PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 4024


Photo of Fraser, Malcolm

Fraser, Malcolm

Period of Service: 11/11/1975 to 11/03/1983

More information about Fraser, Malcolm on The National Archive website.

Release Date: 12/01/1976

Release Type: Interview

Transcript ID: 4024

QUESTION: You came out the other day in support of development in Diego Garcia.
At the moment it's before Congress. Do you want the US to go ahead
with it and what can Australia do to either offer some inducement or to
become partfof Indtan Ocean defence?
PRIME MINISTER: This is a very long story in the sense that discussion over Diego Garcia
has been going on for many years. I strongly supported it when I was
Defence Minister. Also, when I was Defence Minister, I had an understanding
with the United States Secretary of State for Defence who was then Mel Laird;
and with the British Secretary of State for Defence, that Cockburn Sound when
it was properly developed could be used from time to time. We hoped
, that it would be used and that it would be help them in maintaining a
balance in the Indian Ocean. At that time we expressed a strong view that
' Diego Garcia ought to proceed. They expressed the same view again the other
day. It i not only necessary for an Indian Ocean balance and to equalise
facilities that the Soviet is establishing, but it could under certain
circumstances, be fairly important for the resupply of Israel, Middle
East strategy. It ts also important in helping guarantee the sea lanes
and oil supplies that come out of the Middle East. This is of quite
critical significance to Japan in particular-It may be of-more-significance
' to . japan than it is to us, because they are dependent on Middle East oil.
So. the facility of Diego Garcia has not just got one reason for being, it
has really got many. I understand that certain Senators in the United States
want there to be discussions with the Soviet to. try and achieve a ceiling
on the level of naval activity in the Indian Ocean. Let me only say that
their activity would have to come down very, very much indeed to reach the
level of the United States' activity. The prospects of the Soviet Union
reducing it's level of activity, I would have thought are very remote. She's
already started to use the Suez Canal as a means of getting elements of the
Middle East fleet into the Indian Ocean. There has been a careful
and slow build-up of movement of military vessels.. For the first several
months I don't think there were any, or maybe not more than one or two,
military uses of the Suez Canal, but the use of. the Canal for military purposes
has certainly been significant.
QUESTION: What's your information about the level of Soviet military forces in the
Middle East, Persian. Gulf, around the Cape, in Angola, off Angola? / 2

PRIME MINISTER: Well I think some of this information doesn't come to us from our
sources, so it's not just our information. I therefore don't want to give
figures. But it's much more significant than that of the United States.
QUESTION: And offensive?
PRIME MINISTER: In some elements of it, yes, very definitely. But the mere presence
of naval ships from the Soviets point of view in the right place and
the right time, it can certainly be criticaL on having an impact
on domestic events in one of the Littoral States. In the Angola activity in
which the Soviet is, I'm advised quite heavily involved, the appearance
of Soviet naval units from their point of view at the right time can be
critcalin . achieving a final solution which suits their purpose.
And it ought~ to be noted that the sea power's very often been used to achieve
political ends without firing a shot. During difficult times between Israel
and Egypt, the presence of Soviet ships in Alexandria made it quite impossible
virtually , for Israel to take Alexandria. I don't know if they wanted to or
planned to but the danger of hitting a Soviet ship was too great.
JESTIONi Of course ong of the greatest confrontations of all time, Cuba.
RIME MINISTER: Yes, actly. I don't really think that there was much chance of the
! Soviet agreeing to a limitation in sailing time. That's being very kind about it.
I don't think there's any chance really. It's part of their planned
development, as they would believe -the largest most powerful navy in the world
capable of-exercising a dominating role in any ocean of the world. They
obviously want to be able to link up the Mediterranean and Vladivostok Pacific
fleets. The Indian Ocean and the waterways to the north of us are quite
critical to their capacity to do that.
) UESTION: There have been, the South African Government has recently, has been conducting
a publicity campaign in New York and Washington suggesting that ( inaudible)
Nato so'uthern anchor. You mention Cockburn Sound in Australia and Diego
Garcia and Simonstown. It would make a lot of sense ( inaudible)
Indian Ocean along with Bahrain for the U. S. fleet. Would that be in your
thinking as to the kind of defence that ought to occur in the Indian Ocean?
1IME MINISTER: Well South Africa has sometimes suggested this sort of thing. They
have not suggested it to me. I don't know how the United States would react

but I don't think Australia has forces that would enable that to take place.
Our Navy, because of lack of ordering of vessels, is very much stretched.
in its own immediate environment. The number of escorts we. can keep at
sea is goinig to.-become quite critital because of the lead times involved.
QUESTION': What can Australia actually offer on the West Coast for Diego Garcia
support, because Cockburn Sound, as I understand, it is not developed?
PRIME MINISTER: There is a fair bit been done there but there is still a lot remaining
to be done. I don't think the facilities at the moment would really be
adequate to ! do much to assist the United States. This is a matter we will be
looking at just as it is out objective to establish a navy with a capacity
to survey adequately in the areas that are obviously closer and more immediate
. interest oflAustralia. Two oceans I don't really think the navy has
got that capacity at the moment and this is'because of the lack of ships.
QUESTION: What do yqu: have in mind for the future of the Navy?
PRIME MINISTER: This is a matter that the Defence Minister has under consideration
at the momept. The former Government had ordered two patrol frigates.
We had been~ examining earlier--the DDL approach. We do believe the escort capacity of
the Navy nepeds increasing and I have no doubt that the Department of Defence
is examining this in the best way we can achieve this objective.
QUESTION: For what' sort of a role?
PRIME MINISTER: Well its surveillance, and a country like Australia buying ships
has got to buy for a fair degree of multi-purpose capacity. A very large
Navy like the United States can much better afford to have specialist ships
that are good for one particular purpose. A much smaller navy like Australia's
needs ships that not only have an anti-submarine capacity but that have
surface capacity as well.
1UESTION: For coastal defence or further ranging?
' RIME MINISTER: The Patrol boats were originally ordered for coastal defences,
coastal surveillance. I think the larger ships in the'navy, any one of the
multiple roles that the navy can sometimes be involved, but you can't
point to some particular purpose and say that the ships are there for that

particular purpose. It's like the old question of what do you have defences
for. Whereas the enemy have defence forces so that there is never going to
be an enemy.
QUESTION: I guess that the point I am really tryingto ask is forward defence
no longer plays the role it once did.
PRIME MINISTER: It doesn't play the role but there is still part of our defence
agreement which even the Labor Government maintained in some form.
QUESTION: ( Inaudible) Butterworth. Do you foresee that continuing indefinitely?
PRIME MINISTER: There~. have been no proposals to withdraw them.
QUESTION: Any expansi n that you can see?
PRIME-MINISTER: I would not have thought there would be any expansion in the
Air Force there, no:
QUESTION: What about any other kind of ground elements. or naval?
' RIME MINISTER: I donlt think you turn the clock back in that sort of way, but all I
am pointing out is that the arrangement still exists. Under the Labor
Government the-arrangement was conti-nued and while it. wa s saying it is
continental defence alone Australians have got to have in mind the security
of Australia doesn't just depend on what happens within the shores of Australia.
Events outside that can affect us, can have implications for us.
QUESTION: Another aspect of defence forces I've read that you are going to have
to find a replacement for fighters, mirages and also I think for trainers too.
PRIME MINISTER: Always at some stage in the future you have got to have replacements
for these things but I would have thought the Macchier. You know I don't
want to be too precise or too definitive in some of these elements becuase
I haven't had a report from Mr Killen yet on the state of the defences which
I know he is preparing for the Government to examine.
UESTION: There is one aspect of this fighter aircraft simply becuase there
have been so many people offered planes.

PRIME MINISTER: But there always are. There were in my time. They come round
quite regularly every six months and sometimes every three months.
QUESTION: Are you interested in any particular aircraft or have some kind of
arrangement where it could be partially built, assembled in Australia?
PRIME MINISTER: Well an arrangement that could enable aircraft to be partially built
in Australia would certainly be one much better than one in which all had
to be bought overseas and this applied to the Macchie, it applied to the
Mirage, it applied to the Amen Sailors. There is not significant elements
of construction in Australia.
QUESTION: But not to the Flll?
PRIME MINISTER: Oh, there were only 24 of them and that was a much more highly
specialized operation. There were other arrangements that I had negotiated
in earlier times about the construction of helicopters here which would have
given the Australian aircraft industry a reasonably continuous work load
but the Labor Government virtually cancelled the programme.
QUESTION: Are you still interested in that sort of a project?
PRIME MINISTER: Again you can't revive the past. The arrangement was that they built
a large number of aircraft and helicopters. The company concerned would accept
the obligation either to get the commercial ones sold in Australia or somewhere
in the world, and part of the price of this was the defence forces would take
a certain number of these aircraft. Well the previous Government collapsed
the defence order and that virtually collapsed the whole deal. The number that
were ultimately taken by the defence force was very much less. We do need an
aircraft industry. If you are going to be able to maintain and keep your
own aircraft going, you need to have a capacity in Australia. So it's not
just a question of buying aircraft overseas. If you had two equal aircraft
the company that was prepared to go much more significantly into local
construction offsetting arrangements would obviously be presenting us with
a much more attractive arrangement than others. You should not draw implications
from this. Mr Killen will be bringing these matters up in proper time and
in proper order and the fact that you get aircraft salesmen around the state,
around the place trying to sell the produce well it's just part of their
business and it's a pretty regular process.

QUESTION: ( Inaudible) and United Nations Secretary-General. Kurt Waldheim visiting the
region over Timor.
PRIME MINISTER: Well I rather thought that he was due to come but here anyway, but
he is visiting Australia. I think that the arrangement for him to come here
was one that preceded the events in Timor.
QUESTION: But his arrival here gives you at least the chance to talk about Timor.
PRIME MINISTER: It gives us the chance to talk about a lot of things, yes.
QUESTION: Timor is of particular interest to Australia. Is there anything at all that
Australia can or should do in Timor?
PRIME MINISTER: I don't think we can do much more that Mr Peacock has indicated in the
various statements he has made. Those statements have been quite forthright.
The real time for action in relation to Timor was 12-15 months ago when
administration in Portugal had started to disintegrate. It started
to become plain that Portugal was losing interest in overseeing
the decolonisation process in the proper manner. Had this been undertaken
earlier enough action in the United Nations or some sort of regional approach...
would have had a much better chance of success.
QUESTION: You think that day has passed?
PRIME MINISTER: Well that day certainly has passed and options are now much less obvious.
QUESTION: Do you see anything that might provide a solution bloodless or as bloodless
as possible?
PRIME MINISTER: There has already been a good deal of blood spilt so in part that
question is based on a possibility that is no longer real. Australia
will go on pressing the point of view that Mr Peacock has expressed on
behalf of the Government. He has maintained close contact with me on these
matters throughout but beyond that it is difficult to see What Australia can do.
QUESTION: Well there is a lot of oil and gas in the. ground and Labor had a policy
which didn't exactly provide any incentive for anybody to do anything about it
or to invest in it, what are you going to do about it? Do you want foreign
investment and what restrictions are you going to put on it?

PRIME MINISTER: We want foreign investment most certainly. We want to get major
development projects operating and moving forward and we want this to happen
as rapidly-as possible. Our objective is to get 50 percent Australian
equity in major new developments. We also recognise that in a number
of places -because of the amount of funds involved this. is probably
not going-to be possible. Where it's not possible and this is putting
a fairly comprehensive policy in the briefest terms, projects will be
referred to the Foreigo Investment Review Board which will examine against
publicly stated criteria whether ot not it is in Australia's nation interest
for a certain project to go ahead even though the level of Australian equity
might well be less than would be desired but if there is a project that is in our
interest and if overseas corporations have genuinely sought to get Australian
c apital to participate, and have not been able to, the question then remains:
should the project be prevented from going ahead or should we allow it to go
ahead? If against publicly known and statedCriteria which is in our own
foreign investment policy, which now in GovEirnment will be further elaborated
and refined, 1we believe it to be in the national interest well, then, we would
want it togo ahead. This is against the background that we want foreign
investment and we want major development in Australia to begin again.
The previous. Government seemed to be much more concerned with cutting up
AusIt ralian resources or much more concerned with using Australian resources
than building and developing Av. stralian resources and we are just not going
, to hive h ud to enable people to lead the sort of lives they want to lead,
provide the-sort of schools they want, and to provide the sort of welfare
services that people believe ought to be available in a , modern Australia unless
the real wealth of Australia is also-developed.
JUESTION: There is a lot of oil and gas that has not been developed. I may be incorrect,
but, just as a basic principle, I thought the Labor policy was that this should
be used for Australia, no real regard given to export of this even if it meant
obviously better prices that could lead to faster development. Will you allow
development as a general policy of major resources such as, particularly oil,
and gas, where at least a large part of it would be exported?
RIME MINISTER: If export permits will help to get a developmental project off the
ground that certainly is an advantage and something we would consider
and in cases we would allow it. If it is a question of oil, well we still
don't produce all our own needs, that might be a different matter. But if
there were discoverie's so great that we not only had e nough for our own

needs but also significant amounts in addition, then we would have
to fact up to the question of export. Our natural gas supplies seem to
be enormous, and the export of natural gas would seem to provide a
possibility for getting developments underway where otherwise getting the
thing moving might-be difficult.-In many of these instances we would
have * to make the judgement on a case by case approach but again our
judgements in relation to foreign investment matters of this kind will be
against publicly known and stated principles by which we will judge
Australia's national interest and we want to establish the circumstances
i6 which corporations will know where they stand with the Australian
, Government that there are not going to be a series of ad hoc secret
deals behind closed doors with nobody really knowing what's happening
and what rules are being applied because I don't think that encourages
: investment or confidence in what you are doing.
QUESTION: The automobjle industry here d6esn't seem to be invery good shape.
-There have-been discussions about whether the Government should do something
whether Japanese investors should do something, what is going to be the
policy or have you lready decided what will be the policy of this Government
in general.'
PRIME MINISTERS Well it's a fairly complex'matter that involves not only local
producers. f It involves subsiduar suppliers. It involves importers.
It involves overseas manufacturers. It involves Japan and it is not
a matter, you can sort out in a day-or a week but I know that Senator Cotton
is treating it as a matter of high priority because the industry got plunged
into difficultires for two reasons: the changes from 1971-72 plan and downgrading
of the content which leads us to doubt as to whether local skins are going to go on
being produced, for examole, as the Labor plan continues. The other difficulties
occur because of the currency devaluation, the tariff cuts and inflation
which for a while-make imports so much more attractive than many Australian
products and that then led of course to import quotas. and a continuing
difficult situation for Australian producers. Now this is the sort of legacy
we are left with, and that we have to sort out as soon as possible to establish
guidelines so that industry knows where it is going. Our objective will be to
have a plan for the industry which provides encouragement, security, continuity.
QUESTION: Protection perhaps?

PRIME MINISTER: There is already protection and quotas in addition.
QUESTION: Well I ask this because being a private enterprise economy if they
can't make it wouldn't it be better to let them go down?
PRIME MINISTER: What does that apply to? Does it apply to everything we . produce?
QUESTION: I'm asking a question. I don't know what it applies to.
PRIME MINISTER: A country with a domestic market as small as Australia's is going to continue
to need a reasonable degree of protection. People point to some overseas
' countries they point to smaller European countries by comparison, but they
have access: to the~ total European market at their door step. The European
-Economic Community has developed into a reasonably protective and inward
looking tralIing block. If the Australian people are to be fully and properly
employed welare going to need I believe for' quite a long while in the future,
a significant degree of protection for many Austratian industries.
Now the need for this has become all the greater because of the dislocation
over the -paft three years and the rate of inflation over and above that of
many of our, trading partners quite apart from the other things I have mentioned.
The only otper thing I-would want to add is that it must be a level of protection
. that is still consistent with. IAustralia stili-. being a good trading partner.
QUESTION:: You don't want to see the loss of jobs?
PRIME MINISTER: No I don't. There has already been enough loss of jobs. If you want
to restructure an industry if a Government does so in cooperation with that
industry it needs to be done on an industry by industry basis knowing
where you are going, knowing. where people are going to find alternative
employment. One of the problems of Labor was that they tried to restructure
the whole economy and virtually destroyed the whole economy at once.
They just didn't understand where they were going and the decisions we make
have to be taken against an extraordinary difficult background that has been
created over the past three years.
UESTION: Relations with the communist countries, Vietnam, North Korea, are they
in general, going to continue?
') RIME MINISTER: We would want to have relationships with as many countries as possible. It
enables us to put a point off view. We are not going to seek out new friends

at the expense of old ones but decisions to establish diplomatic
relationships with other countries I think is only a sensible one.
QUESTION: And the matter of an Ambassador to Washington, the successor to Sir Patrick.
Has any dectsion-been made?
PRIME MINISTER: No, it hasn't.
9 1 1j

Transcript 4024