CLOCKWISE: Prime Minister Bob Hawke and President Ronald Reagan at the White House, 1986; Halley’s Comet returned to view, 1986; Cabinet on the steps of Parliament House, 1987.
CLOCKWISE: Prime Minister Bob Hawke and President Ronald Reagan at the White House, 1986; Halley’s Comet returned to view, 1986; Cabinet on the steps of Parliament House, 1987. National Archives Of Australia

Secrets come out as government documents released

IT WAS the public self-destruction of the federal Coalition Opposition which secured Bob Hawke's relatively smooth return to The Lodge for his second term as Australia's Prime Minister in 1987.

And despite increasing tensions between Hawke and his right-hand man, Treasurer Paul Keating, throughout 1986 and '87, together the pair drove crucial economic reforms, borne of necessity, which would forever change the face of Australia.

Hundreds of Cabinet documents from 1986-87, which have remained secret until now, were released by the National Archives of Australia under embargo for media to report on from January 1, 2014.

The documents confirmed the divided Opposition, torn between economic "dries and wets" and internal Coalition debate over the party leadership, between then-leader John Howard and contender Andrew Peacock, which drove voters away from the Liberal-National proposition at the 1987 poll.

Those problems were further complicated by Queensland Premier Joh Bjelke-Petersen. He ran a campaign to be installed in the Prime Minister's Office only months before his own government, and his higher political ambitions, would be destroyed through the infamous Fitzgerald Inquiry.

However, the return to the gov-ernment benches was not easy for Hawke. A collapse in the Australian dollar, down from parity with the United States in 1983 to just 60 cents by late 1986, forced the government's hand in driving economic reforms.

Keating sparked the action by his controversial May 1986 comment that Australia would become a "banana republic", moving Labor from a welfare-driven, more protectionist stance to an economic rationalist strategy. Driven by Keating's push for deferring tax cuts and upping government revenue through late 1986, the savings actions culminated in a massive $4 billion in budget cuts, asset sales and tax rises in May 1987.

Cabinet considered selling off a raft of government enterprises in July 1986 including Telecom, Qantas, Australia Post and the Pipeline Authority. By December 1987, the Hawke Cabinet settled on formal considerations of the asset sales, but the final sales decisions would not be made until later. While the proposed sell-offs were controversial in government ranks, Keating's arguments and Hawke's support for the need to put the budget on firmer footing won the day.

Then-Cabinet minister Gareth Evans said the Labor Party had a sense of a unified approach to the major challenges that confronted the Hawke government, a stark contrast to the divisions which plagued recent Labor governments.


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