Fears of a meltdown: Inside cabinet’s secret preparations for the disaster that never happened


The dawn of a new millennium made New Year’s Eve 1999 a party like no other.

Key points:

  • Previously unseen cabinet papers have been released after a two-decade wait
  • It was feared the ‘millennium bug’ could take down international markets
  • Cabinet was warned of chemical or nuclear attacks on the Sydney 2000 Olympics

But as people across the country celebrated, the nation’s treasurer was alert to the threat of the unknown.

“There was a level of anxiety that the financial system would collapse, people thought maybe computers would not work or airlines were going to drop out of the sky,” Peter Costello recalls.

“We had a situation room in the Reserve Bank because our financial markets would be the first affected and we would be able to see whether or not the payments system of the world had crashed. And so I was getting reports out of this situation room at 12.15, 12.30 on New Year’s Day, you know all quiet, all quiet, nothing seems to have happened.”

Y2K, or the millennium bug, was a computer flaw feared to cause chaos when the date switched over to the year 2000.

Cabinet papers from 1998 and 1999, released by the National Archives, reveal concern extended from doomsday preppers through to the highest levels of John Howard’s government.


Federal treasurer Peter Costello feared the millennium bug may have brought down global payment systems. (Alan Porritt, file photo: AAP)

While Australia was considered to be well prepared, then-foreign affairs minister Alexander Downer and trade minister Tim Fischer warned of possible overseas breakdowns in areas like banking, transport and essential services.

“The Y2K problem poses potential international security risks in relation to reduced security and integrity of major weapons and weapons systems (including nuclear weapons) and civilian nuclear facilities,” they told cabinet in early 1999.

Mr Downer and Mr Fischer also warned some of Australia’s major trading partners were behind in their preparations and that countries could face “serious and widespread internal unrest” if government systems collapsed.

“At this stage we judge that high levels of Y2K-related difficulties are likely to occur through most of Asia and Africa, as well as areas of central Europe, South America and the Pacific.”

At home the government was focused on limiting public panic, with cabinet agreeing to a national communications strategy to “stimulate public confidence and minimise personal hoarding”.

“Recently, various media articles have highlighted actions of individuals who are taking extreme measures to insulate themselves from total community breakdown caused by Y2K failures,” defence minister John Moore and communications minister Richard Alston told cabinet later that year.

“Actions such as stockpiling food, fuel and large amounts of cash could have serious implications for industry, community functioning and public safety.”


Cabinet deliberations involved John Howard, Peter Costello and Alexander Downer. (Alan Porritt: AAP Image, file photo)

Terrorism, reputational fears as Olympics approached

Public safety was also at the forefront of ministers’ minds as the government prepared for the biggest event Australia had ever hosted — the 2000 Sydney Olympics.

In 1998, the Australian Security Intelligence Organisation (ASIO) assessed the overall security risk of the Games as “medium”, concluding that while the threat level was low, the level of harm to life, property and Australia’s international standing would be high were an attack to occur.


The Sydney 2000 Olympic Games prompted extensive cabinet deliberations. (AAP: Julian Smith)

Cabinet paid particular attention to the risk from nuclear, biological or chemical threats, with the attorney-general and defence ministers warning the likelihood of an attack could change quickly.

“A serious conflict or incident might lead to the release of constraints presently imposed on state-sponsored terrorist groups or incite individuals or extremist groups to attempt an attack,” they said in a secret document marked Australian Eyes Only.

“It is difficult to assess the intentions of cults and individuals, particularly as the Olympics coincide with the end of the millennium. As Aum Shinrikyo demonstrated in Japan, these groups may be drawn to horror weapons to further their cause.”

Another cause for concern was the coverage from thousands of international media representatives travelling to Sydney for the Games.

“As Atlanta has learnt, unless the international media are appropriately handled and serviced, particularly the unaccredited media, major damage can be done to the reputation of a city and a nation,” the minister assisting the prime minister for the Games, Andrew Thomson, told cabinet in 1998.

The following year, his successor Jackie Kelly pointed to the topics that could attract most attention.

“There is no doubt that many overseas media … will be receptive to protest actions by indigenous and environmental groups, advocates for the homeless (the market for low-cost housing in Sydney is expected to become particularly tight at Games time) and other disaffected groups,” she reported.

“The media strategy will therefore need to include a strong emphasis on the positive efforts the government is making in these areas.”

Source: https://www.abc.net.au/news