|John Lyons | September 09, 2008
THE nation's overseas spy agency was so run down under the previous Labor government, according to former foreign minister Alexander Downer, that Australia was not aware of "any" of the emerging problems in the region.
In a remarkably rare and candid analysis of the Australian Secret Intelligence Service, Mr Downer claimed cutbacks began in the mid-1980s after a bungled training exercise triggered a "massive over-reaction". "I think it was a major mistake to wind back ASIS," Mr Downer told The Australian.
Asked the effect of under-resourcing, he said: "The effect was not knowing enough about any of the problems of the region."
The nation's longest-serving foreign minister said Australian intelligence did not give "the weight or the seriousness" it should have to the rise in Indonesia of the terrorist group Jemaah Islamiah, which was responsible for the Bali bombings that killed 88 Australians in 2002.
Mr Downer said the Hawke government came down hard on ASIS after a botched training operation at the Sheraton Hotel in Melbourne in November 1983 - in which junior officers involved in a mock hostage scenario distressed hotel staff and guests.
"When ASIS bungled that operation ... the response of the Australian government was effectively to crack down on ASIS," Mr Downer said. "There was a massive over-reaction to it.
"With the end of the Cold War, there was a sense that we didn't in any case need to put so much effort into intelligence any more.
"So by the time I became the minister (in 1996) - nobody's ever said this before because it's not a thing that some people talk about - I think ASIS had been substantially run down.
"It was too small, I mean proportional to, say, UK SIS-MI6.
"Britain is three times the size of Australia, (but) ASIS would have been about a tenth the size of UK SIS.
"So ASIS became a very small operation with a very narrow remit.
"It's not that the intelligence people, the people who were there, failed, but it's that they simply didn't have the resources and it's been very important to invest heavily in intelligence."
But last night the foreign minister in charge of ASIS at the time of the Sheraton raid, Bill Hayden, disputed as "nonsense" Mr Downer's comments, saying ASIS - based in the Department of Foreign Affairs and Trade in Canberra - had received a "substantial increase" when he was minister.
Mr Hayden described the Sheraton raid as "a monumental stuff-up," saying the ASIS officers involved "were lucky they weren't machine-gunned by Victorian police because they ran into the armed robbery squad (during the exercise)".
But Mr Hayden said that two years after the Sheraton raid, he arranged a meeting between then prime minister Bob Hawke and then ASIS chief Brigadier Jim Furner, which resulted in more funding. "Jim (Furner) turned up with diagrams and maps and God knows what," Mr Hayden said.
"We got a substantial increase (in budget) and that was the beginning of ASIS's real pick-up."
The agency, Australia's equivalent