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Transcripts from the Prime Ministers of Australia

Transcript 2429


Photo of McMahon, William

McMahon, William

Period of Service: 10/03/1971 to 05/12/1972

More information about McMahon, William on The National Archive website.

Release Date: 12/06/1971

Release Type: Speech

Transcript ID: 2429

SYDNEY, N. S. W. 12_ JUNE 1971
& ech by the Prime Minister, Mr. William McMahon
Mr. President, Ladies and Gentlemen,
Thank you for asking me to come here today to speak to you
about the relationships between the Japanese and ourselves. As you know, I was not
the Foreign Minister for very many years, but the very first submission that I put
to Cabinet of any consequence was in April of last year when I presented a paper
relating to our future relationships with Japan. At the same time, I received the
approval of the Cabinet to institute what I regard as the highest level Inter-Departmental
Committee, headed by the Permanent Heads of the most important Departments of
State, to keep under continuous review the relationships between Japan and Australia
and, once they felt they had come to concrete recommendations, to be able to present
papers to us. I also want to mention the fact that subsequently the Government
also considered I think in February our relationships with the People's Republic
of China. Subsequently we were able to consider papers relating to a new relationship
with the Soviet and particularly what we could do with the Soviet Far East.
Mr. President, I hope my Department has had the good sense
to send to you a copy of my speech to a meeting of citizens in Sydney a few weeks ago.
Because I am sure it broke niew ground and I am as sure as I can be of this, that it had
to be done because we live in this changing area changing so quickly that we can't
be left behind. And I can more or less paraphrase what you have said. We must be
playing our part to see if we can make our contribution to peace and to the development
of the whole of this area. So I put it to you then that we have been doing a tremendous
amount of thinking. And with the recent reorganisation of the Department of Foreign
Affairs and its elevation in stature, and I believe in importance, and I hope that will
continue then I think you will find that continually we will be trying to make our
contribution wherever we can towards the goals that I mentioned to you a few moments
ago. The most important of them at least as far ahead as you and I
can see, will I think, be the two countries you have mentioned, Japan materially, of
course, and I hope politically as well but Indonesia too for many, many reasons
because it is a very vast country and one to which we will pay increasing importance
in the years to come. I mentioned to you the breakthrough we made in the middle of
last year when we decided on a three-year programme of aid something we had never
done before to Indonesia. And we extended our appropriations in a way that we had not
done in the. case of any other country. a 9 / 2

So I think you can take it, therefore, Mr. President, that we
reflect in the Government t he views that you put a few moments ago of the enormous
importance of Japan, the enormous importance of Indonesia and the importance of
Papua/ New Guinea to us as well.
So, consequently, I now come to this responsibility that has
been given to me today. That is to officially open this Conference, which as I have
said, fundamentally relates to the bilateral relationships between Australia and
Japan in the 1970' s. I think you know, and I can repeat this, that it is of fundamental
importance, not onl y to us, but also to the Pacific theatre and particularly to South-
East Asia, but not exclusively because it is not exclusively a regional subject.
We live in a world of interdependence which involves Europe, America and the African
continent, as well as the great nations of the Asian mainland.
Events in the region have a bearing on changes in the power
structure politics and economics in most other places. But today I want to concern
myself mainly with Japan and Australia, and again I emphasise to you that in the speech
I made at the Citizens' Dinner a few weeks ago, I emphasised that in the immediate
future and as far ahead as we could see, Japan was the country that in material, and
I believe in political terms, can offer the greatest advantages of co-operation between
US. And I believe, too, that when the history of this decade is written,
the changes now occurring in Australian-Japanese relations, and what I hope will
happen in the next 10 years or so, will prove to be one of the most significant developments
of its kind. The War is far behind us, its tragedies and sufferings of the
past, and the impeiatives of the future, are, in fact, here. So we have to look ahead.
We must plan ahead, and we must aspire to a new world of peace and prosperity in Asia
and the Pacific. And I believe that Australia and Japan together in several ways, have
much to do so that they can make a contribution to that goal.
Today we are at the threshold of a new era in our relationships
with Japan. This isn't something that is going to be spelt out with a crop of new
decisions or dramatic changes in the relationships that exist already. But it is
something that will be reflected by an even closer relationship than the one we already
have, and one which will have superimposed on the developing economic connection,
some political overtones stronger than we have heard up until now.
Sometime ago, my Government felt it was time to do a
stocktaking, because the progress of our relationships, along a well-ordered path, had
beentaken up to a point vmh ere this could usefully be done. I n-e ntioned to you a few
moments ago, the formation of the Inter -Departmental Committee and the Report that
is now before the Government for detailed consideration.
There has also been a recent decision to form a consultative
committee on trade, and related matters at Ministerial level between Australia and
Japan. The Deputy Prime Minister, my colleague Mr. Anthony, was able to confirm
this during his recent visit to Tokyo. / 3

Now I have for long taken the view that the co-ordination of
diplomatic relationships between any two countries ought to be the responsibility of
the-Department of Foreign Affairs. And I can assure you that in trying to work out
sensible and better relationships between the two countries, that with us now, our
Foreign Affairs Department will be taking the leading administrative role, advised where
necessary by the other Departments, in economics and finance by the Treasury, and
trade* by the Department of Trade, education and science by that Ministry, and
correspondingly, too, with the other Departments, such as National Development, or
in national development schemes, by Mr. Swartz, the Minister for National
Development himself. Now these developments alone at Government level will do a lot
to enlarge the framework within which we can plan ahead. I think, ladies and gentlemen,
when we look directly at the bilateral relationships between two countries such as
those between Australia and Japan we must be clear about our motives and our
objectives. It is also wise that we be completely frank about them.
And if I can say this to you about frankness, in the recent
discussions I had with the Japanese Prime Minister and the various many discussion * s I
had with Mr. Aichi, I have found them completely frank, willing to discuss the most
difficult of problems and anxious, I believe, to co-operate with us for the political and
economic betterment of the South-East Asian region.
Now the first motive on our part, naturally enough, as you well
said in your quotation from U Thant and if I can change it a little bit is national
self -interest. This goes for any country anywhere in the world, and I can assure you, it
goes for us just as much as it goes for anyone else.
Our relationship with Japan should continue to assist the broadlybased
development of the Australian economy and help us to maintain an independent
foreign policy. It should also seek to develop our relationships with other friends and
allies, regional neighbours and trading partners. I like to hope that every Australian
businessman, with an eye on exports, will regard himself as some kind of a latter-day
Marco Polo and go out in search of new markets. He will have the Government
supporting him when he does.
And the second objective is that our co-operation with Japan
should be directed more and more to meeting the needs and aspirations of the
developing countries in our region. We have a wonderland of new experience before
us where a " green revolution" is coming to the paddy fields and plantations of
Asian countries. The miracles of modern science and technology are beginning to
touch the lives of millions who, for the first time, can see the prospect of a better
life being added to the old, sustaining forces of their ancient cultures.
We want them, our neighbours to the North, to feel part of a
broader region, secure within it and being able to share in its progress.
And I believe, too, that we have a remarkable opportunity not
only to help, but to be able to draw them together, because in my experience as a
Foreign Minister, whilst I wasn't there for long, at least I visited South-East Asia and
Japan on several occasions. I think you can take it that they trust us. They know we
have no predatory intentions arid I think they recognise, too, that our aid is given
freely and generously. We don't put any bans or ties on it. We don't ask for repayment * ao/ 4

and what we give we give because we feel we are making a contribution to their development
and at the same time, in a reciprocal way, adding to our own.
And the third objective is that we will be looking to the establishment
of a stable relationship with Japan and among the other three major powers in the
Asian-Pacific area the United States, the USSR and the People's Republic of China.
These considerations will, of course, have to be matched to the
continuing satisfaction of Japan's legitimate economic aspirations.
So, ladies and gentlemen, there you have our motives and our
objectives. They are, I believe, free of enmities, untouched by racism or compromised
by different ideologies. It is time for us in our thinking to move out from the shadow
of the great nuclear deterrents and the " curtains" and " walls" of the past into a more
positive world of progress. And I know in trying to achieve the kind of change we in
the government want to achieve that with you, Mr. President, and with everyone here
today, we will find the most willing companions and accomplices.
Now as to achieving our objectives in our relationships with Japan
we have a solid base to build on. The Trade Agreement or the Agreement on
Commerce, as it is called, of 1957, was a foundation stone of the first importance.
The beginnings were small, but the growith has been rapid.
Japan is now our largest trading partner and Australia is Japan's
second largest trading partner after the United States.
The political relationship has developed more slowly but it is
becoming significant both on a bilateral and on a regional basis. These links have
been supported by business, cultural and scientific exchanges and the encouragement
of tourism between the two countries.
The relationships are plain for everyone to see. I refer to
them because this is our starting point for the developments of this decade.
We also have to remember that there are great differences in
national power, differences in history and social traditions and differences in the
decision-making processes both in Australia and in Japan. To my Japanese friends here,
I can assure them that by now, I have just about learnt how difficult it is for a person
whose mind is cast in a Western mould to be able sometimes to understand quite how
slowly the Japanese work and how frequently a smile doesn't mean " yes" but all too
frequently means " no". Now the remarkable post-war economic growth in Japan has taken
her into the front rank of the industrialised nations. Her gross national product is now
third in the world after the United States and the Soviet Union, and she is emerging
as a major Asian/ Pacific and world power.
You may ask what will this economic strength do to us?
It has already done much, and we expect those benefits to increase
in the future. It is natural that we should because we have the commodities Japan
needs, mostly right in quality and price, and available on a relatively short haul,
while Japan can supply the exports we want and cannot yet make ourselves.

In short, our great natural resources provide Japan with the raw
and processed materials she does not possess and we can get from her the products of
her highly advanced technologies those products we cannot yet provide economically
or in significant quantity to meet the demands of our industrialised society.
As you all know, vwe are twelve and a half million people,, and
the Japanese are over 100 million people. If we look to our relationship as a kind of
partnership, is it lop-sided? I don't believe it is.
Each of us has strengths to share which are not determined
by numbers. I think the relationship can be divided up into three phases.
The first followed the end of the war when Japan became a
substantial buyer of our primary products, mostly wool.
Then came the second phase when we found a fortune-in
minerals. This gave us the boom years of the sixties. Japan took our coal, our iron
ore, our bauxite, and our maganese in addition to our wool, our sugar and our be.-A
Today Japan takes 25 per cent of our total exports over four
times what she did twenty years ago and of this, minerals and metals takes up
54 per cent. Now we are into the third phase. This is where we move on
into a broader economic relationship. This third phase, as we see it, involves a
continuing, and I hope, an enlarging market in Japan for our rural products and our
minerals, the introduction of more joint enterprises, particularly in the minerals
and metals industries, and finally, new outlets for our manufactures.
To date, Japanese investment in Australia has been small. For
the last financial year, it accounted for only about two per cent of total direct
investment in Australia. Now, while I expect this to increase, and no doubt it will be
concentrated in the natural resources area, at this stage it seems unlikely tcb; very
large in relation to the total levels of private overseas investment in this cou:. r.
Now so far, most investment from Japan has conformed with
our preference for foreign investment in the form of equity participation with
Australian enterprises. There is, I am glad to say, plenty of movement at both
Government and business level in this third and latest phase.
There have been annual consultations at official level between
our respective Foreign Ministries since 1967 as well as ad hoc co'nsultations bc,
other Ministries. Frequent consultations at Ministerial level will now take a mn~ are
regular character with the formation of the Consultative Committee to which I have
already referred. At industry level, a Business Co-operation Committee bas
existed for the past nine years and meets regularly. This year tv, inpo~ ec onomic
missions have come to Australia. One was financial and the other was concrnned
with natural resources. */ 6

I am confident, therefore, that the right climate now exists for
us to go ahead even better than we have done in the past and, I think to do so for the
benefit of both countries. Ladies and gentlemen, I believe that the consolidation and
development of our bilateral relationship with Japan advantageous to us both in national
terms is also of considerable importance to the economic and political stability of the
region and I believe that together, and with others in the region, we can take a fuller
part in regional affairs in the future.
Because of her economic strength, Japan has a formidable contributic
to make to economic aid in the region.
The Japanese Government last year announced a 1975 target for
foreign aid, both official and private, equal to one per cent of GNP. If this is achieved,
then something like 500 million will be given in that year just about three times
what was given in 1969. Already there has been a 40 per cent rise in Japan's foreign
aid for 19703 over the preceding year.
Now, two-thirds of Japan's total foreign aid contribution goes to
Asia. This makes Japan a force of tremendous importance to the economic fortunes of
the developing countries in the region.
Australia's role in this, compared with Japan's, must necessarily
be small, but it mus t be remembered that we rank very high among the aid-givers in
relative terms and we, too, are committing about one per cent of our gross national
production to developing countries. mainly in Asia and the Pacific and including the
Territory of Papua/ New Guinea.
Might I interpolate this comment to you on, DAC aid, particularly
the kind of aid Australia gives to the Asian countries, because last . year at the DAC
meeting in Tokyo, when we were starting to talk about the figures and I have never
had them analysed as well as I had them analysed by our own people in Japan we found
that when it came to official aid, that is, aid of a kind that is giver, by the Government
rather than private enterprise assistance, that without any doubt at all, we led the
way. Or, if I could put it a little differently, with the exception of France, in connection
with its colonial territories, and Portugal, there is no other country that makes the
same kind of contribution as we do to official aid. And the value of that official aid,
being on a non-repayable basis, and at the request of the country concerned, has the
highest possible quality. So we spectlcally asked that in future whenever the DAC was
considering aid programmes, it had first of all to divide the aid into official and private
aid so that we can come to our own conclusions about the contribution made by the
Australian taxpayer. And secondly, when we were looking at the components of the
official aid, we had to make up our minds as to its quality and, consequently, the debt
repayment problems, and the problems of the recipient countries, whether they
willingly participated, or the ones that were initiated, the kind of aid that they wished
to receive. You will be familiar with the multilateral organisations to which
we belong, and where we sit in Japan's company. / 7

I refer to ECAFE, ASPAC, the Asian Development Bank, the
Colombo Plan, and the Development Assistance Committee of the OECD to which I
have just referred. WIe also share common membership of aid co-ordinating groups
assisting individual countries in the Asian region.
There are, inevitably, political associations which develop as the
result of increasing regional involvement, and I believe Japan will assume a larger role
in the future. It is true, too, that while we may separate trade and politics,
economic progress cannot take place in a political vacuum.
I think the presence of Japan at last year's conference on
Cambodia at Djakarta was one of the first signs of her growing political influence and
its deployment to the region's advantage.
I see no reason why Australia cannot work usefully with Japan at
the political level as well as the economic level.
And if I can come back: to Djakarta, I do comment very favourably
about the role taken by Mr. Aichi as the representatives of the Japanese Government
and people. And I do comment very favourably about the arduous efforts they made with
the Malaysians and the Indonesians to try and induce other countries to try and restore
the ideals of the Geneva Conference in 1954 and to try and get the various elements to
the conference table to see if we could establish peace in Cambodia.
I now come to the question of Japan's military strength, its defence
capability and how I see it now and in the future.
It was recently announced that Japan's Defence Agency would be
doubling its defence expenditure during the period 1972-1976. The amount to be spent
will still be only about 1 per cent of her gross national product, which is far less than
the percentages committed by other major powers. COurs, by the way is 3. 69 per cent
of GNP. Now these are the facts. For obvious reasons, we dislike any
increases in defence expenditure. Japan has given repeated assurances that she
does not intend to pursue a military role beyond that of self-defence. We fully understand
this attitude. We note that the programme has been public knowledge for a year
and that all expenditure has to be approved by the Diet. In other words, it has a full
exposure to the public, and is dealt with by democratic processes familiar to us.
The programme provides for only small increases in defence
manpower and for moderate increases in equipment. It will aim particularly at
strengthening the air and sea self-defence forces.

Japan's defence role was set out in a White Paper last year. This
showed that while Japan would maintain its security links with the United States, it would
assume, because of its economic strength, greater responsibilities for conventional
defence. It would not possess offensive or nuclear weapons.
And I remind you, too, that Japan is perilously close to Mainland
China. Mainland China is in possession of thermonuclear weapons. Japan has none. I
want you to remember that Japan is in a very vulnerable position and that a few thermonuclear
weapons could, of course, do permnanent harm if they were ever used against
that country. And, of course, we have to remember that Japan would also have
had to-provide for enlarged defence responsibilities when the United States handed over
Okinawa. To sum up, ladies and gentlemen, I believe Australia and Japan
can enlarge the base of their friendship and co-operation to the benefit of both
countries. I believe that together we can do a lot to help stability and
economic progress in the Asian and Pacific region. I believe that what we do together
and what we do within the region will continue tc 11-s based on mutual respect and
trust, and I believe that we can know each other better.
So we want to help, and we want to help with the co-operation of
all Australian people. So for that reason I want to thank you for asking me here tod-ay,
and I want to thank you, too, for coming. Arid having said that, may I now officially
declare this conference open.

Transcript 2429