I am attaching for your information a paper which I prepared for the Prime Minister personally on the eve of his recent meeting in Townsville with President Soeharto.1 I had hoped to see you in Canberra to discuss the talks with you on my way to Townsville but you were out of the country at the time.
I hope that there is nothing in the paper with which you would disagree.
There have been several recent developments concerning the policies towards Indonesia which I should mention to you. One is aid.
Both Dr Cairns, during his recent visit, and the Prime Minister, in Townsville, have made comments on aid to the Indonesian Minister for Finance and to the President which will, I think, be regarded as commitments here. It will be necessary to keep this in mind at the time of the budget discussions. Both the Prime Minister and Dr Cairns have indicated that the value of our aid to Indonesia in the next triennium will be maintained in real terms. The Prime Minister has also added that, unless some unforeseen emergency arises which places special demands on the Australian Government, we would hope to maintain Indonesia's present percentage of our total aid program in the future. Dr Cairns also told the Minister for Finance that he would support at the ADB reconsideration of the exclusion of Indonesia from the list of countries eligible for soft loans.
Another issue on which more precise definition of our attitude would be helpful is Timor.
I feel that Australia has become too directly involved in this question; too much of a front-runner on an issue which is quite likely to become difficult in the future. But the problem for the Department as well as me is that there still seem to be differences in the approach to Timor between you, as Foreign Minister, and the Prime Minister. As I understand it, you tend to place the main emphasis on a proper act of self-determination for Portuguese Timor. If this act were to lead to incorporation in Indonesia, you would 'accept' this. However, it was clear in Townsville that the Prime Minister continues to believe that the logic of the situation is that Timor should become part of Indonesia and we would 'welcome' such an outcome to an act of choice. While we support the principle of self-determination and while we certainly could not condone the use of force, the Prime Minister still does not want to encourage the emergence of an independent East Timor and he believes that continuing public emphasis on self-determination, at this stage, is likely to strengthen pressures for independence. This is, of course, a matter of policy and I mention it only insofar as there is a policy issue which may need some further consideration by the Ministry.
I must say that although I miss being at the centre, I am finding this posting challenging, active and absorbing.
I am looking forward to seeing you at the end of May if the ASEAN Heads of Missions meeting comes off as planned. There should be plenty to discuss in the context of recent developments in the region!2
[NAA: Al838, 3038/10/1/2, ii]