Minutes of Inter Departmental Meeting

Canberra, 21 September 1951

Economic Development Programme: Meeting held in the Department of External Affairs, on Friday 21st September, 1951, at 2 p.m.

The meeting was concerned with one subject only, viz., the suggestion put forward by the Department of Commerce and Agriculture that a Manager (perhaps with other changes in existing organisation) be appointed to help implement Australia’s Economic Development Programme under the Colombo Plan.

Appointment of a ‘Manager’

The Chairman outlined the proposal of the Department of Commerce and Agriculture, and the response made by the Department of External Affairs. Briefly, the Commerce proposal was:

(i) That an ad hoc organisation be established, within the framework of the present inter-departmental committee, consisting of a small Management Board holding delegated authority from the Minister for External Affairs as to financial matters and a Manager.

(ii) The Management Board would consist of External Affairs (Chairman), Treasury and Commerce and Agriculture and would have power to accept and supervise specific projects submitted by the Manager and to determine the method of operation and control over expenditure.

(iii) The Manager, who would need to have commercial experience, a wide knowledge of industry generally and a similarly wide knowledge of government procedure and policy, would examine projects, consult business leaders, submit detailed plans to the Management Board, recommend sources of supply, co-ordinate supplies from various sources, arrange contracts and supervise the manufacture, shipping, installation and operation of plant and equipment in co-operation with recipient Governments.

The External Affairs response to this proposal was generally favourable, subject to the proviso that no ‘quasi-independent Commission’ should be set up and that any Management Board should not have delegated authority from the Minister for External Affairs ‘except perhaps in regard to matters of detail’.

The Chairman pointed out that:

(i) The uncommitted portion of the economic development programme for India and the whole of the programme for Pakistan remained to be decided in terms of commodities.

(ii) In future years, supplies of wheat and flour were unlikely to form as large a proportion of the economic development programme as in the current year.

(iii) Provision of technical equipment under the Technical Co-operation Programme called for the development of a further commodity programme for each recipient country.

Mr. Warwick Smith (Commerce and Agriculture) said that his Department had been impressed with the difficulties already encountered under the Technical Co-operation Programmes in establishing the needs of Asian countries, ascertaining availabilities in Australia, and effecting procurement. In the light of this experience, the complexities of implementing an effective economic development programme over a six-year period could not be exaggerated, especially taking account of the complex objectives of the programme and difficulties within the Australian economy.

The question therefore arose whether an inter-departmental committee was a suitable organisation for implementing the programme. What was needed was devolution of authority and allocation of responsibility to achieve speed in implementation. One important point was that recipient countries had to be assisted in formulating their requirements: they could not do it adequately by themselves. A second point was that Cabinet decisions implied that we should supply developmental goods as far as possible and should, as far as possible, supply them from Australia. If a Manager were appointed therefore he must have a maximum of freedom in sorting out the programme both in Asian countries and in Australia, he must be able to visit and consult Australian industry with authority, and he must be able to settle procurement with supplying firms.

The Department of External Affairs had said that the Manager should not have delegated authority ‘except in regard to matters of detail’. The Commerce view was that ‘matters of detail’ should be widely interpreted. For example, suppose that India asked for equipment for six hospitals. This would go to the Minister for a broad decision to assist but from then on the Manager should have a free hand in selecting equipment, placing orders and so on.

Commerce stressed one final point. Manufacturers needed some special encouragement to modify existing lines or embark on new lines to suit Asian markets. To supply Asian needs under the Colombo Plan would often need a man who had an active and continuing interest in promoting contracts under the Plan. A Manager would have this interest.

Mr. Fleming (Treasury) said his Department appreciated the objectives of the Commerce proposal. However, he pointed out that, firstly, the Colombo Plan was not popular in some circles and, secondly, that the present was a particularly unfortunate time for setting up new government organs. If it were possible to get the same results without the appointment of a Manager, the Treasury would like to avoid any appointment. Finally, the Treasury suggested that one solution might be to second a high-level Commerce man to the Department of External Affairs.

Mr. Edgehill (Customs) said that his Department was in sympathy with the Commerce proposal. It seemed that we do need a special man and that we would get quicker and more effective results with a Manager. There is a job which must be done and we should establish adequate machinery to do that job. The work of the Manager should, of course, fit in with existing procedures as far as possible.

The Chairman suggested that the Inter-departmental Advisory Committee should be continued and that, on points of policy, the Minister would have to be consulted. Once Ministerial approval had been given, then the Manager could go ahead on approved projects. The Manager should not view the programme from a narrow trade promotion angle, but would have to take clear account of foreign policy issues at all stages.

Mr. Warwick Smith insisted that, if a Manager were appointed, he must not have to get prior approval for every item of expenditure or the plating of each order. Where and when he buys should be his responsibility and he should not be bound, for example, by any inflexible procedures for calling tenders. If established channels and established procedures are practicable, the Manager should use them: if not, he should not be too tightly bound by them.

After some further discussion, the meeting therefore agreed:

(1) That an officer, who might be called a ‘Manager’ should be appointed to assist the implementation of the Economic Development Programme and the equipment section of the Technical Co-operation Programme;

(2) That the Manager should discuss, with recipient countries and Australian industry, needs and availabilities for the Programmes and fix the Programmes in terms of commodities. The Manager’s recommendations (in broad terms) would go to the Minister for approval and would be discussed by the Inter-departmental Advisory Committee.

(3) That the Manager, with any necessary clerical staff, should remain an officer of the Department of Commerce and Agriculture and that the impression that any. elaborate organisation was being established should be avoided.

(4) That the Treasury should look at the procedures for calling tenders, etc., which might unduly restrict the activities of the Manager.

(5) That External Affairs should immediately draw up a statement recommending the appointment of a Manager, for circulation to the Departments represented on the Inter-departmental Advisory Committee and submission to the Minister for External Affairs for approval.

The meeting rose at 3.45 p.m.

[NAA: A9879, 2202/El part 4]