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Thursday, 21 July 1921


Senator E D MILLEN (NEW SOUTH WALES) (Minister for Repatriation) . - I move -

That this Bill be now read a first time.

It is quite unusual for a Minister introducing a Supply Bill to speak on the first reading ; but I desire to take advantage of this opportunity to deal with a matter at present exercising, not only my own mind, but those of honorable senators, in reference to the War Service Homes Department. .

I wish to deal with two aspects of the case. The Senate will be supplied a little later with all the details, statistical and otherwise, and will then have an opportunity of going mere thoroughly into the administration of the Department. There are two points to which I shall briefly refer, because they concern myself as distinct from the Department. The first is in connexion with the circumstances in which Lieut. -Colonel Walker was removed from his office as Commissioner for War Service Homes, and in connexion with which, I say at once, my veracity is challenged. Lieut. -Colonel Walker, as honorable senators are aware, ' was appointed to his position as Commissioner in ' February, 1919. During my absence in England, the Assistant Minister for Repatriation (Mr. Rodgers), who was temporarily administering the Department, learned that Lieut. -Colonel Walker was an uncertificated insolvent. at the time of. his appointment. The Assistant Minister interviewed Lieut. - Colonel Walker, who admitted the fact; but said that I was aware of his insolvency at the time of his appointment. I was then within a few days' journey from Melbourne, and the Assistant Minister, with the concurrence of the Cabinet, temporarily relieved Lieut.Colonel Walker from his position, and gave' him the assurance1 that before definite action, was- taken, he would arrange an interview between us to ascertain if the facts, were as stated. Lieut.-Colonel Walker, in support of. his contention, said there was a telegram on the file which conveyed the information concerning, his insolvency. That is so; because Lieut. - Colonel Walker produced the file, and the telegram was there. Perhaps I might at this juncture be permitted to read a statement as. to what transpired, knowing as I do that it carries the indorsement of what both the Assistant Minister and I said, was the position. The, statement, made byrne on the 21st March last, immediately after an interview with Lieut.-Colonel Walker, reads -

On my return journey- to Melbourne. I, was met at Ballarat by Mr., Rodgers. That gentleman informed' me' of the- position that had been, created by the disclosure of the fact that Lieut.rColonel Walker.- was' insolvent at the time of his. appointment. He- further stated that Lieut.-Colonel Walker said that I was aware , of the insolvency. Consequent upon this statement I' sought an interview- with Lieut.-Colonel Walker, which interview took place in the Minister's room; at. the House of: Representatives on, Friday last,, at 10.30 al.m;- I informed Lieut.-Colonel Walker of what: Mr:. Rodgers had told me, and asked Eieuit.-Colonel1 Walker if that correctly represented his- statement to my colleague. He replied' definitely in the,' negative,, and -said thai: he could, not, possibly say what 1 lcmew, and- what I did' . not' know; but, from thc> fact, that; the' telegram relating' to his* insolvency was on, the. fife, he assumed that I knew when, discussing, the; matter with, my colleagues.

After leaving; Lieut.-Colonel Walker I wentover . to the Cabinet room t'o attend a Cabinet meeting timed for 11 o'clock. As the Cfrbinet. had. not- formally-' assembled! I -relMed to such. o£ my colleagues.' as were- present what had transpired, between Lieut.-Colonel Walker and myself. Those of them who had met Lieut'.-Cbronel Walker at the time it was alleged' that he1 made' his original' statement were -so definite as: to his having! clearly affirmed my knowledge of his insolvency that I thought it advisable to seek a further, interview with Lieut.-Colonel Walker, and asked Mr: Rodgers1 to endeavour by telephone to secure: Lieut.-Colonel Walker's immediate attendance. On- Lieut.-Colonel Walker's attending in: response to. the invitation I left the Cabinet with Mr. Rodgers, and we- interviewed liFeut.-Cblonel Walter in the Prime Minister's adjoining' room. I pointed out to Lieut.Coloneli Walker the discrepancy in the statement which my colleagues informed me he had made and that which he had made to me earlier' in the day. I asked him -to state definitely' whether* he had affirmed that I was personally aware1 of his' insolvency when* apgcoying; 06 : his appointment:, lie. stated, de finitely that he did1 not affirm that 1 'was personally aware of . the insolvency, but- he assumed that I knew of it from the fact that the telegram, from Mr. Cupples was on the tile. ° He further spontaneously stated, that he fully, accepted my statement that I was not aware of the insolvency, or' of the existence of the telegram referring, thereto,, at the time the appointment was made.

That was written on the 21st March, and underneath it the Assistant. Minister has written that paragraph. 2, which refers to "the interview between the Assistant Minister, Lieut.-Colonel Walker, and myself, is substantially correct. Since that interview Lieut.-Colonel Walker has, repeated in print and in the memorial addressed to honorable senators, and honorable members, in another 'place have reiterated the statement, that I knew of his insolvency. If. the matter rested between Lieut.-C61onel Walker's word and my own, honorable senators would have to elect for themselves which version they would credit; but I submit that it is not a question of my word against- that- of Lieut.-Colonel Walker, because my- word has been indorsed by Lieut.-Colonel Walker himself, and the obligation is; therefore, upon him to explain' the diss- ' crepancy between bis., . affirmation: and subsequent denial that I knew of' the existence- of the telegram conveying the notification that he was. an uncertificated insolvent.. ' Notwithstanding, his1 denial of my knowledge of' the matter, he now repeats' his> original statement. I submit; if this gentleman' is prepared to adopt tactics1 of this- kind', that-- unless he can give' some- satisfactory explanation - his credibility should not' bc placed beside mine. I . desire to place- honorable, senators in possession of what, the files- da'sclose: Lieut.-ColonelWalker was* inter-1 viewed by me and' two' other members of the- Cabinet who were- appointed' a subcommittee for- the. purpose. Later I personally interviewed Lieut.-Colonel Walker. That was. prior to* the appointment; The interview being- satisfactory, Lieut.-Colonel Walker1 was asked1 to supply the names of per'sonal references',, which he did. Tele1 grams- were1 sent- to three- gentlemen* stat=ing that we contemplated offering' the appointment to Lieut-Colonel Walker, and asking for their views. as to his character and capacity. Replies- were- received. to two telegrams, one . coming to hand at 3.45 p.m. on the 25th February, and the other at 6 p.m. on the same date.


Senator PRATTEN (NEW SOUTH WALES) - Who were the gentlemen?


Senator E D MILLEN (NEW SOUTH WALES) - Mr. Bakerand Mr. Hargreaves. One is a gentleman at Albury, and the other a Queensland resident. The third I shall deal with presently. I submit that it is more important to note the times at which these telegrams were received than the names of those who sent them. Mr. Baker's wire bears the General Post Office stamp 3.25 p.m. on the 25th February, and Mr. Hargrave's 6 p.m. on the same day. I do not know what margin of time honorable senators would care to allow for the, transmission of these messages to the Department, but it appears that there must have been some margin. Whether these messages reached my office on the same day, that is, the 25th Eebruary, I cannot say; but it may be assumed they were there before me on the morning of the 26th. That, I take it, would be a reasonable assumption. There is no record when one was received, nor do the telegraph authorities now send out books for signature . as formerly, but 'it may be assumed that one of the telegrams, at all events, was in my office . on the 25th February, and . certainly both were there early on the 2,6th. Now, the letter offering 'the appointment to Lieut.Colonel Walker left my office on the 26th February. The third wire, that from Mr. Cupples, reached the General Post Office at 3.59 on the evening of the 26th. I cannot . say, and there is no record of the time that telegram reached my Department, but obviously it must have been late that evening; but, even if it did, it "was not in time to be opened that day. The letter appointing Lieut.Colonel Walker went out on the 26th February, and there is a strong presumption that it was despatched before the receipt of the telegram from Mr. Cupples. That telegram Was never shown to me. It is a curious fact -when one bears in mind the dates and hours I have mentioned. That there was an opportunity to -show it to me may be 'correct. I do not think that the Comptroller, Mr. Gilbert, 'saw it himself, in spite of what he now says. I am perfectly confident that he did not ' show it to : me. I 'want 'to pass . from that matter, but I -am somewhat loath to leave it, because, as honorable senators will understand, I -am affected by it. I have been twenty-five years in the public life of this country, and I do not want my -word to be doubted now.


Senator Payne - Would it "be reasonable for Lieut.-Colonel Walker to assume that the Minister had -seen the telegram ?


Senator E D MILLEN (NEW SOUTH WALES) - That is exactly what Lieut. --Colonel Walker -said in his interview with myself . and Mr. Rodgers. He said, " I did not know what you knew, but I assumed from it being on the file that you did know of it." That is & very different . thing . from . saying that he knew I had seen . the telegram. It was right and proper that in the circuinstances he should assume that I 'had seen it, hut the question of some one being at fault and -the ^question whether I am lying . are two totally different questions. 1 have told ihe Senate what happened. Some one was at fault, whether intentionally or unintentionally, in regard . to that wire. I do not think now that it was Mr. Gilbert. ' I think -that in his statement Mr. Gilbert is confusing the wire he did show to me with the later wire, which was received, in all probability, after the letter offering the appointment to Lieut.-Colonel "Walker had gone out.

I want to leave that matter, and icome to the ' administration generally of (the Department. I . have no desire to evade the proper responsibility which belongs to me, but I decline to accept responsibility which . Parliament deliberately placed rapon other shoulders. The War Service . Homes Act created a Commission, and gave to the Commissioner very wide independent powers. The reason for that was obvious. The argument was that in a matter of this kind it was not desirable -nhat political influence should operate. For. that -reason, Parliament appointed a War Service Homes Commissioner, with almost unlimited powers of control. First of all,Lieut.Colonel Walker had the power "to appoint such officers as he thought fit, '.to control and dismiss them, and to pay them such . salaries as -he thought fit. As . the names of some officers have been mentioned in connexion with the Department, let me say that Lieut.-Colonel Walker never 'consuited -me as to 'the appointment of anybody. He consulted me" only with regard to the dismissal of one officer. It is true that when he sought the transfer of an officer from the main Repatriation Departraent, he did consult my convenience as to when that officer shouid leave the main Department. He never consulted me as to whether or not he should make any appointment from an office boy up to his chief of staff.

Honorable senators will pardon me for dwelling a little on this matter. They will see the reason for it later on. Section 5 of the War Service Homes Act of 1918 provides that -

(1)   There shall be a Commissioner who shall, subject to the directions of the Minister, be responsible for the execution of this Act.

(2)   The Commissioner shall be a body corporate, by the name of the War Service Homes Commissioner, and shall have perpetual succession and a common seal, and be capable of suing and 'being sued, and shall, subject to this Act, have power to acquire, purchase, sell, lease, and hold lands, tenements, hereditaments, goods, chattels, and any other property for the purposes of this Act..

I intend to analyze these powers of the Commissioner. He could acquire what land he liked subject to two reservations. He had to obtain the Minister's consent for land sought to be acquired that was public land, such as roads, and so on, and he had to obtain the consent of the Minister where the land sought to be acquired exceeded in value £5,000. Within those two limits he could operate free from control in whatever way he thought fit. The limit of £5,000 in value did not apply to materials under the terms of the Act, and he could buy what material he pleased without reference to the Minister. Rightly or wrongly, Parliament invested him with that power.


Senator PRATTEN (NEW SOUTH WALES) - Did not the point crop up in the course of the debate on the Bill, and did not the Minister accept the same responsibility as to value with regard to everything ?


Senator E D MILLEN (NEW SOUTH WALES) - Many points cropped up; but I am entitled to assume that a Bill as it leaves Parliament contains the will of Parliament. I do not say that it expresses the unanimous opinion of Parliament, but that does not matter, and the fact is that the Act from which I have quoted was passed by majorities in both Houses of this Parliament.


Senator PRATTEN (NEW SOUTH WALES) - I have some recollection of the point croppingup in connexion with large expenditure for any purpose.


Senator E D MILLEN (NEW SOUTH WALES) - -I have no doubt that it was discussed in the Senate.


Senator PRATTEN (NEW SOUTH WALES) - And the Minister, I think, accepted some responsibility.


Senator E D MILLEN (NEW SOUTH WALES) - What responsibility? The Minister accepted responsibility for assenting to the purchase of land of over £5,000 in value.


Senator PRATTEN (NEW SOUTH WALES) - I think that his responsibility went further than that.


Senator E D MILLEN (NEW SOUTH WALES) - I shall be glad if the Honorable senator can show that to me in the section I have quoted from the Act.


Senator PRATTEN (NEW SOUTH WALES) - I am speaking of the debate on the Bill, and not of the Act.


Senator E D MILLEN (NEW SOUTH WALES) - I am not controlled by a debate, but I am by an Act of the Parliament. Some honorable senators might, iii the course of the debate on the Bill, have urged the view suggested in the honorable senator's interjection, but afterhearing that, view Parliament ultimately decided to give the War Service Homes Commissioner the power to which I have > referred. It did not place upon him any restriction with respect to the value of materials which he might purchase. That was done in a subsequent measure, when from experience I had seen the wisdom of placing upon the Commissioner a restriction with regard to the purchase of material of the value of £5,000, similar to that we had placed upon him in regard to the purchase of land of that value.

Lieut-Colonel Walker was given power under the original Act to build War Service Homes by contract or by day labour. Section 17 of the Act reads -

The Commissioner may erect dwelling-houses on land acquired for the purposes of this Act, or may enter into contracts for the erection of dwelling-houses on land so acquired.

Parliament there deliberately gave the Commissioner the choice of either method, and in doing so absolved the Minister of responsibility for the course which the Commissioner decided to adopt. The Commissioner under the Act was responsible for administrar tion, and the Minister was responsible only for policy. I want to draw a clear distinction between the two things, and honorable senators as parliamentarians will appreciate the difference between them. If the administration proved to be- unsatisfactory, it is true that the Minister couicU step in and suspend or dismiss the Commissioner, but he could not interfere with the administration itself. I wish to deal with matters of policy first. The policy adopted, whether right or Wrong, was fully placed before Parliament. Before the Bill was passed in the Senate or in another place, it was made clear that it was intended that the policy should include the purchase of land and materials in big parcels. The term I used on the occasion was " the purchase in a wholesale way." It contemplated group buildings, and the making of an agreement with approved institutions for carrying out the purposes of the Act. In consequence of that provision, the agreement was tabled here and in another place, and no exception was taken to it. There may have been one or two voices raised in criticism, but Parliament did not take action to nullify the agreement, and to that extent Parliament became as responsible for it as was the Minister.

I am assuming to-night that administration rather than policy is under review, and that brings me to this point : I say that the Minister had no control over the administration so long as he knew that it, was going on satisfactorily. He could not be held responsible for mistakes of officers, for their wilful disobedience of orders, or their supply to him of wrong information. He could, and would be responsible if, having discovered these things to have taken place, he failed to take steps to prevent their repetition. That is the way in which I interpreted my responsibility for administration.

Before the Government or I, as Minister, knew that anything was wrong in the matter of administration, I commenced to feel it. One may get an uneasy0 feeling that things are wrong, and yet be unable to find sufficient evidence to justify the removal of - an important officer like the War- Service Homes Commissioner. Feeling that things were not as they ought to be,I took steps to cause an inquiry to be made into the work of the Department. I appointed a well-known Sydney accountant to inquire into the Department from top to bottom, so that he might.be in a position to tell me what was wrong, and the way to put it right: That appointment was made in July of last year."

Afterwards} when- I was away from the Commonwealth, evidence accumulating that things were not proceeding as satisfactorily as could be desired, the Government supplemented my action by the appointment of an Advisory Board, with General McCay at the head, that was empowered to go into the Department, and speed up. inquiries into the various' branches of the administration. That Advisory Board is still in existence. Theresponsibility was upon the Government: and the Minister to take steps to put righfc what was believed to be wrong with the administration, and they accepted that responsibility. The result of the inquiries referred to are before the Government, but they have not enabled us to arrive at a final decision in1 regard toall matters. They have, however, enabledus to decide that in re-organizing the Department we shall get back to the contract system - that we shall eliminate the system under which the Commissioner has been his own builder.. We intend to revert to the contract system, both as to building and as to the purchase of materials. -In otherwords, we shall go out of the building business, and bring the War Service Homes Department more into line with what may . be regarded as a building society.


Senator Duncan - Then the Department will dispose of its present stocks by public auction?


Senator E D MILLEN (NEW SOUTH WALES) - No. If we did that, and placed upon the market the very considerable stocks which are now in existence we should be inviting certain loss. But it is possible to avoid that loss by passing gradually from one system to another. Moreover, it is a very reason-, able proposition that in calling for tenders for the erection of future houses we should require the contractors to draw their supplies from us, providing-, that we can furnish them with those supplies at the market price.


Senator Duncan - Then what are the Government going to do with the timber areas which they have purchased ?


Senator E D MILLEN (NEW SOUTH WALES) - I am dealing now with the future policy of the Department, and I ask the honorable senator to allow me to 'proceed "in my ownfway.. The Government will, by a gradual process, of absorption, pass from the present system to. the ; f-ull contract system.


Senator Wilson - The* Department can enter into contracts: for labour only, and may. use its own, material while it. his any.


Senator E D MILLEN (NEW SOUTH WALES) - I have already said that we can require, contractors to tender for the erection of houses-, with a stipulation that they shall draw their supplies' of timber from- our- depots. We can1 either sell to them at the- market price or ..allow- them to reduce their tenders ' to the extent of the value of the> material which is supplied to them, by the- Department. By that means we hope to- minimize! or: avoid loss: upon contracts! which- have air ready been, entered into. As to the reorganization itself., then Government , whilst retaining in essence the principle or. a Commissioner, with very considerable administrative9 powers., feel that the powers which were granted to the late Commissioner were far too wide. It is proposed, therefore;, to circumscribe those powers very much- indeed. As the powers of the Commissioner are curtailed it follows that the responsibility of the Minister will, be increased. Increased responsibility requires increased power, for responsibility without power creates' an entirely false position-.

I wish now to- say a few words in regard to the findings of the Public Accounts Committee. Those who have analyzed its report know that it. refers to four principal matters. The first finding of the Committee is that land has been purchased with undue haste and rashness. The Committee. - condemns several purchases of land, and also several houses, upon the ground that they are faulty in construction and material. They further condemn the delay which has taken, place in building, as it has added to the cost of the: buildings when erected.


Senator THOMAS (NEW SOUTH WALES) - Were the houses' which they condemned built by contract or by day labour ?


Senator E D MILLEN (NEW SOUTH WALES) - I am just coming to. the figures. In regard to the statement of the Public Accounts Committee that land has been purchased with undue haste and rashness, I wish to' say that Mr. Earle; whose exact title in the Department: I doi nob know, was sent by Lieut -Colonel Walker to interview me in< regard, to; land purchases' towards-- the- end of. 1919'. At that, interview, certain- propositions were., put. up to me, which I thought were rather lavish, and,, consequently, I gave Mr.. Earle, certain, instructions; which; were* to be. followed.. Those' instructions were taken down in. writing by him,, and were duly forwarded to,i. and recorded in, the head, office in- Melbourne. This- is the way in which, his communica

The Minister disapproves, of very large areas being purchased: owing, to -

(a)   segregation,

(b)   the considerable time the property would be. on our hands, before complete development and the sale of homes.. This means the Commissioner is burdened with large interest, -rates, and overhead' charges; which must' be; recharged, and. makes the not immediately developed' areas expensive.

The Minister considers the- present estimation of our requirements too 'high, and' does not approve of considerable' land areas- being purchased, for- anticipated requirements over and above -our building capacity., 'No land should be purchased, for more than our requirements for twelve months hence.

That was the policy which I laid down., and upon it I am open to.be commended or condemned. I submit, however, that it was a fair, reasonable, sound, and cautious- policy. Let us see what steps the War- Service Homes: Commissioner! took to give effect to- that policy. Only a few weeksr later, the- following' instructions, for which Lieut. -Colonel Walker must accept, full responsibility, were' sent out to the Deputy Commissioners in' the various' States -

Land values in the vicinity of the Commission's building operations will undoubtedly increase considerably, therefore a resolute policy of land acquisition, must be maintained, and land must 'be acquired' in advance of requirements. On- the lines indicated in statement in' paragraph (r) a minimum programme of three years and a maximum of five years' acquisition should be effected in the very near future.

It will- thus be seen that only a few weeks after T had laid down the policy that purchases were not to be made in excess of twelve months' requirements, instructions were issued, to the deputies' in the different States' to buy up to three years, and even five years', requirements. Unless it can be- assumed that I could watch every clerk, and see every document that went out of the office, I cannot be: held responsible- for a deliberate breach' of the1 policy set out in such, plain, terms: ins the' instructions^ which I gave tor Mr: Earle.

The Public Accounts Committee have alsc condemned certain purchases- of' land;; and in the light of the information which is now available, their condemnation appears justified. Dealing with the least desirable estate to which they refer, namely, Roe's estate, its'purchase was recommended by Mr. Earle, whose . recommendation was indorsed by Mr. Goodwin, the SurveyorGeneral of the Commonwealth, a tried and trusted officer, who was in the Public Service of this country long before War Service Homes were ever thought of. I have every confidence in . that gentleman. He may have made mistakes, or he may have been misled, but he was the highest authority to whom I could turn to assist me in this matter. The recommendation of Mr. . Earle was supported by the SurveyorGeneral, and indorsed by Lieut. - Colonel Walker. I approved it. What else could a Minister do in such circumstances? He could hot run round and inapect the land himself. He could not make Jiis own valuations. He must rely upon the reports of the expert officers who are attached to his Department. Unless the Minister could accomplish the impossible, there was only one thing for him to do when that report came before !him. He had either to approve or reject it. We required land, at the time, and I approved the purchase of this estate. In order to show the nature of the land, the purchase of which I was asked to approve, may I read the following report upon this estate ?


Senator Duncan - What estate is it?







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