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The Hawke Government baulked at the high cost of renovating Old Parliament House, despite predictions of revenue from tourism and functions such as weddings.
In March 1989, it was reported Cabinet would consider a proposal to remodel the building, at a cost of $25 million.
In 1988, when members moved to the new $1 billion Parliament House, Cabinet agreed to retain the Old Parliament House building "essentially in its 1927 configuration" by removing the rear extension and annex, but again deferred major works because of the high cost of removing asbestos.
The building, formerly known as the provisional Parliament House, was closed to the public as the costs of renovations were reconsidered.
In June 1990, Cabinet accepted a recommendation in principle that it should become part of the National Museum of Australia and be used as a constitutional and political museum.
However, Cabinet papers released by the National Archives of Australia show ministers slowed the plan, at a meeting in August 1990.
The submission from Administrative Affairs Minister Nick Bolkus said there had been parliamentary and public criticism the building "has been left to deteriorate".
"Its inaccessibility to the public can be avoided, concerns about protecting the heritage value of the building can be allayed, criticism from the building industry in a time of low level building activity can be avoided," the submission says in support of funding renovations.
The Finance Department said procedures established by Cabinet to control building costs meant firm costs should be available before ministers are asked or agree to commencement of the work.
Detailed design and commencement of work should be deferred until the 1991-92 budget at the earliest, it said.
Treasury supported the development in principle but believed the funding should be more staggered.
The Department of Prime Minister and Cabinet pointed out Cabinet procedures required that no proposal be brought before Cabinet unless details of user needs are finalised and costings are developed to at least the preliminary estimates stage.
"Initial design work (costing about $1m) is necessary before preliminary cost estimates can be prepared," PM&C said.
Cabinet agreed to Senator Bolkus's recommendation for $1.35 million to develop more accurate costings for the project and to obtain estimates in the "limit of cost" category.
However, he had also sought agreement in principle for funding of $36 million in following years for the project.
"There is a significant level of interest from politicians, the media and the public that OPH should not be left to deteriorate and that it should be accessible to the public," the submission says.
A Cabinet minute for the meeting of August 6, 1990, notes only that ministers agreed to $1.35 million.
One iteration of the plan was for the historic building to be, as well as a political history museum, the Australian Electoral Commission's education centre, a government information and exposition centre and headquarters for the Australian Heritage Commission.
"The Senate chamber and King's Hall have also been used for functions, the House of Representatives bowling green is in constant use by the New Parliament House Bowling Club, the Senate rose gardens have proven a very popular venue for weddings," the Cabinet papers say.
"There is currently a low level of activity in the building trade in the ACT with the result that prices are stabilising and advantage could be taken of the competitive building environment if the redevelopment commences in the 1990-91 financial year.
"Were it to be left unoccupied, the current level of funding of $1 million per year for the care and maintenance regime could escalate."
The submission notes that an earlier submission, in December 1987, provided for complete refurbishment of the building, internally and externally, and its redevelopment as a parliamentary and electoral exhibition and education centre, at a cost of $54 million.
"The current cost option is the result of a substantially reduced option," the 1990 submission says.
It contains a ministerial statement for Senator Bolkus to read to Parliament, which says the first stage of redevelopment involves removing asbestos, demolishing the southeast and southwest wings, removing the temporary annex and restoring the site.
"On the main or King's Hall floor of the building, the National Museum of Australia will operate a Museum of Australian Political History," the prepared statement says.
"With visitor levels expected to be in the vicinity of 750,000, provision will be made for tourist information, a shop for souvenirs, and refreshments.
"The aim is to have the former members' dining room used again, this time as a public restaurant for Australian and overseas visitors to enjoy."
It was reported in November 1992, that Senator Nick Bolkus was to announce a plan to refurbish parts of the building for a political exhibition, at a cost of $1.25 million.
Old Parliament House was the venue for the 1988 constitutional convention and is now home to the Museum of Australian Democracy.