4. In relation to Portuguese Timor, the Cabinet accepted the view that in the current state of world opinion, no practicable alternative to eventual Indonesian sovereignty over Portuguese Timor presented itself. It would not be acceptable to Australia or the West for Indonesia to proceed against Portuguese Timor with arms, and this must be brought home to Indonesia. But otherwise the course which it seemed best to follow is for Australia to bring such quiet pressure as it can upon Portugal to cede peacefully and in addition to explore ways by which the international community might bring pressure on Portugal.
8. Also in the course of discussion, there was reference to proposals by the United States Administration to the effect that Australia should take more defence and diplomatic initiative in South-East Asia, thus sharing responsibility more, rather than, as at present, limiting itself to the support of leads of the United States or Britain. While noting these proposals, the Cabinet indicated that although it did not rule out some action of the kind, it would by no means wish to take initiatives which might lead to the point where Australia came to be seen by Indonesia or other countries as a standing adversary. The objective in relations with Indonesia must be to achieve the greatest available degree of mutual understanding.
Therefore, while Australia must observe the course of policy referred to in paragraph 2 above,3 it should at the same time persevere in seeking to improve relations wherever and in whatever ways possible.
[NAA: A4940, C3739]