It was the years the Hawke Labor government consolidated and then-Treasurer Paul Keating 'brought home the bacon', a budget surplus of historic proportions.
The National Archives today released the cabinet documents of 1988 and 1989, a period which saw the Federal Government slash spending, sell off assets and grapple with new threats such as climate change and HIV/AIDS, as well as old foes like Cold War spies.
It was Bob Hawke's third term as Prime Minister.
Reflecting today, Mr Hawke told SBS News, "It was an interesting period. It was one of the sections of my time where there was not a [federal] election. We had just won in '87 and the next one was coming up in 1990. So we were free of elections."
"It was more keeping the ship steady as she goes in that period."
"It was a time of consolidation and keeping the spirit of the troops and the party alive. We had this enormous exuberance, if you like, in 1983 coming in and being able to all the things that we did then. It was more keeping the ship steady as she goes in that period."
"I was extraordinarily fortunate in the quality of the Cabinet I had. A large number of extremely talented Ministers. I had Paul [Keating] in Treasury, Kim Beazley, John Button and Gareth Evans."
Paul Keating's warning of a "banana republic" was two years old. In August 1988, he said he was "bringing home the bacon" by announcing a $5.5 billion budget surplus for 1988-89.
"Paul had a lovely turn of phrase and it sounded good at the time," said Mr Hawke.
"I am not sure we were bringing home the bacon. We were keeping up the momentum. We were more building up the Australian farm so everything, including the pigs, could do their jobs more efficiently."
Fiscal policy tight
Hawke Government cabinet documents for 1988-89, released by the National Archives of Australia, revealed the use of words such as "reciprocal obligation" and showed concern about the economy running too hot.
In March 1989, Treasurer Paul Keating warned of "an overly strong investment boom."
Fiscal policy was tight, but external problems were growing and the then-Treasurer said "in a nutshell" he was trying to avoid a wages blow out.
On December 12, 1989, the Finance Minister Peter Walsh was laid down the law over government spending: "We do not have the luxury of being able to contemplate undisciplined wish lists."
"The outlook for the forward years, particularly 1990-91 is not encouraging," Mr Walsh noted.
Government sales of assets such as Qantas and defence properties were one answer. Bob Hawke says, in this, he was not bound by Labor tradition.
"The herd of sacred cows had to be culled ... and they were," said Mr Hawke.
The Cold War was coming to an end, but in April 1989, a wire had been found in a vent in the Australia Embassy in Moscow.
There was concern a bribed or turned Australian officer or former officer had placed it.
On October the 30th, 1989, the Foreign Minister Gareth Evans warned, in a now redacted Cabinet submission, that "the likelihood that it was placed by *******, or at their direction, is real."
The Cabinet documents show tension over issues such as a second Sydney airport and Tasmania's forests. The then Education Minister John Dawkins reflects that, "Cabinet became a little ragged."
"I must say we did not handle the Tasmanian forests issue very well. Because there was kind of entrenched positions on the Resources Minister (Peter Cook) on one hand who saw the forestry as an important resource to be exploited and, on the other hand, you had the Environment Minister (Graham Richardson) who was in favour of stopping logging."
"Those things of course clashed and there was very little prospect of finding a consensus between them," said Mr Dawkins.
University fees, or HECS was introduced at the start of 1989. Bob Hawke paid tribute to Gough Whitlam's "enormous vision" on opening up tertiary education, but he saod, "There is this economic truth there is no such thing as a free education."
The government did not have the numbers to get the HECS package through the senate on its own and need the support of the Democrats.
John Dawkins says the passing of the measure underpinned 25 years of strong growth in the higher education sector.
"We now have a highly skilled workforce capable of responding to changes in the economy," he said.
University fees were not universally popular. Students protest erupted across the nation's campuses.
"It was not easy, but the results speak for themselves," Mr Dawkins told SBS News.
Migration patterns changing
Migration to Australia was changing. Cabinet was now looking for the economic benefit and skills that migrants would bring. Multiculturalism was downplayed.
"People who were looking for family reunion were wondering whether this new emphasis upon skilled migration would prejudice their chances," said Mr Hawke. "We established the Fitzgerald Committee and they looked at these things expertly and dispassionately and we were able to find our way through it."
"This is not an issue where there was great division of ideological debate."
But, there was concern in the community about Asian immigration and Japanese investment and ASIO was informing Cabinet that racist groups like National Action and Australian Nationalists Movement were becoming more violent.
On the October 18th, 1989, ASIO advised that "these have passed from acts largely of harassment and vandalism to attacks in which there is some prospect of loss of life."
There were great expectations for new Indigenous peak body, the Aboriginal and Torres Strait Islander Commission. ATSIC was being set up in 1988 and the then Aboriginal Affairs Minister Gerry Hand warned Cabinet, "if ATSIC starts its life under-resourced, we doom it to failure."
ATSIC was disbanded in 2004.
Australia opened the doors to thousands of Chinese students after the bloody suppression of unarmed civilians in Beijing's Tiananmen Square in June 1989.
Mr Hawke sobbed on stage as he described how Chinese forces spared no one, including children. He unilaterally overruled advice to offer permanent residency regardless of "serious implications for Australia's migration program."
"I was not concerned with what it did with numbers," says Mr Hawke. The former Prime Minister has a number of artworks on his office walls painted by students who came to Australia in 1989.
John Dawkins says there was concern in Cabinet about returning the students to danger.
"I think we were happen to have them here and for them to make a contribution to the Australian economy in which many of them did," he said.
Cabinet also noted concern about Australia's relations with China and that other ethnic groups would have trouble with any special treatment for the students.
The later years of the eighties, saw Australia begin to tackle climate change, HIV/AIDS and Bob Hawke was integral to the global ban on Antarctic mining, overruling the Cabinet.
"In this case I was just about on my own, with two or three others." Mr Hawke told SBS News.
"I am very proud of that."
"The thought of the last great wilderness area in the world which was a very useful area for environmental research possibly polluted by activities of miners, I just found appalling."
