NAA:A5882, CO1191

Canberra, 19 May 1971

Secret

The Strategic Basis of Australian Defence Policy–1971

In accordance with established procedure, the attached Report of the Defence Committee, 'The Strategic Basis of Australian Defence Policy–1971' is submitted for the Cabinet's consideration.¹

2. The Report, together with the conclusions reached by Ministers in their consideration of it, is intended to provide guidance for more detailed defence studies and for the development of Australia's force structure, including the manpower levels of our three Services, procurement of defence equipment, defence works, defence industrial capacity in Australia, research and development and related matters. Resulting proposals for the development of defence capacity, and corresponding expenditure levels, will be presented in the Defence Five Year Rolling Programme for Ministerial consideration.

3. The Report contains a broad assessment of trends in the strategic environment in which Australia is likely to exist in the decade of the 1970s, and to which decisions in the field of foreign and defence policy will need to be oriented; the contingencies of which our policies will need to take account; and the broad objectives to which in particular our force development policies should aim. It outlines considerations which should be taken into account in developing the characteristics of our forces and the range of our combat and logistic capabilities and our defence infrastructure generally.

4. The period since 1968 and the decade of the 1970s is seen as one of considerable change in our area of strategic interest. Globally the essentially bipolar organization of power is giving way to a more complicated strategic situation in which China, Japan and Western Europe have greater importance, and lesser states too are enabled to assert their independence and strengthen their economic and military capabilities. Our major allies–firstly the British and more recently and significantly the United States–are reducing their military involvement in South East Asia. China is emerging from its isolation, and from a more settled domestic base is purposefully seeking new political relationships. Japan's economic growth portends major economic, perhaps also major political influence, and the potential to develop great military strength if her people so decided. The USSR is extending its military presence. Our South East Asian neighbours are seeking wider and more flexible relationships. Papua/New Guinea and other Pacific Island Territories are moving toward full independence. In view of the scope of these and other changes, the Report is concerned more with the directions in which our defence policy should evolve than with a static policy formulation. The new Five Year Rolling Programme, with its provision for annual re-appraisal, already embodies this approach.

5. No single contingency is seen which affords a clear basis for Australia's force development policy in the coming years. The Report (paragraph 184) summarises the balance which must be struck between the obligations of continental defence and the possible necessity for overseas military involvements in the following terms ...²

6. The document is conceived integrally and must be read as a whole. While generally endorsing the utility of our existing Treaty relationships the report points to the need for our foreign and defence policies to continue to develop a more independent character consonant with our growth in wealth and strength, and accordingly to achieve the increased flexibility which is demanded if our strategic interests are to be protected and advanced in the more fluid strategic environment of the 70s. This is a judgement which derives from the realities of our changing environment. Its implications in the field of defence, however, have to be faced openly. The development of an increasingly independent military capability backed by an increasingly independent defence infrastructure carries major cost implications. Increased costs may be eased but they cannot be avoided. If we are, as I believe we must, progressively to enlarge Australia's independence of decision and therefore of capabilities I think we must accept that the price of that independence will have to be paid.

7. Submitted for Cabinet's consideration.

1 See Document 107.

2 For paragraph 184, see Document 107.