was $4.5 billion, which was ‘totally untenable’. Officials were ordered to review the estimates, with no area being ‘immune from scrutiny’. However political realities quite often thwarted the zeal of the economists. An attempt to raise cost recovery on airports and air navigation charges above the existing level of 66 per cent failed when Cabinet rejected the options of a sales tax, a service charge on domestic passengers or increased navigation charges. In July Cabinet over-ruled a 1974 decision to end subsidies to outback air services by 1977 and decided to continue them for three years. The 1976–77 deficit finally came in at $2.74 billion, against the budget estimate of $2.6 billion.

The states also required restraint. Stage 1 of Fraser’s New Federalism policy guaranteed the states 39.87 per cent of Commonwealth personal income tax collections, but there was prolonged debate over how the relativities among the states should be determined in the light of changing population projections. The Premiers wanted to borrow an extra $200 million to fund public works, but this was opposed by Lynch, who said that it would be a humiliation for Commonwealth macro-economic policy, especially if the money was borrowed overseas.

Lynch presented the 1977–78 budget on 16 August, with a predicted deficit of $2.21 billion. It reduced personal income tax scales from seven to three (32 per cent, 46 per cent and 60 per cent) and also provided personal tax cuts to operate from 1 February 1978. However there were still underlying problems. The current account deficit rose from $1.1 billion in 1975–76 to $2.5 billion in 1977–78 and foreign reserves dropped in 1977–78, although they picked up again in 1978–79. In mid-1977 Australian short-term interest rates were around 9–11 per cent, although the inflation rate dropped from 13 per cent in 1975–76 to 9.5 per cent in 1977–78. By October Lynch was warning that the projected 1977–78 deficit had increased to $2.5 billion, due to tax changes and additional spending, and it eventually blew out to $3.3 billion. 

Unemployment remained a major concern. In May 1977, 314,000 people (5.1 per cent of the workforce) were unemployed and a year later the total had risen to 395,000 (6.2 per cent). Youth unemployment was disproportionately high and in February 1977 a Commonwealth study group reported that many young people found school boring, unduly academic and deficient in vocational training. Interviewees also complained that employers gave too much weight to experience and formal qualifications, and preferred married women to school leavers. In July the Minister for Employment and Industrial Relations, Tony Street, suggested that local government and private employers might be subsidised to hire the long-term unemployed, but Lynch argued successfully that ’jobpropping’ wage subsidies or job creation schemes had little long-term effect on unemployment and that it would cost hundreds of millions of dollars to employ 20,000 people.

The Government saw wage restraint as crucial to the attack on inflation and unemployment. Indexation had reduced the level of increases, but they were still running at 14.3 per cent for the year ending February 1977. Cabinet decided in January that it would not legislate to control wages and instead concentrated on attempts to persuade the Conciliation and Arbitration Commission to minimise increases granted at its quarterly national wage case hearings. At the March hearing the Government argued for a wage increase of only $2.90 per week; the Commission awarded $5.90. On 13 April Fraser persuaded the Premiers’ Conference to call for a three-month pause in wage and price increases, which was immediately endorsed by major employer groups. However the ACTU was not prepared to support the pause unless taxes were also cut and it was effectively ended by the national wage decision on 24 May, which awarded a 1.9 per cent increase up to a maximum of $3.80 per week. The Commission awarded increases of 2 per cent in August and 1.5 per cent in December.

The year 1977 saw a number of significant strikes and work bans. Strikes by Commonwealth air traffic controllers and postal workers led to the enactment of the Employees (Employment Provisions) Act to enable Commonwealth employees to be stood down, although it was not proclaimed until a Telecom strike in 1979. In the private sector there was an 11-week strike by Victorian power workers that caused huge disruption to the state. There were disputes in the oil, building and iron ore industries, while work bans affected the export of uranium, merino rams, and live cattle and sheep. The Seamen’s Union refused to crew tugs for the Hay Point coal terminal near Mackay in an attempt to force the Utah Development Coy to ship 40 per cent of coal exports in Australian-crewed ships. The ships were kept moving without tugs, but work was halted on the development of Utah’s Norwich Park mine, which was to deliver coal to Hay Point.

In January 1977 Cabinet agreed to a series of amendments to the Conciliation and Arbitration Act. They included the establishment of a general right of conscientious objection to compulsory union membership and the creation of an Industrial Relations Bureau to investigate breaches of the Act, unfair labour practices and irregularities in union administration. Street also proposed to strengthen the enforcement of industrial awards through the use of deregistration, secret ballots and restrictions on union funds and property. The unions strongly opposed many of the changes, but the ACTU and Street negotiated a compromise under which the unions accepted the Industrial Relations Bureau and agreed to join a reconstituted National Labour Advisory Council in return for the deferral of the other changes.

In April Cabinet supported recommendations by the Minister for Business and Consumer Affairs, Howard, that secondary boycotts be prohibited where they would lessen competition or have substantial adverse effects on the targeted business. This might occur where the boycott sought to prevent price-cutting or the conduct of business with someone considered politically undesirable. However the prohibition would not extend to ‘a traditional and proper issue of industrial relations’. Section 45D of the Trade Practices Act was enacted in August to achieve this.

The turbulent affairs of the Australian Union of Students attracted considerable media coverage. Cabinet considered banning compulsory student fees other than for amenities, but decided instead to provide for conscientious objection and to urge the universities to ensure fully democratic procedures in student activities. Cabinet also wanted to hold an inquiry into the financial problems of the Australian Union of Students travel service, but the Victorian Government refused to participate.

In July Cabinet confirmed the 1976 decision to give the Northern Territory full selfgovernment by mid-1979. In September Cabinet agreed on self-government arrangements for the Australian Capital Territory, allowing six months for public debate before decisions were finalised and elections held for the Legislative Assembly. One of Cabinet’s main objectives was to impose greater financial self-sufficiency and discipline on both territories, although it recognised that this would be a gradual combination of reducing services to state levels and increasing revenue-raising efforts.

Cabinet remained a moral guardian for the Australian Capital Territory. In August the Health Minister, Ralph Hunt, recommended that Cabinet accept a Legislative Assembly recommendation that private abortion clinics be banned, but that a clinic be established at a public hospital. Hunt suggested that abortion, like homosexuality and nude bathing, was an issue that could be left to the Assembly. Cabinet confirmed the ban on private clinics. Cabinet also rejected a proposal by Capital Territory Minister, Tony Staley, to approve construction of a casino in Canberra. Cabinet may have been swayed by a strong letter of protest from Sir Robert Menzies. Menzies said that his government had worked to make Canberra ‘a place of beauty’ and ‘a Capital City of which all Australians could be proud’, not a miniature Las Vegas.

Cabinet considered the future of the Cocos Islands, taking into account on one hand Australia’s international decolonisation obligations and on the other hand the undesirability of control of the islands passing to another country. It was decided that Cocos should be permanently integrated with Australia and that it was ‘a firm objective’ to reduce the economic and social dominance of the Clunies Ross family.

By 1977 Australia’s natural rate of population increase was down to zero and the net migration gain in 1976 was only 39,000. Some 70,000 arrivals were expected in 1977, of which less than 20,000 would have assisted passage. The main migrant groups were family reunions, refugees and people with occupational eligibility. Cabinet, mindful of trade union opposition to migration at a time of high unemployment, decided not to set a migration target for 1977–78 and to fund only 16,000 assisted passages.

In May Cabinet considered the plight of Indo-Chinese refugees in Thailand, Malaysia and on boats, noting that there had been some criticism of Australia’s ‘inadequate’ and ‘ad hoc’ response to the issue. Refugees, like Aboriginals, were a group that Fraser believed strongly the Government had an obligation to assist. Cabinet affirmed that Australia recognised a humanitarian commitment to assist refugees to resettle in Australia or elsewhere. By November 17 boats had arrived with 647 people and it was believed that another 4000 people were at sea.

The Foreign Minister, Andrew Peacock, met US Vice President Walter Mondale and Secretary of State Cyrus Vance in March, with Cabinet guidance reflecting concerns that the new Carter administration might give our region less attention than other issues and see Australia as merely ‘an addendum to Japan’. Peacock returned satisfied that the US recognised Australia’s ‘important responsibilities’ in the South-West Pacific and would seek Australia’s advice and help on issues in South-East Asia and the Pacific. However he noted the ‘asymmetrical’ nature of the relationship and the fact that US policy1977 making was often fragmented and domestically driven. Later President Jimmy Carter gave the Australian Government his personal assurance that US agencies (in particular the Central Intelligence Agency) were not engaged in improper activities in Australia, an issue that had resurfaced in the espionage trial of Christopher Boyce in the United States. Fraser included this information in a statement to the House of Representatives on 24 May.

Fraser took a prominent role at the Commonwealth Heads of Government Meeting held in London in June. The most significant outcome of the meeting was the Gleneagles Agreement rejecting racially based sporting teams. Fraser strongly supported the advancement of majority rule in southern Africa, but emphasised that Australia could in no way support guerrilla activities. Cabinet had already decided to legislate to prohibit the Rhodesia Information Centre in Sydney from sending or receiving funds. Fraser also promised a substantial increase in Australia’s world food aid contribution and he secured agreement for a meeting of heads of government of Commonwealth countries in Asia and the Pacific to be held in Sydney in February 1978.

Fraser met US President Carter in Washington on 22 June. Carter impressed him ‘as a decisive man’ who would be ‘setting American objectives in the great humanitarian issues’. Carter undertook to consult Australia before any agreement was concluded with the Soviet Union on arms limitation in the Indian Ocean. However in November Cabinet expressed concern about Western Australian reactions to the possible coverage of a US– Soviet agreement extending to the WA coastline. Cabinet noted that the agreement would not affect Australian warships or US bases in Australia, but decided to seek US assurances that it would not be allowed to affect ANZUS or visits by US warships to WA ports.

Fraser accepted an invitation to meet the five ASEAN leaders after their summit in Bangkok in August, the first occasion on which ASEAN leaders had met another national leader as a group. Fraser saw the meeting as an opportunity to combat ASEAN concerns about Australian tariffs and import quotas, and to point out ‘with a firm directness’ the marked growth in ASEAN–Australian trade. He emphasised that current Australian import quotas were short-term measures to combat serious economic difficulties. The leaders agreed on a range of consultative and development measures on trade and aid. Fraser also met Japanese Prime Minister Fukuda in Bangkok. There were ‘firm words on each side’ over ongoing problems with Japanese beef import quotas and attempts to renegotiate the Australian sugar contract. However Fukuda accepted Australia’s intention to declare a 200-mile fishing zone, with assurances of consideration of the interests of Japanese tuna boats.

Design funding was approved for a new Antarctic expedition ship to replace the ageing Danish icebreakers used over the past two decades. The submission emphasised the importance of maintaining a credible presence in Australia’s vast Antarctic territory, particularly when the identification of land and offshore resources was becoming an issue.

Cabinet considered the academic status of the planned Defence Force Academy in Canberra. The Department of Education argued that the Academy should not be called a university because its purpose was military. Defence argued that the title of university was essential in order to give cadets ‘a balanced and liberal education to the highest attainable standards’. Finance supported Education, mainly because it did not want the Academy to develop expensive research and postgraduate facilities. However Defence won and Cabinet allocated $49 million to build the Academy.

In October Cabinet accepted a five-year defence spending program of $13.4 billion, which would cover a third FFG frigate, new tactical fighters to replace the Mirage, new naval air capacity to replace HMAS Melbourne, enhanced RAAF surveillance capacity from Edinburgh (South Australia), patrol boat bases at Darwin and Cairns, the new Defence Force Academy and Army Apprentices School, and improved manpower, training and accommodation.

On 15 September the Indian military attaché in Canberra and his wife were attacked by a member of the Indian Ananda Marga sect and in mid-October 11 anti-personnel land mines were stolen from an Army depot at Mangalore in Victoria, with a phone threat to use them against police and politicians. On 19 October an employee of Air India’s Melbourne office was stabbed by a man who left a threatening letter, allegedly from the Ananda Marga-affiliated Universal Proutist Revolutionary Federation. Cabinet decided to review the management of explosives by Commonwealth agencies and to provide 203 more Commonwealth police for diplomatic security work, while foreign missions in Australia were urged to upgrade their security. It also transpired that Ananda Marga was receiving Commonwealth financial support for three schools and that it was planning a national gathering near Galston (New South Wales) in January 1978. ASIO had its knuckles rapped for taking six weeks to produce an urgent threat assessment and Cabinet decided to suspend all recognition of, or assistance to, the sect.

The Government had delayed decisions on the mining and export of uranium until the second report of the Fox inquiry on the proposed Ranger mine in the Northern Territory was received in May. On 23 May Cabinet agreed the basic elements of a safeguards policy to ensure that Australian uranium, if it were to be exported, would be used only for peaceful purposes within the framework of the Nuclear Non-proliferation Treaty. On 15 August Cabinet decided that Australia would negotiate bilateral safeguards agreements with purchasers covering both present and future use of the uranium. Australia would seek an understanding with other exporters on the application and enforcement of safeguards, but this would not constitute a commercial cartel to control price or quantity.

Cabinet made its final decisions on uranium on 23 August, endorsing the main findings of the Fox inquiry unless there were ‘compelling reasons’ for departing from them. It was agreed that mining could proceed, subject to environmental controls and a stringent nuclear safeguards regime. The Ranger mine could be developed without further environmental assessment, but the other two mines in the Alligator River region – Jabiluka and Koongarra – would not be approved for a considerable time.

On 15 September the ACTU congress resolved to ban the mining and export of uranium from mid-November unless the Government agreed to hold a referendum on the issue. The referendum proposal was not favoured by the ALP, most of whose Parliamentary leaders were inclined to support mining. The situation was complicated by the large number of unions involved and the fact that the unions themselves differed on policy. The Australian Workers’ Union supported mining, but the rail, maritime and Northern Territory unions were opposed to it and there had already been protests on the waterfront.

There were also problems in meeting existing contracts to supply uranium to electricity generators in Europe and Japan. The only immediately available sources of uranium were the small Mary Kathleen mine in western Queensland and the government stockpile at Lucas Heights in Sydney. The latter would be exhausted by 1980, while Mary Kathleen required substantial financial assistance to keep it open. Even if Ranger and the small Nabarlek deposit in Arnhem Land were brought into production as soon as possible, it seemed unlikely that Australia would be able to meet even existing contracts by the early 1980s.

Uranium affected decisions on the establishment of Kakadu National Park. The Fox inquiry had recommended that the whole park be declared at one time, but there were issues about its extent and how mining should be managed. Environment wanted to declare the whole park and deal with mining within its management framework. National Resources wanted to exclude commercial mineral areas from the park. Finance favoured mining within the park management framework, but wanted to exclude the Mudginberri and Munmarlary pastoral leases from the park as unnecessary and tending to encourage Aboriginal land claims. Cabinet decided in August to purchase the two pastoral leases, exclude the Jabiluka, Ranger and Koongarra uranium leases, and declare areas of the park progressively after land claims had been dealt with.

In 1977 Australia produced around 65 per cent of its own crude oil needs, predominantly from Bass Strait, but this was sold at less than one-third of the world market price. Australian self-sufficiency would decline significantly unless new fields were developed, but oil companies were unlikely to undertake this development unless prices moved towards world parity. To cushion the political and inflationary effects, Cabinet agreed to progressively increase the proportion of Australian crude oil sold at world parity prices to 50 per cent by 1981.

Cabinet also considered the 1976 report of the royal commission on petroleum marketing. The commission had found that there were too many oil companies, far too many retail outlets, archaic price structures with excessive margins and widespread lessee dissatisfaction. The commission had recommended establishing a statutory authority to control the industry and set prices, but Cabinet accepted Howard’s recommendation that rationalisation should be left to market forces, supported by the Trade Practices Act.

John Howard tabled a White Paper on the future of the manufacturing industry on 24 May. The paper noted that despite the growth of mining, manufacturing still employed more than 1.3 million people in 1975, of whom 0.5 million had been born overseas. Manufacturing depended substantially on tariff protection and other government assistance, but even so it faced major problems and the Government ‘cannot in the long term insulate Australians from changing trends, either external or internal’. Australian wage costs had risen more rapidly than those of its competitors, but there had not been a commensurate increase in productivity and it faced ever-increasing competition from other countries, particularly in Asia.

The White Paper attempted a middle path on industry protection, suggesting that in the longer term Australia would move towards a lower tariff structure, but that in the short term more temporary assistance would be required to enable industries to maintain employment levels in difficult times. This reflected the views of Industry Minister Robert Cotton, who had warned Cabinet that manufacturing had lost around 95,000 jobs in the preceding three years, one-third of them in clothing and textiles.

The passenger vehicle industry typified the problem. Despite a 45 per cent tariff on imported cars, local manufacturers’ market share had fallen below the Government’s target of 80 per cent by July, and Australian car makers had shed 5000 jobs in 12 months. In October it was decided to restrict car imports to 94,000 vehicles in 1978.

Tariff reform thus remained a politically sensitive issue, complicated by increasingly forceful protests from Japan and the ASEAN countries about Australian tariff levels and import quotas. The review of tariff structures initiated by the Industries Assistance Commission in 1971 was moving towards completion. In August the Minister for Business and Consumer Affairs, Wal Fife, recommended that the final group of references, relating to the metal and engineering industries, be sent to the Industries Assistance Commission. However Cabinet, mindful of pleas from the industry for deferral, decided not to proceed.

On 6 September Cabinet considered a submission from Cotton and Fife suggesting that it was time to rein in the Industries Assistance Commission’s enthusiasm for the unfettered operation of market forces. It was agreed to amend the Commission’s legislative guidelines to require it to consider the effect of recommended changes on the economy and the workforce, and to report on the level of assistance needed to maintain present activity and employment levels. Ministers would also be able to direct the Industries Assistance Commission as to the priority it should give to its various guidelines.

In July Cabinet considered the Coalition’s election commitment to establish a national rural bank to give farmers better access to long-term loans. Lynch took the view that if there was a need for such an institution (which he doubted) it should be established on a purely commercial basis. The Primary Industry Minister, Ian Sinclair, believed that some form of subsidy would be necessary to make the bank effective. After discussions with bankers the issue returned to Cabinet in October. The banks favoured a purely private company, Lynch wanted a private company with significant Commonwealth policy control and Sinclair wanted a statutory corporation. The Lynch option prevailed.

Health costs were as always a concern. Nationally costs had increased from $1.9 billion in 1971 to $5.2 billion in 1976 (7.5 per cent of GDP) and the Commonwealth’s share had risen from 29 to 52 per cent. Pathology benefit payments doubled in a year, causing the Government to confine bulk billing to pensioners and their dependents. However Finance’s suggestion that amputees be charged for the supply of artificial limbs did not find favour, ministers perhaps reflecting on the public relations aspects of recovering limbs from defaulting purchasers. Finance also failed to persuade Cabinet to apply a 50-cent prescription charge for pensioners to discourage over-prescribing.

In July Cabinet considered proposals that the Pharmaceutical Benefits Scheme be confined to pensioners or include a user charge, and that the Government call for tenders for the right to dispense pharmaceutical benefits. Cabinet decided that it did not wish to antagonise chemists, the Pharmacy Guild and the general public.

Health Minister Ralph Hunt suggested that 1 per cent of revenue from alcohol and tobacco excise be dedicated to health education and the treatment of alcoholism. However Lynch persuaded Cabinet that, while an increase in excise was worth considering, the proceeds should be devoted solely to deficit reduction. Modest support (also opposed by Finance) was provided for the Life. Be in it campaign, which would emphasise ‘activity’ rather than ‘fitness’; research had shown that a ‘fitness’ objective had connotations of pain or inadequacy for many people.

A new approach to human quarantine was approved to address changed travel patterns, the decline in smallpox cases and the possible appearance of new viruses. The old quarantine stations were to be replaced by a high-security unit at Fairfield Hospital in Melbourne and by Commonwealth-funded treatment in public hospitals.

In July the Minister for Social Security, Senator Margaret Guilfoyle, took a series of pension and benefit-related submissions to Cabinet, some of them clearly at odds with the views of Treasury and Finance. She fought off an attempt to tax invalid pensions. She put to Cabinet a range of cost-cutting options proposed for aged pensions by Commonwealth officials, although she opposed all of them. The most radical proposals would have extended the means test to pensioners over 70 (it already applied to the 65–69 age group) and withdrawn pensions for women aged between 60 and 64. Cabinet, perhaps mindful that ministers, not officials, would have to fight the next election, decided only to means test future pension increases for people over 70. Cabinet also rejected a proposal to save $500 million per year by halving the rate of family allowances.

Senator Guilfoyle also attempted to engage Cabinet with basic structural issues in social security. She pointed out that aged pensions accounted for one-eighth of budget expenditure, the proportion of people aged over 65 was increasing and there was pressure to improve pension rates and benefits. She suggested that pensions might be funded by a flat rate tax or by an earnings-related tax on either individuals or employers. Cabinet was not enthusiastic. She also suggested establishing a national compensation scheme, noting that while existing schemes cost $2 billion annually they had major weaknesses in coverage, overlap and efficiency. Cabinet referred the idea to an interdepartmental committee.

The Government cautiously grasped the expensive nettle of the Home Savings Grant Scheme introduced by Menzies in 1964. Whitlam had decided to end it, but Fraser had pledged to continue it. It was confined to the first five years of home ownership in 1976 and in July 1977 Cabinet agreed to cut annual expenditure to $20 million. However, in November Cabinet was warned that unless a six-month waiting list was applied, it would cost $91 million by 1979–80. Options included abolition and means testing, but Cabinet was not prepared to change the scheme a month before an election.

In August Cabinet decided to establish a Special Broadcasting Service as a statutory authority. It would operate initially through the existing ethnic radio stations 2EA and 3EA, but might extend later to Indigenous, educational, community, youth and children’s services. Finance urged that the ABC be compelled to take over the two stations, fearing that the ambitions of an independent authority would be impossible to restrain, but Cabinet refused to do so because of the ABC’s ‘unco-operative and unreasonable approach’.

Cabinet also considered the future of Radio Australia, which had been operating from a very inadequate facility at Shepparton since losing the Cox Peninsula transmitter in Cyclone Tracy in 1974. Finance questioned the value of Radio Australia, but Cabinet decided to re-establish a transmitter in northern Australia and undertake some rehabilitation of Shepparton.

A draft Industries Assistance Commission report in 1976 had recommended that assistance to the performing arts be phased out over eight years. This would have affected the Australian Opera and Ballet, 17 state opera, dance and drama companies, and the six ABC symphony orchestras. The proposal did not attract Cabinet’s approval. However, Cabinet did decide that the National Gallery of Australia should not purchase Georges Braque’s Cubist painting Grand nu and that this decision should be publicised; ministers no doubt recalled the uproar over Whitlam’s purchase of Blue poles.

Cabinet approved construction of a new repository for the Australian Archives (now the National Archives of Australia) at Mitchell, Australian Capital Territory, to replace the ‘notorious’ Romney huts beside Lake Burley Griffin; the huts were not only a hazard to the records, but were hindering completion of the High Court and National Gallery of Australia. Drafting of the Archives Bill was approved, although Cabinet records were to be excluded from the public access provisions.

The Third Fraser Ministry was sworn in on 20 December by Sir Zelman Cowen, who had replaced Sir John Kerr as Governor-General on 8 December. Most Cabinet ministers retained their portfolios, but Lynch replaced Cotton in Industry and Commerce. Howard retained the Treasury, but Finance went to Eric Robinson. Ian Viner (Aboriginal Affairs) also joined Cabinet. In the outer Ministry Queensland National Party Senator Glen Sheil achieved the distinction of losing his portfolio (Veterans’ Affairs) even before he had been sworn in, due to his outspoken support for apartheid in southern Africa.

On 22 December Hayden and Lionel Bowen replaced Whitlam and Uren in the ALP leadership. Bob Hawke, President of the ACTU, remained a highly visible figure whom many expected to enter Federal politics. Hawke was important to the Government as a bridge to the union movement and also for his role in brokering settlements in major industrial disputes.

Cabinet held its last meeting for 1977 on 20 December. Ministers were reminded of what was expected of them, including the ‘absolute requirement’ to attend Cabinet meetings, the importance of collective responsibility and of not invading their colleagues’ territories, and above all the need to avoid any conflict between public duty and private interest. Their reward was a requirement to take up to two weeks’ leave each year ‘for the purposes of recuperation.’