88 Chifley to MacArthur
Cablegram CAB210 CANBERRA, 18 May 1945
TOP SECRET AND PERSONAL
I would refer to the following passages in the Prime Minister's letter  15th February:-
'In its recent review, War Cabinet reached the conclusion that, as you had made your operational plans on the assigned strength of the Australian Forces, it would be impossible to make further reductions in the strength at this stage if your plans are being adhered to, and I was requested by War Cabinet to ascertain if such is the case.
If there has been no variation in your plans, I was asked to consult you regarding the contemplated use of the Australian forces, with a view to determining the stage at which appropriate reductions can be made and deciding the future strengths which should be maintained. As the war effort is still in a state of disequilibrium, War Cabinet considered that the earliest opportunity should be taken to rectify it as soon as the operational situation will permit.' 2. In your reply of 5th March , you stated:-
'In categorical reply to your basic question, I would state that my plans contemplate the use of all of the Australian forces now assigned to the Southwest Pacific area.' 3. War Cabinet concurred in the view expressed by the Prime Minister and Minister for Defence that, except for such measures as may be possible to ensure the economical use of manpower in the forces, it would not appear, in view of your reply, that any further steps should be taken for the reduction of the present approved operational strength of six divisions and two armoured brigades, until after the completion of the next phase of operations. 
4. With the end of the war in Europe and the assurance that the strength of the United Nations can be concentrated against Japan, the Government has been considering the adjustments that can be made in the strength of the Australian forces, in order to relieve the manpower stringencies and at the same time maintain a fighting effort of appropriate strength to the present stage of the war.
5. The Commander-in-Chief of the Australian Military Forces has pointed out  that, if there is to be a substantial reduction in the strength of the Australian Military Forces, the 7th Division should not be committed to operations on the Borneo mainland, since it will form a commitment where there may be considerable fighting and where we may ultimately be committed to a very large garrison.
6. I shall be glad if you can give urgent consideration to this matter in relation to the present stage of your plans for the Borneo campaign, and furnish me with your observations. I would add that it is the desire of the Government that Australian forces should continue to be associated with your command in the forward movement against Japan, but the Commander-in-Chief of the Australian Military Forces advises that, if a reduction in our strength is to be made, the 7th Division should not be employed for further operations until the overall plan is known.
J. B. CHIFLEY