NAA: A1838, TS677/3 PART 5

Canberra, 13 February 1963

Top Secret

Australia's Strategic Situation ¹

You hold a copy of Defence Committee Minute No. 2/63 entitled 'Australia's Strategic Position'. We are informed that this has now been approved by the Minister for Defence and will be submitted to Cabinet.

2. The present paper arises from Cabinet consideration of the Defence Committee's paper on the Strategic Basis of Australian Defence Policy on 7th September, 1962 and Cabinet asked that an up-to-date appreciation of Australia's strategic position should be prepared. This was to take fully into account our broad interests and Cabinet requested that the basic assumptions be thoughtfully reassessed and that the Defence Committee comment on:

(a) the effects of recent changes in Indonesia and West New Guinea;² and

(b) the degree of mobility of our forces in Malaya and the value to us of our Malayan base and retention by us of a force in Malaya.

3. From the External Affairs point of view, the most significant features of the present paper are:

(i) the attention which it gives Indonesia;

(ii) the possibility of Australia being called upon to assist in the defence of Malaya or Malaysia; and

(iii) the references to urgings by the United States on Australia to increase its defence effort.

The report concludes in paragraph 36 that 'some increase in the present scale of defence programming will be necessary if our military capability is to be such that we can make an effective and sustained contribution to South-East Asia and at the same time deter Indonesia from possible activities inimical to our strategic interests. Such an increase would also put us in a better position to deal with eventualities arising in the Malaysian area which might have important implications for Australia'. The report also notes that substantial development in the size and shape of our defence forces would take three to five years to accomplish.

4. The present report comes to conclusions not different from those of the 1962 paper, as it makes a sound case for Australia to spend more on defence and to appear to be doing so. The question which then arises is whether the modest expansion of our forces agreed to in 1962 and, of course, significantly supplemented by the Government's decision to purchase the submarines and additional guided missile destroyer, meets the need demonstrated both by the 1962 submission and more pointedly by the present paper. As one means of increasing our military capability, you mentioned to the Minister for the Army the possibility of a further battle group being raised. Mr. Cramer ³ wrote to you on this subject on 24th October, 1962, and pointed out that the present three-year defence programme provides only for the achievement of the current objectives of the provision of a battle group in Malaya, two readily available battle groups and command, home defence, training and administrative units in Australia. The Minister noted that the cost of raising an additional battle group would be of the order of £24 million per annum and that, at present rates of recruiting, the additional manpower required would take about eight years to raise. The Minister also noted that a battle group on a restricted basis (not available for operations without special enlistments) would cost about £11 million annually to maintain.

5. The views of the United States on the desirability of Australia having defence resources adequate for the burdens arising in the area have been made clear again in Mr. Rusk's conversation with Sir Arthur Tange on 11 th February, 1963, reported in Sir Arthur's telegram 401 from Washington, a copy of which is attached. ⁴

6. Although we believe the report is generally satisfactory, and in fact much more so than the one prepared in January, 1962, you might like to draw attention to the role of defence forces in enabling Australia to sustain a variety of diplomatic positions in the conduct of international relations. The example of lndonesia which is quoted in the report, shows the extent to which it is possible to conduct a successful political campaign without the actual use of force, provided that adequate forces are in the background. Another instance is the recent suggestion that the Commonwealth Brigade at present in Malaya might be used to 'occupy' Kashmir. Similarly, Australia might be asked to contribute forces to a UN peace-keeping exercise and it might be in accordance with our policy to do so. Under present circumstances, however, full participation in such operations would require the diversion to them of the major part of our defence effort. Our other responsibilities, such as contributions. to SEATO plans and perhaps to the defence of Malaysia, could not be met.

1 The typescript original reads 'Australia's Strategic Reserve'; a manuscript amendment was made substituting 'Situation' for 'Reserve'.

2 In 1962 the Dutch and Indonesian navies clashed in the waters of Western New Guinea (West Irian). After US diplomatic intervention, West Irian was briefly administered by the United Nations. It was transferred to Indonesia in May 1963.

3 J.O. Cramer, Minister for the Army, 1956–63.

4 See Document 17.