5 Reports:

- The Australian: Invasion Of Timor `In Our Interests' - Cabinet Secrets Revealed

- 1978 - The Year That Was - Cabinet Secrets Revealed

- SMH: Why Fraser Gave Up On East Timor

- CT: Fraser Feared ETimor Fallout

- The Age: Terrorism, Refugees, And Howard

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The Australian Thursday, January 1, 2008

Invasion Of Timor `In Our Interests' - Cabinet Secrets Revealed

Siobhain Ryan

INDONESIA'S 1975 takeover of East Timor was in Australia's strategic interests, then defence minister James Killen told his prime minister, Malcolm Fraser.

Cabinet documents released today show the extent of the Fraser government's willingness to embrace the Suharto regime, even though it knew of the military's plans to rearm to retain its control over the archipelago.

Indonesia provoked international condemnation when it invaded the former Portuguese colony in response to its civil war and declaration of independence. Tens of thousands are believed to have died in the invasion.

Killen visited Suharto and his generals in 1978, in the same year the Fraser government controversially gave de jure recognition to East Timor's incorporation into Indonesian territory.

He wrote to Mr Fraser of Jakarta's disappointment and resentment at Australia's earlier failure to support it ``in the containment and cleaning up of a mess in Timor''.

``The Indonesians believe that their action in this respect has, after all, been essentially in Australia's interest too. From the defence point of view, I am bound to say that I do not disagree with this,'' Killen said.

The letter was written at a time when Australia feared communism could spread beyond China and Vietnam. The pro-independence Fretilin in East Timor was viewed as a left-leaning party, George Quinn, from the Australian National University's Southeast Asia Centre, said.

``Both in Australia and Indonesia, there was a feeling that it would not be in their interests to have an independent and left-leaning country in its immediate neighbourhood,'' Dr Quinn said.

Damien Kingsbury, associate professor with Deakin University's School of International and Political Studies, said Australia's decision to give legal recognition to Indonesia's claim over East Timor ran very much against international and domestic opinion at the time.

``I think the Australian government went to some very considerable lengths to be conciliatory, regardless of the position in international law,'' he said.

Killen backed an expanded defence co-operation program with Indonesia, noting the country wanted to diversify its sources of military equipment after then US president Jimmy Carter tied supplies to human rights.

``The Indonesians could be looking to Australia as a source of support for defence equipment,'' the minister said.

His report reveals, however, the Indonesian military was rearming largely to ensure it was ready to retain power ahead of the 1981 elections.

``General Yusuf did not beat about the bush in these remarks: the armed forces' intention to retain a firm grip on the country was freely expressed,'' Killen said.

Then foreign minister Andrew Peacock briefed cabinet early in 1978 that he wanted to give Suharto the advantage of Australia's de jure recognition ahead of an Indonesian election in March that year. He also warned that the president would not visit Australia until he secured that recognition.

``There are signs that the patience and understanding of a growing group of influential Indonesians in the government are running out, and I believe the point has been reached where our continued refusal to accept fully and formally the reality of the situation in East Timor could damage the relationship,'' Mr Peacock said.

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The Australian Thursday, January 1, 2008

1978 - The Year That Was - Cabinet Secrets Revealed

Jan 1 Air India flight 855, a Boeing 747 passenger jet, crashes into the ocean near Bombay, killing 213

Jan 1 Special Broadcasting Service (SBS) is established to provide multilingual radio and television services

Jan 20 The federal Government accepts Indonesia's takeover of East Timor

Feb 1 Hollywood film director Roman Polanski skips bail and flees to France, after pleading guilty to charges of engaging in sex with a 13-year-old girl

Feb 11 The People's Republic of China lifts a ban on works by Aristotle, William Shakespeare and Charles Dickens

Feb 13 A bomb explodes outside the Hilton Hotel in Sydney, killing two garbage men, a policeman and several others

Feb 15 Serial killer Ted Bundy, who murdered numerous young women in the US, is captured in Pensacola, Florida

Mar 6 American porn publisher Larry Flynt is shot and paralysed in Lawrenceville, Georgia

Mar 11 Palestinian terrorists kill 34 Israelis

Mar 14 Israeli forces invade Lebanon

Mar 18 Zulfikar Ali Bhutto, prime minister of Pakistan, is sentenced to death by hanging for ordering the assassination of a political opponent

Apr 1 Entrepreneur Dick Smith tows a fake iceberg into Sydney Harbour

Apr 4 Cyclone Alby kills five people in Western Australia

Apr 30 The Democratic Republic of Afghanistan is proclaimed, under Nur Mohammed Taraki

May The Bee Gees dominate the singles and album charts as Saturday Night Fever becomes a cultural phenomenon. At one point, the album was selling 1 million copies a week

May 15 Sir Robert Menzies dies in Melbourne, aged 83

May 19 A State funeral is held for Sir Robert at Scots Church in Melbourne.

Prince Charles and representatives from 30 countries attend the funeral

View a slide show of 1978 at www.theaustralian.com.au

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The Sydney Morning Herald Thursday, January 1, 2008

Why Fraser Gave Up On East Timor

Phillip Hudson

THE Fraser government's controversial decision formally to recognise Jakarta's takeover of East Timor was based on the belief that the occupation was "irreversible" and made because influential Indonesians were losing patience with Australia's stand against it.

Cabinet documents released today by the National Archives of Australia under the 30-year rule, reveal the then foreign affairs minister, Andrew Peacock, pushed for the policy change, telling his ministerial colleagues Asia saw Australia as "irritating, uncertain and unpredictable" and he was concerned about severe trade and security consequences.

Two years before, the government had rejected the push to give de jure recognition to Indonesia over East Timor but at its first cabinet meeting in Canberra in January 1978, Mr Peacock told his colleagues he was worried the relationship with Indonesia was deteriorating and "time is running out for us".

Mr Peacock, who was agitated about Australia's poor image in South-East Asia, told ministers that Indonesia's then president Soeharto would be "especially pleased" with the decision, which would allow Australia to negotiate the seabed boundary between the countries in the Timor Sea.

Mr Peacock said the prime minister, Malcolm Fraser, and Mr Soeharto were developing a close friendship and there was a risk this bond could weaken "if adjustments are not made to our Timor policy".

But while he said it would be supported by the "silent majority" and the issue was "fading as an international one", Mr Peacock was concerned about a backlash from what he described as small vocal anti-Indonesian groups. He gave cabinet a detailed explanation how the government should "try to avoid" directly saying Australia "recognised" Indonesian control. Ministers were urged to use terms such as "full", "formal" or "definitive" acceptance. If pressed, they should explain that Australia recognised "the fact that East Timor was part of Indonesia but not the means by which it was brought about".

Speaking to the Herald this week, Mr Peacock said it was a "no-win situation in those days" but he still believed "we were taking the right decision at the time".

"It was putting pressure on the Soeharto-Fraser relationship which is an important consideration," he said. "It was a difficulty but I learnt to live with it. I wouldn't allow myself to be torn up. That was my job."

Mr Peacock, who now lives in the US, said he had personally protested about the occupation to Mr Soeharto "but there came a time for us after more than two years when the situation was still the same and you had to face certain realities. There was a fundamental question: who was in control? The correct answer was the Indonesian government. It forced the hand somewhat."

In his submission to cabinet, Mr Peacock said senior Indonesians were disappointed that Australia continued to dwell on the 1975 invasion and had not "looked to the future".

"There are signs that the patience and understanding of a growing group of influential Indonesians in the government are running out and I believe the point has been reached where our continued refusal to accept fully and formally the reality of the situation in East Timor could damage the relationship," he wrote. "The balance of our international interests lies in accepting the fact that the integration of East Timor into Indonesia is irreversible."

Indonesian troops killed five Australian journalists in Balibo in 1975, but according to the documents released today, by 1978, the Fraser government was increasingly concerned about maintaining good relations with not just Indonesia but throughout South-East Asia.

In December, cabinet was shown a report by diplomatic heads in South-East Asia that said Australia was "seen in some [Association of South-East Asian Nations] quarters as being in their view a selfish, introverted nation" and that Asian leaders were reluctant to visit because they feared a hostile media reception.

Cabinet instructed Mr Peacock to talk to the ABC chairman about Radio Australia's "inaccurate" reporting in East Timor, which was irritating Indonesian sensitivities and "damaging to the relationship". On a visit to Indonesia, the defence minister, Jim Killen, told his hosts "with some personal feeling" that the media were beyond government control. He told cabinet relations with Indonesia were "certainly strained" by East Timor.

Officials raised concerns that 72 per cent of Qantas flights then passed through Indonesian air space and it would be a considerable cost and inconvenience if relations soured.

Successive Australian governments maintained the Peacock policy until December 1998 when the then prime minister, John Howard, wrote to B. J. Habibie, then Indonesian president, saying Australia was backing self-determination for East Timor. Mr Habibie then gave East Timor a choice of independence or autonomy. Australian-led United Nations forces took control of East Timor and it became a country in 2002.

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The Canberra Times Thursday, January 1, 2008

Fraser Feared ETimor Fallout

By Philip Dorling National Affairs Correspondent

A secret ''Australian-eyes-only'' cabinet submission shows that the Fraser Government feared continued objections to Indonesia's takeover of East Timor would ''seriously harm'' Australia's relations with the nation. The 1978 cabinet papers released by the National Archives today reveal the triumph of expediency behind the decision by Prime Minister Malcolm Fraser's Government to formally recognise Indonesia's military takeover of East Timor. Although former Labor prime minister Gough Whitlam copped much political flak for his handling of the East Timor issue in the lead-up to Indonesia's December 1975 invasion, his successor Mr Fraser largely escaped criticism even though it was his Government that caved in and recognised Indonesia's seizure of the former Portuguese colonial territory.

According to the submission presented to cabinet by then Foreign Minister Andrew Peacock in January 1978, there were ''signs that the patience and understanding of a growing group of influential Indonesians in the government are running out and I believe the point has been reached where our continued refusal to accept fully and formally the reality of the situation in East Timor could damage the relationship''. Significant portions of Mr

Peacock's cabinet submission have been withheld from public release, suggesting that the Foreign Minister also warned cabinet that Australia's bilateral intelligence cooperation with the Indonesian military could be jeopardised if differences over East Timor persisted. The submission makes no mention of the brutality of the Indonesian military occupation of East Timor which was well documented by Australia's intelligence agencies. Small-scale Timorese resistance

was expected to continue for some time, but it was expected that opposition to Indonesian rule would ''continue to fade and it will become just another of the 20 or so irredentist movements which the Indonesians have suppressed in the archipelago since independence''. Instead, the main problem was seen to be Australian domestic politics, largely the influence of a small but active pro-Timorese lobby, including figures such as former diplomat Jim Dunn.

The Australian media was also identified as a difficulty as a consequence of the deaths of five Australian journalists by Indonesian forces in East Timor in 1975, and MrPeacock recommended that announcement of a policy change be preceded by personal contact with selected newspaper editors. Cabinet decided on January 1978 that all future Australian policy toward Indonesia would be based ''on the acceptance of the proposition that Indonesia exercises sovereign power so far as East Timor is concerned''. The form of recognition was in turn determined by the Government's desire to open negotiations on the seabed boundary between Australia and East Timor and thus access the oil and gas reserves believed to be located in the region. Woodside Petroleum and Australian Aquitaine Petroleum were keen to begin seismic surveys and drilling, but were reluctant to do so in

the absence of seabed boundary determination. In a further submission to cabinet in November 1978, Mr Peacock recommended a low-key announcement of the opening of negotiations as the best approach. With cabinet's agreement, seabed boundary negotiations with Indonesia commenced in February 1979.

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The Age (Melbourne, Australia) Thursday, January 2008

Terrorism, refugees, and Howard

Leo Shanahan

1978 Cabinet Papers - Overview

Malcolm Fraser's second term as PM got off to a difficult start as Robert Menzies was farewelled, writes Leo Shanahan.

IT WAS the year the Commodore replaced the Kingswood, the West Gate Bridge opened, Hawthorn won the premiership, two popes and our longest-serving prime minister died and terrorism came to Australia.

1978 was the first year of the second term of Malcolm Fraser's government - and it did not begin easily.

The Commonwealth Heads of Government Regional Meeting in February was supposed to be Mr Fraser's debut as a major foreign policy player, but this was overshadowed by a bombing outside the conference's venue, the Sydney Hilton Hotel, on February 13.

Three people were killed in the blast: two garbagemen, Alex Carter and William Favell, and police officer Paul Birmistriw.

Three members of the Indian Ananda Marga sect were jailed for the bombing.

Previously confidential cabinet papers released today by the National Archives show that there was significant concern about the Ananda Marga sect prior to the bombings, following the kidnapping of an Indian diplomat in Australia.

Immigration Minister Michael MacKellar decided on January 13 that members would be banned from entering the country unless they were Australian citizens or residents.

Following ASIO reports of the significant threat posed by the group in Australia, tougher security measures were introduced at Parliament in Canberra, shattering an innocence that had formerly allowed workers and guests to enter and wander the building in an almost security-free environment. The perilous state of the economy posed the most real challenge for the government, especially for the then treasurer, a young John Howard.

Around the same time of the death of his idol Robert Menzies, on May 15, Mr Howard handed a report to cabinet demanding many of the same things he was still asking for when he came to power in the 1990s: cuts in public spending, cuts in spending to the states, industrial relations reforms and widespread tax reform.

Mr Howard was concerned that not enough was being done to rein in spending, leading to a budget deficit of $5.2 billion for 1978-79.

The dire state of finances led to the government breaking a key election promise to provide a "fist full of dollars" in tax cuts, with Mr Fraser deciding to raise taxes and introduce the controversial "piggybank" tax on children's earnings.

Mr Fraser controversially appointed former governor-general Sir John Kerr as Australian ambassador to UNESCO, but was forced to back down after public criticism, which Mr Fraser felt was fanning "conspiracy theories" over the 1975 dismissal. He also chose to sack Reginald Withers as Senate leader after he sought to change the name of a Queensland electorate.

Foreign Minister Andrew Peacock was grappling with challenging issues relating to the recognition of East Timor as part of Indonesia, as well as the changing role of Australia in the region.

Mr Peacock observed that Indonesia had started to view Australia as an "irritating, uncertain and unpredictable element in the South-East Asian situation". He was also less than impressed with the work of US President Jimmy Carter, whose achievements Mr Peacock said were "fairly thin", and felt that Australia was not doing enough to influence US opinion.

At the end of the year, according to cabinet documents, Mr Peacock thought President Carter had done "far better than was considered possible" but this was largely due "to a shift from traditional democratic opinions towards those more in keeping with national opinion".

In August Pope Paul VI died. John Paul I was then elected - and died 33 days later. John Paul II was his successor.

The arrival of Vietnamese and Cambodian refugees in boats from the north meant that immigration issues occupied a great deal of cabinet's time.

By the end of 1978, 47 boats had arrived carrying refugees from South-East Asia with cabinet agreeing to increase the intake of Indo-Chinese refugees from 9000 to 10,500. By the next year Australia had taken 22,000 refugees from the region.

Cabinet found that the number of people in Australia illegally had "reached unacceptable levels" at 50,800, primarily blaming not refugees but increased visa overstayers and cheaper airfares to the country.

A series of new detention centres were planned as a result, including embryonic planning for a brand new immigration detention centre in Melbourne. In the end there was an upgrade of the existing Maribyrnong centre in 1983.

In sport, cricket was split by Kerry Packer's World Series Cricket. And Australia's poor performances in the Commonwealth Games, finishing third behind Canada and England in Edmonton, after having not won one gold medal at the 1976 Olympics, led Sports Minister Ray Groom to inform cabinet that the issue had become one of "widespread community concern".

It led to cabinet considering what is now accepted policy of providing significant funding for the Olympic team as well as the establishment of national sports program.

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