STRENGTH AND ORGANISATION OF POST-WAR DEFENCE FORCES

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OBSERVATIONS OF PRIME MINISTER:

3. The following is a summary of the observations of the Prime
Minister:-

(1) Observations on the Defence Vote

(i) A Defence Vote of 90,000,000 based on the Defence Committee's
proposals, cannot be provided. It would represent 25% of the
Government's income and it was not possible to provide funds for
Defence purposes to this extent. The most that can be made
available for the overall requirements of the ultimate Post-War
Forces is 50,000,000.

(ii) The amount provided for Defence and Allied Services this
financial year is 147,000,000. For some time there will still be
special war-time commitments to be disposed of, but the Services
should now shape their organisations and plans with the knowledge
that, except for these special and additional commitments, the
maximum Defence Vote to cover the Navy, Army, Air Force and the
Defence and Munitions Departments will be 50,000,000.

(2) Observations for the Guidance of the Services and the Defence
Committee

(i) The general basis of the Government's Defence policy was
outlined in the Governor-General's Speech on 6th November last. It
is a blending of participation in the collective security provided
for by the Charter of the United Nations, including Regional
arrangements, co-operation in Empire Defence, and the forces to be
maintained by Australia to provide for the inherent right of self-
defence. This Policy must, of course, be realistic in regard to
the degree of reliance to be placed on each of these three
safeguards.

(ii) The Prime Minister briefly summarised the general position as
he saw it, as follows:-

(a) A new attempt is now being made to establish another
collective system of security. A great advantage this time is that
the United States is a member.

(b) The strength of a system of Empire Co-operation is now greatly
weakened, for the following reasons:-

The United Kingdom has not the capacity and strength she formerly
possessed.

Our strategic position in the Middle East has been greatly
weakened. India appears to be on the way out.

Canada and South Africa are non co-operative.

Britain, Australia and New Zealand alone are prepared to take
measures and co-operate in a plan.

(c) The British Commonwealth could not fight a major war without
United States co-operation. A world system of collective security
must be made effective and supplemented by a series of regional
arrangements. It is in respect of a regional arrangement in the
South-West Pacific (including strategic parts of South-East Asia),
that Australia can play a leading part in Empire Co-operation and
in collaboration with the United States and also other Nations
with possessions there.

(d) Should the world system of collective security fail, the
regional arrangement should stand its participants in good stead.

(e) Australia is the main support area for the strategic region of
which it is the heart.

(f) The Australian Machinery should be used for the development of
the defence aspect of regional security. This development should
also include the decentralised development and distribution of
British Commonwealth resources in Australia as proposed by the
Prime Minister's Conference.

(g) The development of a Defence Policy along these lines will
enable the nature and strength of the Forces and the resources to
be provided in a balanced form to the extent to which provision is
made in the Defence Vote.

(h) This approach to the determination of Post-War Defence Policy
is also in harmony with the principle of Australia acting from
time to time on behalf of the rest of the British Commonwealth in
External Affairs matters relating to the Pacific.

(iii) The Minister for Defence has mentioned the stages through
which we must pass before the ultimate Defence Policy is reached,
and the factors influencing it, which must be resolved in the
meantime.

(iv) The Government has noted the great emphasis placed by the
United Kingdom Government on research and development. Australia
has agreed to undertake extensive commitments in connection with
the Guided Missiles Project and it notes that the Defence Science
Conference has made recommendations relating to other avenues of
research by Australia.

(v) At the Prime Ministers' Conference in London last year, the
importance of arranging for the strategic development and
resources of the British Commonwealth by decentralisation was also
greatly stressed.

(vi) Finally, the Prime Minister expressed the view that, as there
is a large body of trained men in the country, the immediate need
is for concentration on research, development and decentralisation
rather than on training large numbers. The Services should be
small and highly efficient, with machinery to allow for rapid
expansion in an emergency. With the early determination of the new
conditions of service, it should be possible to get the numbers
required at present by voluntary enlistment. To enable recruitment
for the Permanent Forces to proceed, the future strengths can be
authorised as soon as the new proposals under the 50,000,000 Vote
have been submitted and approved by the Government.

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CONCLUSIONS OF COUNCIL

6. The following conclusions were submitted by the Prime Minister
and concurred in by the Ministers on the Council:-

(1) General Basis of Defence Policy

The general basis of Defence Policy is outlined in the Governor-
General's Speech on 6th November 1946 (see Appendix).

(2) Transitional Policy

It is evident that we must pass through several stages before the
ultimate ideal Policy can be determined. The reasons for this may
be summarised as follows:-

(i) The British Commonwealth Occupation Force in Japan is an
interim commitment which makes additional demands on the Defence
Vote, though the Forces maintained there can be embodied as part
of the post-war organisation to be provided.

(ii) The progress of world and regional security will have an
important hearing on the nature and extent of our Defence
preparations.

If an overall plan could be prepared in accordance with the
principles of the Charter, it would indicate the nature and
strength of the Forces, and facilities and resources to be
provided by each of the parties to the arrangement. This would
have a vital influence on our future defence organisation and the
basis of our planning. It is essentially a long-term view, but is
fundamental to any scheme for a substantial reduction in the
burden of armaments. In the meantime, reliance must primarily be
placed on co-operation in Empire Defence and the development of
regional security in the Pacific with the United States.

(iii) In the short-term view, the development of co-operation in
Empire Defence and regional security will have an equally
important influence on the nature and strength of the forces and
the resources to be provided by Australia as a main support area
in the strategic zone of which it is the heart. This is also bound
up with the strategic development and distribution of Empire
resources.

(iv) Also, scientific developments will have an important bearing
on the weapons with which Forces are to be armed, and their
organisation to use them. This is also tied up [with] how the
amount for Post-War Defence should be allocated between research
and development, and the strength and composition of the Forces
and their administration and maintenance.

(v) The amount for research and development can be determined by
reference to the importance, cost and priority of these proposals
in relation to other Defence requirements and the total proportion
of the Vote that should be devoted to these purposes.

(vi) (a) The amount for the strength and composition of the Forces
and their maintenance will be the balance of the Defence Vote
after providing for the amount that should be devoted to research
and development in accordance with (v).

(b) As stated in the Governor-General's speech, pending the
evolution of the ultimate ideal Policy, 'Australia's defence
effort will be the maintenance of the strength and organisation
necessary with existing weapons, to provide for commitments in the
interim period for the Australian component of the British
Commonwealth Occupation Force in Japan, and for forces on the
mainland for administrative and maintenance purposes, as well as
to provide a basis for carrying for-ward the organisation of the
peace-time forces.'
(c) As stated earlier, the realisation of the ultimate
organisation of the Forces is a matter of evolution through
stages, as progress is made in resolving the governing factors
mentioned in (i), (ii), (iii) and (iv) above.

(3) Ultimate Defence Vote

The amount of the Post-War Defence Vote for the total peace
requirements is to 50,000,000. This is to include the full
provision made under the votes for the Navy, Army and Air Force,
and the provision made for Defence under the votes of other
Departments such as Defence, Munitions, and Supply and
Development.

(4) Procedure

(i) The Defence Committee is to take note of the high priority
given by the Government to research and development, and the
relation of this to the Prime Minister's statement to the
Conference of Prime Ministers that Australia is prepared to
undertake a greater obligation in the Pacific in respect of Empire
Defence.

(ii) The Defence Committee will accordingly recommend an annual
amount to be devoted to a programme for research and development
from the Defence Vote. These amounts will necessarily be
provisional and variable, as they are dependent on the
Government's approval of the sum to be accepted as an Australian
commitment in respect of the Guided Missiles Project and other
proposals, and on the organisation of the measures necessary to
undertake the research and development.

(iii)After provision for the research and development programme,
the Defence Committee will then:-

(a) Provide for the vote required for the Defence Department,
having regard to the approval given for the expansion of the
joint-Service Machinery in the shape of the Joint Intelligence
Organisation, the Scientific Advisory Committee, and the New
Weapons and Equipment Development Committee.

(b) Provide for the vote required for the Munitions Department for
Defence purposes, after provision for research and development as
mentioned in (ii).

(c) Report on the strength and composition of the Forces which can
be provided in a balanced scheme of defence if the remainder of
the Defence Vote is divided equally between the Services, or with
such adjustments as may be agreed between the Services.

The proposals of each of the Services will be a matter for
consideration by the respective Service Ministers and Boards, the
co-ordination and report thereon from the Joint Service aspect
being a matter for the Minister for Defence and the Defence
Committee.

The extent to which the peace organisation can be expanded in war
must remain in abeyance until the preparation of plans for the
allocation of manpower in an emergency. These will be undertaken
in connection with the Commonwealth War Book.

(iv) The proposals of the Services and the reports of the Defence
Committee will be submitted to the Council for consideration, and
the recommendations of the Council will be submitted to the
Government for approval.

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