Cabinet papers show Y2K fears spooked Coalition and sparked $12bn in contingency plans

Gay Alcorn
Photograph: Mario Tama/EPA

Anyone under 30 probably does not remember “Y2K”, the fear that there would be a widespread breakdown of computer systems as the date ticked over from 31 December 1999 to 1 January 2000, thanks to the “millennium bug”.

Those who lived through it may be reassured or bemused at how seriously the cabinet took Y2K, how many pages of submissions were written, how many special committees set up.

It’s easy to mock now, but the reason for the alarm was that when computer programs were first written, there was a two-digit code for the year – so 1980 was coded 80. The fear was that computers would struggle to cope with the year 2000 and would behave as though it was 1900. No one quite knew what would happen.

In March 1999, the cabinet considered a submission from the foreign affairs minister, Alexander Downer, and the trade minister, Tim Fischer, who declared that Y2K disruptions were expected internationally in “banking, finance, transportation, communications, manufacturing, energy, water and sewerage, health facilities, emergency supplies and food supply”.

There were security risks to the “integrity of major weapons and weapons systems (including nuclear weapons)”, although, thankfully, the assessment was that “the risk of unintended explosions or activation of weapons systems is low”.

In 1997 the Howard government had appointed Maurice Newman to head a national strategy steering committee on Y2K. The cabinet was briefed quarterly and the government’s estimate of the cost of Y2K remediation for commonwealth agencies was $600m.

The defence minister, John Moore, submitted to cabinet in March 1999 that while the states reported they could cope with most Y2K problems, they had “major concerns about the possible failure of electricity supply and telecommunications”. Detailed plans were made as though a national disaster was imminent – the National Emergency Management Coordination Centre would be the point body if something terrible happened.

Downer and Fischer were especially worried about what might happen overseas. Australia’s top 10 export markets were classified as a high to extreme risk of Y2K problems and included Japan, China, Germany and Indonesia. Treasury scoffed, saying the assessment was presented in an “overly pessimistic manner”, with the economic impact on Australia judged to be small.

By November, Downer was briefing on how Australia’s overseas postings could fare, saying the biggest worries were Indonesia, PNG, Russia and Thailand. The breakdown of social order was possible in some countries, leading to fears for Australians’ safety and the possibility of emergency evacuations.

Staff in overseas offices were given cash in case banking collapsed. “Provision has been made for backup generators, stocks of safe drinking water, chemical toilets where required, alternative heating and cooking arrangements and additional fuel storage,” the submission noted.

Non-essential staff in Moscow and Warsaw would be directed to leave temporarily because of the assessed risk and the difficulties in providing contingency measures.

As 2000 began, 800,000 people an hour logged on to the government’s Y2K website to find out what was happening. It was a dull website – nothing was happening. There were no incident reports all night.

The cost to prepare for Y2K for governments and businesses was estimated at $12bn.

Whether that was money well spent or not is a matter for debate – the only reported problems were with ticket-validation machines on buses in South Australia and Tasmania. There were few problems overseas, either, and life went on much the same.