UKNA: FCO 24/104

British High Commission, Canberra, 16 July 1968

10/1. Confidential

Sir Charles Johnston in his despatch of 21 May² assessed Australian defence thinking in the light of our decision to withdraw troops East of Suez by the end of 1971 at a time when the Australian Government was preparing for the Five Power meeting in Kuala Lumpur, and when Mr. Gorton was about to go to the United States and to tour South East Asia. The Five Power Talks took place early last month, Mr. Gorton is back from his two trips and in this despatch I have the honour to offer some observations on the effect of these events on the situation.

2. Mr. Gorton, as reported in my telegram No. 818 announced on the 20th June that a 'new strategic appreciation' is to be presented by the Defence Committee to the Cabinet probably in August which will enable the Australian Government to assess the 'far future role' of Australia after 1971. Meanwhile, the Australian Government continue to hold their cards close to their chests; and there is every reason to suppose that they will play them with caution for the foreseeable future. Indeed Mr. Gorton has now reaffirmed that an Australian contribution to the stability of the area cannot be fixed until the Australian Government know what Britain, New Zealand, Malaysia and Singapore will do, or are likely to do. Mr. Hasluck has drawn attention privately to the other uncertainties impeding the formulation of clear defence and foreign policies–the result of the United States Presidential election, the outcome of the Paris Talks on Vietnam and the course of the Vietnam war itself.

3. Nevertheless, whilst the Australian Government continues its policy of keeping all options open, the crystal ball begins to look slightly less clouded. Before going to the United States Mr. Gorton had made much of the need to assess United States long term aims in Asia and the likelihood of the United States underwriting under ANZUS any continuing Australian presence in Malaysia and Singapore as pre-requisites for any Australian decision which might be taken to stay after we go, and he had allowed the impression to grow that he personally tended rather to favour a change in Australian strategy away from military commitments in South East Asia.

4. Clearly the United States Government thus forewarned, was bound to make an effort to convince the Australian Government that the United States was not about to retreat into a new isolationism and to exert all possible pressure to persuade Australia to continue to play an active role in the defence of Malaysia and Singapore. Equally clearly no firm new guarantees under ANZUS were going to be forthcoming. It was therefore difficult to see how, if Mr. Gorton felt real doubts about future United States intentions, he could expect to hear anything which would resolve them from an Administration with so short a time to run or from any of the likely Presidential candidates.

5. As Sir Patrick Dean reported in his despatch of the 10th June³ the Administration made the predictable effort to win over Mr. Gorton, and as Mr. Gorton has revealed in answer to questions by the press no helpful re-definition of the ANZUS Treaty was forthcoming. Yet Mr. Gorton has been at pains to stress on numerous occasions since his return that in his assessment the United States commitment to resist aggression in South East Asia remains, and will remain, firm. Unless one ascribes a greater degree of naivety to Mr. Gorton than it is reasonable to suppose he possesses, this apparent conversion from agnosticism to belief is a little hard to interpret. Too much should not however be read into either his former doubt or his present conviction about American intentions. Mr. Gorton is clearly now only beginning to learn that as Prime Minister he must weigh his words with care. Since his return from the United States he has implied that in saying early in May that the concept of forward defence needed to be re-examined, he had meant no more than that. Some re-assuring noises from the United States Administration, whilst sufficient to satisfy Mr. Gorton that there is no urgent requirement for Australia to begin to think in terms of a policy of withdrawal, should not be taken in themselves to be likely significantly to reduce the scepticism of the Australian Government towards firm new military commitments in South East Asia. Secondly, Mr. Gorton may feel that what appears on the surface to have been a bout of windmill-tilting has served a useful purpose in putting the United States Government and its successors on notice that the Australian Government's support for American policies in South East Asia is not to be taken for granted, and that if in the formation of these policies Australia's position is not taken fully into account Australia should not be assumed to be unable or unwilling to look at the alternatives open to her. Finally, Mr. Gorton seems to have come back from his two journeys with his money on the Vietnam hawks rather than on the doves. He has said that he can see no end to the war coming out of the Paris peace talks. Mr. Gorton may well have concluded that, whether they like it or not, the United States Government will have little option but to remain militarily committed in South East Asia for a long time to come.

6. If the prospect of an early Australian decision to disengage in South East Asia after our own withdrawal has receded there is still no saying whether, and if so how soon, the Australian Government will take any kind of firm decision to maintain a continuing presence after our own withdrawal. Sir Michael Walker⁴ in his despatch reporting on the Five Power Talks gives it as his impression that there are signs that the Australian Government may now be more forthcoming about a continuing commitment. I think it is fair to say that in terms of our objective of encouraging the Australians to play a continuing role in the area, the talks certainly went as well as we could have hoped. The Malaysians and Singaporeans made the right noises about joint co-operation and we did the same about future exercises and the handover of our facilities in the area. The result is the Australian intention to maintain an R.A.A.F. contribution to the defence of Malaysia and Singapore at any rate until 1971. But beyond that I would expect that the Australian reluctance to take more than one step at a time will not diminish. In the first place, the longer they retain their freedom of action the more clear it will become in three important fields what others are in fact going to do as opposed to what they say they are going to do. By the time a new American President is elected, some sort of development in the Paris Vietnam talks could have taken place and the realities of the United States position should have become clear. The shape and role of our general capability is now defined in the Supplementary Statement on Defence Policy of the 11th of July; and time will also put to the test the Malaysian and Singaporean declarations of intent to co-operate in the defence fields.

7. The second factor making likely a continuation into the foreseeable future of a flexible Australian defence policy towards South East Asia is a financial one. It is true that Australia is not spending a great deal on defence, although in recent years expenditure in this field has moved up to almost 5% of her gross national product. But Australians are conditioned to the expenditure of very little on defence and financial commentators have expressed alarm both at the rise which has already taken place and the prospect of an even steeper rise in future. Mr. Gorton's statement on his return from South East Asia that the Defence Committee's strategic reappraisal together with facts gathered on his own journeys will enable the Government 'properly to assess what the far future role of Australia should be' seems to contain more than a hint that Australia, rather than deciding what her role in the defence of South East Asia after 1971 should be, and equipping herself to fulfil that role, will seek first to assess what sort of defence capacity she can afford and tailor her policies in South East Asia to that. This is not the sort of thinking which will appeal to either Mr. Hasluck or Mr. Fairhall. But Mr. Gorton has an election to fight next year; the Treasurer is already faced with demands from the State Governments for more money, and Mr. Gorton will be reluctant to enter an election year to the accompaniment either of higher taxes or reduced expenditure on national development.

8. Though there are a great many possibilities of external factors causing changes in the situation in the coming months it seems to me nevertheless likely that the sort of defence policy disclosures the Australian Government are moving towards will embrace a determination of the size and character of the Australian defence forces generally during the period 1969–1972, expressions of intention to continue to play a role in support of the defence forces of Malaysia and Singapore in the future but no firm undertakings this year to maintain particular forces in a particular place at a particular time. If an Australian defence review later this year does in fact emerge as this sort of package, I would expect the Australian Government to be very sensible of the criticism which might be levelled by Malaysia and Singapore that this would amount to an undertaking to offer all aid short of help, and to be very ready to demonstrate their goodwill by measures of technical aid in the defence field–particularly in training and the provision of equipment.

1 J.S. Rooke, Minister (Commercial), 1966–68, Acting High Commissioner, 1968.

2 See Document 96, note 2.

3 See Document 96.

4 British High Commissioner, Malaysia.