The Crucial Resource, 1975–1983

As Hope undertook his investigation into the state of affairs within ASIO, he soon discovered that personnel management was a major area in desperate need of reform. He identified a direct link between poor personnel-management practices and poor morale. Not surprisingly, therefore, a crucial set of reforms arose from his reports, necessitating a major overhaul of ASIO’s personnel practices and procedures. The urgency of the reforms was particularly evident in light of the fact that the original ASIO employees dating back to ASIO’s founding were reaching retirement age and society had undergone substantial cultural, demographic, political and economic change. Hope could see that ASIO’s personnel were the crucial resource. His reports gave clear direction on where changes were required. This gave Woodward the scope he needed to drive through wide-ranging reforms.

The changes generated by the Royal Commission on Intelligence and Security had numerous ramifications, with which successive directors-general were required to deal by introducing further changes. This chapter examines the reforms undertaken within ASIO under the stewardship of Director-General Justice Edward Woodward, particularly in the realms of personnel policies and practices and operational procedures.

Hope’s Second Report in particular focused on morale within ASIO, which until ‘very recently’, he wrote, had been ‘very poor’. He put this down to poor leadership, insufficient understanding of ASIO’s goals and purposes, inadequate resources, very bad personnel-management practices (including nepotism, inadequate training, lack of professional standards and uneven discipline), too great a distance from central government and the lack of public understanding of ASIO’s proper function. The matter was compounded by indicators—voiced by a number of ASIO officers themselves—of a deep malaise.1 Clearly, there was much work to be done in rectifying these faults.

One man brought into ASIO to help with the changes was Les McBride, who had worked for the Public Service Board before joining Hope’s royal commission staff. One of his jobs was to review ASIO’s personnel and management practices and, through that, develop ideas about how to reform these.2 He commenced as Assistant Director-General of the Administration Branch in 1977. He later became head of Personnel Branch, playing a prominent role in the reforms featured in this chapter. He worked for ten years as a branch head in ASIO until the relocation to Canberra at the end of 1986.3 The combination of Barnett and McBride, Hope thought, would serve as a constructive professional complement to the recent appointment of Woodward.

Recruitment, employment categorisation and pay

At the heart of the reforms of the Woodward era was the issue of how the staff were recruited, trained, paid and managed. Early on, Woodward realised that ASIO was understrength, lacking enough people with the right quality and skills to do the job required of them by the nation.4 Spurred on by the adverse comments on staffing and staff relations in the royal commission reports, Woodward paid close attention to these issues.5

One of his early actions was the creation of the Personnel Branch, which set about developing new policies covering the spectrum of conditions of service. In doing so, it worked closely with the Public Service Board, to ensure broad compatibility with the conditions found in the Australian Public Service while making allowance for the unique and unusual aspects of employment with ASIO. Issues addressed included salary ranges, allowances for overtime and higher duties, eligibility for a superannuation scheme, flexible working hours, procedures for promotion and transfer arrangements.6

Following the royal commission, and Prime Minister Fraser’s endorsement of ASIO’s increased budget estimates for the 1977–78 financial year, ASIO embarked on a sizeable recruitment program to obtain 120 additional staff. This represented an increase of nearly 25 per cent. McBride rightly recognised that absorbing this number of new members would place great strains on the Organisation,7 a strain that would continue for several years into the early 1980s.8

Woodward appealed to his staff to be actively involved in trying to find fresh recruits ‘of the proper standard for the Organization’—that is, well-educated, bright, intuitive, resilient and motivated young people. In financially stringent times, he observed, the only way ASIO could survive was by improving its efficiency and ‘following vigorously the priorities laid down’, avoiding spending resources on lower priority tasks.9

A recruitment failure

Just as ASIO’s recruitment efforts were gaining momentum, a ‘bad apple’ was uncovered. At the end of May 1977, the Acting Director-General, Harvey Barnett, called together the staff at headquarters with some ‘miserable tidings to impart’. A nineteen-year-old man had been recruited to work in ASIO’s special surveillance team, as a probationary trainee surveillance officer based in Canberra. Previously, he had been with the CPF for a few months. To join ASIO, he went through a large number of separate security checks of one sort or another. Referees were interviewed to testify to his good character, and he was interviewed by ASIO before taking up the appointment. He started training with a team on 16 April.10

Only a few weeks later, on 23 May, the Polish Embassy complained to the Department of Foreign Affairs about two letters it had received, which it perceived as a provocation on ASIO’s part to try and trap it into undertaking espionage. On investigating the matter, the police discovered that the letters were written by the recruit. They offered ‘vital information concerning ASIO,’ which he was willing to impart to a foreign power.11

One ASIO officer involved in the case recalled: ‘It was lucky that the Polish did not realise its significance, because if they had passed it on to the Russians, ASIO would have been none the wiser.’ During the recruit’s training, the officer remembered, he ‘had become interested in counter-espionage cases and had even asked how information would be passed to foreign officials’. ASIO traced it back to the recruit because he had registered a post-office box in one of Canberra’s inner suburbs under his real name.12 The recruit was interrogated for several hours and ended up signing a nine-page written statement in which he ‘freely confessed he had indeed communicated with the Poles’. ASIO began investigating the remaining trainees to see if others were involved, but concluded that the recruit had acted alone. As ASIO had enough information to prosecute him, it organised with the CPF for him to be arrested and charged under the Crimes Act 1914.13

Reflecting on the experience, the Assistant Director-General of Personnel, Les McBride, wrote to the Director-General observing that ASIO’s procedures ‘followed the standard pattern’, and the only ‘jarring note’ in the recruitment process came by way of an informal report on the recruit from the CPF to the Victorian Regional Director. McBride noted: ‘One is forced back to the beginning of the exercise: the fact that he is a “walk-in” [i.e. he approached ASIO for employment, rather than ASIO approaching him]. It is tempting to rule out all such recruitments in future as a safeguard against developments of this kind.’14

In assessing the potential damage to the Organisation arising from the recruit’s handiwork, an officer in ASIO’s internal security area offered the opinion that he ‘did not gain sufficient knowledge, did not act with disloyal intent, is unlikely to excite further interest by either the Polish or Sov-bloc intelligence services, and that necessary counter-measures have been taken’.15 The recruit’s sentencing and conviction featured in discussions at a CPA (Marxist–Leninist) meeting, which was reported on faithfully by an ASIO agent, but there was little to say except to gloat at ASIO’s apparent misfortune.16 The incident certainly challenged the rigour of existing recruiting procedures, although it did not result in walk-ins being barred.

Changing recruitment criteria

ASIO’s experience with the one bad apple did not deter it from continuing its recruitment drive. Only a few months later, in November 1977, newspaper advertisements appeared inviting applicants to join ASIO as intelligence officers. These complemented ASIO’s traditional recruitment methods of drawing on university contacts, other government departments and personal friends. As a result of the newspaper advertisements, 1600 responses came flooding into ASIO. Of these, 40 were detected to have ‘traces of security significance’, effectively ruling them out of contention, and 35 subsequently were employed. In the fifteen months from January 1978 to March 1979, a total of 2300 prospective employees were processed, of which 165 were given jobs.17

As it turned out, between 1976 and 1981 more than 550 people were recruited into ASIO to account for separations (i.e. resignations), retirements and a 50 per cent increase in ‘establishment’—that is, the ceiling of authorised staff positions to be filled.18 A recruitment section was established to cope with the extra work this expansion generated.

The fresh approach involved seeking new members from within the Australian community without necessarily relying on personal contacts and introductions. To do this, a more rigorous recruitment process was established to check personal identity details and then interview potential recruits. Selected applicants underwent a number of interviews, usually conducted by officers in ASIO’s regional offices, to determine the applicant’s suitability, obtain additional information, and assess skills or specialised knowledge. A final interview allowed the ASIO selection board of senior officers to obtain sufficient impressions of the candidate to make a firm recommendation to the Director-General.19

As part of his reform of personnel practices, Woodward established the Promotions and Appointments Committee in June 1976, marking a break from the earlier less-structured practice of appointments being made at the Director-General’s discretion. The committee met twelve times in its first year, and Woodward made clear to his staff that he was taking a ‘close interest’ in the committee’s work.20 Vacancies were to be advertised internally, and applications were to be managed by Personnel Branch, which would then inform the respective branch head or regional director.21Once the recommendations of a remuneration review were implemented, the committee was replaced in 1978 by the Personnel Assessment Panel, chaired by the Assistant Director-General of Personnel.22 A separate selection committee was raised to consider the promotion of intelligence officers. It was chaired by the Director-General, and comprised the Assistant Director-General (Personnel), the branch head or regional director in whose branch the vacancy existed and a staff representative.23

Open recruitment required ASIO to be very careful and very thorough from the outset. In one instance, a journalist went through the normal recruitment process, and was about to be appointed when he admitted he was a journalist. This led to some concerns within ASIO about the possibility of penetration by someone with more hostile intent.24 A report in October 1976 noted that ‘no system yet devised could guarantee the Organization against a planned penetration’, but also noted that at that stage there were so many defects in the method of processing applications ‘that it would be really too long to describe them in narrative form’. One of the problems ASIO encountered as a result of the increase in recruitment was delays during processing applications and issuing a security clearance.25

ASIO sought by various means to ensure that the people applying for recruitment were checked and vetted appropriately. Some thought was given to using polygraph tests to help screen out undesirable applicants, but the strong consensus among ASIO management was that this was unacceptable and did not fit the Australian pattern of life. Moreover, any possible advantages were seen to be outweighed by the damage it would cause to ‘esprit de corps within ASIO’.26

ASIO’s recruitment remained separate and distinct from other arms of government. A lot of time and trouble went into bringing the Organisation’s conditions of service in line with those of the wider Australian Public Service, as much as was felt appropriate.27 But Woodward declined, for instance, an invitation for ASIO to become a prescribed authority pursuant to the Commonwealth Employees (Redeployment and Retirement) Act 1979. He argued for ASIO to remain separate ‘Because the conditions of ASIO service are unique and so significantly different in important aspects from those prevailing in other areas of Commonwealth employment’. Woodward also had reservations about the practicality of redeploying staff into and out of ASIO from the wider public service. In addition, he was uneasy about ‘possible adverse consequences for the internal security of the Organization’.28 The factors Woodward spoke about would have an enduring effect on ASIO’s place as an apparatus of government.

Opening up recruitment

Hope and Woodward recognised that for ASIO to recruit not just from a wider pool, but to select the best and brightest available, the selection criteria had to be revised. ASIO required personnel with a spectrum of skills and not just ‘people skills’. Increasingly, technology came to play a part in how ASIO functions and demands for technical expertise grew. In addition, Hope’s observations pointed to the need for high-quality analytical and writing skills associated with higher levels of education, particularly tertiary and postgraduate qualifications.

A number of criteria were outlined for employment within ASIO that highlighted enduring qualities required by the Organisation. Recruits were to be ‘of absolute integrity’, with sufficient maturity and potential to ensure they would be ‘capable of working with others in ASIO towards the protection of Australia from acts of espionage, sabotage, terrorism and subversion’. But additional specifications were included to ensure the quality and reliability of staff selected. For instance, only people with ‘fully checkable backgrounds’ were to be appointed.29 ASIO still preferred to seek its own recruits rather than to accept those who applied without sponsorship or ‘accepted motivation’.30 Preference was to be given to Australian citizens, with no discrimination on the basis of social origin, race, colour, gender, religion or political opinion. The minimum educational standard ‘preferred’ was the Higher School Certificate, and tertiary qualifications were desirable, but these were not deemed mandatory, as ‘other qualities’, such as experience, were ‘also very important’.31 Woodward wanted emphasis placed on graduate recruitment, language capabilities and high standards of professional expertise, but change would have to overcome resistance and inertia.32

Some ASIO officers without university degrees were concerned about this emphasis on education. They were rightly worried that their experience could be overlooked at promotion time in favour of a graduate. Picking up on this concern, Woodward circulated his views on the topic.33 He recognised that there were officers without a degree but with very good track records and who were demonstrably capable of working at graduate level. ‘Such officers should not feel that they will be disadvantaged by a lack of tertiary education,’ he assured them, as outside qualifications were secondary and the pursuit of them could unduly affect work performance. But he did want to encourage those who were qualified for entry to a tertiary institution to consider part-time study in the fields of politics, sociology, administration, personnel management, languages or technical studies—including electronics, data processing and photography—and made it clear that ASIO would help with associated costs where possible.34

McBride was eager to reduce reliance on recruitment from among former defence force members. Instead, McBride felt the focus should be on a mix of university graduates from varying disciplines to ensure that the Organisation was not locked into a particular intellectual paradigm.35 Not surprisingly, therefore, ASIO’s recruitment of former military personnel was based on individual capabilities and kept to a minimum.36

Despite improvements to the recruitment procedures and mechanisms established, the Organisation found it difficult to fill all the positions. Over a three-year period from mid-1976 until mid-1979, for instance, ASIO recruited 305 staff, but with the establishment (authorised staffing numbers) increases and a turnover of staff higher than the public service norm of 7 per cent, the number of vacant positions remained substantial. Of ASIO’s 683 established positions in mid-1979, for example, 118 remained vacant. With growth anticipated in 1979 to around 730 positions, the rate of recruitment was simply insufficient to meet internal demands. Personnel Services staff expressed their exasperation at the scale of the challenge they faced.37 The growth that fed that exasperation continued. By 1981, ASIO had 720 people on the payroll, with a staffing target of 750 people.38

Psychological services

ASIO had considered employing a consulting psychologist as early as 1971, but had struggled to identify someone suitable for the position. As the Organisation’s personnel-management services became more professionalised and as the rate of recruitment grew, the need for psychological services to support ASIO staff became more apparent. ASIO’s Director (Planning and Development) invited a retired former senior Army psychologist, who was employed elsewhere in the intelligence community as a consulting psychologist, to advise ASIO on the introduction of psychological techniques into personnel practices. The new Assistant Director-General (Personnel), Les McBride then invited the psychologist to act directly for ASIO as a consulting psychologist, with the initial task of advising on the selection of clerical assistants.39

The psychologist helped develop a series of recruitment procedures to meet ASIO’s specific needs.40 This led to the establishment of the small Psychological Services Section within Personnel Branch. The section covered personal counselling and reviews of personnel practices, including recruitment and performance evaluation procedures. It also covered a variety of personnel research projects, training and advice on operational problems—including assessments of agents and advice on handling agents with emotional problems, drinking problems or other ‘vulnerabilities’. In addition, the section prepared papers on topics including ‘homosexuality’, ‘cult’ problems and resistance to ‘brainwashing’ that could be used to better prepare agents and agent handlers for the challenges they faced.41 Woodward later spoke glowingly about the work of the section in ensuring that the quality of recruits brought into ASIO was ‘excellent’.42

Promotions and appointments

Despite Woodward’s best intentions, the system clearly still faced significant institutional resistance to change. In the past, decisions about hiring, firing promoting and posting of ASIO officers had been made at the Director-General’s discretion, and those concerned were informed of decisions via letters that commenced with the phrase ‘I have decided …’. Under the new arrangements, however, a proper appointments and promotions system was instigated, with a staff representative involved in the decision-making process. Some may not have liked this modernisation of ASIO’s personnel practices, but it did bring the system of promotions and appointments out into the open. Woodward was eager to have it seen that nothing went on behind the back of the staff representative. ‘There is no room for nepotism,’ he declared. There was no room for favouritism either. Woodward stressed that, provided reports made upon staff members and their performance were honest and objective, then people could know how they were faring in the Organisation and what their shortcomings were. They were thereby given a chance to improve their performance and seek better opportunities for promotion or more useful employment in future.43 Some still saw the system as significantly flawed including in the areas of promotion and pay.44

Pay grades and categorisation

In light of such concerns, Woodward introduced a review of the Organisation’s remuneration arrangements. This was the first critical examination of the level of members’ salaries and allowances in comparison to the Australian Public Service in more than twenty years. The review recognised that because of its small size, ASIO was not always able to provide skilled employees with satisfactory career paths. Some, for instance, were identified as having sought salary advancement at the expense of job satisfaction simply because there were no career path options in their preferred areas of specialisation. The new arrangements, with increments within employment grades, were designed to place greater emphasis on step-wise advancement and therefore enhance individual and corporate efficiency and professionalism. Henceforth, Personnel Branch prepared a service career program for each new recruit.45

Woodward’s intention was for intelligence officers to spend several years in general training through planned job rotations. This was designed to allow them to gain experience at headquarters and at least one regional office, covering intelligence collection (including agent running, surveillance and ‘field enquiries’), intelligence processing (information evaluation, and intelligence collection and analysis) and at least one area of administration or management.46 Training included courses in developing the necessary skills for interviewing, report writing, ‘tradecraft’, being a ‘case officer’ and surveillance, as well as basic supervisors’ courses.47 The idea was that after this general training and experience, they would be able to concentrate on the type of work that they and the Organisation found would suit them best.48 Barrier requirements were established to bring this into effect, with time and experience criteria needing to be met before officers would be deemed qualified.49

Additional clarification was provided on matters such as temporary transfer and entitlements to higher duties allowances.50 Similarly, salaries and career opportunities for clerical officers, particularly keyboard staff, were brought into line with the standards of the Australian Public Service. This allowed for greater recognition of qualifications, experience and performance.51

The Staff Association

With so many personnel-related issues up for consideration, there was scope for a heightened level of engagement with the rank and file ASIO staff members. They were not allowed to join a public sector union, in part because of their unique personal contracts with the Director-General, which set them apart from the Australian Public Service, but also because of security concerns. An internally managed staff association, however, was a different matter. Momentum grew from 1977 onwards for the establishment of a staff association as a quasi-internal union representing the interests of ASIO employees. It received support from staff and senior management. Feeling was particularly strong in the New South Wales Regional Office, and at an address to its staff in late November 1978, Woodward said he would consider any proposal to form such an association.52National and regional staff representatives were elected from the headquarters and from each region in July 1978.53 These people were intended to assist with personnel assessments panels and selection committees for clerical and intelligence officers.54 But there was an increasingly apparent need for more than this to satisfy the demands of staff members.

A ballot gauging support for a staff association was conducted within ASIO in June 1980, and the majority was in favour of its establishment (324 versus 206 out of 530 who voted). The National Staff Representative wrote to Woodward outlining the results and explained that employees wanted the Staff Association to be created as the official body representing them, acting as a de facto internal labour union. Key to the argument was concern that the level of staff involvement in decision-making ‘should not be solely reliant on the goodwill of the current Director-General’. Many also wanted to be more closely consulted before policies were promulgated. On 7 July 1980, Woodward agreed that the Staff Association should be formed. It was to be managed by a committee comprising a president, vice president, secretary, treasurer and three committee members, made up of a mixture of headquarters and regional staff. Members were elected for one-year terms, although they could offer to be re-elected, and membership was open to all ASIO staff upon payment of membership dues.55

The Staff Association was closely consulted in the preparation of a staff agreement to replace that originally drawn up by the Solicitor-General in 1951. The new staff agreement had been under consideration by Prime Minister Whitlam in 1974, but he had directed that the issue be deferred until the completion of the Royal Commission on Intelligence and Security.56 The staff agreement that eventually emerged was the result of an extensive review of conditions of service and personnel practices. The aim was to provide employment conditions that were ‘appropriate for a modern security intelligence service’, and comparable with and at least as attractive as those that applied elsewhere in the public service.57

Enhanced ASIO training

The royal commission had identified training deficiencies as an important area for improvement, and ASIO officers conceded that they had not made adequate allowance for resourcing such training.58 Prompted by, but before completion of the royal commission, a review of ASIO training requirements was undertaken and completed by ASIO’s Director of Training, Bob Rodger, in December 1976. He recommended the establishment of an intensive basic training course, with a probationary period, after which new recruits would ‘graduate’ as intelligence officers. His scheme was for a two-week induction course, followed by nine weeks of working attachments in the research areas of counter-subversion and counterterrorism, counterespionage, and protective security. That would be followed by a short attachment to a regional office for experience and the completion of the tradecraft, agent-running, report-writing and desk-officer courses.59 The proposal was ambitious and, with a trickle of recruits arriving, considered impractical. Instead, a scaled-down version of the program was proposed in mid-1977 consisting of three fixed-date courses at Headquarters ASIO, working attachments with branches and regions, a set program of reading and a written assignment.60

Woodward continued to press the Organisation to make sacrifices in order to enable further reform. In late 1977, he declared training to be a top priority, second only to recruitment, and managers were exhorted to release their staff to attend and actively participate in training when required.61

The program developed required trainee intelligence officers to participate in an intensive six-month schedule of activities, including a ‘major assignment’, a series of examinations, participation in several ‘realistic ASIO work situations’ and varied work attachments. The program was not just for new recruits but those who had been in the Organisation for some time but had not yet received appropriate training.62

Subsequent modifications and improvements were made to the training program. In 1980, for instance, the five phases of the revised ‘Generalist Officer Development Program’ were detailed as including completion of the Basic Intelligence Course, a placement, attachments to relevant offices relating to the placement, assessment of the officer’s suitability and progress, and then confirmation of their appointment. This would be the broad pattern of training for new intakes from this point.63

Recognising the overlap and parallel responsibilities between training and personnel, Woodward integrated Rodger’s Training Section into Personnel Branch, which had expanded from four staff members at its inception in 1976 to twenty by mid-1977. This meant that Personnel Branch encompassed the spectrum of personnel-related responsibilities, from recruitment and training to counselling and psychology, personnel development, and control and review of the establishments of the various components of ASIO. Administration of salaries and conditions of service, however, remained with A Branch (Management Services).64

As time went by, more officers were recruited. In 1980, for instance, the intention was to recruit up to 60 generalist officers, twice the 1979 figure. This generated a requirement for six orientation, desk-officer and tradecraft courses, which in turn necessitated improved and readily available facilities and more training staff.65 The challenge was that while ASIO’s approved staffing level had increased by only 21 positions for the 1980–81 financial year, the Organisation still had to recruit more than 100 people to replace those who were leaving.66

Woodward’s successor, Harvey Barnett, continued his predecessor’s reforms, when he took over as Director-General in 1981. How successful he was is the subject of later chapters. Importantly, Barnett would face a number of extraordinary challenges in the months and years ahead. It was he who was in office as Director-General as the Fraser era came to a close with the March 1983 Federal election and Bob Hawke took over as Prime Minister.


The personnel reforms introduced in the years after 1975 saw ASIO transformed from what could be described as a cottage industry into an organisation virtually established on an industrial scale. From this point on, ASIO increasingly drew on industry standards for personnel and organisational management established in other parts of society, notably other arms of the Australian Government and particularly the Australian Public Service. Changes across a spectrum of personnel issues transformed the Organisation in the realm of recruitment, employment, categorisation and pay. Despite the occasional bad apple leaving many cautious and wary, ASIO’s opening up to public recruitment meant that no longer was the Organisation the preserve of the well connected. Changes to the recruitment criteria meant that people from different ethnic and cultural backgrounds could be included and considered in a fair, methodical and consistent manner. Tertiary education was now considered important if not completely essential for new ASIO staff. Internal training became more rigorous and thorough, fostering a higher level of professionalism across the board.

Benchmarking of ASIO pay levels and grades against the standards of the Australian Public Service helped pave the way for ASIO to become an integral part of the government bureaucracy, so that ASIO staff could justifiably hope and plan to transfer to other government departments and agencies without fear of undue penalty. Conversely, ASIO would be able to recruit laterally, allowing for new people and fresh ideas to circulate.

The creation of the Staff Association gave staff a greater say in their own management, enabling them to have input in decisions about promotions, standards, pay and other conditions of service. Importantly, the Staff Association provided a vital outlet for views, enabling issues to be addressed before they grew out of proportion. For an organisation dependent on its staff remaining faithful and honouring their commitment to maintain official secrets indefinitely, loyalty was a key factor. The creation of and support for the Staff Association helped engender that sense of mutual respect so essential for loyalty to an entity such as ASIO.

While the changes took some time to implement, and some internal and external critics remained, the trajectory for reform was entirely positive for the Organisation and its staff. Externally, however, the spectrum of security challenges remained. In fact, ASIO would face new and more challenging difficulties in the years after 1975—many of which were unanticipated. Politically motivated violence, earlier seen purely in terms of subversion, was understood as a principal focus for the Organisation. Events in the mid- to late 1970s, however, would transform how ASIO perceived this threat. How ASIO responded to these changing dynamics is the subject of the following two chapters.

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