CONFIDENTIAL

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The refugee problem could yet become a major issue in the campaign leading up to the Federal Elections in October. Having

Having now increased their South East Asian refugee quota to 26,000 places (Eldon's letter of 15 July to Williamson) the Federal Government have gone just about as far as they politically can in the direction of re- settling more Vietnamese refugees. Even then there is pressure from the Lander governments to limit the intake to family reunion cases, which do not really benefit Hong Kong.

5. We shall continue to take every opportunity at working level to speak to the Germans on Hong Kong's behalf. But in view of the above I should be surprised if we have much success, at least over the next few months. A Ministerial approach before the elections would, I think, be unlikely to get us very far and could well be counter- productive in present circumstances. Even after the elections the terms of any approach would need careful prior consideration in the light of the points made above. If we were able to decide, before making such an approach, to take some more Vietnamese ourselves, that would make it infinitely easier to brief the Secretary of State persuasively!

Your

Peter

ever

P W Unwin

CONFIDENTIAL

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