Port Moresby, 16 September 19671
Confidential
I refer to your letter of 14th June on the subject of relations between the Department and Territorial Administrations.2 In my view, your letter sets out a reasonable procedure in the event of disagreement between the Department and this Administration. I share your desire that disagreements be kept to a minimum. I have been giving thought to the methods which might be adopted, not only to resolve disagreements, but in order to reduce the frictions which occasionally occur in the exchanges between the Department and the Administration. This has led me to write about a problem which seems to me to be fundamental to an effective relationship between the Administration and the Department—namely—adequate administrative and financial delegations.
From the Administration’s point of view, the present arrangements do not lead to smooth and efficient performance. In part, this is due to the necessity to submit for Ministerial decision administrative and financial matters of a size and cost which, as Administrator, charged with the duty of administering the Government of the Territory on behalf of the Commonwealth, I feel should be delegated to me. In the last six months, more and more matters have had to be referred for Ministerial decision in Canberra and greater detail has been required. The area of delegation has been reduced.
In part, the lack of efficiency is due to the volume of detailed administrative queries from the Department; some of these queries have been trivial. Others, though justifiable, have been expressed in terms which have caused irritation … The volume of queries derives both from the restriction of delegation and also from what might be termed the ‘dual system of administration’, in which the same type of enquiry is carried out both in Moresby and in Canberra.
To make these remarks is not to question the constitutional authority of the Minister and the position of the Department as his statutory adviser. These are fundamental and are accepted. Indeed, the present framework in which that authority is being exercised in relation to policy matters is one of increasingly taking into account, in the making of decisions, Territory views and opinions as expressed in the House and the Administrator’s Council. It is fair to say that this process of consultation is taking place on a broad scale and is effective.
Nor do I refer to lack of consultation with the Administration (as distinct from the Territory bodies) before policy decisions are made. There have been instances where the Administration does not agree with decisions made, but generally speaking, it has had the opportunity to offer its views. In any event, the procedures you have laid down now satisfactorily cover this situation. What is at issue is set down in detail in the following paragraphs.
Delegation of authority
In my view, there is insufficient delegation of administrative or financial authority to enable the Administrator to carry out effectively his statutory task of administering the government of the Territory on behalf of the Commonwealth and in accordance with policy approved by the Minister. In my view, this applies to the Public Service Commissioner also, in his area of responsibility. But it is for him to approach you on this matter. The Administrator holds a formal delegation of $100,000. In practice, this delegation is limited by various administrative instructions. These involve the submission of all new works proposals of more than $6,000 for Ministerial approval before inclusion in the Works Programme and of all projects of more than $20,000 before inclusion in the Design List. I am particularly concerned now at a recent instruction that, before an architectural project of more than $50,000 is admitted to Design List, the Minister must approve the Architect’s brief.
I believe that, for reasons of administrative efficiency, the current administrative restrictions in the Administrator’s delegation should be lifted and the amount should be extended to $250,000. This delegation should cover approval of services, stores and supplies, including admission to Design List and to the Works Programme of capital works. It should also cover the entry into contracts. I also recommend that authority to write up work in progress and projects after tenders have been received be increased from $10,000 to $25,000. The delegations would, of course, be exercised in accordance with approved policies. It would be incumbent on the Administration to develop a system of prior scrutiny of expenditure proposals such as to ensure that the tax–payers’ money is not wasted. It will have to find the staff to do the kind of work needed. In the initial stages, it will need assistance from the Department.
The dual system of administration
Accepting the constitutional position, I would like to see a more expeditious procedure than now exists for reaching decisions on policy matters and administrative and financial matters not covered by delegation. I am encouraged to make suggestions to this end because what I have in mind has already been put into practice in relation to this year’s budget. My suggestion is that, as a general rule, the initial preparation of submissions for the Minister on these matters should be a joint effort by Administration and Departmental officers. The resources of both bodies could then be regarded as complementary rather than competing. Time consuming duplication of work could be avoided. It is the time taken by the ‘second scrutiny’ in the Department that causes the greatest concern to me.
The way I see this working would be to have the officers at Assistant Secretary level from the Department visit the Territory at quarterly intervals and for periods of at least a week in order to discuss matters likely to be the subject of submissions from the Departmental. Heads. They would actually participate in the preparation of the submission, certainly to the extent of ensuring that all relevant considerations were included, the necessary facts assembled, and questions answered. It would be desirable if, so far as the recommendations were concerned, the Assistant Secretaries were able to discuss them and indicate the likely Departmental attitude. Such participation at this level, or above, would be welcomed by senior officers of the Administration. This procedure would have avoided the kinds of exchange that have recently taken place …
I emphasise that I am not suggesting that the Minister make his decisions on the basis of inadequately scrutinised submissions. Many of the questions now asked by the Department will, if greater delegations are approved, need to be asked here and the Administration will have to have the organisation and the staff to do this. But the Minister could be better served if the initial process of preparing the submission was a joint, rather than a separate one. I emphasise, too, that I am not seeking to intrude on the Department’s statutory function of advising the Minister. Although the initial process of preparation would be a joint one, the submission would leave here in the Administration’s name and the recommendation would be that of the Administration. I assume that it would only be placed before the Minister in the context of the Department’s advice. But time would have been saved by reducing the need for teleprinter or written exchanges between the Department and the Administration.
I would appreciate the opportunity to discuss these matters with you and with the Minister when I am in Canberra in early October.3
[NAA: Ml867, 1]
PNG and Britain’s application to join the European Economic Community
In a Cabinet submission of 19 September, Minister for Trade and Industry John McEwen explained that in talks with the British in April 1967, it had been agreed that Australian and UK officials should meet after the Kennedy round of the General Agreement on Tariffs and Trade (GATT) to ‘explore the possible bases of a new or modified {United Kingdom/Australia Trade} Agreement’.1 In the interim, Britain had decided to apply for entry into the European Economic Community which, McEwen wrote, ‘obviously creates many complications in considering fUture British/Australia trade relations’. One of these was PNG, with it being ‘proposed … to take advantage of the forthcoming discussions to register with Britain the special problem of exports from Papua and New Guinea, and the need for appropriate safeguards for Territory products in the event of Britain joining the E. E. C. ’. In a brief for the official chosen to represent PNG, E.J. Wood (Assistant Secretary, Resources Development Branch, DOT), Territories wrote that
In consultations with the British a major aim is to stress the need for expanding PN. G. trade to assist in building up a viable economic and social structure in PN.G. and to emphasise the importance of continued preferential treatment in the British market … It is obvious that a difficult position would arise if tropical products from L.D.C. s2 Commonwealth or other) were given improved access to the U.K. market. We would want consideration given to extending similar arrangements to the products of Papua and New Guinea … We would stress the unique position of Papua and New Guinea … It should be emphasised that something is being sought, not for Australia itself, but for a dependent and backward territory. New Guinea is a United Nations Trust Territory and both the U.K. and E:E.C. have an obligation under the U.N. Charter to promote the welfare and advancement of this Territory. Australia as the Administering Authority has a major task of ensuring the rapid economic development of PN.G.; at present the direct cost to Australia is in excess of$/OOm. per annum.3
Talks began in London on 21 September.
1 The original erroneously locates this document in 1968.
2 It noted that Barnes placed ‘some emphasis’ on the achieving ‘the best possible working relationships between the Department and the Administration’ and suggested that both he (Warwick Smith) and Hay had been working at this. Warwick Smith wrote that ‘legitimate differences of view’ were ‘inevitable’ and stressed that he was ‘concerned here with the machinery that might best be adopted to minimise and resolve differences, and if resolution is not possible, to express and communicate those differences to [the] appropriate authority in a manner satisfactory to all concerned’. To this end, staff in DOT’s central office had been issued with an instruction that required officers to ‘make every effort to achieve common ground with [the) Administration’; ‘afford [the] Administration the opportunity of commenting on new points of substance about a particular proposal and to ascertain its views on points that may not have been covered in the comments already to hand from the Administration’; ‘express and communicate a differing viewpoint of [the) Administration in the Administration’s own words as far as is practicable’; and ‘precede their recommendation with a statement of the position as regards the extent of agreement of viewpoint and consultation’. Rejection of the Administration’s advice was to be communicated to Port Moresby by a senior officer in Canberra and the questioning of a decision in Port Moresby was to be conveyed by staff at the same level (NAA: NA 1983/239, 49/6).
3 Hay has since explained that although this letter was written barely a year after receiving his initial instructions from Barnes (Document 53)—which included a statement of DOT’s role in ‘examining all proposals submitted from the various Territories’—he ‘very quickly came to the conclusion that the delays involved in reference back to Canberra of so much … [placed) the whole efficiency of the Administration … in jeopardy’ (Hay interview, 1973–4, NLA: TRC 121/65, 3: 1/36–7).
1 Cabinet submission no. 466, 14 September 1967, NAA: A452, 1967/6213. The trade agreement had been negotiated in 1957.
2 Less (or least) developed countries.
3 Attachment to minute, Gutman to Warwick Smith, 19 September 1967, NAA: A452, 1967/6213.