How was Australia able to start to demobilize in 1944?

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Whether there was immediate danger or not, Australia was still at war - a demobilisation at this point would be strange to say the least. I suspect that you misinterpret Frank Welsh here and the demobilisation didn't actually start in June 1944. What happened instead according to Wikipedia:

The Australian War Cabinet approved the Department of Post-War Reconstruction's proposed principles to govern demobilisation on 12 June 1944.

That doesn't mean that the demobilisation immediately started, merely that the plan was ready and the demobilisation could be prepared. It then started "on 16 August 1945, the day after Japan surrendered." Makes sense, doesn't it?

Upvote:2

What actually happened is that Australia had problem with its economy, because mobilization removed many men from industries. Citing wikipedia:

As manpower restrictions in the Australian economy forced the early demobilisation of large numbers of men.

As an example, in the 9th brigade

... elements of the Militia were disbanded to return personnel to war essential war industries.

In fact, the demobilization started earlier, in 1942.

The Army was considerably expanded in early 1942 in response to the Japanese threat to Australia. During this year the Army's strength peaked at eleven infantry divisions and three armoured divisions, and in August 1942 the Army had a strength of 476,000 men. This force was larger than Australia's population and economy could sustain, and its strength was reduced in the second half of the year.

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