Canberra, 24 January 1964
Secret
Defence Assistance for Malaysia
Introduction
1. Over the last six months the Malaysian authorities have stated from time to time their intention to approach Australia (and New Zealand) for defence assistance (equipment, training etc.) once the extent of United Kingdom assistance has been established.
2. In Cabinet discussions on Malaysia in December and earlier this month Ministers recognised the value, both militarily and politically, of encouraging the Malaysians to strengthen their resources for their own defence.1 On 16th January the Prime Minister announced publicly that the Government was consulting the Malaysian Government to see what it could do to contribute to the development of Malaysia’s own defence effort.
3. It is of first importance to Australia that this development of Malaysia’s capacity to defend herself should take place as quickly as possible. Australian contributions to it should therefore be effective and prompt. Australian sources of supply should be fully investigated. If they are unable to provide the equipment required within a reasonable time other sources will need to be investigated because of the urgent need.
4. No formal request for assistance has as yet been received from Malaysia but informal discussions have taken place in Kuala Lumpur between officers of the Malaysian Departments of External Affairs, Defence and Treasury and the Australian High Commission. An informal paper was prepared by the Malaysians as a basis for the discussion and a copy has been received in Australia.2 The paper covers proposals for substantial requirements for arms, ammunition, stores, engineer and signals equipment, barracks accommodation, small ships, secondments, training courses and liaison visits.
5. The Malaysian paper has been studied in the Defence Group of Departments and External Affairs, and by the Defence Committee,3 with a view to assessing the value and relative priority of the requests in assisting the expansion of the Malaysian forces, the practicability of Australia meeting some or all of them and the considerations which would affect possible assistance.
6. The Malaysian paper was prepared quickly and needs revision and amplification. Some of the Malaysian requests have been stated in such general terms that it is not possible to identify the requirement clearly and it is not therefore possible to assess either the priority or the cost with any accuracy. Nevertheless, the paper provides an adequate basis for consideration by Cabinet of the nature and scale of assistance which Australia might provide to Malaysia. Australian officers could, in due course, discuss the requests in greater detail with the Malaysians.
Expansion of Malaysian Forces
7. The Malaysians have a long term plan for a five Brigade Army by 1972, together with lines of communication and miscellaneous units. The Air Force is planning the acquisition of new aircraft while the Navy plans the addition of a number of ships. The capital cost up to 1965 is estimated at £A33m. approximately. The maintenance cost from 1964 on is estimated at £A29m. approximately. Expansion of forces has been planned in close consultation with Britain and recognises the importance of permitting Malaysian economic development to continue.
8. The United Kingdom capital assistance to Malaysia for defence purposes, which is provided in accordance with the terms of the United Kingdom/Malaysian Defence Agreement, is of the order of £A19m. up to the end of 1965, thus falling short of the estimated Malaysian requirement by some £A14m. The U.K. assistance covers mainly arms and equipment, to be supplied from British sources, and also certain buildings and facilities in Singapore and Malaya which the British Government has agreed to transfer to the Malaysian Government for defence purposes. In addition, the United Kingdom is helping with the maintenance costs by paying a share of the cost of seconded officers, and charging reduced training fees and reduced fees for the repair and servicing of aircraft, etc.
9. The outline Malaysian requests on Australia fall under the broad headings of equipment, training and liaison visits, secondments, and works. The requests are commented on under these headings.
Equipment
10 The requests for equipment include ammunition, engineer and signals equipment, vehicles, ships, boats and some machine tools. Much of this equipment could be supplied from Australia. We do not know in detail what equipment the Malaysian forces have at present nor what the United Kingdom proposes to supply in its assistance programme. It is not therefore possible to assess the precise importance of the individual items to the planned programme for expansion without further discussions with the Malaysian authorities, but in general the requests appear to be reasonable, and a number of them of a high priority. It is estimated that Malaysian requests for equipment to the order of roughly £A3.142m. could be supplied over the two year period 1964/1965.
11. The following considerations are relevant to the provision of equipment by Australia:—
(a) The provision of items produced in government munitions factories would increase the volume of peacetime production and assist in maintaining Defence production capability and in reducing costs.
(b) Standardisation or at least compatibility of equipment between the Malaysian and Australian Services should be sought as far as practicable and Malaysia should be encouraged to look to Australia as a long term source of defence supplies.
(c) Australian assistance for the purchase of equipment should be used on purchases in Australia, provided these are prompt and effective. Otherwise other suppliers will need to be investigated.
(d) Australia could supply other items not included in the Malaysian paper which might assist Malaysia. This could be taken up in technical discussions with the Malaysian authorities.
Training and Liaison Visits
12. The chief training requirement comes from the Malaysian Army and covers a wide field of officer and technical training. The Malaysian authorities have already provided funds for a training programme in 1964 but would seek considerably more vacancies if Australian financial assistance could be provided. The Navy requirement is for advanced technical training for officers and senior ratings in unspecified fields. As most RAN advanced training of officers is done overseas it will be necessary to find out what the Malaysians have in mind before we can decide what help we can give them. The Royal Malaysian Air Force has suggested that the Australian Government may wish to establish a Flying Training School at Alor Star.4 We believe this to be essentially a Works project but it is possible that the Malaysians may have in mind that Australia should organize and initially run the Flying Training School. The RAAF would be unable to spare the staff required for such a project.
13. In general the requests for training, training aids and liaison visits can be met. Australian training assistance should be very useful to the expanding Malaysian forces and would also help to establish Australian ties and influence with officers who will later hold senior positions in the Malaysian forces. It is considered desirable that the conditions under which assistance is provided should broadly equate with those under which SEATO training assistance is given. The cost of providing training and liaison visits over the two year period would approximate £A0.037m.
Secondment
14. Seven RAN officers (including the Commander of the Malaysian Navy) and two Petty Officers and one RAAF officer have already been seconded to Malaysia. The Malaysian authorities have requested the secondment of Army engineer officers, additional RAN officers and four crews for Dart Herald aircraft.5
The shortage of Engineer officers in the AMF is such that none can be spared. The RAN could only meet the request with difficulty as there is a shortage of RAN officers in all the categories requested. The RAAF could provide up to two crews for the Dart Heralds.
15. The Malaysians have requested that all seconded officers should be free of cost to Malaysia. Under present arrangements Malaysia reimburses pay, allowances and other direct costs of the RAN personnel and RAAF officers seconded to that country. It is believed that this corresponds broadly with present arrangements for British seconded officers, but it is possible that the United Kingdom has recently undertaken to bear the costs of seconded officers as part of her defence assistance to Malaysia. We should keep in line as far as possible with British financial arrangements in this matter. The cost to Australia of seconded officers could accordingly vary from virtually nothing under present arrangements, up to £200,000 over the next two years, if Australia bore the full costs and it was found possible after further examination to second additional officers.
Works
16. The Works proposals in the informal Malaysian paper, for new permanent accommodation in Borneo and Air Force works at Alor Star,6 could amount to some £A2.7m. for 1964 and 1965. The Malaysian paper indicated that the British have hitherto offered no assistance in the Forces building programme and that any assistance in this direction from Australia would be most welcome. Service resources could not be made available to assist in these works so that Australian assistance could only be by way of a financial grant to the Malaysian Government. Whether assistance of this kind should be provided might be examined when more information has been obtained of the extent to which Australia can meet Malaysian requirements in equipment, training and in the other fields mentioned in preceding paragraphs.
FINANCIAL SUMMARY
-
The following is a broad indication of assistance which could be given to Malaysia during the calendar years 1964 and 1965:— £Am. Equipment 3.1 Training and Liaison Visits 0.04 Secondments 0.2
These estimates should be regarded as an order of costs only. The equipment provision includes as one item two landing ships medium (length 196 feet) at a total cost of £A1m., with estimated delivery 21 months to two years from Australian sources. The cost of secondments would depend on the considerations in paragraph 15 above. No provision has been made for Works (para. 16 above). The range of expenditure would depend on the results of the further technical examination of how promptly equipment can be made available.
SUBMISSION TO CABINET
18. We submit the following recommendations for consideration by Cabinet:—
(a) Defence assistance should be given to Malaysia to strengthen her defence potential along the broad lines covered in this report, from a special fund of £A3m. created for this purpose.
(b) Assistance should in general be in a form which can be readily identified in Malaysia as Australian, and attention should be given to some items which can be made available relatively quickly to make an immediate impact.7 In particular the Government could offer, as an immediate gesture, a gift of supplies on current Malaysian orders from Government factories which have not been fulfilled amounting to approximately £A0.2m.
(c) The question of making a financial grant to the Malaysian Government for Works projects should be considered when definite information is available on how much of the equipment required can be made available promptly from Australian sources.
(d) A mission comprising representatives of the Departments of Defence, the three Services and the Department of Supply should be sent to Malaysia to assist the Malaysian authorities in formulating their requests for the types of aid Australia could provide, and to prepare for consideration firm proposals on the details of the assistance Australia should offer.
[NAA: A4940, C1473]
1 Cabinet had discussed defence issues relating to the Malaysia situation on 19 December 1963 (see Documents 139 and 140). On 15 January, Barwick gave Cabinet a full review of the situation between Indonesia and Malaysia in which he referred ‘to the continuing scope for diplomatic activity … especially with Indonesian leaders’. In Decision No. 15, Cabinet noted that Australian military advice determined that there was ‘no immediate need for further Australian direct military assistance to Malaysia’, and that Malaysian and British authorities shared this assessment. Cabinet also agreed that a public statement ‘derived from the Cabinet discussion’ should be issued after the meeting.
2 The Secretary, DD, referred this paper to the Defence Committee on 24 December for their consideration. Hicks also advised the committee that, given ‘the wide range of Malaysian requirements it is proposed that they be examined by an ad hoc working party representative of the Departments of Defence, External Affairs, Treasury, Supply and the Service Departments, consulting other committees or individuals as appropriate on particular items’. This action was in response to Barwick’s asking for a general assessment of the need and relative priority of possible requests, and the practicability of Australia meeting these requests.
3 The Defence Committee considered the paper and the report on it by the ad hoc working party at Defence Committee Meeting No. 2/1964 held on 23 January.
4 Northwest Malaysia, in the state of Kedah.
5 No. 4 Squadron RMAF had only been formed in November with the arrival of eight Dart Herald aircraft—a transport aircraft that could also be employed for psychological warfare (e.g., leaflet dropping) and reconnaissance flights.
6 These projects were included as part of the permanent accommodation required for the development of the Malaysian Armed Forces. The barracks in Sabah and Sarawak were to provide accommodation on new sites and the Alor Star project would develop an existing runway into a complete base.
7 In a note on the submission to Menzies, Bunting advised the Prime Minister that he and Tange were ‘concerned that there was too much emphasis on equipment being identifiable as Australian, as if we were looking at the matter from a trade or political promotion angle. Surely what we need is effective aid and quickly, without being over-concerned about Australian impact’.