236 Telegram from New Zealand High Commission in Canberra to Ministry of Foreign Affairs

Canberra, 19 February 1982

No 443. CONFIDENTIAL NZEO PRIORITY

CER

The High Commissioner saw Scully and Anderson yesterday for a general discussion about CER. The main burden of their comments was that it was vital to move quickly to bring the negotiations to a conclusion. The Australian political environment could only become more uncertain and more troubled in the months ahead. The Government was being subjected to increasing criticism of its economic policies. Interest rates were expected to go sky high. Unemployment was likely to increase significantly and the possibility could not be ruled out that Mr Fraser would decide to call a general election before things deteriorated too far.

  1. Anthony had a difficult job ahead of him to bring his Ministerial colleagues into line over the CER. There was no outright opposition but a tendency for some Ministers to raise objections, call for more information, and generally stall.
  2. Mr Templeton's proposed visit to Canberra would therefore present an important opportunity to provide the 'political goodwill' that would be needed if the exercise were to be successful, to emphasise the benefits that would flow to both countries from the CER and to point out that tough decisions would have to be taken on both sides of the Tasman. A visit by Mr Cooper would be similarly important in this regard.
  3. Assuming that all went well in the Cabinet and that the Permanent Heads were able to make satisfactory progress Anthony envisaged that it would probably still be necessary for him to go to Wellington in late May for further discussions with Mr Muldoon to make sure that everything was in place before the Prime Ministerial meeting.
  4. Scully then injected the disturbing note that it was his conclusion that if the worst came to the worst and 'Anthony was defeated in the Cabinet' the best thing would be to shelve the whole CER exercise for say two or three years. To carry on with negotiations when the political will was not there would be the surest way of killing off the whole idea.
  5. We were taken aback by this comment. While it would perhaps be a mistake to read too much into it the fact that Scully thought it necessary to make it suggests that he, at least (and his relationship with Anthony is very close), regards the possibility of failure as a real concern and reinforces the argument in favour of applying as much political pressure as possible over the next few weeks.

[ABHS 950/Box 1228, 40/4/2 Part 2 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]