The Australian Government have for some time maintained a Consulate at Dili in Portuguese Timor.
It was the Australian Government's hope in establishing this Consulate, which it did at considerable expense, that greatly increased commercial relations might be developed between Australia and Timor. It has, however, been found difficult to promote commercial enterprises in Timor, or to promote trade by Australian interests between Timor and Australia on any firm basis.
In view of these facts, the Australian Government has been considering for some time the possibility of withdrawing its Consul from Timor, as it does not appear to be fulfilling adequately the function for which it was first established. Before taking this step, however, I should be grateful if your Government would be so good as to indicate its general policy on the development of the territory by foreign capital.
We have a very direct interest also in the security of Portuguese Timor. Events during the last war proved this, and developments in South-East Asia since the conclusion of hostilities have tended to increase rather than decrease this interest. It is considered, therefore, that the time has arrived when our two Governments should consult together on matters of mutual security interest, as well as mutual commercial interests.
If we were encouraged to pursue this thought it would be a relevant consideration in deciding the future of the Australian Consulate at Portuguese Timor. The Australian Government would appreciate any comments your Government has to offer on both matters. The Australian Government for its part would be glad to discuss these matters further at any time.1
[NAA: A1838, 3038/10/1, i]