Aust, ‘ready to review N.Z. link’

Press, 31 August 1989, Page 6

Aust, ‘ready to review N.Z. link’

By

BRENDON BURNS

in Canberra

Senior members of the Australian Government are said to be ready to review the entire relationship with New Zealand if the Anzac ship deal is not confirmed.

An Australian academic, Dr Ross Babbage, said yesterday that Federal Cabinet Ministers had told him of strains between the two Governments.

Dr Babbage said some policies of the Palmer Government, particularly the anti-nuclear stand, had caused fundamental questions to be asked in Canberra about the transTasman relationship. Failure to buy Anzac frigates would cause a “review of just about all aspects of the relationship.” This could extend to limits being imposed on the closer economic relationship, which next year will create a free flow of goods between the two countries. Australia has warned on a number of occasions in the last year that failure to buy Anzac frigates would upset the relationship. The Australian Prime Minister, Mr Hawke, has spoken of “adverse economic” effects without a favourable decision on frigates. Dr Babbage is deputy head of

strategic and defence studies at the Australian National University in Canberra. The centre is a thinktank for defence policy. Dr Babbage said he has contact with “very senior members of the Australian Government.”

It was New Zealand’s right to negotiate as good a deal as it could get on the frigates, or even pull out of the project. But both countries faced restraint.

“It’s not just New Zealand that has budgetary problems.” Australian defence spending had fallen as a percentage of the whole economy for the last three years. It was at its lowest in real terms since the early 19605. A myth existed among some New Zealanders that Australia was on a defence spending spree. In fact there was a modest modernisation programme under way. Dr Babbage said it was not the case, as Mr Tizard suggested on arriving in Canberra, that New

Zealand was being asked to contribute towards a shipbuilding industry in Australia.

With a basic price established for frigates, New Zealand should bear a portion of the cost of providing support facilities, he said. Potential gains included access to these facilities and a share of the maintenance and servicing of Australian as well as New Zealand frigates. Dr Babbage endorsed the warning of the former Secretary of Defence, Mr Denis McLean, that by forcing too tough a deal, New Zealand could incur more costs longer term. New Zealand risked losing a share of maintenance and access to some Australian facilities. Royal New Zealand Navy frigates might have to go to Europe for servicing, said Mr McLean.

Dr Babbage said neither New Zealand nor Australia could afford the costs of failing to co-operate in defence.