Some unpredicted decisions by the Whitlam Government had created practical problems in organisation—particularly the sudden abolition by Whitlam of the Service Departments which had been headed by Barnard as a temporary measure. The action had the consequence, presumably unforeseen by Whitlam, of removing the Secretaries from the Service Boards, leaving direction of each of the Services solely in the hands of uniformed officers. In due course the Secretaries were relocated outside Defence, save for Sam Landau. I commented in Chapter 1 on the inadequacy of reporting to Canberra on defence policy debates in Congress and elsewhere. Indeed I had felt in earlier External Affairs days that the Americans served their Australian ally well enough with their views and their information about third countries, wanting no doubt to win our support where it mattered. But we were not doing enough independent studies on the Americans themselves. I never seemed to have enough embassy staff to remedy that deficiency. A similar situation existed in Defence in the 1970s. We needed to read the potentialities for change in American strategic policy and posture. Pentagon sources, cooperative in other areas, were unlikely to offer speculative opinion or forecasts of changes of this kind. In addition, we needed more contact with divergent views in Congress and in the think-tanks that are influential in the United States. Few Service officers were equipped for this kind of enquiry and judgement. More often than not they seemed to approach the Pentagon as a place for sharing operational and professional interests, and for keeping alive past associations in combat.

This attitude seemed to be reciprocated by the Pentagon because, when I nominated Landau to be Defence Attaché, there was an indignant protest and a threat not to cooperate with a civilian. I insisted on keeping Landau in the post. But his wings were clipped. Fortunately, Defence needs were met to some extent by some Foreign Affairs officers with particular aptitude in this field who happened to be in the Embassy.

Reforms of varying merit were being applied throughout the Public Service. We had to fight off some that showed ignorance of Defence requirements. One was the planned creation of a centralised government purchasing agency for the purpose of exploiting the Government’s muscle against suppliers—a project with an ideological flavour, pitting the Government against the private sector. A report by a business adviser commissioned by the Government confused procurement by identifying it with the act of purchasing. Doing so (in the case of Defence) failed to accommodate the various elements that entered the procurement process and selections, preceding the purchase contract with a supplier. Big ticket items such as aircraft, ships, sensors, and fire control systems are not bought ready made like motor vehicles on a display lot. Procurement involved an iterative process between an officially approved Defence requirement and the equipment suppliers who showed themselves to be technically capable of producing in a required time scale, with an assurance of maintenance feasibility and much else, in a process involving hundreds of defence experts. Some worked almost as part of the production process in the United States or Britain or France, particularly on the modifications that the Australian buyer required because of the unique atmospheric or geographic features of the continent. There was no such capability elsewhere in the Public Service; and the concept of an adversarial relationship between supplier and purchaser confined to price is inappropriate.

But several years later in 1978 the then Minister, James Killen, announced the scrapping of the system and the restoration of Defence control of procurement processes. His explanation (in succinct terms not always employed by Killen) was as follows: ‘Presumably my colleagues opposite reasoned that a civilian Minister, having nothing to do with the defence portfolio, would accept responsibility to the nation for whatever results in war, this socialist apparatus would impose on the Services.’

We had difficulty with the Commonwealth Auditor-General’s failure to recognise that some procurement of high technology still in development required management of the inherent risks, which he should judge on that basis rather than simply calling into question the costs implicit in delivery delays as a result of unforeseeable problems in the development process. That said, prudent supervision by the Department of Defence required it to judge when a Service’s ambition to acquire the highest technology used by major allies (rather than, as they would say, ‘buying obsolescence’) involved unacceptable cost risks. Debate on this issue in the Department’s policy committees was frequently heated, and was a major contributor to the recurring complaint by the Service users of interference by the civilians. To deplore such Service-civilian tensions as avoidable missed the point. The issues required that there be tension, provided it was constructive in purpose. What was needed in those early days of invigorated Defence Department authority was respect for the different criteria brought to the discussion, and tolerance of people doing their duty. Unfortunately, these emollients were often absent in the debates during my time as Secretary. There were personality faults on both sides.

While we were engaged and stretched to the limit in managing the ongoing programme, and while I was personally tied up in devising Defence Force control for the Minister for Defence, a major investigation of programmes and priorities in the civil Departments was underway. The individual who had much to do with recommending and planning for Whitlam was H.C. ‘Nugget’ Coombs. This remarkable man served Prime Ministers on both sides of politics and was, in my estimation, the greatest of all those who served the national interest in several capacities, all of them outside of politics. This admiration had been first forged when I had earlier been his subordinate in various international endeavours.

Those investigating the Departments called me up for an investigation. Coombs was not one of them. They were mainly members of the new breed of Ministerial advisers/promoters. Typical of the culture of the times, several were consuming beer while asking their questions (and in one case wounding my vanity by declaring that my opinion would not satisfy an economist). I explained our in-house process of reviewing against policy criteria, the Service and defence factory programme. There is a suggestion in Coombs’ autobiography that he was not satisfied by whatever he learned from his advisers in this process (and I was not invited to meet him directly).^[8] His memoir reflects his chagrin at not being able to examine whether Defence priorities were adjusting to the new strategic outlook (which of course was precisely what we were doing for Barnard). Coombs had John Stone, one of Treasurer’s most competent investigators, as his axeman, but lamented that, like other Treasury officials, Stone was reluctant to target Defence’s programmes. My own reflection, on reading this in later years, was that Stone understood that there was no quick fix in Defence, comparable with cutting fertiliser subsidies or business tax concessions—much simpler than making judgements about the relevance to policy of Service activity. Moreover, Treasury had long been a member of the Defence Committee. We were spared educating the Task Force on these matters, while I was myself at the time absorbed in pulling together the ramshackle system of financially managing Defence activity. Labor’s Defence budget in 1974–75 made the first step to conform to the new strategic review that had preceded it. In my career I have had few such reasons to be grateful to Treasury.