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Thursday, 21 July 1921

Senator E D MILLEN (NEW SOUTH WALES) - He was the supervising engineer of the War Service Homes Department.

Senator GUTHRIE (VICTORIA) - Is he in the employ of the Government now ?

Senator E D MILLEN (NEW SOUTH WALES) - Not of this Government.

Senator PRATTEN (NEW SOUTH WALES) - Is Mr. Goodwin still in the employ of the Government?

Senator E D MILLEN (NEW SOUTH WALES) - He is an old, trusted, and capable officer. In the light of that report, which apparently dealt satisfactorily with every point that one needed to consider, indorsed as it was by Mr.- Goodwin and the Commissioner, there is not an honorable senator who would not have approved the purchase.

Senator Wilson - Were there not other valuations?

Senator E D MILLEN (NEW SOUTH WALES) - Other valuations in addition to three - no.

Senator GUTHRIE (VICTORIA) - Who was the vendor of the estate, and who were the agents ?

Senator E D MILLEN (NEW SOUTH WALES) - I cannot say at the present moment. As a matter of fact, the names of the vendors are set cut in the report of the Public Accounts Committee. Senator Wilson has asked if there were nob more valuations of the property. If the reports of three officers to the Minister are not sufficient, how many ought we to have? It is true that in purchases involving bigger sums of money, private valuers were sometimes called in.. The services of such firms as Messrs. Richardson and Wrench, of Sydney, were occasionally requisitioned. But in a purchase involving the sum of only £8,000, the Minister was surely entitled to say that the reports which be had received were, ample warrant for his approval of it. James Roe appears in the Public Accounts Committee's report as representing the vendors. Another matter involving a sum of £26,000, was the purchase of what was known as Piatt's Estate, at Newcastle. According to the Public Accounts Committee, there was nothing wrong with that block except that it was rather far distant from tram and train. It is situated at Mayfield, and the Australian Agricultural Company were the vendors. Its distance from tram and train was a disability; but let me point out the circumstances, which seemed to outweigh that disability. I cannot do better than read the report as submitted to me on that point -

The land is situated in a splendid locality, and constitutes, good building allotments if subdivided. Huge industrial works are within a few minutes' walk, and further large works are. to be erected in the vicinity. Water is laid on along Maitland-'road, but there is no sewerage system,' although advantageous for same. Electric light could be extended on request to the City Council. The site is generally elevated and healthy, ?and lends itself admirably for residential development.

The position with regard to that block was that, although rather distant from train and tram, it- was within a few minutes' walk of big industrial concerns: It is to the credit of the district of Newcastle that the number of recruits which it sent to the war was high, and the calculation as to the number of men who would be applicants, plus those who would become eligible as they married from day to day, indicated and justified the acquisition of an area there, there being nothing wrong with the block except its remoteness. I submit, therefore, that in view of the number of applicants and the proximity to the block to those industrial works, there was justification for purchasing it. Here, again, I purchased on the report of the three officers previously named.

I wish to deal now with a more serious matter. I mentioned that the Commissioner had power to purchase land up to the value of £5,000, and I want to put on record this incident to show what transpired in the Department. I mention it now because it was referred to in evidence given before the Public Accounts Committee in Hobart the other day. It was alleged that 35 acres of an estate there had been purchased by the War Service Homes Commission for £8,100, although only a few months ago the same sum had been paid for the whole estate of ninety odd acres. In giving these figures, I speak from memory. On reference to the file, I find that proposition was submitted to me, and that I sent it away on the ground that the information was not sufficient to admit of my coming to a decision on it. It never came to me again, but the land was purchased by the War Service Homes Commissioner in two parcels, and the fact that it was in two parcels brought the price of each parcel below the limit of £5,000 fixed by the Act. I ask the Senate if I am responsible for that?

Senator Wilson - It is a disgraceful thing.

Senator E D MILLEN (NEW SOUTH WALES) - Honorable senators can form their own conclusions. I am only giving the facts, but I submit that no responsibility can attach to me -when action of that kind is taken behind my back, whatever the motives may have been, clearly in contravention of the spirit of the Act itself. That is not the only instance of that kind.

Senator Fairbairn - Cannot yon prosecute them criminally if they rob the country?

Senator E D MILLEN (NEW SOUTH WALES) -I am dealing just now with matters in which it seemed to me that I was personally involved. I want to show what part I played, and where, so far as I can Bee, the responsibility does not rest on my shoulders. The Minister cannot be held responsible where improper transactions of that kind are carried through behind his back.

Let me take the next point referred to by the Public Accounts Committee. I want the Senate to understand that I am in no sense quarrelling with the findings of the Committee. TJn fortunately I am bound to indorse much of what it has said. The next point is the matter of inferior houses. The Committee inspected , and condemned forty-seven, and the press has so starred those fortyseven condemned dwellings that an impression has been created that they are typical of the work of the Department. I am confident that when the Committee reviews the work of the Department as' a whole, as it probably will in its final report, it will be the first to repudiate the idea that those houses are typical of the whole of those constructed by the Department. May I point out that twenty-seven of the forty-seven condemned houses were built by the Commonwealth Bank, and twenty were built by the Commission. I do not want to suggest that, because the Bank has committed errors, it in any way exonerates the Department, but when a verdict is being passed, I am entitled to point out the proportion of inferior houses constructed under each authority. It appears to me that, whether intentionally or otherwise, a sorb of effort has' -been made . to create the impression that the Bank has done its work fairly well, bub that in some way or other the whole -of the houses built by the Commission are hopelessly inferior.

Senator Duncan - What State were those condemned houses in?

Senator E D MILLEN (NEW SOUTH WALES) - I am dealing with the New South Wales report.

That is the only one made by the Committee so far.

Senator PRATTEN (NEW SOUTH WALES) - How did the proportion of inferior houses compare?

Senator E D MILLEN (NEW SOUTH WALES) - The percentage would be higher in the case of those built by the Commonwealth Bank than in those built by us. I am not seeking to suggest that the fact of the Bank making a mistake relieves the Department from any responsibility for faulty workmanship in its own case. The point I am making is that, because fortyseven houses out of the total built were found to be inferior, they must nob be regarded as typical of the whole aggregate.

Senator PRATTEN (NEW SOUTH WALES) - Is it not rather a question, of how many houses in all the Public Accounts Committee inspected 1

Senator E D MILLEN (NEW SOUTH WALES) - Those are the only ones the Committee mentioned, and it viewed them because complaints regarding them had reached it. The total built or building in ' New South Wales - because some of the houses which the Committee inspected were not completed at that time - was 2,300, so that the number which the Committee condemned was less than 2 per cent. I admit that- it is deplorable that even one house should have to be condemned, but it is a very different matter to say that only 2 per cent, have been proved hopelessly defective, as compared with the assumption that the defective houses are typical of the lot.

Senator PRATTEN (NEW SOUTH WALES) - Can we assume that allthe rest are right ?

Senator E D MILLEN (NEW SOUTH WALES) - That would be going to the other extreme, but I feel confident that the vast majority of the houses, whatever other criticisms may be directed against them, have been well and faithfully built according to the specifications submitted either to those in control of the day-labour system or to the contractors.

The Public Accounts Committee did not discover the defective houses to which I have referred. I do not want the Senate to think thab the Department was blundering along without knowing the mistakes which had been made. The Department knew of them, and had already taken steps to correct as far as possible bhe defects which had been discovered. The Department had, with regard to the houses at Cessnock and elsewhere; taken steps to remove the offi- : cers responsible; and they had been removed before the Committee's inspection. In addition, the Department had, at the contractor's expenses - for the bulk of those houses were being built by contract and not by day labour - proceeded to remedy the defects. Since the Public Accounts' Committee were there, a report has been received which would indicate that the work of putting the defective buildings into as good order as possible is practically completed, and that many of the men for whom they were built have notified their satisfaction and their willingness to occupy them.

Senator Duncan - Has any compensation been given to the soldiers for the time they were kept out of occupationo f the cottages owing to defective work ?

Senator E D MILLEN (NEW SOUTH WALES) - I have never found that a landlord would pay me compensation because- his house was not ready for me to go into. There has been no guarantee, nor could there be any, as to the time at -which the soldiers would be able to go into - the houses. I can sympathize with soldiers who have, been kept waiting, but when yon have 17,000 applications, and each applicant wants his house next week, it is impossible to satisfy them, -all, and ' somebody has to - wait. It is a physical impossibility to build 17,000 homes, within a few months.

Senator Duncan - I understand that same of the soldiers had to get out while repairs were being made.

Senator E D MILLEN (NEW SOUTH WALES) - I cannot anBwer that question, but I doubt if that happened in more than an isolated case or two. I believe some occupants had to get out at Goulburn, but those houses were built by the 'Bank, and were not taken over by' the Department until all the' defects' were put right; that is, if they have been taken over yet.

Senator PRATTEN (NEW SOUTH WALES) - Is 17,000 the total number of applications that have been received for the building of houses to date?

Senator E D MILLEN (NEW SOUTH WALES) - I do not know that those figures are up to date. There were 17..00O ' applications in some time ago. Whether the number has been increased or decreased, or . whether the number who have been, supplied has to be deducted or not,I cannot say.

Senator PRATTEN (NEW SOUTH WALES) - May we reasonably assume that that would approximately be the- extent of the Department's activities?

Senator E D MILLEN (NEW SOUTH WALES) -You cannot say - that,, because every day soldiers are 'getting married, and as they marry they become eligible. Many do not even wait until they are married, but make application to. us, saying, " We intend to marry."

Senator Fairbairn - Were those defective houses put right at the expense of the contractor?

Senator E D MILLEN (NEW SOUTH WALES) -In the. case of those built by contract, yes. Those built by day labour were- put right at the expense of the Department, so that the charge will not fall upon the soldier.

As regards defective houses, it is stated iu the report of the Public . Accounts Committee that Mr. K easing, honorary architect of the New South Wales branch of the Soldiers League, stated in evidence that he had found that the houses' now being built by the . Commission were of excellent construction. I submit that that evidence is worth something, because that gentleman, who is a professional architect, was appointed by the Soldiers League to watch the interests of the soldiers.

Another point which the Committee stresses is the delay in building, and the fact of this, delay, seeing that . interest charges had to be added, increasing very much the cost to the future occupant of the home. That is admitted and regretted, but' it seems to me that it is entirely due to the imperfect organization which the Department had created for supervising its day-labour 'operations. Day labour may be, and I believe in certain circumstances can be, used very effectively, but it is absolutely essential to have over it the most complete and well-keyed-up controlling organization. That was entirely absent- in the case of the War Service Homes. I have mentioned that day labour is to be abandoned.

Senator PRATTEN (NEW SOUTH WALES) - Will the Department penalize the soldiers for the extra expense incurred owing to the want of organization ?

Senator E D MILLEN (NEW SOUTH WALES) - If the honorable senator means cases where the costhas gone beyond the statutory limit, the reply is that except where soldiers have themselves' been responsible for the amount being exceeded by asking for additions, or'- where they nave agreed to accept the house within- a certain . limit, Broadly speaking.,, the' Government propose to shoulder that loss.

I turn now to another aspect of this matter. When the Commissioner first took office; and in conformity with the policy of the> Government announced when I presented the Bill to this Chamber,, the Commissioner then set about assembling supplies' for the work. It was quite: clear at that time that the market was. short of . building, materials. The: Commissioner endeavoured to obtain these through the ordinary channels; expecting, of course,, some reasonable concessions from those who were in . a posir tion to- contract, for the supply of timber, bricks, and other materials for- building purposes but, he found it practically impossible, to, get supplies in any guaranteed quantities,, ox at anything like, a, reasonable concession- on. market rates., So much is admitted,in the earlier repoart. of the Committee to which I' have- referred. He was,, at the same time, severely criticised by the associated builders', of. this city and of. Sydney for seeking to enter an already denuded and barren market for building material.

Senator GUTHRIE (VICTORIA) - Was there an artificial shortage at that time ?

Senator E D MILLEN (NEW SOUTH WALES) - I do not know; The Commissioner, at all events', was unable to obtain his supplies under the ordinary contract system, and, as a consequence,, he entered into negotiations for the purchase of the timber areas to which Senator Duncan has made reference.. I direct attention to the fact that the Commissioner entered into negotiations for the purchase of many of these things before, by accident, I learned of them at all. I." want to stress that point, because it was apparent that the Commissioner, by entering into these long-distance contracts without the knowledge of the Minr ister, little understood what, was due to the Minister. It was, as I have stated, only by accident.. I learned, that these negotiations were in progress. The. first contract had been completed before I heard of it. and to have broken, it would have involved, the Government in legal action. After1 1 learned, of these things-, I. took the- matter to- Cabinet, and inefr agreed, that. I should go on, subject to my satisfying; miyself that, each contract was a sound . business proposition.

It is necessary that-I should refer now te- the building' programme pf the Depart ment. The amount set aside f or the purchase of houses- already- erected was £250,000>; 'but instead of following out this policy, the Commissioner purchased houses already erected to the extent of nearly £3,000,000'. As a result of spending so much money in this way, he- had on hand a great quantity of material for which, there was: no use. I. want the Senate to understand this position. I hope- 1, have made- it quite clear.

Senator Payne - That brought about a suspension of- operations, I presume?

Senator E D MILLEN (NEW SOUTH WALES) - Yes. The Government are reviewing these contracts and making such adjustments as appear to be: desirable in the circumstances. The action, of the: Commissioner' in purchasF- ing- houses' already erected, . to the extent of nearly £3,000,000, was- clearly a violation of the policy laid' down by the Government. Many of these purchases, were effected1 long before the Government knew anything about them. Contracts had been entered' into, and the soldiers had. frequently paid their' deposit, so that there was only one thing to do in order to avoid losses to the soldiers, and that was to complete the purchases. This placed the Department in the position in which, it finds itself to-day with regard to a superabundance of supplies and an absence of. funds.

Many of the houses, built by the Commissioner exceeded the cost laid down in the Act. I refer to this matter, because I am, to some extent, involved, in it, as on two or more occasions; when attending the opening of certain groups of cottages, I told those interested in. the matter that the price fixed by the Department had not been exceeded. It is regrettable to know now that, in the case of 1,400 houses, the statutory limit has been exceeded, by a total amount of £130,000.

Senator PRATTEN (NEW SOUTH WALES) - Were they built by day labour?

Senator E D MILLEN (NEW SOUTH WALES) - Yes. I refer to this matter because, as I have said, I made public: statements regarding it,, the first occasion being the opening of a group of cottages at Bell, in Victoria. But, before making any statement at all, I asked the Commissioner if he could tell me the: cost of the houses; because I intended to make a public statement, and I did not wish to. be bowled out the following. week by the disclosure of some error on the part of the Department. I requested him to carefully check the cost of each building, and then to get his accountant to verify his figures, so that I could be on perfectly safe ground. The figures supplied by the Commissioner were those which 1 used at the opening of the cottages at Bell. I followed the same course' at the opening of cottages at Belmore, in Sydney. 1 regret now to find that . the cost in each case exceeded the figures given to me b;r, I think, from £35", to £80. I want to emphasize, however, that I cannot be held responsible for inaccurate information "given to me by my. departmental officers; I cannot be expected to check the figures and the costing system of the Department. I discharged my responsibility when I took every reasonable precaution to get the most, reliable information from the responsible officers of the Department. I lr.ention this matter, because, to some extent, my veracity is involved. I asked Lieut.-Colonel Walker. how he could give me the cost of these houses to -a £10 note, and he said, " I can . tell, to half-a-crown, the cost of every stick of timber that goes into these houses.". Isay, then, that, with such an assurance, I was perfectly justified in using the figures supplied to mo. . 1 regret, as much : n any one else, that they. were wrong, but I repudiate altogether the suggestion that, with any fairness, I can be held responsible for them.

The Act requires that once a year a report of the activities of (he Department shall be made available to Parliament. That report is in course itf preparation. I hope it will be availab le soon. In the meantime, I shall be pleas fed to give honorable senators any inclination at my disposal. Necessarily, it, isnot possible, in , the brief summary which I have presented, to deal with all the matters that may properly find a place in the report to which I nave referred.

Senator PRATTEN (NEW SOUTH WALES) - Will the Minister make it quite clear that soldiers will not be required to shoulder the extra cost of the houses "that have exceeded the esti- mate ?

Senator E D MILLEN (NEW SOUTH WALES) - I- have al- . ready pointed out that where the extra cost is the fault of the Department, the soldier will not be charged the extra amount; but, in cases' where a soldier entered into an understanding with regard to excess costs, . it is fair to. ask him to stand up to his bargain. In no case will the soldier be penalized through any default of the Department.

Senator PRATTEN (NEW SOUTH WALES) - That is, to say, where a soldier has contracted to pay £800 for a house, if it costs more, the Go- \ernment will shoulder the extra cost?

Senator E D MILLEN (NEW SOUTH WALES) - Yes, unless the extra cost has been incurred with the concurrence and approval of the soldier himself.

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