Australian Dictionary of Biography

Herbert Coombs, n.d.

National Archives of Australia, M2153:4/27

Herbert Cole Coombs (1906–1997), economist and public servant, was born on 24 February 1906 at Kalamunda, Western Australia, second of six children of English-born Francis Robert Henry Coombs, railway official, and his Irish-born wife Rebecca Mary, née Elliott. Coombs’s primary schools were those nearest to where his father was stationmaster—first Claremont and later, from 1913 to 1918, Bridgetown. Winning a scholarship to Perth Modern School in 1918, he boarded in a Subiaco household, qualifying for matriculation at the end of 1923. He was keen on sports (cricket and Australian Rules football) and debating. Diminutive at five feet three inches (160 cm), he was known from youth as ‘Nugget’—a bestowal reinforced by his accumulating reputation as a valuable contributor to any enterprise or social occasion.

Acquiring his first job in 1924, Coombs worked as monitor at Busselton Primary School, before further training at Claremont Teachers’ College (1925–26). Aspiring to physical education, he was soon captivated by economics. He taught in rural and city government schools while enrolled (1927–30) at the University of Western Australia (BA, 1930; MA, 1932), where his teachers included (Sir) Walter Murdoch in English literature and Edward Shann in political economy and history. Studying for his master’s degree, he tutored in economics, acted as president of the Guild of Undergraduates, and represented students as a (non-voting) member of the university senate. On 5 December 1931 he married Mary Alice (Lallie) Ross, a schoolteacher, in a Catholic ceremony at the Church of the Queen of Martyrs, Maylands. They embarked later that day for London, as he had been awarded a Hackett fellowship to study at the London School of Economics and Political Science (PhD, 1933).

In his master’s (on the Commonwealth Bank) and doctoral theses, Coombs studied central bank policies in Britain’s dominions. Global debate over the social responsibilities of finance capital and central banks was at the time dividing the Australian Labor Party as the government of James Scullin sought to manage the Depression. Observing similar divisions in British politics, Coombs in 1933 expressed fears for liberalism’s ability to survive the spread of communism and fascism; he hoped that Australians would remain free to consider policies other than those favouring the propertied classes. He had witnessed working-class miseries as a part-time teacher in London schools. Following his return to Australia in 1934 and a brief period teaching at Perth Boys’ School and the University of Western Australia, he was recruited as an assistant economist by his master’s thesis examiner, (Sir) Leslie Melville, to the Commonwealth Bank of Australia in July 1935. The royal commission on money and banking (1936–37) helped to legitimise ideas about monetary and fiscal policies that Coombs had anticipated in his PhD thesis. The imperative to gear Australia’s economy to the demands of World War II saw him move into the Treasury (1939–42), as the Commonwealth tried new economic-policy interventions.

Appointment as director of rationing in May 1942 by the minister for trade and customs, Richard Keane, enabled Coombs to experiment with a more visible mode of public service. Studying Swedish government policy in the 1930s had taught him that central bankers should openly discuss policy so that capitalists’ investment decisions could be influenced by official statements of government aims. Public servants, he thought, should sometimes converse with the public. Responsibility for rationing gave him the opportunity to experiment with this approach, for rationing would not work if it were not seen as fair and necessary by those it affected. Implementing rationing was thus his first foray into public relations and his earliest national political achievement.

Appointed director-general of the Department of Post-War Reconstruction (1943–49) by the treasurer Ben Chifley, Coombs again committed to public education. Addressing open gatherings and radio audiences, he asked Australians to think about how a better society could be built through policies of full employment, town planning, regional development, and university education, led by a more powerful national government. When a constitutional referendum in August 1944 rejected the permanent transfer of many powers from the States to the Commonwealth, he reflected that the ‘people have a right to make their own mistakes’ (NAA CP73/3, 1).

In the 1930s Coombs had confided to friends his theoretical reservations about Keynesian economics, but he found that the war economy successfully tested Keynes’s view that governments could determine the level of aggregate demand to ensure full employment. For Coombs, full employment was central to domestic and global postwar reconstruction. Collaborating with prominent economists and other officials of the Department of Post-War Reconstruction, in 1944 he drafted the white paper Full Employment in Australia. In it, he argued that wage labour would in future have to be disciplined not by fear of unemployment but by appeal to workers’ sense of responsibility for productivity; by regular, productivity-based adjustments of their rate of pay; and by convincing them that their needs were being addressed by government. After the department’s drafts had been vetted by the Curtin cabinet, the May 1945 white paper carefully tailored its proposals regarding such issues as revising the machinery of wage determination and redistributing wealth between labour and capital, to avoid alienating unions or Australian labour movement supporters.

Reconstruction after World War II was not only a domestic but an international project, in which Australia urged all nations to commit to full employment. Known as the ‘positive approach,’ this stance had been the Curtin government’s response to learning in February 1942 that the United States of America (USA) would demand free international trade once the Axis powers had been defeated. Rather than defend the protection of Australian industries, Coombs counselled, Australia should press the USA to commit to spending and lending in such high volumes that global demand would bring full employment to all nations. As the leading advocate of the ‘positive approach’ within the Curtin government, he represented Australia at conferences at Hot Springs, Virginia (on optimising the global supply of food) and London in 1943, Geneva in 1946–47 (formulating the General Agreement on Tariffs and Trade, or GATT), and Havana in 1947, drafting the charter of the International Trade Organization (ITO).

Through Coombs’s diplomacy, Australia was attempting to bind the USA—the nation that financially benefited most from the war—to the social obligations of a rich nation in a free-trade world. Politicians in the USA who had seen socialism in Roosevelt’s New Deal derailed this commitment, but Coombs had some victories. The reporting mechanisms of the nascent Food and Agriculture Organisation resembled what he had advocated. The GATT initiated a series of postwar negotiations to reduce tariffs on manufactured goods. However, resistance from Congress stopped the USA from ratifying the charter of the ITO.

In Coombs’s view, global security required nations not only to avoid the use of military force but also to assure citizens’ material well-being through reformed economic and social policies. The United Nations, born in 1945 to replace the League of Nations, encouraged this perspective, and some who were then recruiting the UN’s leading officials asked him to consider a position—perhaps leading the ITO. However, periods of diplomatic work between April 1943 and February 1948 in London, Washington, Sweden, Geneva, and Havana tempered his optimistic internationalism, and he decided that Australia’s domestic reconstruction should be his priority.

Intellectual creativity was important to Coombs, both in government and as something inherently good. One of his tasks upon returning from Havana was to advise John Dedman, Chifley’s successor as minister for post-war reconstruction, in 1948–49 on the future of the Commonwealth Scientific and Industrial Research Organization, thereby averting its downgrading from statutory authority to government department. After being appointed to the interim council of the Australian National University (ANU) in 1946, Coombs discussed with distinguished Australian and New Zealand academics in Britain the possibility of their returning to lead the nascent university. Declining the role of founding vice-chancellor, owing to his commitment to the broader task of postwar planning, he remained devoted to the university throughout his life. After serving on the interim council he became a member of the council (1946–52), subsequently its deputy chair (1952–59), and then later the university’s pro-chancellor (1959–68) and chancellor (1968–76). In 1964 a new campus building and an annual creative arts fellowship were named after him. During fifty years of ANU activity, he formed friendships with colleagues not only from the humanities and social sciences but also the biological sciences. Through the latter, he became aware of the troubling questions that the new science of ecology was beginning to pose in the 1960s.

Appointment as governor of the Commonwealth Bank in January 1949 (and as chair of its board in 1951) afforded Coombs more time with his family; they had settled at Cremorne, Sydney, while he was abroad. When elected prime minister in December of that year, (Sir) Robert Menzies surprised many by retaining him in the role. As a Labor government appointee, he was viewed warily by the private banks, though he had neither publicly criticised nor advocated the Chifley government’s bank nationalisation proposals in 1947. The High Court of Australia had struck down Chifley’s law in August 1948 four months before Coombs commenced as governor; the Chifley government appealed and the Privy Council confirmed the judgement in July 1949. The political campaign and legal contest over bank nationalisation had inflamed private trading banks’ sensitivity to government direction. Coombs recalled in 1970 that they had seen him as ‘a kind of socialist ogre’ (Coombs 1975, 404).

Coombs had now to persuade the bankers to align their lending to government monetary policy, which sought to limit inflation fuelled by pent-up consumer demand, immigration, Cold War defence expenditure, and a global surge in demand for wool. While he had initially declined to publicly advocate inflation-restraining policies, from 1953 his public addresses became a serial elaboration of the theory and practice of banking under conditions of full employment. Avoiding inflation sometimes required banks to curb their core business, lending. The central reserve bank’s restraints—a mixture of convention and legislated rules—evolved throughout the 1950s through trial, error, and the governor’s public reasoning about what financial institutions owed to the common good.

In the 1950s the private banks expanded their business into retail savings banks and hire purchase finance. This fuelled their wish to break up the Commonwealth Bank—that is, to separate its central banking from its trading and savings divisions. Coombs fought unsuccessfully to preserve the bank’s three-part form. The Menzies government, internally divided on the issue, eventually accepted that the Commonwealth Bank should not be both regulator of and competitor with the other banks, resulting in the Reserve Bank Act 1959. Appointed governor of the new Reserve Bank of Australia in 1960, he developed the bank’s intellectual culture by hosting visits by highly regarded economists from overseas. A later governor commented that in coming to favour ‘more flexibility in interest rates and a more market-influenced approach to monetary management,’ Coombs was ‘ahead of most of his contemporaries’ (Johnston 1997, 12).

Long interested in the arts—something he shared with Lallie—in the 1940s Coombs had persuaded Chifley to found a National Theatre, as a trust governed by a board and funded by tax-deductible donations from the public. Progress on this endeavour stalled under Menzies, and so in 1953 Coombs began to rally leaders of the professions and business to form the Australian Elizabethan Theatre Trust; in 1954 he became its founding chairman. Funded by public subscription, the trust was both entrepreneur and patron of other entrepreneurs in opera, ballet, and drama. He petitioned the Victorian and New South Wales governments to support opera seasons, persuading the business and cultural elites of Melbourne and Sydney to cooperate in planning schedules. His lobbying of the Menzies government from the late 1950s resulted in the subsidised formation of the Australian Ballet in 1962 and the Australian Opera in 1970. The trust also supported drama, and he relished the emergence of the playwrights Ray Lawler, Alan Seymour, and Patrick White as portrayers of distinctly Australian mores.

The trust’s alliances with other institutions—the Australian Broadcasting Commission (controlling orchestras), the universities (building theatre spaces), and the Adelaide Festival of the Arts—were invaluable, as Coombs gradually provoked the Commonwealth to assemble, in a series of ad hoc decisions, what amounted to a national cultural policy. A persistent ‘Australianism’ flavoured his pleas for government patronage, evident also in his supervision of the Reserve Bank’s growing art collection and in his sponsorship of designers of such items as furniture (at the ANU), the Commonwealth and Reserve Banks’ annual reports, and the new decimal currency that Australians adopted from 14 February 1966. When the Holt government formed the Australian Council for the Arts in 1967, he resigned from the trust to become its chairman; he authored a series of influential statements on the rationale and methods of national cultural policy. Almost twenty years of advocacy, networking, and managerial innovation culminated in Prime Minister Gough Whitlam’s appointing him as founding chairman of the Australia Council (1973–74).

Coombs was aware that as a colonial power, Australia had responsibilities under its United Nations mandate to help the people of Papua and New Guinea build the institutions of a sovereign nation. In the 1960s the Reserve Bank seconded staff to advise on designing cooperative enterprises and on the formation of a banking system in the territory. By then, he had also begun to rethink Australia’s internal colonial policy: did not ‘assimilation’ undervalue the traditions of Indigenous Australians, he asked? His study of their circumstances quickened from November 1967 when the Holt government appointed him to chair the Council for Aboriginal Affairs, with the diplomat Barrie Dexter and anthropologist W. E. H. Stanner as members. The council proposed new policies consistent with the public goodwill evident in May 1967, when 90.7 per cent voted ‘Yes’ in a referendum that removed a constitutional barrier to Federal government legislation about Indigenous Australians. Advice to the Gorton and McMahon governments on Aboriginal land rights in the Northern Territory was contested by other agencies dedicated to assimilation. ‘Self-determination’—which advocated resourcing Indigenous Australians and granting land title, to enable their decisions—became the Whitlam government’s policy in April 1973. The CAA subsequently advised the Whitlam and Fraser governments on the Aboriginal Land Rights (Northern Territory) Act 1976. As chairman of the Australia Council, Coombs also delegated arts funding decisions to an Aboriginal Arts Board from 1973. Developing a growing awareness of Torres Strait Islander issues, in 1976 he was central to proposing—in consultation with Australian and islander government representatives—an amended boundary between Australia and the newly sovereign Papua New Guinea, which was adopted almost exactly.

After retiring as Reserve Bank governor in July 1968, Coombs had taken no interest in banking other than to deliver a 1969 lecture that reviewed the evolution of Australia’s financial system since 1945. However, his interest in economic policy was revived when Whitlam appointed him as counsellor-at-large in 1972. Inflation—his old nemesis—loomed in 1973–74 as a threat to funding the government’s new programs. He recommended cutting some expenditures inherited from coalition governments, reducing tariffs, and indexing wages. Enlarging on these antidotes to inflation, in 1974 he penned a series of memoranda to Whitlam that outlined the architecture of a taxation base for social democratic programs in the long term. His growing contact with the conservation movement from the late 1960s also stimulated a series of submissions to inquiries about resource policy, as well as a deeper reflection on whether economics could comprehend what ecology was revealing: the economists’ ‘view of human beings is too restricted’ (Coombs 1990, 59–60), he warned in a 1990 book. In 1977 he became president of the Australian Conservation Foundation.

Coombs’s service to government in the 1970s included chairing the royal commission on Australian government administration (1974–77). There was a widespread perception that the public service and its staff had experienced ‘a progressive deterioration, a loss of enthusiasm, a loss of judgment, a loss of flexibility’ (Payne 1981, 3). Chairing the royal commission thus returned him to a question that had long worried him and that he had discussed in his 1970 Boyer (Australian Broadcasting Commission) lecture series, The Fragile Pattern: Institutions and Man: the vitality and decay of institutions. Witnessing, while in Paris on bank business, the May 1968 student mobilisation had stirred these reflections. As the commission’s chairman, he had a chance to recommend means to ensure the social responsibilities and public accountability of elites. This reflected his conceptualisation of his role in public affairs as that of a steward.

From 1976 until illness defeated him in 1996 Coombs was a visiting fellow at the ANU: in the Centre for Resource and Environmental Studies and in the North Australia Research Unit, Darwin. Lallie remarked that a ‘normal family life with Nugget is unattainable’ (Convocation News 1976, 4A) and during his long retirement, their relationship became increasingly remote. He researched Indigenous development policy in northern Australia. The greater rapport he experienced with remote Aboriginal people, compared with those from the south, continued in his field trips to communities in Arnhem Land, Central Australia, and the Kimberley. Combining ethnographic knowledge with experience of government, he was the source of the Fraser government’s Community Development Employment Projects program in 1977. With poet and environmentalist Judith Wright in 1979, he launched the Aboriginal Treaty Committee, giving talks on the need and possible processes for treaty negotiations between the Commonwealth and Indigenous Australians. In 1983 he advised the Central Land Council, a statutory authority, on the organisational forms through which it might reconcile accountability both to Indigenous landowners and the Commonwealth government. His last conference address, in Darwin in September 1995, considered how the initiatives of remote Aboriginal women might be assured of public funding.

Suffering a stroke during his presentation, Coombs was admitted to hospital and then to the James Milson Nursing Home, North Sydney, where he died on 29 October 1997. His funeral service at St Mary’s Catholic Cathedral combined the rites of Lallie’s faith with those of his Yolngu friends, led by Galarrwuy Yunupingu, climaxed by all present singing ‘Waltzing Matilda.’ Cremated, he was survived by Lallie and their daughter and three sons. A suburb in Canberra was named after him in 2010, felicitously adjacent to his dear friend, and assumed lover of many decades, Judith Wright. A portrait by Clifton Pugh is held by the Reserve Bank of Australia.