Reference your PMS.23.  The following appreciation has been furnished by the Australian Chiefs of Staff with General Brett  co-opted as the representative of General MacArthur :-
The Japanese, having completed their conquest of the Netherlands East Indies, and possessing decisive air superiority and effective control of the seas in the areas in which they are operating, are in a position to launch further attacks in the South West Pacific.
Attacks in force against Australia and Australian lines of communication are likely at an early date.
2. The area in Australia vital to the continuance of the war effort lies on the east and south east coast, generally between Brisbane and Melbourne. Port Moresby is the key to this area. An attack in force on Port Moresby could develop at any time. There is an accumulation of evidence of the movement of enemy forces in the direction of Rabaul where there is already a formidable concentration. This threat is most serious, not only because the indications are that an attack is impending, but also because any success would imperil both the lines of communication between Australia and the United States of America, and the security of the vital area of Australia. Were it not for successful attacks on the Japanese in this area, an attack on Port Moresby would have been made before now.
3. Early attacks are also likely on both the following areas:-
4. If Darwin were properly defended and bomber aircraft and Naval forces based there, attacks could be launched against the enemy in the Netherlands East Indies which might contain the enemy in that area and prevent reinforcement elsewhere, and which would prepare the way for an eventual offensive.
5. Fremantle is also open to attack and the risk of sporadic raids by carrier-borne aircraft is very real.
6. In all the foregoing front line areas there are not sufficient forces available to secure their defence, much less to take the offensive which is all important. The requirement of greatest urgency is for increased Naval and Air forces to protect these areas.
7. The minimum Naval forces required for operations to the north east of Australia is the Anzac squadron reinforced by two task forces which should include two or three aircraft carriers, and should be based in the area. A squadron of submarines is also necessary.
8. The first priority requirement of aircraft is for aircraft to equip with modern planes the existing operationally trained R.A.A.F. and United States air corps units. Taking into account the aircraft already here and known to be en route, the aircraft necessary for this purpose are as follows:-
These figures provide for 25% wastage.
9. Of these aircraft the most urgently needed are heavy bombers and the importance of the immediate supply of these cannot be over-emphasised.
10. With the foregoing forces, it should be possible to undertake initial offensive operations against enemy bases, particularly Rabaul.
11. The foregoing relates merely to immediate requirements but it is necessary to keep constantly in mind the need for combined offensive operations on such a scale as will draw off the Japanese forces that are now available for further attacks.
12. In this connection it is desirable to stress the need for combining initial offensive operations with the building up of the forces that are required to undertake a major offensive, and in particular to emphasise the importance of keeping in the forefront of our policy the need for building up an Allied Naval force of sufficient strength to challenge the Japanese fleet at any moment.
Such a project should be constantly in our minds, whilst the tactical groups of which this force will be composed should be continually employed in offensive operations until such time as the moment for concentration arrives. Ends.
2. I have discussed it with General MacArthur who is repeating it directly to General Marshall.  He is in entire agreement with the appreciation and urges that the provision of Naval forces as proposed and the aircraft indicated are the minimum essential for the purposes indicated. You are requested to seek the acceptance of these views and the early provision of the forces and equipment specified.
3. This cablegram is being repeated to Bruce in London, so that he can also support it there.