H. C. Coombs - Public Service

Public Service

In 1934 Coombs returned to Australia and in 1935 became an economist at the Commonwealth Bank of Australia, then a state-owned bank which served as Australia's central bank. In 1939 he shifted to the Department of the Treasury in Canberra as a senior economist. He became known as a Keynesian rebel against the classical economic theory which dominated the Treasury, under the influence of the Melbourne University school of economists led by L.F. Giblin and Douglas Copland.

The Australian Labor Party under John Curtin came to power in 1941, and Coombs found himself in a political environment much more supportive of his views. Curtin appointed him to the Commonwealth Bank board in October 1941. In 1942 the Treasurer, Ben Chifley, appointed him Director of Rationing, and in 1943 made him Director-General of the Department of Post-war Reconstruction, a new ministry which Chifley held in addition to the Treasury. Coombs played a leading role in the preparation of the White Paper on Full Employment in Australia which, for the first time, committed the government to maintaining full employment from the post World War II years.

Chifley, a former train driver, had no training in economics and came to rely heavily on Coombs's advice. Coombs's closeness to Chifley, and the greatly expanded role of government in the economy during World War II, made him one of the most powerful public servants in Australian history. His influence grew even greater when Chifley became Prime Minister in 1945.

In January 1949 Chifley appointed Coombs Governor of the Commonwealth Bank, the most important post in the regulation of the Australian economy. When the Liberal Party came to power in December of that year, however, Coombs's demise seemed likely, but the new Prime Minister, Robert Menzies, kept him on and soon came to trust his judgement. Menzies was a moderate Keynesian and there were few policy differences between the two men, especially since Australia soon embarked on a long postwar boom and there were few tough economic decisions to be made.

In 1960, when the Reserve Bank of Australia was created to take over the Commonwealth Bank's central banking functions, Coombs was appointed Governor of the Reserve Bank. At the time, he paid tribute to Sir Leslie Melville by advising the government and others that the best man for the job had been overlooked.

He retired as a public servant in 1968.