Predictions of a chaotic IT collapse brought on by the Y2K bug had the Howard government fearing Australia was unready for the worst, previously classified documents reveal.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
As the year 2000 approached, the federal government in 1997 took seriously the warnings that the new millennium's arrival could play havoc with electricity, hospitals and traffic lights.
The "millennium bug", cast by some as a looming apocalypse, brought on hundreds of billions in estimated spending worldwide to avoid catastrophe.
Cabinet documents from 1996-1997, released on Tuesday by the National Archives of Australia, show the federal government feared inaction could expose emergency services, telecommunications and navigation equipment to failure.
Computer programmers raised the alarm when they realised software using two-digit codes for the year might interpret 2000 as 1900, tripping up IT systems worldwide.
Then finance minister John Fahey and science and technology minister Peter McGauran told cabinet the bug could unleash chaos in banks as computers grossly miscalculated interest and ended mortgages early.
While United States, British and Canadian businesses were updating software to stop computers malfunctioning upon ticking over to 2000, Australia's private sector was six months behind by comparison, the ministers said.
"There are still substantial pockets of widespread ignorance or indifference to the problem across the community," they said.
Parts of the federal bureaucracy also weren't acting fast enough. An internal survey showed most government agencies that responded were in a "poor state of readiness", Mr Fahey and Mr McGauran said.
"Potentially, the delivery of a wide range of government services are at risk and may not be able to be rectified swiftly in the event of a system failure. Incorrect calculations could cause large overpayments or underpayments with costly recovery consequences," their cabinet submission said.
The ministers described a daunting task in preparing for the millennium bug.
"The scope and scale of the work required to achieve this objective nationally is enormous. There is simply not enough time to convert all systems; focusing initially on business critical systems is generally considered the only way to address the problem."
A media statement from Mr Fahey - endorsed by cabinet - appeared to understate the lack of preparation in the government's own ranks.
"Commonwealth agencies have been working steadily on this problem for some time and have made good progress, however, to ensure we meet this immovable deadline, I believe there is a need for a more strengthened effort," it said.
Cabinet documents show the Howard government decided to monitor agencies more closely and help businesses update their IT.
Despite agreeing to spend $5.4 million in two years to accelerate the nation's preparations, the Coalition told its bureaucracy to find its own funding to avert a Y2K disaster.
The government's health and workplace relations departments criticised a plan to increase oversight to keep agencies on track, while Treasury pushed back against a proposal to warn businesses about the problem.
"Given the significant coverage of the millennium problem in all forms and levels of the media, it seems that the issue of a lack of available information, alerting Australian businesses to the potential risks, could be overstated," it said.
The arrival of the new millennium failed to bring the crisis feared by governments, and while there are today questions about the true threat Y2K posed in 2000, people who overhauled computer systems to stave off the expected disaster deny there was nothing to fear.
After Australian governments and industry spent an estimated $12 billion, the new millennium arrived without major incident, a result the Howard government in 2000 said justified the outlay.
