The Hawke government dumped one of the bulwarks of the Whitlam era, free university, as part of a plan to turn education into one of the driving forces to keep Australia prosperous.

The move resonates today, with university fees still high on the political agenda.

But cabinet papers from 1988 and 1989 show the battle between reformers and the belief by some Labor supporters that the government could give Australians everything.

Perhaps only a Labor minister could have terminated such a cornerstone of Whitlam-era idealism.

The then minister for employment, education and training John Dawkins and his faction succeeded in getting the ALP national conference to support the re-introduction of university fees.

Dawkins said the conference proposal got home by only two votes from his centre-left faction and even then dissatisfaction was so widespread that his preselection was challenged, even though he was supposedly untouchable as a minister.

In a submission to the Hawke cabinet in January 1989, Dawkins recommended the adoption of a higher education contribution scheme (HECS), by which the domestic beneficiaries of higher education would contribute directly to its cost, subject to their capacity to pay.

He reassured cabinet that public opinion polling already showed support for this principle, especially if the "skewed social mix" of higher education was redressed by schemes assisting access of disadvantaged and marginal groups.

Dawkins' submission is contained in selected key cabinet records for 1988 and 1989 released by the National Archives of Australia on Thursday.

The papers reveal that while the government's main task was preparing Australia's future in a global economy, cabinet was inundated with the minutiae of life at the time: AIDS, the opening of a new parliament, war crimes, the establishment of the Aboriginal and Torres Strait Islander Commission, the battle between resources management and conservation and the changing pattern of violence among racist groups.

The slickness with which Dawkins was able to get his reforms accepted are in deep contrast to the difficulties encountered by the current Education Minister Christopher Pyne in his attempt to deregulate universities and allow them to set their own fees.

Addressing a press conference in early December on the cabinet papers from his era, Dawkins avoided direct criticism of the current imbroglio over tertiary fees but said he thought that in his time most of the health, education and economic issues had been handled in a way that  "avoided the pitfalls that have perhaps occurred more recently".

Dawkins was also keen to point out that contrary to John Howard's recent claim at the National Press Club, the Coalition did not support the introduction of HECS but rather the Hawke government had to negotiate a deal with the Australian Democrats to shepherd the legislation through the Senate.

Today Dawkins sees HECS as a shining achievement. "It set in train a 25-year expansion program in the tertiary system and hugely increased participation and contributed to a long period of growth and improvement (in the economy)."

The HECS changes were part of a package of reforms by the Hawke government that made higher education central to goals of economic efficiency, productivity, competitiveness and accountability.

Dawkins said earlier Hawke governments had focused on budget deficits but when they unexpectedly won the 1987 election they were able to turn from the old stale policies and enter ALP no-go areas like asset sales, privatisation and tariff cuts.

The government delivered budget surpluses during the years but its reforms required a more centralised management and three cabinet committees – the Structural Adjustment Committee, Social and Family Policy Committee, and Expenditure Review Committee – often sorted out decisions before the matters came before cabinet.

Treasurer Paul Keating declared in his August 1988 budget speech that long-term reform was "bringing home the bacon".

Domestic spending grew at 8 per cent in 1988 but revenue was down to half of spending. "The period ahead looks no less difficult than we have been through recently," Keating told cabinet. There could be no relaxation of public restraint and private discipline, given trends to "overly strong demand" that were exacerbating imbalances. He said the imperatives to policy innovation remained clear and so was the need to further reduce government spending.

Government paid for 'scab' pilot labour to break strike

The 1989 Australian pilots' strike was a key major part of the deregulation of the Australian airline industry but the cabinet papers reveal just how far the Hawke government was to put its neck on the line to achieve change.

Cabinet was deeply worried that if the pilots won its hard-won incomes policy and its overall economic policy would be shattered by a wages breakout.

The pilots might be well-paid renegades, but the union movement was watching closely how much they might get, and how roughly they were treated by government.

In August, pilots working for Ansett Australia, East-West, Ipec and Australian Airlines imposed limits on flying in support of a wage claim of almost that teetered close to 30 per cent.

The strike by members of the Australian Federation of Air Pilots severely disrupted domestic air travel.

On August 23, Hawke declared a national emergency.

RAAF planes and pilots and overseas aircraft and pilots were used to provide services.

For a Labor government, the Hawke cabinet was in the strange position of effectively encouraging the airline companies to employ overseas "strike breakers".

But cabinet gave even further help - it paid "scab" pilots from the public purse.

"The cabinet agreed that the net wage cost incurred by the airlines as a result of their not using their right to seek stand-down of employees who would normally be stood down, who stand ready to continue to carry out their duties as directed, but who cannot be gainfully employed, would be met by the government," according to a cabinet minute on September 12 said.

The 1989 air pilots' dispute hastened deregulation of the industry, but it also ended in the defeat of the Australian Federation of Air Pilots, with mass resignations reducing the union's bargaining power.

Uren fights for better pension for our POWs 

Former deputy ALP leader and Labor stalwart Tom Uren threatened to embarrass the Hawke government into a fairer deal for Australians who had been Japanese prisoners of war.

In March 1989 with the Hawke government cutting many programs, Uren wrote to the minister for veterans' affairs Ben Humphreys saying that former Japanese POWs were dying at a faster rate than other old soldiers.

Uren demanded a special pension in lieu of a TPI and other conditions be re-instated.

"Unless our government is compassionate," Uren, a former POW himself, wrote, "I will use all forums at my disposal to work publicly to obtain justice for them."

The following month Humphreys wrote to the prime mInister Bob Hawke proposing to lift dental benefits and the recognition of a specified group of diseases and disabilities known to be prevalent among ex-Japanese POWs.

"Mr Uren's threats, which I take at face value, will undoubtedly attract public sympathy," Humphreys said.

Cabinet agreed to the package in July 1989.

Kodak given $36 million to stay in Coburg

Bob Hawke may have been the MP for Wills but it was his wife who really held the fort while he ran the country.

Hazel Hawke represented her husband during his frequent absences and locals tended to think of her as the real MP for Wills.

Hawke's power base was the old Coburg council. Local Labor councillors guarded his back against the knives of the Socialist Left and he returned the favour by showering the electorate with government largesse.

In September 1989 Hawke was stunned when one of Coburg's biggest employers, Kodak (Australasia) Pty Ltd, announced it was planning to close its local production plant with the loss of at least 900 jobs.

Kodak said they would stay. But only if Canberra bailed them out with millions of dollars.

The Hawke government was in the midst of beginning to remove tariff protection from a host of Australian industries such as clothing and footwear.

And here was an Australian subsidiary begging for money after its American parent wanted to close up shop.

The minister for industry, technology and commerce John Button put up a fine fight, strenuously arguing that such assistance ran directly counter to "the hard task of dismantling piecemeal assistance arrangements" over previous years.

Prime ministerial intervention carried the day, but deepened tensions within cabinet over direction, consistency and the political lure of the "ad hoc".

Cabinet gave Kodak $36 million to stay in Coburg, contingent on it achieving $1 billion worth of exports over the next five years.

Although the bailout pleased Kodak and the local member, cabinet was unhappy at being used by the American subsidiary and included a sniffy coda in its memorandum: "The Cabinet further agreed that all opportunities be taken by Australian Ministers to make known to the United States Administration as well as the Eastman Kodak Company the gravity with which the Australian Government viewed the behaviour of Eastman Kodak in this matter."

Kodak closed the Coburg factory in 2004. Digital photography made it redundant.