Late in April, at Waller’s instigation, longtime diplomat K.C.O. ‘Mick’ Shann was promoted to deputy secretary, succeeding Jim McIntyre, who in turn was appointed Australia’s permanent representative to the United Nations.111 Promotions for sixty-three diplomats followed and, early in September, McMahon took to cabinet a proposal to rename the Department of External Affairs. Arguing that the name was anachronistic and, among other foreign ministers, unusual, McMahon sought to change it to the Department of Foreign Affairs. Some thought this Waller’s idea, but McMahon had expressed his desire for the change as far back as June, when he called himself the minister for foreign affairs during a meeting of the federal council of the Liberal Party.112 Kim Jones attributed the change entirely to McMahon. ‘The name change was McMahon’s initiative,’ he said later. ‘As he [McMahon] travelled, he saw that other ministers around the world were called ministers for foreign affairs, and he was minister for external affairs. He wanted the name to be the same.’113 Gorton had no problem agreeing. ‘Billy will be the head of the department of F.A. — fuck all,’ he quipped.114 Cabinet approved the change on 3 September, though it held off announcing the news until November.115
In Waller, McMahon had found someone who knew how to manage and administer. Waller could see the need for change within the department, and drove those changes while being careful to give McMahon the public credit he desired and loved.116 On 20 December, after approval from the Public Service Board, McMahon announced a restructure of the Department of Foreign Affairs. ‘I have been keenly aware since taking office of the need for a radical reorganisation of the Department of Foreign Affairs,’ he said. The department’s four divisions were to become seven, and renamed with their titular responsibilities. A second deputy secretary’s position was established, as was a policy-research branch containing planning and liaison units. The first would ‘prepare policy papers and proposals on any area or situation of current or potential interest,’ according to McMahon, ‘thus ensuring that a programme of forward thinking and planning is constantly in progress, and will act as a sort of “fire brigade” unit which can be injected into any part of the department which is dealing with a matter of major concern at any given moment.’117 The Post Liaison Unit, meanwhile, to be headed by the diplomat Richard Woolcott, was intended to involve overseas-based departmental officers in the process of policy formulation — to make them ‘feel less “out of sight, out of mind”,’ as Woolcott later put it.118 Both were innovative moves, and, for McMahon, they were proof of his good work as minister. Alongside recent expansions to Australia’s foreign-aid programme, he was winning plaudits for his handling of the portfolio.119
But there were still more issues to deal with, more changes to be made. Since returning from the United States, Waller had been pressing for reconsideration of Australia’s policy towards the communist-governed Peoples’ Republic of China (PRC). It was, he said later, ‘the first thing’ he wanted to do.120 Apart from matters of trade, Australia had followed America’s lead, and had recognised only the Nationalist-governed Republic of China (ROC), based in Taiwan. Notwithstanding that any prospect of the Nationalists returning to mainland China had long been extinguished, the fiction that it was the legitimate and sole government of China had been furiously maintained, aided and abetted by heated rhetoric — usually from Liberal or Country party members and senators — about the PRC’s subversive actions in Vietnam and its international recklessness. For its part, the United States refused to allow any possibility that the Chinese communists might replace the ROC in the United Nations, which led it to using a series of procedural motions in the General Assembly to obstruct moves to the contrary.
Nonetheless, by 1970, the stalemate that had characterised international relations with the PRC — which in turn refused to countenance diplomatic relations with any country that recognised the ROC — was beginning to give way. The Cultural Revolution was drawing to a close. Amid tensions with Russia, the PRC was showing signs of engagement with other countries. Nations across the globe, including respectable allies such as Canada and Italy, were recognising the PRC and establishing diplomatic relations with it.
Within the Department of External Affairs, there had been disquiet about Australia’s seemingly frozen position for some time. In March 1969, Australia’s ambassador to Taiwan, Frank Cooper, had written of his belief that Australian policy on China appeared to be too much in thrall to America. Moreover, since that US policy represented probably ‘the biggest blunder the Americans have ever made’, Australia needed to do ‘its own thinking on China’. Cooper had enclosed a prescient warning with this letter:
In any event, one of the lessons of Vietnam is surely that we cannot assume that the Americans will always consult us if and when they decide that the time has come to attempt to settle the China problem.121
But the department’s deputy secretary, Jim McIntyre, dismissed the warning, writing that it was ‘irrelevant’ if America’s policy on China represented a monumental blunder. ‘The policy exists. It sets the framework in which we have to operate.’122 Nonetheless, there were continued attempts by diplomats to prompt a reconsideration of the government’s policy, particularly as signs emerged of a change in America’s policy. In October 1970, Waller received cables from Plimsoll, in the US, from the new ambassador to Taiwan, and from the acting first assistant secretary, all of which noted that recognition of the PRC by Canada, Italy, and Belgium were sure to prompt uncertainty about Australia’s policy — and cause problems.123 Another letter, from Australia’s ambassador in Paris, Alan Renouf, argued that Waller should know that ‘if and as the pace of recognition increases, Australia should re-consider its own position’.124 To this, Waller was straightforward: he was aware of the ‘China problem’, and had been working on it. ‘The time before the Senate elections is hardly a propitious one for directing Ministers’ attention to this problem,’ he went on. ‘But come December, we shall try to get things moving.’125 He knew that there had to be some urgency: ‘By the end of 1970,’ Waller wrote later, ‘it was quite apparent that this strategy [to prevent the PRC’s admission to the UN General Assembly] would no longer work; the numbers simply weren’t there, it was patently a device, no one could pretend to regard it as a sincere argument, and something new would have to be done.’126
McMahon was already aware that China was a political issue. In October, he had received notices from various committees and groups within the Liberal Party membership supporting recognition of the PRC.127 In the September and October parliamentary sessions, Labor had questioned the government over the lucrative and long-running export of wheat, iron, and steel to the PRC, asking why it continued despite a US-led trade embargo. Labor also pressed the government over its refusal to recognise the PRC amid the tide of other countries that were moving in the opposite direction. McMahon’s answers were an echo of his comments from the 1950s. Nothing, for him, seemed to have changed. He was anxious, still, to speak of the PRC as a looming and aggressive exporter of violence and communism:
Our position is clear. We do not necessarily follow what other governments do. We have stated … that of course we would like Red China to be in the United Nations provided only that it accepted the Declaration of Human Rights and abided by it and provided it was willing to abide by the principles of the Charter itself. The condition would be that Red China renounced the use of violence and force in an attempt to ensure its political objectives. Secondly, we have stated that if Red China does live up to its obligations we would be prepared to reconsider our position.128
Late in October, undeterred by comments such as these, the department sought direction from McMahon on a study of Australia’s options regarding the ‘China issue’. The preparatory paper specifically pointed out that cabinet had not formally considered diplomatic and political policy for China since 1958, and that public opinion within Australia was shifting markedly. To this request, McMahon was guarded, cautious about change, and unw
illing to confront the need for urgency. To the note that Australia’s policy had always been based on the needs of the US alliance in the short term and that US policy was ‘changing’, McMahon made clear that he had no desire to pre-empt or get in front of a shift in US policy:
We must proceed on the basis that we review all the circumstances in order to decide what action should be taken in our best interests — no change may be needed and there may be variations between the extremes.
To the suggestion that Australia might encourage the ‘emergence’ of a ‘two China solution’ — that is, simultaneous recognition of the Taiwanese Republic of China and the Communist Peoples’ Republic of China — McMahon was swift in his appraisal of its connotations. ‘This savours too much of the Plimsoll/Freeth statement,’ he wrote in the margins. ‘It is politically unwise and I doubt if we could “facilitate the emergence”. Handle this with sensitivity.’129
In December, as McIntyre wrote from the UN to concede that it would not be viable to continue to obstruct the PRC in the next year’s sessions of the General Assembly, and as the press reported rumours of a reappraisal of Australia’s China policy,130 the Department of Foreign Affairs’ Policy Planning Group sent McMahon a long, detailed, and fleshed-out draft policy paper. This time, urgency was emphasised. The acceptability of the PRC both domestically and world-wide; the absence of any Australian review of its policy since 1958; the definite beginning of a US shift in its relationship with the PRC; and — importantly — a potential breakdown in Australia’s ‘traditional trading patterns’ meant that there was ‘now an urgent need to review our policy towards China’. The submission bluntly echoed Cooper’s warning from two years before:
[T]he United States, as a super power, will tend to move at its own pace, and that pace will largely be dictated by the desire on the part of Washington and Peking to achieve some accommodation of interests … Australia should clearly make every effort, first, to discover the guidelines of American assumptions and, second, and no less important, to impress our own fundamental interest upon the United States, before the latter commits itself to any particular course of action.131
McMahon’s response to the paper was again circumspect, and betrayed his ideological blinkers. Stating that his changes were of ‘crucial political importance’, he redrafted a paragraph on Australia’s aims to include a caveat that a relationship with the PRC hinged on its willingness to live up to the obligations of the UN Charter. He recast another paragraph to state that Australia needed to discuss the inevitability of recognition of the PRC with the US — not, as the draft had it, that recognition of the PRC was Australia’s ‘ultimate objective’ and that it was in Australia’s national interest to exchange diplomatic recognition with the PRC before its entry into the UN.
The comments that he sent to the department’s deputy secretary, Mick Shann, revealed McMahon’s view of the China problem. To him, time was hardly pressing: ‘There is no desperate urgency,’ he wrote, ‘and I do not think a submission could be dealt with by Cabinet before February.’ He believed that a submission that was as direct and blunt as this would be counter-productive: ‘I do not want the impression to be created that I am trying to ram the Department’s views down Cabinet’s neck. A persuasive approach is, I think, better.’ Finally, there was the transparent political calculation: ‘Remember please that we have a DLP — and that its reaction must be considered!’ More than a little hint of fear was conveyed in his postscript decision to attach to his comments a series of press cuttings ‘which reflect the DLP views’. Variously noting the government’s political reliance on the DLP, and the DLP’s preoccupation with defence matters and foreign policy, those cuttings were further confirmation of what had motivated McMahon all year: the desire to avoid the kind of outcry that had seen Gordon Freeth lose office and the DLP win further seats in the Senate.132
According to Kim Jones, however, McMahon had not always been so mindful of the DLP when considering diplomatic recognition of China. ‘It was clear that McMahon was in favour of it,’ he said later. ‘Serious work on a proposal was done, and then stopped, put on hold.’ The turning point, Jones recalled, came when three men in dark suits arrived in McMahon’s office for a meeting. Not informed of the meeting, Jones did not know who they were. It was only afterward, when momentum on the issue of recognition stopped, that Jones understood: the three men were from the DLP.133 Waller agreed that McMahon was very conscious of the DLP. ‘They had a hypnotic influence on him,’ he said later. Moreover, McMahon was aware of the need to engage with China. He told Waller much later that he should have taken the chance and recognised China. ‘He knew this was the logical thing to do.’134
THE tension with Gorton persisted. In January 1971, following the good press that had greeted McMahon’s reorganisation of the Department of Foreign Affairs, Gorton wrote him a cutting letter: ‘The manner in which the press recently described your Department’s reorganisation suggested to the uninformed reader a major expansion of staff … It is, of course, inappropriate for this belief to be fostered in the community in the circumstances which the government now faces following the recent wage increases in the private and public sectors of the economy.’ To this rebuke McMahon was perplexed: ‘I think the reports did a lot of good for the Government,’ he told his staff. ‘Unless it is nitpicking again I can’t understand it.’135
On 12 January, when McMahon and Gorton left Australia for the Commonwealth Heads of Government Meeting (CHOGM) in Singapore — leading a large delegation that included Sir Keith Waller, newly created knight Sir Lenox Hewitt, Sir Alexander Downer, and Nicholas Parkinson (respectively Australia’s high commissioners to London and Singapore) — they travelled on separate planes. McMahon took a scheduled Qantas flight and Gorton a VIP aircraft that was not filled to capacity. Staying at the same hotel in Singapore, they took rooms on separate floors. It was a point that Alan Reid saw fit to make much of. ‘McMahon,’ he wrote of this, ‘was treated in a humiliating fashion’.136
Gorton’s return from Singapore was not a happy one. Amid a spike in inflation, he had to front the Liberal party room on 2 February to discuss the Senate election results. McMahon would have been aware that the anti-Gorton MPs had arrived at that meeting well prepared. Howson had been meeting with dissidents like Harry Turner, David Fairbairn, and Jeff Bate. The discontent and its causes had been well traversed.137
The meeting was predictably heated. When Fairbairn, Turner, and Jess criticised the campaign and Gorton’s performance, Gorton answered them himself. He was more than willing to confront his critics. Howson, appraising it from the safe view of a chair, thought Gorton was using the meeting to establish his authority over the party.138 Undoubtedly, Gorton was. Perhaps no moment showed this better — and, by corollary, the weakness of the anti-Gorton forces — than when Queensland senator Ian Wood rose to speak.
A travel agent who had gravitated to conservative politics for what he belived was its better policies for the poor, a ‘forty-niner’ who had entered federal politics out of horror at Labor’s attempts to nationalise the banks, and an instinctively independent character undeterred by threats who would, in the course of his Senate career, cross the floor on 130 occasions, Wood was deeply concerned by the government’s performance at the half-Senate election. For weeks, too, he had heard colleagues talk about how something had to be done — how some move had to be made to force the issue of leadership. Standing up, he took it upon himself to do so.
He told the party room that Gorton was the issue. With Gorton as leader, the Liberal Party would lose the next election. That could not happen. The party needed a new leader. Gorton had enjoyed three years in the position and had been found wanting. He should resign, Wood said.
Gorton was cool. ‘Would you like to move that as a motion?’
‘Yes, I would,’ Wood replied.
Gorton looked around the room. ‘Is there a seconder?’
Silence followe
d. No one rose to support Wood. No one spoke up to second the motion. All those who had spoken so heatedly about Gorton’s flaws and failings had suddenly lost their voices. There was, Wood said later, an embarrassed quiet. ‘It was a warm, sunny day in Canberra,’ he recalled, ‘and when I looked around all the snowmen had melted in the summer warmth, and they weren’t there to support me.’139
After a tense second or two, Gorton moved on, and called for another speaker.
Watching that day in the party room, McMahon could not have failed to perceive that, even with all the obstacles ranged against him, Gorton was a formidable man, able to lead, willing to fight. Again, the prime minister had forced his critics to the precipice — and seen them pull back. He had shown nerve, courage, discipline.
Should McMahon ever wish to become prime minister, at some point, he would have to reckon with that.
CHAPTER THIRTY-TWO
A Transient Phantom?
1984
What could McMahon say about his time in the foreign affairs portfolio? What legacy could he say he left? From the vantage point of retirement, his short time in Foreign Affairs — just sixteen months — seemed an interregnum that was barely relevant, quickly forgotten. Certainly, McMahon had been no Percy Spender, devising the Colombo Plan and negotiating the ANZUS Treaty, all within a sixteen-month tenure. Was he, as one historian would later suggest, a transient and embarrassed phantom?1
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