Unlocking cabinet secrets from the Howard era

The public release of cabinet papers on January 1 each year opens a window into the past. The formal deliberations of ministers grappling with often difficult and complex issues, and sometimes matters that are completely unforeseen, can shed light on the inner workings of previous governments. They also hold lessons for the present. Cabinet papers are now made public after 20 years and, as this change is being phased in, those from the first two years of the Howard government, 1996 and 1997, are being made available today by the National Archives of Australia. They show a new administration methodically run by John Howard, mindful of the principles of Westminster cabinet government, and determined to implement its core policy agenda while also recognising the need to be responsive to events.

Following the March 1996 election, treasurer Peter Costello was advised that the underlying budget deficit had blown out from $600 million to $7.6 billion. But before the election, finance minister Kim Beazley had assured voters the budget was in surplus. This gave rise to the claim that the shortfall the Coalition inherited was “Beazley’s black hole”. While Treasury also advised that the overall economic outlook was “relatively favourable”, the government, understandably, made this a millstone around the new opposition leader’s neck. But political rhetoric was not enough to guarantee economic credibility.

The government had to reduce the budget deficit. We are now accustomed to Labor and Liberal treasurers promising to deliver budget surpluses but never doing so. Cabinet papers show Mr Costello urged ministers to agree to reduce expenditure by 1.5 per cent of GDP over two years. (Treasury had recommended “a discretionary tightening” of the budget to the tune of 1.5 per cent of GDP — but over three years rather than two.) This fiscal consolidation, the most significant since the 1980s, was to be achieved “to the maximum extent possible through savings on outlays”. This was the more difficult road back to surplus, and some ministers were resistant to trimming their portfolios, but it was the most economically responsible route.

There are several reasons why the Howard government succeeded in the task of fiscal repair and why subsequent governments have found it much more difficult. There was strong leadership from Mr Howard and Mr Costello, and finance minister John Fahey. Mr Costello told cabinet that savings had to be “substantial” but also “credible” in the eyes of voters and the burden of cuts had to be shared across government. Importantly, they made the case for the cuts to voters and could persuade the Senate to support them. While the Morrison government has estimated a budget surplus in 2019-20, it comes after more than a decade of deficits during a long period of economic growth.

There is a modern relevance in many of the issues dealt with during the first two years of the Howard government. Cabinet debated whether to continue to be part of international climate change negotiations relating to the Kyoto Protocol. Immigration levels were reduced in 1996 and 1997, largely in response to high unemployment, and the overall program was geared more towards skills needs rather than family reunion. The landmark High Court ruling in the Wik case, which found pastoral leases could coexist with native title, was debated at length and a legislative response proved difficult. The cabinet did not support an apology to indigenous Australians forcibly removed from their families.

Differing views on various issues were often expressed in cabinet as well as in the Coalition party room. Mr Howard’s conception of the Liberal Party being “a broad church” of liberals and conservatives helped to unify the government through most of the subsequent decade. Ministers and MPs could express their opinions and were respectfully listened to, while a form of consensus was reached. There were no formalised factions in place nor was the ideological divide in the party as pronounced as it is today. Careful internal management also extended to the Nationals, who were respected as the junior Coalition partner.

This is evident in one of the most important cabinet decisions of the Howard era: national gun laws. The massacre at Port Arthur shocked the nation. Mr Howard, who had been prime minister for seven weeks when the mass shooting occurred, was determined to see new firearm laws implemented. Cabinet agreed on a package of initiatives, including a ban on automatic and semiautomatic guns, and a buyback scheme. This issue was difficult for the National Party’s rural and regional constituency. But, as on many issues during these years, agreement was reached because the principles of good cabinet government, with conviction and a unity of purpose, were prized above all. This is a timely reminder for the Coalition, and also Labor, of what voters expect from their government.