Restructuring and Refocusing, 1976–1983

Judge Edward Woodward had been appointed by Whitlam to help drive significant reform from within ASIO, and Fraser’s endorsement of Woodward as Director-General gave him a clear mandate to pursue the reforms associated with the Royal Commission on Intelligence and Security.

Early on in his tenure, and before Hope had completed his work on the royal commission, Woodward declared that ASIO needed a fresh and continuing capacity to review its tasks and priorities. He therefore directed his officers to begin work on a comprehensive review of Australia’s national security. It would then be possible, Woodward stated, to compare extant obligations with present achievement and decide where the Organisation’s main efforts should be directed. Woodward was eager to review the level and extent of threats from espionage, sabotage and local terrorists.1 He wanted to consider all forms of espionage—political, military, scientific and economic. Concerning subversion, he was striving to distinguish those groups that were ‘truly subversive of democratic institutions or threaten violence as a means of achieving their ends’ from groups that sought political or social change by lawful means and were not subversive—a distinction with which ASIO had traditionally struggled.2 Woodward was impressed with Don Marshall, and felt he was the best person to lead this work, supported by the internal ASIO historian and former Special Projects Section officer, Bob Swan.3

Don Marshall, who was the son of an ASIO officer and had been seconded to Lionel Murphy’s staff following the raid on Headquarters ASIO in March 1973, was now the Assistant Director-General (Policy and Priorities). In this capacity he was made responsible for conducting the review and producing a report. Recognising that he had much to gain from studying developments abroad, Woodward sought input from ASIO’s British and American counterparts.4 The press described the review as the first for some time, and reported that ASIO was seeking input from several Federal Government departments, including Foreign Affairs, Defence, Overseas Trade, Prime Minister and Cabinet, Attorney-General’s and Administrative Services.5

A submission to the review provides an interesting perspective. In essence, they considered the key weakness of Australia’s internal security, not just within ASIO, to be the ‘very limited manpower resource’ dedicated to it by the Australian Government. The submission argued that the Soviets had upgraded the calibre of their intelligence personnel in Australia. It observed that approximately one-third of all Soviets abroad on permanent assignment were intelligence officers and that they were mostly focused on infiltration of local police and security services, political parties and mass organisations. In addition, the Soviets were seen as maintaining an effective capability targeted against the communications system used by ASIO’s counterintelligence surveillance officers. On a positive note, it said there was no evidence to indicate that the Australian Government had been penetrated by a foreign intelligence service, but noted that it was circumspect to operate on the assumption that intelligence agencies were in fact penetrated and advised that this course be followed by ASIO.6 Woodward made a record of all these points as he reflected on the changes he needed to make within the Organisation.

Woodward’s early changes

Woodward’s determination to instigate reform was not welcomed by everyone inside ASIO. What to some was a refreshing input, to others heralded upheaval and disturbance of established practices and procedures. This was particularly true of a number of long-serving officers. Under Woodward’s charge, ASIO faced significant challenges, many of them identified in Hope’s royal commission, which triggered calls for renewed organisational change. Apart from the headquarters in Melbourne, ASIO maintained ten separate Australian offices, although four of these were staffed by only two to four intelligence officers. The staffing numbers in the regions were smaller than they had been in the past. In 1978, New South Wales, for instance, had just over 100 staff, a drop of 20 per cent from a decade before. Other states had experienced commensurate declines.7

When Woodward took charge, ASIO’s branch structure was already significantly different from that of the 1960s. Woodward and his Deputy Director-General, Harvey Barnett, were supported by the Office of the Director-General Executive and Support Services. Under this, the main working branches of the Organisation and their assistant directors-general were:

• A Branch (Administration)

• B Branch (Research and Analysis) under Blair Nienaber

• C Branch (Protective Security) under John Elliott

• D Branch (Operations) under Jack Griffiths.8

B Branch was broken into four sections that reflected ASIO’s key priority areas: B1 Section (Subversive Activities), keeping abreast of the various communist, socialist, Trotskyist and anarchist groups; B2 Section (Terrorist Activities), covering Middle Eastern terrorism as well as Croatian and other terrorism, including the Irish Republican Army (IRA) and South American groups; B3 Section (Soviet Bloc Espionage), watching the Soviet diplomatic and trade offices as well as Eastern bloc diplomatic missions; and B4 Section (Asian Espionage), focused primarily on China.9

The four sections worked with their counterparts in D Branch to coordinate collection operations against priority targets in various regions. This meant that responsibility for counterespionage and counter-subversion work was shared between B and D branches. This split along functional rather than target lines seemed innovative to the former Director-General, Peter Barbour, when he introduced the arrangement in 1970, but it became increasingly problematic. There was too much overlap, not enough collaboration, and considerable confusion about the delineation of responsibilities.

Beyond the headquarters and its branches, ASIO maintained regional offices in the state and federal capitals, as well as liaison officers in a number of overseas countries, particularly in Europe and the Americas, but in time spreading to a number of posts in Asia and the Pacific.10

Over time, Woodward became convinced that the existing structure—especially the functional separation between the Research and Analysis Branch (B) and the Operations Branch (D)—was not working. The Assistant Director-General (Protective Security) explained to him that the structure gave rise to a number of deficiencies. The lines of communication between intelligence collectors in the field and analysts at headquarters were long, complex and blurred, watering down the authority of headquarters instructions to the extent that they were sometimes ineffectual.11

Woodward concluded that the arrangement with B and D branches led to ‘unnecessary divisions and misunderstandings and do nothing to encourage appreciation of the respective problems of intelligence gatherers on the one hand and intelligence recorders and evaluators on the other’.12Consequently, in May 1976 he announced that it was the unanimous view of all senior officers that the Organisation should revert to a system in which people concerned with field and agent operations on a specific target would work side by side with the intelligence recorders, assessors and researchers at each level. This would apply in the regional offices as well.13 Woodward also established new branches to cover responsibilities that he felt needed urgent attention. These included the Personnel Branch, Policies and Priorities Branch, and Planning and Development Branch.14

In weighing up the resource implications of this organisational reshuffle, Woodward emphasised that ASIO existed to collect intelligence in order to provide advice to government. ‘That is the whole reason for our being here,’ he told his staff. Those assessments had to be relevant and of interest to the recipient, and they had to be provided as promptly as possible.15

Everything ASIO did, Woodward stressed repeatedly, should be predicated on the assumption that the Government would change next month. He declared:

We work every day on that principle. We must just give as much as we can and quite often the negative information is as important as the positive. It may be just as important to government to know that the local branch of the Communist Party is not playing an active part in some major industrial disturbance as to know that it is playing an active part, because the alternative answers may suggest different solutions.16

Woodward’s observations highlighted a contentious issue: the Organisation’s struggle with coming to terms with the declining significance of the CPA and its increasingly marginalised splinter groups. Woodward emphasised how important it was to be able to give the Government a balanced judgement about the activities of its targets. He explained: ‘The government was entitled to know to what extent the uranium debate was being sponsored, to what extent demonstrations were being planned and violence becoming possible, as a result of the activities of people who have not got the best interests of Australia at heart.’ To Woodward, it was important that the Government should receive a balanced view of the reasons for such disruptions and ASIO had ‘an important part to play’.17

Woodward appointed a subcommittee in 1976 to examine the need for reorganising B and D branches and to report its conclusions by 15 October. The subcommittee found that there was no consensus within ASIO on the need to reorganise but recognised that the separation of research and analysis officers from the intelligence collection process had blurred related lines of accountability. Existing practices had diverged from Barbour’s original concept of the organisation of B and D branches to such an extent ‘that nothing short of re-organisation would remedy existing shortcomings’.18 Woodward did not have to look far for evidence.

1976 staff seminar

Realising that communication was important, in November 1976—eight months into his job—Woodward organised a staff seminar. He hoped it would provide fifteen promising ASIO managers with an opportunity to contribute to the Organisation’s policy development and future. Discussion was wide-ranging, covering sixteen topics including ASIO’s public image, its relations with federal and state instrumentalities, the Federal Opposition, overseas services, protest groups and whether ASIO should have a dedicated public relations officer. Those present agreed that ASIO should be more engaged and suggested that the Director-General give a public address at the National Press Club.19

One topic concerned philosophical debates, including whether the existence of a security service was justified in an open, democratic society. Some even wondered whether ASIO should amalgamate with the Commonwealth Police Force (CPF). On balance, however, they recognised that closer cooperation with law enforcement rather than amalgamation was called for, and supported the separation of executive policing functions from intelligence and security functions. Debate ensued about personnel vetting and whether ASIO or the particular government department should be responsible for security clearances. Rather than making a decision, they agreed that the matter required closer examination.20

The question of espionage also arose, and respondents spoke of the difficulty of detecting Soviet espionage activities in Australia because of the sophistication of the Soviet illegal apparatus. Measures for preventing the penetration of ASIO itself were discussed, including the need for revalidation of personnel security clearances, extensive inquiries into the backgrounds of recruits, and the strict application of physical and personal security measures.21

Another discussion concerned ASIO’s priorities. Questions were asked about the relationship between resources and priorities, how subversion was to be defined (the judgement on such terms from the Royal Commission on Intelligence and Security had yet to be released) and whether or not terrorism and domestic violence were proper subjects for ASIO scrutiny. Importantly, considering the problems with ASIO’s structure, they also discussed the issue of relations between Headquarters ASIO and the regional offices. A clearer delineation of functions and greater regional autonomy was called for, to enable the regional offices to respond to ‘immediate’ operational opportunities.22

A final topic concerned ASIO’s training and recruitment needs. Discussion covered whether the preference should be for specialists or generalist officers; the relationship between training, recruitment and career planning; and the need for professional training for ASIO staff.23

Woodward himself had selected this range of topics for discussion, as he saw them as critical for ASIO’s renewal and reform. How they were addressed is covered in the chapters that follow. In summing up, Woodward asked his staff to ‘have faith, patience and determination’ as they worked together to make the necessary adjustments in the months and years ahead. He stressed that subsequent reform phases would arise from the implementation of the changes discussed in the seminar.24 Woodward invited a list of proposals arising from the discussions,25 but he did not simply wait for suggestions. He was determined to act with purpose and not to procrastinate. He would continue to push ahead, even in the face of opposition from some of his senior managers.

A few months earlier, in June 1976, Woodward had issued a memorandum dealing with new ASIO staffing and establishment procedures, insisting that all ASIO personnel read and sign the document.26

As part of his drive for reform, Woodward sought to review ASIO’s assortment of human sources thoroughly. He challenged his staff to check that their agents were productive and their targets worth monitoring, then to cease persevering with unproductive sources. He instructed his managers to ensure their staff were well supervised, achieving to their potential and optimally employed. He also called for procedures to be scrutinised for their efficiency and, where appropriate, for staffing adjustments to be made in response. In essence, he was calling for a hard-headed, professional look at internal inefficiencies. He called for action, saying: ‘We cannot cover up for inadequacies; we cannot just take a “she’ll be right mate” attitude—“it will all come out in the wash”. We really do have to go into this in a tough, professional way.’27 This approach was a breath of fresh air in an organisation that was overdue for proactive and innovative thinking.

November 1977: implementation of a new structure

Woodward had tasked his Director of Planning and Development, Phil Gilbert, in late 1976 to work out the procedural changes required to implement his intended reforms and obtain agreement from those concerned across the Organisation. But the extent of the changes and the effort required to work through the implications meant that it was not until November 1977 that the proposed reorganisation was ready for implementation.28

Three new branches emerged from the reorganisation of B and D branches on 5 December 1977. E Branch, under John McFarlane, focusing on counterespionage, comprised the Soviet Bloc Affairs Group, Asian Affairs Group and the Research and Investigation Section. S Branch, under its Assistant Director-General Blair Nienaber, consisted of the Subversive Studies Group and the Politically Motivated Violence Group. R Branch, under its Assistant Director-General Jack Griffiths, which was to provide the various resources and services required, included a range of sections for operational planning, warrants, transcriptions and technical services.29 This meant that the line-up of branches to emerge from the changes in 1978 included:

• A Branch (Management Services)—including information services and administration

• C Branch (Protective Security)

• E Branch (Counter-Espionage)

• P Branch (Personnel Matters)

• R Branch (Resources and Services)

• S Branch (Subversion, Politically Motivated Violence and Terrorism).30

External consultants were commissioned to study the best way to use emerging data-processing technology. When the report was received in 1979, Woodward decided that a separate branch was required to manage ASIO’s growing data-processing requirements. This became the Information Management Branch.31

Regional offices also had to be reorganised to match the new arrangements in Headquarters ASIO. Case officers were seen as the key personnel in regional offices, responsible for planning, coordinating and conducting operations. They were required to align with their counterpart branch, and so were grouped primarily in the E or S branches.32

Operations Resources Group

Part of the reorganisation Woodward was steering included the establishment in January 1978 of the Operations Resources Group in headquarters. This group formalised the process for operational decisions and ensured that they were made in accordance with the resources available and specifically related to ASIO’s targets and priorities.33 Before long, the Operations Resources Group was also given responsibility for planning manpower allocations for operational requirements, taking into account analysis of staffing and resource needs across ASIO.34 There were some teething problems, as the Operations Resources Group’s work impinged on the remit of various branches. Notably, personnel considerations were a recurring issue. Sorting all that out took some time, but, as Woodward observed, the establishment of the Operations Resources Group was ‘a clear example of a good idea, which has produced a useful solution’. In the process, unnecessary problems arose due to obstruction from some senior managers, including regional directors. Reflecting his collegial managerial style, Woodward declared: ‘I ascribe no blame; we can all learn from it.’35Woodward masterfully defused what could have been a quite destructive management problem. He managed hard men, who were determined to maintain and retain their operational grip on their fiefdoms, with a quiet but impressive determination.36

The Operations Resources Group’s agenda largely consisted of approving warrant applications for telephonic interception, examining the highlights from regional telex reports, and approving the monthly surveillance program. The intelligence collection plans were formally submitted by the Operations Resources Group and, after an oral explanation to senior management by the responsible group coordinator, formally approved. By March 1980, however, criticism of the group was mounting. Phil Gilbert argued there was broad agreement that the Operations Resources Group lacked effectiveness and was reduced to dealing with matters of routine, while the expected rationalisation of resource allocation had not been fully realised. Regional offices, however, were more positive, finding the group particularly valuable for coordination and ‘deconfliction’.37

Revised senior management arrangements

The Headquarters Liaison Group—Canberra, had been created under Barbour’s leadership to represent the Director-General in Canberra and liaise, particularly at a policy level, with the Government. It also provided the Director-General with basic staff support during his visits to Canberra. Colin Brown had been head of the Headquarters Liaison Group and thus the Director-General’s representative in Canberra until his replacement was appointed in October 1976.38 The responsibilities of the group would increase in the lead-up to the transfer of Headquarters ASIO from Melbourne to Canberra in 1986. Liaison with government departments and agencies increased as the Federal Government’s responsibilities and functions expanded in Canberra, notably with the advent of additional interdepartmental meetings, committees, working groups and task forces.39Hope had called for this move in the Royal Commission on Intelligence and Security, but it would take a decade to come to fruition. As the importance of the Headquarters Liaison Group grew, it accrued additional responsibilities and staff. By 1983, three years before the headquarters actually moved to Canberra, the Headquarters Liaison Group included a team charged with security reviews particularly of intelligence threats to ASIO. The group also included Executive and Support Services, which provided legal and scientific advice, auditing, management evaluation and executive support.40

With the ASIO Act 1979 coming into effect and additional accountability measures in place, Woodward felt the need for a body that would not only handle all ministerial, parliamentary, press and public inquiries directed towards ASIO, but also deal with a range of other matters affecting the Organisation, such as the establishment of the Security Appeals Tribunal, requirements arising from the Ombudsman Act 1976 and the Freedom of Information Act 1982, and preparation of the annual report. There was also a need for greater coordination of external relations, inter-branch matters, conferences, police liaison and archival management. Woodward therefore established Executive Branch (X Branch) in Headquarters ASIO to deal with these issues. John Elliott’s appointment as the Assistant Director-General of the Executive Branch took effect in January 1980.41

In July 1980, Executive Branch absorbed the security review function, although the responsibilities remained largely unchanged. The main focus of these reviews continued to be hostile activities directed against ASIO. The work covered counterintelligence tasks, including a systematic review of the security status of all ASIO personnel and investigation of incidents that potentially compromised staff and appeared to threaten ASIO’s internal security. This included matters ranging from drink driving to unauthorised contact with foreign intelligence officers.42

By 1980, the main branches focused on performing the operational functions of ASIO in headquarters included:

• C Branch, for protective security

• E Branch, for Soviet Bloc and Asian affairs

• S Branch, for subversion, terrorism and politically motivated violence.

The regional offices supported the work of these three branches with intelligence collection, and implementation of policies and directives. The work of these branches and the regional offices is the main focus of subsequent chapters dealing with subversion, politically motivated violence, terrorism, espionage and protective security.43

Jack Griffiths, the head of R Branch and one of ASIO’s longest serving employees, felt that the restructure under Woodward led to a lessening of operational security. According to Griffiths, ASIO became much more open, ‘with everyone entitled to know everything’.44 Griffiths’ comments reflected the views of those steeped in a world view for which the ‘need to know’ principle prevailed; keeping information compartmentalised provided an additional security measure. To such people, Woodward’s more open approach appeared ill advised. In fact, much of what Woodward was doing was driven by the need for ASIO to operate ethically and efficiently, focusing on agreed priorities. Concerns about balancing such needs with requirements for operational security would present the Organisation with an enduring challenge.

Annual reports, assessments and collection arrangements

The pursuit of efficiency was one of Woodward’s top priorities, and one way he sought to modernise ASIO, both in its own and the public’s eyes, was to improve its reporting. Early on in his tenure, Woodward introduced the concept of documenting the Organisation’s intelligence collection. This involved clearly stipulating and prioritising ASIO’s collection efforts and allocation of resources, which in turn provided useful data for some strategic planning. Woodward described the new process as a ‘great step forward in formulating operational objectives’. The implementation of this new program entailed some growing pains, but the system helped distribute scarce resources to best advantage and served to show up some of ASIO’s deficiencies—which Woodward found helpful in identifying areas in need of additional reform.45

One officer, Tony Beard, later observed that these documentation efforts became an entrenched feature within ASIO and ‘evolved to become very effective instruments of good management. The net result was that it drove the collection function, whereas beforehand the independent collection functions drove the rest of the organisation.’ This development was ‘revolutionary’ in that it fundamentally changed the Organisation’s operating procedures.46

The new program was based on another initiative introduced under Woodward—the annual report to government on the current security threats facing Australia. Woodward saw this as a most important document for the Organisation and as ‘an important part of the relationship with government’. This single publication provided the Government with all the information it needed on current threats. The report proved ‘enormously difficult’ to produce on the first occasion in 1976, but by 1979 it was a familiar process; it was being produced with appropriate input from the respective branches, and was being read by senior ministers and officials across a range of government departments.47

This reporting arrangement gave ASIO a far greater profile within the other arms of government than previously. As it turned out, however, it proved difficult to produce these threat assessments on an annual basis after the success of the 1979 report. The following one was not released until 1981. The delay was due in part to Woodward’s determination that it be a very thorough and definitive document, tackling a number of topics from novel viewpoints to prompt fresh thinking with regard to ASIO’s targets.48 Nevertheless, the reports continue to this day, and this reporting arrangement is now rightfully a prime function of ASIO.

Another measure that further increased ASIO’s profile beyond internal bureaucratic circles was the creation of the classified annual report for distribution through the senior ranks of government as well as the parliamentary opposition. The report had as much detail as ASIO felt it could supply of ‘everything that is going on’ inside the Organisation. ASIO was the first intelligence agency to produce such a document. Woodward was quite certain that the availability of the annual reports and the threat assessments, as well as the verbal briefings to ministers and opposition leaders, had ‘a good deal to do with’ the low-key and ‘very responsible’ approach that the parliamentary opposition took to the ASIO Bill as it passed through Parliament in 1978 and 1979. Woodward acknowledged that the Opposition had ‘attacked the government and moved a large number of amendments’ some of which were ‘based on a misunderstanding of the situation’. But they were all points, he conceded, ‘which I think a responsible opposition could be expected to raise, bearing in mind its duty to oppose’.49

Overall, Woodward viewed the work on threat assessments and annual reports as part of a campaign to bring ASIO into line with the reporting processes of most other Commonwealth departments and agencies, and one that would eventually work to the Organisation’s advantage. Those in ASIO felt it would better inform the Government and public both of its role and of the fact that it was now an accountable organisation.50

Guidance for audio, entry and search operations

The ASIO Act 1979, which came into force on 1 June 1980, made significant changes to internal procedures relating to technical operations. The Special Powers division of the ASIO Act 1979 covered the use of listening and recording devices, covert entry and search, and inspection of postal articles. A lengthy telex was sent to all regional offices to explain.51 Additional details would be provided in a comprehensive instruction thereafter.52 As a result of the legislation, a warrant was required for all technical operations, and in applying to the Attorney-General for approval of the warrant, the Organisation had to make a substantial case in writing to justify the effort. In addition, on completion of the operation, a report had to be provided to the Attorney-General outlining the value to ASIO of the operation. This was a formalisation of the arrangements that had existed informally during the period of the Whitlam Government. Earlier, short-term audio interception operations could be mounted (as long as there were resources available) without anyone worrying too much whether the results would be beneficial or not. In other words, until this point decision-makers within ASIO were not required to justify their actions to anyone outside the Organisation. In essence, this meant that ASIO had to be more professional and discriminating in setting operational requirements. As a result, ASIO was forced to focus on mounting technical operations with a higher prospect of successfully retrieving valuable and important information.53 The process also necessitated greater staff numbers due to the large volume of paperwork involved.

Policies and procedures were reviewed and approved for the installation and use of listening devices as well as for covert entry and search operations. These grew out of the reality of ASIO’s new legislative circumstances and were completed in 1981 and revised in 1985. ASIO officers were enjoined to ask themselves three questions before proceeding. First, could the product be gained through other, less invasive means? Secondly, could they be placing other long-term assets, or future operations, in jeopardy to achieve short-term gains? Thirdly, was the operation justified, or did the potential product justify the risk of getting caught? The more valuable the potential intelligence, the more justifiable the risk, whereas worthless intelligence justified no risk.54

The author of the handbook was one of ASIO’s most experienced operational officers, Len Heilig. He made some interesting prefatory remarks:

Persons who are to successfully participate in Physical Intervention Operations [entry and search] need a natural gift of perception and sensitivity which enables them to sense and correctly respond to the dangers inherent in all the circumstances which can exist in the various situations encountered under covert entry conditions. Those who do not possess this gift will never be a real success in this field, though they may be endowed with all other qualities and virtues. With the best intentions in the world, they will lack the intuitive instincts which avert disaster.55

Heilig warned against underestimating the target’s own security precautions. Apart from any actual measures taken by the target to protect their premises against entry, Heilig warned, ‘we have to be aware of precautionary tactics designed to detect covert entry’. In addition to the range of alarms available, he cautioned about ‘surreptitious measures which can jeopardise both our operations and our reputation’. Voice-operated recorders, for instance, could automatically record covert entry and activities, while talcum powder could be sprinkled on the floor to reveal disturbances and footprints. Sound contingency planning was needed to take these and other unforeseen possibilities into account. Likewise, professionalism was key to avoid the pitfalls of carelessness, neglect of detail, overenthusiasm, indiscipline and a subjective approach, as well as pride, sloth and anger, which, Heilig observed, could all contribute to the unravelling of operations. Heilig saw photography as ‘indispensable’ for physical intervention operations, as it could produce far more detail than a written description of cursory reconnaissance. ASIO officers were reminded that it was ‘necessary to have up to date photographs of every person connected with the target’. Well-placed observation posts were seen to provide the best cover to study a target area in depth without alerting the ‘target persons of interest’.56 This advice was all based on lessons ASIO had learned in more than 30 years of successful and unsuccessful operations.

A guide to technical operations was developed for internal use in 1982, explaining in layman’s terms some of the technologies and techniques in use for eavesdropping. This included a brief description of some of the basic concepts, such as consideration of various potential countermeasures, used in operations involving electronic devices, ranging from passive radio signal reflectors to other telephone interception equipment.57 The breadth of options reflected the growing range available for eavesdropping as well as the increasing counterespionage challenges arising from the application of emerging technologies. The proliferation of such technologies also presented significant additional training requirements.

Expenditure and oversight

To undertake the required expansion and to make the necessary improvements along the way, additional funding was required. As Table 2.1 indicates, between the 1974–75 and 1978–79 financial years, ASIO’s budget more than doubled.

Table 2.1: Estimates of increasing ASIO expenditure, 1971–79

Financial year

ASIO expenditure (AUD)


$4.11 million


$4.55 million


$5.75 million


$6.35 million


$9.95 million


$12.59 million

Source: ‘ASIO Annual Report, 1982–1983’

The increase was directly linked to the recommendations in the Hope Royal Commission and to Cabinet’s agreement that ASIO, having been ‘starved of funds’, be given adequate resources.58 ASIO’s meteoric increase in funding generated some debate, and perhaps a little jealousy among other service heads, at the Permanent Heads Committee on Intelligence and Security. Woodward was reminded by his fellow committee members that the Government was taking a firm line in strictly limiting government expenditure, and that ASIO’s claims for increases were considerably higher than the average. Woodward’s staff had prepared talking points on the rationale for the increases based on additional surveillance requirements to monitor the increase in Soviet and Eastern bloc activities under diplomatic cover.59 In the end, Woodward’s estimates were approved, and their rationales drew on the wording of the Royal Commission on Intelligence and Security to deflect criticism and defend the budget estimate.60

Further to the reforms flowing out of the Royal Commission on Intelligence and Security, operational finance procedures were introduced in December 1977 to ensure that accountability was beyond reproach for funds drawn from ASIO’s No. 2 account—the fund used for secret operational purposes that was not otherwise subject to scrutiny by staff of the Auditor-General. This involved signed approval on expenditure by regional directors before the administrative staff could provide the funds. In turn, the officer collecting the money would need to sign first before using the funds on, for instance, special payments to agents or gifts to unregistered contacts.61

Woodward reinforced stringent rules for expenditure on official hospitality. No longer were club fees to be paid out of ‘contact expenses’. And entertainment offered was to be ‘no more than is appropriate to the occasion’. Branch expense ceilings were set, and the sum allocated was to be regarded as ‘an upper limit for expenses rather than a sum to be expended’.62

The royal commission recommended that ASIO appoint appropriate experts to review its entire system of accounts and recommend improvements. In late 1978 an interdepartmental team was formed to review accounting records and procedures, using terms of reference agreed by the Department of Finance, the Auditor-General and the Director-General of ASIO. The review team made a number of recommendations directed towards updating and improving the administration of ASIO’s finances, including the appointment of an internal auditor for both its secret and everyday accounts, Nos 1 and 2. These recommendations were implemented in the months that followed.63

Until the ASIO Act of 1979, ASIO had been in the enviable position of being able to carry forward into the new financial year the unexpended portion of its budget. There was no oversight by the Department of Finance, and ASIO was not considered to be subject to the Audit Act. After 1979, however, the ASIO Act ‘necessitated a much more detailed and thorough approach to the preparation of estimates’. These now had to be presented to the Permanent Heads Committee on Intelligence and Security, and the Department of Finance became responsible for detailed examination of ASIO proposals. ASIO also became subject to the Audit Act, Finance Department regulations and other regulations. This generated considerable additional work inside ASIO, as the estimates demanded a level of precision hitherto not required. Bids had to be examined internally to ensure that only those items that were necessary and cost-effective were approved for inclusion in ASIO’s estimates. This called for robust and detailed written justification. It took some time for ASIO’s internal bureaucracy to prepare and deliver these estimates in a timely and comprehensive manner, and senior officers were directed to ‘identify themselves more closely with financial matters, especially estimates both current and forward’. This involved close scrutiny of requirements for vehicles, office, technical and photographic equipment, furniture, training aids, and repair and maintenance matters.64

Woodward noted in a speech in 1981 that the details of ASIO’s budget were ‘now scrutinised by the Department of Finance, which gives a report to the permanent heads’ committee, which considers the appropriateness of the amount allocated and recommends to ministers, who make the final decision’. The overwhelming majority of ASIO’s expenditure was audited in the ordinary way by the Auditor-General, while a small percentage was spent on exempt and secret ‘operational matters’. An internal auditor was seconded from the Auditor-General’s office to audit this separate fund properly. Woodward believed that the finances were supervised in as thorough a way as could be achieved, ‘consistent with national security’.65

This position of Internal Auditor, an external appointee, was established in ASIO in April 1981 and provided an additional, independent appraisal capacity. This move was designed to help management evaluate the effectiveness of financial controls and to identify inefficient and wasteful practices. ASIO’s branch heads and regional directors were instructed to engage with and ‘afford every assistance and co-operation’ to the Internal Auditor.66

Keeping abreast of technological innovations

As technological devices proliferated, ASIO was faced with the challenge of adapting to the new technology while also developing policies and procedures for controlling access and responding to leaks. Introducing new technology therefore generated a series of procedural and organisational changes.

The first mini-computer was installed in ASIO in 1979 to serve as an interim and limited computer system pending the transfer of Headquarters ASIO to Canberra. It was used in the development of a central library catalogue system and for stores. But its primary function was to provide hands-on experience and training for ASIO staff and to allow automated data-processing techniques to be developed gradually.67 Subsequently, Wang computer terminals were purchased and installed. It was envisaged that they would be used to reduce workload in the preparation of reports by capturing standard phrases, items and papers, and incorporating them into a Wang database.68 At the time, this seemed like a major leap forward in technology for the Organisation. An automated data-processing management committee, chaired by the Director-General, and a systems advisory committee, chaired by the head of A Branch, was established to create ‘an appropriate management to control their development and use’.69

One female ASIO employee became involved in the introduction of computers into ASIO, largely because of her interest in mathematics. She was offered twelve months’ study leave to undertake an introduction to computers course at university, but turned it down for two reasons: going back to study would be difficult; and she believed it would be a waste of taxpayer money given she was only a few years from retirement and understood that computers would not be introduced until after she left. In the end, she completed evening classes in FORTRAN programming language.70(Her experience highlights the problem ASIO faced in finding people who were appropriately trained and sufficiently motivated to engage in the introduction of computers in to the Organisation.)

Ian Thomas was another officer who had some experience in computers, and this placed him at the forefront of ASIO’s move to computerisation. He recalled being the only one in ASIO at the time who had ever written a computer program. Thomas’s principal job was to write a program to scan computers in another government department and compile a database of immigrants who fitted an illegals profile. This involved examining contemporary cases but also looking through historical data.71 ASIO was slowly but surely making headway with automating important data-processing tasks, but its workforce remained predominantly focused on human intelligence rather than technical means or other forms of intelligence. The Organisation lacked the critical mass of personnel with technical skills to take advantage of new advances in technology evident elsewhere relating to intelligence collection and analysis. ASIO was reliant instead on technological advances being developed elsewhere, both domestically and internationally, in counterpart organisations.

ASIO’s priorities and ethics

ASIO’s interim Director-General, Frank Mahony, had formally endorsed the Organisation’s hierarchy of intelligence targets in late January 1976. Top-priority targets were representatives of foreign governments or those operating on behalf of foreign governments, and directing, funding or otherwise involved in espionage, sabotage, subversion or terrorism. These included Soviet, Chinese and Eastern European intelligence services, and the activities of the Soviet-funded Socialist Party of Australia (SPA) and the Chinese-funded CPA (Marxist–Leninist). These targets required a major allocation of resources in the form of agents and other sources, and technical surveillance to identify, counter and report on their activities.72

The next level of target included organisations, groups or individuals whose objectives were ‘to overthrow by force the Government of Australia or to undermine its authority by unlawful means’. These included groups that had ‘come to security notice’ and needed to be studied to establish the nature of their objectives and/or the activities of individuals within them. This included ‘certain Palestinian and Croatian organizations, foreign communist parties such as the Italian and Spanish Communist Parties in Australia’, as well as organisations that may have been under some Marxist–Leninist influence, such as the Australia–USSR Society, the Association for International Cooperation and Development, and right-wing groups such as the Australian League of Rights.73

These targets were subdivided into two groups. The first were those directly supporting or having direct knowledge of acts of terror or violence. These included pro-Palestinian and pro-Croatia groups. The second included those whose objectives were ‘of a long term nature’, including the wide range of Trotskyists, anarchists and extreme right-wing groups. These demanded ‘an urgent and considerable allocation of operational resources’ towards specific but frequently short-term objectives, sometimes in cooperation with law-enforcement bodies.74

In January 1976 ASIO had 506 personnel. Of these, several hundred agents and registered contacts as well as more than a dozen telephone interceptions and several permanent observation posts were allocated to the priority targets. ASIO had nearly 100 personnel engaged in the direct collection of information from these targets.75

Woodward continued to steer ASIO’s operations in accordance with those priorities identified by his predecessor. He made an effort to understand the role of ASIO and concluded that a democratic society such as Australia should permit individuals and organisations to preach the need for overthrow of existing institutions and forms of government. He declared: ‘We believe we can afford to do so because parliamentary democracy is so firmly entrenched that we need not take the risk of revolution seriously.’ But Woodward revealed a hard-nosed Cold War perception of the stakes when he explained that the ‘more real and immediate threat’ came from groups or parties that advocated ultimate revolution and were seeking to advance their aims by working towards the political and economic disruption of the country. ‘They do this by jumping on the bandwagon of any genuine industrial or public issue which looks promising for their purpose,’ he said. These targets, he believed, went about ‘making the solution of that issue as difficult as possible for those involved in it’. Woodward saw this kind of activity carried out by people who were ideologically committed to a different form of society, acting sometimes in the interests of a foreign power, with the ends justifying the means, ‘however violent and destructive those means may be’.76

It was this kind of behaviour that justified, to Woodward and the Government, ASIO’s continued operations in this field. But equally, Woodward recognised that a most important consideration was that ASIO must not, in the way it went about its work, damage the very ideals and institutions it was meant to protect. To him, this made it all the more important that if certain actions were justified in the interest of the community as a whole but infringed private legal rights, then those acts should, with proper safeguards, be made lawful. This was the approach underlying the new legislation enacted in 1979.77

Woodward, conscious of the sensitivities involved in appearing to infringe private legal rights, constructed a scale of sensitivity concerning the intrusiveness of the methods used to obtain intelligence. The differences as far as civil liberties were concerned may not have been great. Woodward counselled, however, that as a starting point, the less intrusive methods were to be used in the first instance, with gradual escalation to more intrusive methods if the lesser were not achieving the necessary outcome. Woodward recognised that rights could be infringed by a security service that was not subject to proper internal control and self-discipline but was instead so concerned by the threats to national security that it felt justified in cutting corners or rewriting the rule book. ‘This must not and will not happen in Australia,’ Woodward informed his staff.78

One area of particular sensitivity concerned obtaining incidental intelligence about Federal or state MPs. Instructions on this matter had been issued in March 1972, stressing that MPs were not to be the primary focus of the Organisation’s collection efforts, despite at times inadvertently crossing the paths of surveillance and monitoring of other ASIO targets. But Woodward, feeling further clarification was required, issued new instructions in May 1976, directing that regional offices were not to obtain intelligence about MPs without the express authority of the Director-General. Any information concerning MPs that was derived from coverage of ASIO’s intelligence targets was to be reported only if the activities related to ASIO’s roles and responsibilities as defined in the act. Furthermore, when someone about whom a regional office held a file was elected to a parliament, their file and all personal index references were to be forwarded to headquarters under personal cover to the Registrar.79 There, they were registered for special handling, and only the ASIO most senior officers would be authorised to have access.80 The number of political figures with ASIO files was small (and not all of them were listed as ‘adverse’), but in May 1976 the list included a number of prominent public figures.81

When files were reviewed for disposal, deciding what to do with them became contentious. When a registered file ceased to exist, it was believed that a record of cessation must remain extant, explaining the reasons, recommendations and decision for disposal.82

The matter would resurface in 1980 when an MP toured China as a member of a tour group. Officers strongly recommended against raising a file on the MP, as he was not ‘adversely recorded’ and ASIO had no grounds for retaining the file for background material purposes.83 But there was already a memorandum on file that confirmed the identity of the MP, whose statements concerning ASIO had been reported in the newspapers. The head of S Branch, Blair Nienaber, wrote to Woodward explaining that he certainly agreed that the MP was not of security interest and in normal circumstances the file would be destroyed and his name removed from ASIO’s indices. ‘Unfortunately,’ he noted, the memorandum ‘exists and presumably should be retained, if only to show we did not comment adversely’. He consequently recommended that the item be placed in a separate file and the remaining papers be destroyed.84 This demonstrates the care with which ASIO treated material about MPs and prominent public figures under Woodward.

Woodward’s 1979 assessment

By 1979, many of the reforms in train as a result of the Hope Royal Commission were well on the way to being implemented. Woodward wrote to the Attorney-General, Senator Peter Durack, in January, providing a draft ministerial statement that captured his assessment of the progress made so far.85 Woodward reported that the preparation of confidential annual reports, which had first been submitted to the Attorney-General in 1977, continued, and the new ASIO Bill was progressing, set for enactment by Parliament that year.

Woodward indicated that the threats to Australia’s security had not changed significantly since the Hope reports. A number of foreign intelligence officers, particularly from the Soviet Union and the Soviet bloc, were still working in Australia under cover of diplomatic and other positions, and undeclared to the Australian Government as intelligence officers. Some of these, he noted, performed the classic work of spies, while others attempted to recruit Australian citizens as ‘agents of influence’ to work in the interests of the foreign power concerned. Others, he wrote, ‘may have special roles assigned to them which come within the Royal Commission’s description of “clandestine or deceptive action taken by or on behalf of a foreign power to promote the interests of that power”,’ particularly among migrant communities. Recruitment of operatives in these categories could be subtle, and undertaken over a prolonged period, he cautioned.86 ASIO’s operations targeting these operatives are the subject of Chapter 9.

In addition to traditional espionage and related clandestine activities, ASIO’s functions increasingly concerned countering international terrorism. There was clear evidence, Woodward noted, of increased efficiency, more sophisticated weapons, better training and wider ranging aims among terrorist groups than ever before. Australia’s geographic isolation continued to work against the nation becoming the target of a terrorist incident, he argued. He did acknowledge, however, that there were a number of people living in Australia who believed in the legitimacy of violence and terror as a political weapon, were being cultivated by terrorist movements abroad and appeared prepared to support actively or participate in a terrorist incident in Australia.87 His comments were made only a short while after a bomb was detonated outside the Hilton Hotel in central Sydney in February 1978.

Countering subversion had been a top priority for ASIO during the 1960s and early 1970s. Woodward admitted that subversion remained a difficult concept to define and represented ‘the area of greatest difficulty and delicacy for any security service in a democratic society’. But he noted that a distinction must be drawn between legitimate dissent or political difference on the one hand, and extremist activities that should attract the attention of a security service on the other. He therefore defined subversion as ‘activities leading to the violent overthrow of constitutional government, or the undermining of parliamentary democracy as we know it in this country’. Woodward noted that subversion had declined in significance for ASIO because the parties and groups identified as inclined to subversive activity were more fragmented and weaker than they had been for many years, representing ‘only a low level of long-term threat to security’. Still, those that remained of concern to ASIO were the SPA, with its ties to the Soviet Union, and the CPA (Marxist–Leninist), with its ‘very close links’ to the People’s Republic of China (PRC).88 These ties are considered further in Chapter 7.

ASIO looked not only at groups with links to China and the Soviet Union, but also at migrant groups believed to be acting towards the overthrow of a foreign government. This focus arose largely as a consequence of the problems experienced with migrants from Yugoslavia, principally among the Croatian community, as explored in Volume II of this history. ASIO sought to detect among migrant applicants those with a demonstrated propensity for political violence. The Organisation kept the Government informed about any organisations falling into this category.89

Woodward explained to the Attorney-General that ASIO’s main task was to identify the members or supporters of organisations controlled by and working in the interests of foreign governments or advocating violence as a solution to social problems. This served as an important distinction for those in society and politics concerned about the breadth of ASIO’s remit. Woodward argued that ASIO had no interest at all in the private lives of Australian citizens—with the possible rare exception of a public servant or minister who had access to secret information and, by their behaviour, showed they could not be trusted with such information or made themselves susceptible to blackmail. But ASIO did have an interest in discovering whether and to what extent campaigns or demonstrations with an international flavour were influenced by any foreign power. In addition, ASIO wished to know if activities with a potential for violence had been organised or supported by groups whose main aim was to promote disorder as a first step towards social upheaval. To this end, negative information was just as important as positive information. The real safeguard to civil liberties, Woodward argued, lay in strict control of the use made of information received and retained by ASIO.90

Managing a dispersed organisation

Woodward railed against interoffice squabbling. In one instance he identified a clear breakdown in communications in the New South Wales Regional Office, which had decided not to appoint a local staff representative or to take any part in the election of ASIO’s national staff representative. Woodward declared to his senior management:

At first I was annoyed by this negative attitude, but saw that annoyance and disappointment are inadequate responses. It is clear that there is a problem. Whether the problem exists as a breakdown of communication between Headquarters and New South Wales managers and supervisors, or whether it is a breakdown between the management and supervision in New South Wales and the rank and file in New South Wales, I’m not sure. I suspect there’s probably an element of both involved. But somehow or other we’ve got a situation where a significant number of the Organization staff are dissatisfied, it appears, with the steps that have been taken to involve staff more than in the past in the processes which affect their pay, their conditions of service, their promotional opportunities and so on. This is a situation which is going to require a good deal of attention.91

Woodward realised that these kinds of issues were inherent in bureaucracies, particularly those geographically dispersed around the country such as ASIO. But he exhorted his directors to rise above it. ‘Sometimes as I read the floats and files and sign letters that have been prepared and see what has passed between branches or between Headquarters and regions, I get very cross. At other times I admit to being very sad and very disappointed,’ he said. Woodward saw it in the wording of minutes and telexes, which ‘all too often seem to be concerned with point scoring and with a display of petulance which is entirely out of place between senior officers in an organization such as ours’. He was concerned that employees were losing sight of who the real enemy was, observing that officers sometimes derived greater satisfaction from a win by a regional office over headquarters or vice versa, or a win by an operational department over a support branch, than in the achievement of organisational goals.92 Woodward had a masterful way of grappling with the problems at hand while bringing most—although not all—of his staff along with him. But there were plenty of challenges to address, including the question of a possible move to Canberra.

Delayed relocation to Canberra

For ASIO to best meet the Government’s expectations, it became increasingly obvious that Headquarters ASIO needed to relocate from Melbourne to Canberra, where the majority of government department head offices had been located since the mid-1970s.

One of Justice Hope’s principal recommendations was for all the intelligence agencies to be relocated to Canberra. Important questions of intelligence and security affecting the national interest required, he wrote, a ‘bi-partisan attitude’.93 Woodward agreed, and in February 1977 directed that planning towards that end be initiated. His preference was for a multistorey freestanding building, preferably located within a radius of 5 kilometres from the Australian War Memorial or within a similar distance from Parliament House.94

The earlier argument against such a move for fear of compromise in a sparsely populated city carried less weight as Canberra grew and as the centre of gravity of Federal bureaucratic efforts shifted there. Besides, ASIO staff were increasingly reliant on insecure telephone and slow and inadequate telex communications to compensate for the lack of face-to-face meetings with their counterparts in Canberra. These constraints affected the Director-General’s ability to consult with and influence thinking across the bureaucracy and particularly with the Attorney-General and the Prime Minister. This was especially the case when sudden crises or other pressing matters claimed the Prime Minister’s attention. Conversely, there were a number of times when the Prime Minister would have liked to see the Director-General urgently over a newspaper report, a question in Parliament, an ASIO document presented to him or a particular security-related event. In most cases, the delay and cost of a special trip from Melbourne to Canberra precluded short visits, and matters were addressed guardedly over open telephone lines or via telex. This was unsatisfactory and insecure.95

Cabinet decided on 31 May 1978 to approve the relocation of ASIO to Canberra, authorising the National Capital Development Commission to plan for a purpose-built building and submit to Cabinet firm proposals for construction.96 A Move Committee and subcommittees were established within ASIO in April 1979 to address the wide range of personnel, communications, security, procurement, and other administrative and removal matters that would have to be considered.97 Initially, one site at Russell, where the Department of Defence is located, and two other sites within the parliamentary triangle in Barton were considered.98

The matter was considered by Cabinet again in July 1979 after the Intelligence and Security Committee of Cabinet reaffirmed that the relocation should proceed. The Deputy Secretary of the Department of the Prime Minister and Cabinet, John Enfield, advised Woodward that some ‘real concern in Cabinet’ was expressed about the siting of Headquarters ASIO close to the main political party headquarters in Barton, so alternative sites were called for in the Woden Valley town centre and the Cameron offices in Belconnen. His superior in the Department of the Prime Minister and Cabinet, Sir John Bunting, pointed out that ‘any resistance previously shown by [Secretary of the Department of Defence] Sir Arthur Tange to a site in the Defence area (Russell) might not be pressed so strongly by his successor’.99 In the end, a site was chosen at Russell Hill, plans were completed, and excavation and concrete foundation work commenced in January 1981. Yet work ceased prematurely when funds were suspended in April 1981.100

By this stage, ASIO’s plans were well advanced,101 but the Fraser Government was looking to make cost savings. The government razor gang recommended wide-ranging cost-cutting measures in the face of the Government’s reduced budget revenue. In light of the financial constraints, ASIO was advised that funds would no longer be available for construction of the new headquarters in Canberra. Woodward received an assurance from the Attorney-General, Peter Durack, that there would only be a one-year delay in budget allocation before construction would be approved. But Woodward admitted that he could not deny the possibility that there might be further delay—as indeed there was.102

While planning for the move was underway, the estimate for travel expenditure added justification for the move. For the 1982–83 financial year, for instance, the Organisation budgeted for 360 trips between Melbourne and Canberra, costing $93,000 in fares and travel allowances. In addition, maintenance and equipment upgrades were becoming pressing concerns, and expenditure on such requirements in the Melbourne headquarters was seen as wasteful given the imminent move. Together, the imperatives for the move suggested that the razor gang’s efforts to find savings were misleading.103

On 4 September 1981, in his final letter as Director-General to the Prime Minister, Woodward asked ‘one last important favour’: that the construction of ASIO’s new headquarters building in Canberra be allowed to proceed on schedule. Woodward wrote: ‘I am convinced, as was Mr Justice Hope, that ASIO will never be seen in its proper light, nor be able to take its necessary place in the workings of government, until it is established in Canberra.’104 Work on the new building was approved in August 1982, with $16 million assigned for its construction and fitting-out.105

Harvey Barnett’s succession

On completion of Woodward’s term, and on his recommendation, in September 1981 Harvey Barnett was promoted from Deputy to Director-General of ASIO. Barnett was described by Michael Boyle as ‘an intelligent man, a very good man, a very honourable man, but his experience of organisation management and administration was limited to what he had done in another intelligence service, which was a very small organisation … and he probably didn’t have a very clear idea of what the problems were within [ASIO]’.106 Another officer, Gerard Walsh, described him as ‘an innately decent man’, although not well versed in finance, administration and in arguing at the forward estimates hearings.107 These weaknesses would come to haunt him later when, as Director-General, he oversaw ASIO’s transition from the Fraser Liberal Government to the Hawke Labor Government in 1983—which is covered in Chapter 13.

Woodward spoke glowingly to the National Press Club of his successor as ‘a man of complete personal integrity, and political independence. He has my utmost confidence, and I might say the confidence of all the members of the Organization.’108 Woodward also knew that the former Prime Minister, Gough Whitlam, in announcing Woodward’s appointment in late 1975, had sought to establish a principle whereby a judge was appointed as Director-General rather than someone from within ASIO—in effect, Woodward recited, to ‘watch the watchdogs’.109 There was considerable press commentary on this matter at the time of Barnett’s appointment.110 The Shadow Attorney-General, Senator Gareth Evans, declared that ASIO’s attempt to regain public confidence would be much harder without a judge at its head.111 In endorsing Barnett, however, Woodward rejected this outlook. ‘My view,’ he said,

is that the best person available for the job should be appointed. On each occasion there should be a decision as to who is the best person within the Organization, and then some consideration of outside possibilities, both judicial and otherwise—senior public servants, I suppose, would be the most obvious alternative.112

Over time, Woodward would be proved correct.

In his memoirs, Woodward recalled that he sounded out two or three judges whom he thought would be appropriate and might be interested, ‘but received only a polite hearing and no enthusiasm’. He reported this to the Attorney-General and recommended Barnett, ‘who was a willing but not especially ambitious nominee’.113 In turn, Barnett, in his first message as Director-General to the staff of ASIO, admitted that he followed a man of Woodward’s calibre ‘with hesitancy’. Barnett was lavish in his praise for his predecessor and former boss:

Not only has he re-established the Organization along the lines recommended by the Hope Royal Commission, but he has grafted ASIO into the corporate life of the Government and established its place in the international intelligence community. We in ASIO, and indeed all Australians, owe him an immense debt of gratitude. The foundation he has laid will underpin the ASIO of the future.114

Woodward lived for another 29 years. His obituary in The Age in April 2010 observed:

He injected confidence and a radically new career structure, as well as modern conditions of employment to a seriously demoralised organisation. He supported existing officers in tertiary study, and recruited and supported university graduates, including women. Even under government pressure to assess a particular threat at a higher level, he backed the sound assessment of his sometimes junior or middle ranking staff.115

To be sure, Woodward made an enormous contribution to the reformation of ASIO, but there was still more work to be done. One ASIO officer, Tony Beard, who worked in ASIO from 1971 to 1988 and rose to mid-level management, witnessed much of what is covered in this history. To him, the key point was that Woodward’s reforms were well and good, but beyond the surface changes there was a lack of intellect and vision within ASIO to adequately guide the development of policies and operating capabilities to a level necessary to meet the Organisation’s legislative responsibilities. ‘I believe the result of this failure was that national security obligations were not adequately addressed. There was a lack of leadership and effective management and governance that denied the building of a strategic approach and framework.’116 His views may not have been all that representative of his colleagues, but they reflected an enduring concern that further hard-nosed reform was required.

The March 1983 elections

Following the defeat of the Coalition Government in the 1983 election, Barnett wrote to Senator Durack, saying that ASIO would be losing ‘a respected and supportive minister’. Barnett expressed his gratitude on behalf of all the officers of ASIO ‘for the wonderful support you gave to our work during your term as Attorney-General of the Commonwealth. The degree of trust you reposed in us and the vigorous way in which you debated the provisions of the ASIO legislation were highlights of our association.’ Time will show, Barnett assured him, ‘what a wise and firm foundation was laid for ASIO by your efforts’.117


The period from 1975 to 1983 witnessed a wide range of reforms implemented within ASIO primarily under the leadership of Justice Woodward. Indeed, Woodward’s term as Director-General was a turning point for the Organisation. Under his leadership, ASIO experienced a significant restructure of its branches and regional offices and was guided through a major process of focusing on fresh, relevant priorities. Ethical issues and accountability featured strongly, aided by the production of annual reports and increased oversight. There was still considerable work to be done, and the Organisation still needed to move to Canberra. But the introduction of new senior leadership and management arrangements, Woodward’s outreach to staff through seminars and his introduction of modern technology, all helped bring about a gradual transformation within the Organisation.

In 1982, ASIO reported that less than 50 per cent of its total expenditure was ‘incurred conducting intelligence’—collecting, processing and reporting. The remainder was spent on a range of administrative tasks. Indicative of ASIO’s counterespionage focus, two-thirds of the surveillance effort was committed against the Soviet bloc target. The remainder of the surveillance was split between the Asian, politically motivated violence and ‘subversive’ targets. While this is a crude measure of activity and performance, it does give a clear indication that ASIO’s priorities remained firmly on the Soviet bloc countries throughout this period.118

ASIO had started producing annual reports, which Woodward described as ‘detailed and frank’. In addition, the annual threat assessment helped place ASIO firmly at centre stage in the minds of senior officials in other government departments in Canberra and around Australia. In effect, the intelligence and security domain had undergone a remarkable, albeit incomplete transformation.

That move towards renewal was not before time. ASIO faced ongoing operational challenges that required an efficient and effective organisation. This was the case across the spectrum of ASIO responsibilities now enshrined in legislation. A critical dimension to the transformation concerned how ASIO personnel were recruited, trained and looked after, which is the subject of the next chapter.

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