Australian government spent big to counter Y2K Millenium bug

Government and industry spent an almost $12 billion countering the Y2K bug ahead of the end of the millenium.

The arrival of the new millennium and dreaded Year 2000 bug sparked warnings from senior Howard government ministers of international disruptions to trade, banks, transport, communications, food supply and even water and sewerage, while there were concerns at home that Australians were not sufficiently prepared.

Cabinet records from 1998 and 1999, released on Wednesday by the National Archives, reveal that keeping Australia’s electricity and telecommunications running were considered “the most critical areas” to address.

The Y2K bug – a term coined amid fears IT systems would be messed with and computer programs thrown out by the calendar ticking over to the year 2000 – was a popular topic around the cabinet table, but the crisis did not eventuate.

Former foreign minister Alexander Downer and former trade minister Tim Fischer said there were implications for trade, with Australian exporters particularly exposed to “major Y2K” problems in Japan, China, Germany and Indonesia.

A significant increase in the level of demand for consular assistance was expected as a result of Y2K failures overseas and there could be major issues for the welfare of Australians working for the government abroad and for their families.

“Y2K disruptions are expected internationally in banking, finance, transportation, communications, manufacturing, energy, water and sewerage, health facilities, emergency supplies and food supply,” their February 1999 cabinet submission states.

Treasury said the submission portrayed the risks associated with Y2K “in an overly pessimistic manner” and future cabinet consideration of related issues “would benefit from a more balanced assessment”.

Weeks later, then defence minister John Moore told cabinet that contingency planning needed to be based on worst-case scenarios even though the extent and duration of the effects were unknown.

A $6.5m national communications strategy was established to raise awareness of Year 2000 issues, minimise unnecessary contingency planning and ensure the public was confident in preparations by governments and industry.

“More accessible information is likely to reduce the economic and safety risks associated with unnecessary contingency actions,” then communications minister Richard Alston says in a March 1999 cabinet submission.

“These could include hoarding of cash, fuel and good and changed patterns of consumption, cancellation of travel and holiday plans and concern about law and order, national security, pensions and other payments.”

A national government response centre was created for the “critical date changeover period from 31 December 1999 to 7 January 2000” to manage risk to the public’s safety, which was considered minimal.

An estimated $12bn was spent by the federal government and industry to counter the bug.