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Tuesday, 15 March 1932

Mr FRANCIS (Moreton) (Assistant Minister) . - This bill is designed to overcome certain difficulties arising out of a judgment of the Victorian Full Court, and does not grant any special concessions to returned soldiers. The Government has appointed a special committee, composed of senior returned soldier members of the Public Service, which has been requested -

(a)   To inquire into and report upon the effect of the present industrial depression in, and economic conditions of, Australia, upon the carrying out of contracts entered into by purchasers of war service homes under the War Service Homes Act 1918-1929, and upon the repayment of advances made under the act; and

(b)   To make recommendations as to the action which should be taken having regard to paragraph (a) above, with a view to the completion of the contracts entered into by the purchasers and borrowers under the said act, and the continued occupation of the homes in course of acquisition by those purchasers and borrowers by virtue of their contracts.

Mr James - Does the Minister intend to incorporate in the act provisions relating to the setting up of this committee ?

Mr FRANCIS - No. The Governmen has already appointed a committee, the first meeting of which will be held as soon as possible after Easter, probably on the 4th April next.

Mr James - Will the Government consider the appointment of a purchaser of a war service home?

Mr FRANCIS - Among the persons appointed is a purchaser of a war service home. The selection of the members of the committee was so made as to ensure that the best persons available were appointed, and to give the returned soldier organizations direct representation. The Returned Sailors and Soldiers Imperial League of Australia was asked to submit a panel of names from which a representative of the returned soldiers could be selected.

Mr Ward - Does that league represent the majority of returned soldiers in Australia ?

Mr FRANCIS - I do not think that anybody doubts that. The procedure followed on the present occasion was identical with that followed by previous governments, including the Scullin Government. The bill is designed to deal only with the urgent question of validating certain powers and actions taken under those powers that were thought to exist from the commencement of the war service homes administration. Since I took charge of this department, all my endeavours have been directed towards ensuring that the purchasers of war service homes remained in their homes. The policy definitely adopted by this Government - the policy that was in operation when this legislation was originally introduced - is that every endeavour is to be made to provide returned men with their own homes. The act was designed for that purpose. We are doing all in our power, taking into consideration the difficult times through which we are passing, to ensure that the returned man shall remain in his home. We are accepting, as instalments, small payments in accordance with the wages, salary, or income of the individual occupant. As the Leader of the Opposition (Mr. Scullin) said a moment ago, a portion of that policy was introduced during the regime of the late Government. A man with a wife and three children, on an income of £3 18s. a week, pays only £1 a week. The payment diminishes pro rata, until the income reaches £2 3s. a week, in which case the returned soldier pays 2s. a week. On an income of £2 2s. a week and under the payment is only ls. a week. That policy has been adopted by this Government to ensure that, so far as possible, the exsoldier will remain in his home. The bill is designed only to rectify an anomaly under a judgment of the Supreme Court of Victoria, but opportunity has been taken by the Government to deal with one or two minor matters. The allegation of harshness, cruel administration, and lack of consideration has no application to this bill, and no act of administration on the part of this Government since it took office could justify any of those charges. The returned soldier occupant himself has made no complaint about this proposal.

Mr James - The Minister should hear the complaints of the returned soldiers in my electorate.

Mr FRANCIS - This small measure was designed to amend only three sections of the act. When it became known that it was to be introduced, the president of the Returned Sailors and Soldiers Imperial League of Australia asked me to make copies of the bill available to him. That was done on the 26th February, at the time the bill was introduced. Copies have been distributed among the States, and there has been no objection taken to this amending legislation except from Victoria in respect of one matter. The honorable member for Hunter (Mr. James) quoted one protest against the bill, but he referred to a letter which was written to him two days before E made my second-reading speech in this House.

Mr James - After the first reading was agreed to I obtained a copy of the bill and circulated it. By return post I received a protest against the bill.

Mr FRANCIS - If the honorable member's interpretation of the bill is similar to the interpretation placed upon it by the writer of that unfortunate letter, I am not surprised that the resolution referred to was carried. The official representative of the Opposition in this House referred sympathetically to the administration of the department, which, he said, had always endeavoured to carry out the intention of the act. I also, from my personal experience of the department prior to and since I have been in charge of it, express my appreciation of the work of the officials. They have endeavoured to carry out the spirit of the act, at the same time dealing as leniently as possible, in the light of the circumstances, with all cases that have come under their notice. They have always had a difficult and delicate task, and have carried out their duties with sympathy and tact. While home purchasers who are unemployed or partially unemployed, or whose work is rationed, have been granted the definite concession of pro rata payments, the Government is requiring those who are in regular employment to honour - their obligations. I pay a tribute to the returned soldier occupants for the way in which they have stood up to their obligations. Since 1918, 37,000 homes have been erected, but only 32 evictions had taken place up to the time of the financial depression; the arrears representing 1 per cent, of the total payments due. That was a splendid record. The Government 13 now asking honorable members to validate the conditions under which this excellent record was created by the war service homes occupants.

Mr Makin - Will the Minister supply the House with particulars of the Davies case?

Mr FRANCIS - Yes. Unfortunately, a number of homes have reverted to the commission. When I assumed control of the department, 884 homes had reverted to the commission, and of those 445 homes, representing more than 50 per cent., were situated in New South Wales.

Mr Paterson - The total number of reversions represents less than 1\ per cent, of the total number of houses erected.

Mr FRANCIS - That is so.

Mr Lane - What percentage do those 445 homes in New South Wales bear to the total number of houses ?

Mr FRANCIS - I shall obtain that information for the honorable member. The honorable member for Werriwa (Mr. McNicoll) brought under my notice certain conditions in respect of homes in 3*ew South Wales, particularly at Goulburn, and raised several objections to this measure. The group of homes at Goulburn was built in 1919, not by the War Service Homes Commission, but by the Commonwealth Bank on behalf of the COInmission. The architect who supervised ihe building of those homes was sued by the "War Service Homes Commission in respect of faulty construction and the offer of £10,000 to indemnify the commission for damages was accepted. On receipt of that sum the commission offered to build for every soldier who had one of those faulty homes, a new home to his own design. That offer was accepted by all except two returned soldier occupants who desired to remain in their old homes, and in those instances the original price of the house was reduced to £600. The Returned Sailors and Soldiers Imperial League of Australia at Goulburn has been unstinted in its appreciation of the action of the commission in this connexion.

The difficulty in respect to the question of sewerage raised by the honorable member for Werriwa is finance; we cannot afford the expenditure of large sums of money at this time. Since the honorable member brought this matter under my notice, I have been in communication with the Goulburn City Council. I have informed that body that we shall be pleased to do all within our power to assist it. The commission is having considerable trouble, mainly in New South Wales, from vandalism in unoccupied houses. For this additional reason we are anxious to carry out our policy of keeping returned soldiers in their homes. If there is any equity in a property, we hope to preserve it for the returned soldier occupant.

Sitting suspended from 6.15 to 8 p.m.

Mr FRANCIS - The purpose of this bill is to validate the action the Government has been taking since the War Service Homes Act was first put into operation. It is not proposed to increase in any way the obligations of the soldiers, and no additional powers are to be given to the Commissioner. The whole matter arises out of a case heard before the courts dealing with a returned soldier named Davies. He was £38 4s. 5d. in arrears in his payments. He had occupied a house since October, 1923, to the 26th February, 1931. He was in permanent employment as a shunter in the Victorian railways. He resides at Newport, His wage was in excess of the basic wage, and he made arrangements to pay the usual instalments, and a small sum in addition every month to overtake the arrears. That arrangement was not carried out, and the commission instituted proceedings after the issue of a final notice. The contract was cancelled, and the Commissioner took action to recover the amount in arrears, and was successful in the County Court. The matter then went to the Full Court, and, on a technical point, the decision went in favour of the occupant. It is in order to put beyond any doubt the legality of the regulation under which action was taken by the Commissioner that this amendment is being brought forward at the present time. The regulation which was declared by the court to be ultra vires will, in future, be a part of the act. It will be a sub-section in section 36 of the present act.

When the decision of the Full Court was made known, several applications were received by the Government for refunds of sums of money previously paid by occupants of war service homes under regulation 17. I issued a statement, which was published in all the leading newspapers of Australia, urging returned soldiers not to incur costs in making application through solicitors for refunds of payments they had made. I told them that the Government proposed to amend the act in order to carry out its original intention, so that they would only be wasting their money by taking legal action. This legislation has been brought down as early as possible, so as to protect the soldiers themselves, and to safeguard the revenue.

To-day several honorable members paid tribute to the occupants of war service homes for the exemplary way in which they had met their obligations under the terms of the contracts into whichthey had entered. I join with them in that tribute, and point out that, prior to the present depression, payments by occupants of war service homes were in arrears only to the extent of 1 per cent. Of the 37,000 occupants of war service homes only 32 had been ejected, and this excellent result had been achieved under the act as it stood before the judgment of the court was given. Therefore, I can see no reason why honorable members should raise any objection to the proposed amendment.

The honorable member for Hunter {Mr. James) referred to the case of a man named Endean. I have been advised by the officers of the department that this man is not a returned soldier.

Mr James - I did not say that he was

Mr FRANCIS - He objected to the contract, and was freed from it on terms very favorable to himself. He said that he had been tricked by the agent, not by the department. The honorable member for Barton (Mr. Lane) asked what proportion of war service homes had been provided in New South Wales. Out of a total of 36,810 homes, 12,079, or 33 per cent., were provided in New South Wales. The honorable member for Balaclava (Mr. White) suggested that the Govern ment had not acted fairly in regard to the interest rate which returned soldiers were required to pay.

Mr White - I said that the Government ought to reduce the interest rate to soldiers in proportion to the reduction of interest rates paid by the Government to bondholders.

Mr FRANCIS - The rate of interest payable by returned soldiers in 1918 was 5 per cent., on money borrowed by the Government at 51/4 per cent. Recently, as the result of the conversion loan, the late Treasurer reduced the rate of interest to returned soldiers from 5 per cent. to per cent. Several organizations have since requested that the rate of interest should be reduced by another1/2 per cent. The request has been carefully examined by the Government, and a statement has been drawn up, copies of which will be sent to the various organizations which have preferred requests. The statement is as follows: -

Your representations that the rate of interest on war service homes should be reduced to 4 per cent. from the rate at present charged, viz.,41/2per cent., to which rate interest charges were reduced as from the 1st August, 1931, in accordance with the undertaking given by the late Government in Mr. Theodore's speech in Parliament on the 9th July, 1931 (see Hansard, volume 130, page 3741 ) have had the most careful consideration of the Government.

From what Mr. Theodore said on that occasion it has been assumed that the cost of administration is now borne by the purchasers of war service homes, and that the whole of the present interest charges met by the Commonwealth Government on money used in the erection or purchase, as the case may be, of war service homes plus the cost of maintenance is covered by the present interest charge of 41/2 per cent.

The facts of the case are as follow: -


Allowing for loan expenses and discounts at the time of flotation of the loans the effective rate of interest the Commonwealth is now paying on such of the money as was raised in Australia for war service homes is approximately41/2 per cent.

However, about one-third of the loan funds which have been used in the operations of the

War Service Homes Commission was derived 1 from overseas loans. As you are aware, the diminution of the interest charges now paid by the Commonwealth only applies to moneys raised in Australia, whereas the interest charges on overseas loans have had added to them the- present high exchange rates.

On the third of the money so used and raised overseas the interest rate is £5 4s. per cent., which, together with the exchange rate, means that this money is now costing the Commonwea.lth Gi per cent. The average rate of interest on money raised in Australia plus the money raised overseas is 5.2 per cent.

It will be seen, therefore, that in charging the purchasers of war service homes 4J per cent, interest for money which costs the Commonwealth Government 5.2 per cent., the Government is making a concession in favour of the soldier in interest rates of .7 per cent., amounting in the aggregate to about £125,000, and in addition, the Commonwealth Government is paying the whole cost of administration. This concession in interest rates is still considerably greater than when the war service homes scheme was first launched in 1918.

The fact is that the occupants of "war service homes are better off to-day than when the scheme was inaugurated in 1918. The honorable member for Balaclava further referred to alleged land and timber scandals, and made various other wild statements.

Mr White - I regard that statement as offensive to me. I did not make wild statements, but substantiated everything 1 said. I ask that the Minister withdraw his statement.

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