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Tuesday, 23 March 1965

Senator PALTRIDGE (Western Australia) (Minister for Defence) . - by leave - Mr. President, I wish to made a statement to the Senate on my recent visit overseas to South East Asia and to the United States. My purpose in visiting South East Asia was to gain first hand information of the situation which, as stated by the Prime Minister (Sir Robert Menzies) in his review of the expanded defence programme in Parliament last year, had deteriorated and was causing the Government considerable concern. This deterioration arises from increased Communist pressures in the area as a whole and particularly in South Vietnam and Laos and from Indonesia's policy of confrontation against our Commonwealth neighbour, Malaysia. While in the area I also took the opportunity to visit Australian servicemen deployed in Malaysia, Vietnam and Thailand, and to acquaint myself with their role in each particular situation.

During five days in Kuala Lumpur I had close and detailed discussions with the Malaysian Prime Minister, the Deputy Prime Minister and other Ministers. There was and still remains concern at the con siderable build up of Indonesian forces in Kalimantan and Sumatra and the threat which this poses to the territorial integrity of Malaysia. Along with this build up of forces there has also been over the past months a steady increase in infiltration across the Malacca and Singapore Straits into Malaya and Singapore. These developments require the deployment of additional British forces: to the area and this reinforcement which was essential in order that the United Kingdom should fulfil its commitment to the defence of the area was proceeding whilst I was there.

I informed Malaysian Ministers that the Australian Government fully shared their concern over the build up of Indonesian forces and I gave them a full and frank exposition of our own position on the continuance by Indonesia of its policy of confrontation. The Malaysian Minister for Defence explained comprehensively and forcefully the need for reinforcements to meet the increased threat to Sarawak and Sabah and to ensure the defence of the Malayan peninsula against infiltrators. Honorable senators will recall that in response to a Malaysian request the Acting Prime Minister announced on 3rd February that in view of all the circumstances and in accordance with the pledge previously given the Australian Government had concluded that the development of additional Australian field units into Borneo was necessary. These additional units comprise the Australian battalion serving with the Commonwealth Brigade which is available to serve in Borneo in rotation with Malaysian and British units and also an Army Special Air Service Squadron from Australia which has since been moved into the area. These units are already preparing for service in the Borneo Territories where 1 am sure the abilities of our fighting men will be in good evidence and contribute materially to the defence of Malaysia.

While in Kuala Lumpur I also discussed the provision by Australia of defence aid in the form of equipment and training to Malaysia and I received unqualified assurances from Malaysian Ministers that Australian assistance to date had contributed substantially to the common effort. The requirements of this young and developing Commonwealth country remain considerable and I was given the opportunity to learn something of Malaya's impressive development programme and plans which unfortunately are being retarded by the need to devote resources to defence against confrontation. I assured Malaysian Ministers of Australia's continued sympathetic consideration for their needs inthe present situation.

After leaving Kuala Lumpur 1 visited Singapore where I had discussions with the Singapore Prime Minister, Lee Kwan Yew, and the British Commander-in-chief, Far East, and later I was able to visit operational areas in the Borneo territories and inspect at first hand some positions which have been taken up by Allied forces along the 1,000 mile frontier with Indonesian Borneo. In particular I saw something of the work being carried out by the Australian engineer squadron and was impressed with both the quality of their construction programme and their morale.

From Borneo I flew to South Vietnam, and, despite the fact that a few hours prior to my arrival there had been a further change in the leading personalities responsible for government of the country, 1 had very useful discussions with senior South Vietnamese Ministers, the United States Ambassador, General Westmoreland, who is leading the American forces in the area, and other authorities. I left the country with a much more intimate understanding of the difficulties of the peoples' struggle and of their defence needs. Above all I was convinced of the vital importance of maintaining the independence of South Vietnam and of the validity of the Australian Government's policy supporting this country in its struggle for independence against Communist subversion. In particular I consider that we must continue to support Unted States efforts in the field by full political and diplomatic endeavours and by the provision of military advisory assistance and logistic support as necessary to meet military requirements.

While in Saigon I was pleased to announce the decisions of the Australian Government, made just prior to my departure, to make available additional nonmilitary aid to Vietnam to assist in the pacification programme and to supplement the military aid which we have been providing since 1962. Following the visit of a special aid investigation team to Vietnam last year to investigate ways in which Aus tralia might help in the fields of agriculture, engineering, medical services and social welfare, some recommendations had already been put into effect. Additional aid to be given by Australia as announced by me in Saigon was as follows -

(a)   An Australian engineering team would work on the development of the Bien Hoa town water supply and help road construction and maintenance techniques. This team would also investigate the possibility of undertaking additional tasks, including a proposal for the building of two canal bridges in the port of Saigon;

(b)   A further shipment of 3,000 tons of galvanised iron will be sent to Vietnam to meet the Vietnamese Government's request for 6.000 tons to be used for a housing scheme for military dependants;

(c)   About one million copies of text books to be printed in Australia in the Vietnamese language for use in primary schools throughout South Vietnam.

While in South Vietnam, I had the opportunity of visiting some of the strategic hamlet areas which demonstrated to me the value of the non-military aid which Australia had already given towards the construction of these safe havens.

I also announced that the Australian Government is providing additional military aid to Vietnam of a further 17 Army training instructors, which will bring the total in South Vietnam to 100. A replacement of the Caribou aircraft damaged some months ago is also to be provided, which will bring the Royal Australian Air Force Caribou detachment back to the original strength of six aircraft. The addition of this aid to the assistance already being given Vietnam by over 20 other countries is a further encouragement to the Vietnamese people to continue their struggle against aggression with determination. In Vietnam, as elsewhere, a stable government is an indispensable prerequisite to the successful outcome of the struggle against Communist subversion and terrorism.

While in Vietnam I also visited Australian soldiers working as jungle warfare instructors at the Duv My ranger training camp near Nha Trang and the R.A.A.F. Caribou transport flight which is based at Vung Tau. I found the Australian personnel in very good heart, fully dedicated to their task, and very much aware of the importance of the struggle to which they are contributing.

From Vietnam I journeyed to Thailand where I had a valuable series of talks with the Prime Minister, the Deputy Prime Minister, the Ministers of Foreign Affairs and National Development, and the Deputy Minister of Defence. I also called on the South East Asia Treaty Organisation headquarters where a number of Australian officers are serving, and I paid visits to the R.A.A.F. Sabre fighter detachment at Ubon and the vehicle repair workshop at Rangsit, which is one of the projects being sponsored under our S.E.A.T.O. aid programme to assist in the logistical backing of the Thai services.

My talks with Ministers covered a wide range of topics of mutual interest and I found my discussions particularly valuable. I was impressed with the good and cooperative relations which have been developed between Thailand and Australia particularly as a result of our S.E.A.T.O. partnership. Thai Ministers were most willing to exchange ideas frankly and openly.

During my visits to Thailand and Vietnam I was deeply impressed with the size, efficiency and depth of United States military effort in these very important strategic areas of South. East Asia. The deployment of our own Australian forces in South East Asia is to be seen as part of the allied effort to defend these people against Communist aggression and subversion and allow them to live as independent countries pursuing their own ideals and aims free from the shadow of Communist aggression.

I want to record my unqualified satisfaction with the manner in which Australian troops are conducting themselves in all of the areas I visited. Not only are they upholding the high reputation established by their predecessors in the field but they are winning high praise by their readiness to adapt themselves to the local scene and to affiliate themselves with civic and communal affairs. They are proving to be good ambassadors for Australia and worthy opponents to the challenges they are meeting in their day to day role.

My visit to the United States was the more beneficial because of the background which I had gained of the difficulties in South East Asia and a confirmation of the need to view the South East Asian problem as a whole. I had the opportunity of discussions with the United States authorities in both the State Department and the Pentagon. In addition, through the courtesy of the United States Government, I was able to visit many of their defence installations and their defence factories and thereby gained an appreciation of the might of the United States defence effort.

In particular, I had a long conversation with the United States Secretary for Defence, Mr. Robert McNamara. and was able to explain to him the Australian Government's new defence programme. I outlined to him the strategic background against which it had been prepared and the main measures which would be undertaken in the three years up to 30th June 1 968. We then talked about the growing extent of Australian purchases of military equipment from the United States, particularly the arrangements for the construction of three guided missile destroyers and the procurement of 24 FI 1 1A aircraft. During my stay in the United States I had the opportunity of seeing for myself the actual progress being made on these projects. I was present when the keel for the third ship was laid. I saw the F 1 1 1 A aircraft.

The main purpose of my talks with Mr. McNamara was to negotiate arrangements for the purchase of further equipment from the United States. Our new defence programme contemplates the purchase of substantial quantities of material and services from the United States at a total estimated cost of 350 million dollars over the three years. My objective was to obtain an overall package deal with the United States Government to cover this total, rather than to negotiate each separate purchase as it arose, and so obtain possibly more advantageous financial terms, together with assurances of better delivery dates to meet our requirements. Mr. McNamara accepted the commitment to assist us with this major procurement programme and the various items will be ordered in accordance with the timings laid down in our programme, so that they will become available as they are required. The main items are: For the Navy, 14 tracker anti-submarine aircraft, torpedoes, missiles and ammunition; for the Army, amphibians and tracked carriers, fixed-wing aircraft and helicopters, radio and radar equipment; for the air force, 12 Hercules medium transport aircraft, 10 Orion maritime reconnaissance aircraft, equipment, weapons and missiles for the F111 A aircraft, radar and communications equipment.

The terms of payment which I was able to negotiate with the help of officers of my Department and the Treasury are most favourable. Instead of having to pay for the equipment roughly in line with deliveries, we can spread payments over an extended period, and this will considerably lessen the foreign exchange burden over several critical years. The effect of the agreement is that in the current financial year and in 1965-66 we will pay as we go in the normal way. Payments due in subsequent years will be covered by a series of annual credit arrangements, each of which will last for seven years, so that at any one time we will have a number of such arrangements running concurrently, and each of these will be repaid by 14 half-yearly instalments covering capital and interest. The interest charged on the outstanding balances against Australia will be at the rate of 43/4 per cent, per annum.

I also concluded an arrangement with the United States Secretary of Defence which provides for co-operative logistics supply support of our armed forces. This is complementary to the arrangement covering the payment for military equipment purchased from the United States which I have already described. The co-operative logistics arrangement will enable our Armed Forces to use the organisation and facilities of the United States defence logistics system for the maintenance support of Australian military equipment as specified by Australia and common to the armed forces of the two Governments. Our Navy, Army and Air Force will thereby obtain logistic material and services equivalent in timeliness and effectiveness to that provided to United States armed forces. This will mean that Australian military units will be treated identically with those United States units having the same state of readiness for combat tasks.

The arrangement does not cover the initial capital purchase of equipment nor the initial purchase of associated spare parts required to be held in Australia. It will, however, ensure the confirmed supply support of equipment purchased without the need, as at present, to place additional sales orders each time quantities of spare parts have to be purchased. The co-operative logistics arrangement will apply to the support of American aircraft, including the F111A, and also to the guided missile destroyers. It is a selective system which permits us to use to the maximum extent our own production capability of selfsupport of our military equipment.

Finally, may I refer to my visit to the General Dynamics Factory at Forth Worth, Texas, where the F111A aircraft are being produced. My visit there confirmed the information which Mr. McNamara had given me concerning the progress in the production of this aircraft. A number of test flights has taken place including one at supersonic speeds and a second aircraft has also flown. Some technical problems have been encountered as is usual with military developments of such a very advanced and complex weapon system but the United States authorities are confident that these problems will be successfully overcome. Mr. McNamara had stressed to me that the production schedule was being met and I am confident that we can anticipate receiving the aircraft which we have ordered on the planned delivery dates commencing from mid- 1968.

Our defence effort is viewed favourably in the countries which I visited. I am more than ever convinced that we must continue with our expanded defence effort so long as the present threat exists in South East Asia and be prepared to take our place with our allies in the common effort against aggression.

I lay on the table the following paper -

Statement by the Minister for Defence, dated 23rd March 1965. and move -

That the Senate take note of the paper.

Debate (on motion by Senator McKenna) adjourned.

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