After 13 years of Labor, the new coalition government of John Howard was destined to collide with the unions and where else but the waterfront.
The major dispute erupted in April 1998 with the infamous Patrick Corporation lockout of their workers.
But Cabinet documents for 1996 and 1997, released by the National Archives of Australia show the government was anticipating a showdown and had laid the groundwork well in advance.
The first area of contention was ANL, the government-owned shipping line which the coalition had promised to privatise.
This was hardly a surprise - due diligence for privatisation had started two years earlier under Labor.
ANL wasn't a big player, with just nine ships in an increasingly competitive environment.
To make it more saleable, ANL needed to be restructured. But the problem, Transport Minister John Sharp noted in a cabinet submission in June 1996 was that the ACTU and Maritime Union of Australia had advised ANL there would be a major dispute if it sold its two trans-Tasman vessels.
Mr Sharp consulted Industrial Relations Minister Peter Reith who advised that a strike could be far less manageable now then later once the government's IR legislation had been enacted and once all other maritime reform issues "likely to provoke strike action (eg the waterfront) are ready to be dealt with."
With the submission was correspondence between senior ANL managers who quoted a senior MUA official as declaring there would be "blood on the carpet" if the sale of the trans-Tasman vessels proceeded.
One ANL official said the MUA was convinced the government was "out to get them."
In line with its IR reform, the government amended the Industrial Relations Act, renaming it the Workplace Relations Act and creating Australian Workplace Agreements. Among other changes these specifically reduced the powers of external organisations, particularly unions.
Although scarcely a friend of the unions, the government attitude wasn't helped by protests outside parliament on the eve of the government's first budget.
Mr Howard, special guest at the launch of the Cabinet papers, said that only strengthened his resolve.
"That riot was outrageous. It was before the budget had been handed down and it did the Labor Party and the union movement an enormous amount of damage in the eyes of ordinary Australians and it deserved it," he said.
Mr Howard promptly cancelled a scheduled a meeting with ACTU leader Jenny George.
He said he was very committed to waterfront reform as it was an issue placed in the too-hard basket for decades.
He said it proved the most difficult of their reforms in their first term.
"It was an open secret that you wouldn't be able to get waterfront reform unless you had a combination of a government determined to do it and an employer with the backbone to stand up," he said.
"Certainly Patricks showed backbone."
Mr Howard said this was a fundamental clash between the old world and the new in economic terms. Productivity was well below world standards and after reforms were implemented exceeded world standards.
"It was a stunning turnaround and it would never have happened without that," he said.
To assist, the government agreed to make funds available to relevant employers in the form of a repayable loan to meet cost of redundancies "owing to restructuring and reform in the stevedoring and maritime industry".
Media reports originating from union tipoffs indicated stevedoring company Fynwest was hiring former defence personnel and planned to train them as waterfront workers in Dubai.
The actual dispute erupted on April 8, 1998 when Patricks dismissed all its employees then went back into business the next day with a non-union workforce.
The government fully supported the company and what ensued was perhaps the most rancorous industrial dispute of modern times.
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