1. With reference to my statement to the Conference of Prime
Ministers that Australia is prepared to undertake a greater
obligation in the Pacific in respect of Empire Defence, the
Government is at present considering proposals relating to its
Post-War Defence Policy.

2. The Defence Science Conference last June outlined the important
part which Australia can play in research. The widening of
Australia's responsibility in this direction, of which the Guided
Missiles project is the first step, is in harmony with the policy
of strategic development and distribution of resources discussed
at the Conference of Prime Ministers.

3. To assist the Australian Government to decide, in a programme
extending over several years, 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, it would be helpful if the United Kingdom
Government could furnish for our consideration:-

(1) Any proposals for the extension of research and development of
guided and air launched weapons beyond that associated with the
assembly, testing, repairs and minor modifications of the weapons
to be tested on the range, which work would mainly be carried out
in the supporting establishment at Salisbury, in accordance with
the arrangements reached between us on the setting up of the
experimental range and supporting development establishment.

(2) Any proposals for the provision of facilities in Australia for
research and development in the whole field of radio and radar to
supplement efforts in the United Kingdom and elsewhere in the
Commonwealth.

(3) Any other proposals relating to research and development which
might be carried out in Australia.

4. In regard to 3(1) the Salisbury Factory has been transferred to
the administration of the Long Range Weapons Board of the
Department of Munitions. The portion of the factory recommended by
General Evetts for use under the agreement for the experimental
range and supporting development establishment, would also provide
to some degree, facilities for extension of development work. The
retention of the remainder of the factory for research and
development, instead of lease for industrial purposes etc.,
depends on whether research and development is extended beyond the
scope already agreed. It is noted from paragraph 4 of your cable
No.316 dated 20th September 1946 that further consideration was
needed to determine to what extent the development work can and
should be carried out in Australia.

5. The difficulties in reaching a determination on these matters
are appreciated, but, if information along the lines mentioned can
be given, it will be helpful for our guidance, and the earliest
possible reply would be appreciated. It is realised, as with the
first stage of the guided weapons project to which we have agreed,
that our scientific and technical resources are limited, and
assistance would be necessary in this direction. The present
intention is to allot an annual sum of several millions to
research and development in the Defence Programme.

The Australian Guided Missiles Committee is at present examining
matters for inclusion in the agreement relating to the Guided
Weapons project other than finance, and, as indicated in paragraph
4 of your cable No.393 dated 13th December 1946, the latter will
be considered when sufficiently comprehensive and accurate
estimates of cost are available.