Cabinet papers reveal Howard government's Y2K contingency plan

It turned out to be a non-event as the Australian government was well-prepared for it.
Written by Aimee Chanthadavong, Contributor

The release of the 1998-99 cabinet papers by the National Archives of Australia has revealed that in 1999 the Howard government was deep into developing a contingency plan in fear of what the Year 2000 (Y2K) bug, which ended up not being bad as predicted, would do to computer systems worldwide when the date ticked over from 31 December 1999 to 1 January 2000.

In a submission made to cabinet in March 1999, then Foreign Affairs Minister Alexander Downer and Trade Minister Tim Fischer warned of how Y2K was going to have global disruptions in "banking, finance, transportation, communications, manufacturing, energy, water and sewerage, health facilities, emergency supplies, and food supply".

Downer and Fisher highlighted that Y2K would lead to "internal unrest in the event of prolonged breakdowns in critical infrastructure, including food distribution and supplies, electricity, water and gas networks, and financial services".

In addition, both ministers noted how Y2K posed potential international security risks to "reduced security and integrity of major weapons and weapons systems (including nuclear weapons)". However, the pair wrote that given nuclear facilities had systems redundancy and non-computerised fail-safes that the risk of a "Y2K-produced accident was low".

The submission also cited research by Gartner, which had predicted that 30-50% of companies and government agencies worldwide would "likely to experience at least one mission-critical system failure in the first quarter of the year 2000 and 10% of those failures will last three days or more, in some cases one month or more".

By July 1999, Downer's team had undertaken "extensive work" with other Australian agencies operating overseas to "ensure Y2K compliance of mission-critical systems within their control".

The papers also revealed how within the government's contingency plan, it contained possible emergency evacuation if the welfare of Australians overseas were at risk, as there were fears that Y2K would have led to economic and social breakdown, particularly in "high risk" countries including Indonesia, Papua New Guinea, Russia, and Thailand.

By November, arrangements for backup generators, safe drinking water, chemical toilets, alternate heating and cooking, and fuel storage were also part of the government's Y2K contingency plan, the submission revealed, as was handing cash to staff in overseas offices amid fears that banks were going to collapse.

The submission added how backup telecommunications systems for data and voice transmission to its overseas offices via satellite were also provided to at least enable limited voice and data communications with staff.

"Because the majority of DFAT posts will not have access to dedicated satellite communications circuits and will be relying on the publicly accessible Inmarsat system, priority access to Inmarsat channels in the event of saturation of capacity is being pursued with Telstra. All Austrade posts have been equipped with Iridium satellite telephones," the submission to cabinet said.

Simultaneously, then Minister for Communications, Information Technology, and the Arts Richard Alston proposed for a Year 2000 national communication strategy to be implemented to address any public concerns about the risks or service failures due to Y2K. The strategy was to be overseen by the Year 2000 National Steering Committee established in February 1998 and chaired by Maurice Newman.

"A strategy is needed to stimulate public confidence in measures undertaken by governments and industry to ensure Year 2000 readiness; minimise scope for unnecessary contingency planning by the public (eg panic buying; cash hoarding etc) … and raise awareness of Year 2000 issues among groups where remediation progress appears slow (such as SMEs)," Alston wrote in the submission.

Early warnings about Y2K within government dated back to September 1997 based on a joint submission by Minister for Finance John Fahey and Minister for Science and Technology Peter McGauran revealed. They warned of how "widespread faults" in existing computer systems and hardware used by the government would not be able to handle Y2K unless action was taken.

"The extensive interdependence of organisations (across and between government and business) increases the risk of system failures. Of particular concern are dates built into electronic equipment in essential services such as telecommunications, gas, oil, electricity, and water," the submission said.

The pair also noted that a review by the Office of Government Information Technology (OGIT) showed work by the government on this issue was "not progressing fast enough" to ensure that business-critical systems, as well as other systems, were Y2K compliant.

"There is a clear need for strengthened accountability and oversight across the whole of government to ensure that the Commonwealth is not exposed to avoidable risks in relation to its own responsibilities for programme and service delivery," the papers said.

The submission said how the OGIT had estimated the cost to cover planning, programming and testing the date changes, replacing hardware, and systems testing would have been around AU$600 million.

At one point in July 1998, as part of the National Steering Committee's third quarterly report into the government's progress to achieve Y2K compliance, it was proposed that seed funding be used to allow agencies to accelerate their Y2K remediation work.

The cabinet papers also revealed that in March 1998 the government met with then Microsoft CEO Bill Gates to discuss a range of matters relating to government information technology and communications management in the information economy.

It was around that same period that Minister for Industry, Science and Tourism John Moore put forward a submission to reform and improve compliance monitoring of the R&D tax concession. He detailed that if stricter controls were not introduced, taxpayers would see little return for their investments.

"This proposal will enhance the integrity of the government's taxation system while continuing to encourage genuine R&D activities," he said in the submission.

Updated 3 January 2020, 3:18pm (AEDT): Cited research by Gartner stated mission-critical system failures would occur in the first quarter of 2000, not 2020 as originally reported.

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