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.