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Tuesday, 13 December 1927


Senator McLACHLAN (South Australia) (Honorary Minister) . - I move -

That the bill be now read a second time.

The object of this bill is to approve of an agreement between the Commonwealth Government and the commissioners of the State Savings Bank of Victoria in relation to the erection and purchase of homes for returned soldiers in that State. This branch of Commonwealth activities has been go verned by the War Service Homes Act, but, so far as Victoria is concerned, the work has for some time been carried out by the State Savings Bank, the relationship existing between the War' Service Homes Commission and the bank being that of principal and agent. The bank has accepted no responsibility for the repayment of any advances made in connexion with the erection or purchase of war services homes. That relationship is altered by the bill. The bank will continue to function as formerly; but it will accept full responsibility for the repayment of the advances made to it by the Commonwealth. The amount for which it will be responsible in respect of past advances will be fixed by the Auditor-General. In practically every other respect the provisions of the War Service Homes Act will apply. Advances will carry interest at the usual- rates. Various machinery clauses to provide for the better control of war services homes are included in the bill. The Commonwealth, by its officers, will have power to inspect a war service home at any time during the course of construction, or on completion of the work. Part I. is of a purely machinery nature. It provides that the agreement shall not come into force until it has been ratified by this Parliament and also by. the Parliament of Victoria. I understand that the Victorian Parliament has already ratified it, so that it now remains for this Parliament to do the same. Part II. relates to the adjustment of past transactions. The AuditorGeneral will finalize matters of finance as between the Commonwealth Government and the bank. Subject to certain limited appeals, the bank will accept liability for the amount shown in- the certificate of the Auditor-General. Honorable senators may be interested to know that, up to the 30th November last, the State Savings Bank of Victoria had erected 3,045 war service homes. In addition, it had purchased 204 homes, discharged mortgages in respect of 35 homes, and had enlarged one home. The number of houses now in course of construction is 163, while tenders have been called for 35 more. The total expenditure to the 30th November, 1927, was £2,412,196, of which £501,771 had been repaid. Arrears at that date amounted to £4,136 ; the total amount outstanding, including arrears of interest, was £2,331,118. Part III. governs the advances which may be made under the new arrangement. The somewhat complicated method of computing interest is dealt with by clause 17 (2). There are ample safeguards to ensure that the money advanced shall be expended in accordance with the agreement, and that the bank will repay the advances, together with interest thereon.

SenatorFoll. - In the event of a soldier not fulfilling his obligations, will the bank be given any additional powers ?


Senator McLACHLAN - The powers of the bank are strictly limited to those vested in the War Service Homes Commissioner under the War Service Homes Act. In addition, clause 23 of the agreement provides for the rigid observance by the bank of the provisions relating to persons to whom advances may be made. Sub-clause b provides that the bank will not, out of moneys advanced by the Commonwealth, advance to any borrower a greater sum than £800 unless authorized in writing by the commissioner. There has been an increase, as honorable senators are aware, of the amount that may be advanced, and that will be given effect from time to time.

SenatorFoll. - What power will the bank have in the case of default by a returned soldier?


Senator McLACHLAN - The bank will be in the same position as the War Service Homes Commission is in now.


Senator Foll - Will not the War Service Homes Commission retain to itself the right of ejectment in cases of default ?


Senator McLACHLAN - No. The State Savings Bank authorities, having accepted full liability for the whole of the amount advanced, will take the place of the War Service Homes Commission in respect of all administrative acts, subject to the provisions of that act.


Senator Duncan - Will returned soldiers have the right of appeal to the commission ?


Senator McLACHLAN - Not with regard to ejectment or matters of that kind. It would not be reasonable to expect the bank to accept full responsibility for the expenditure of moneys advanced by the Commonwealth, and surrender its right to realize on its security. I direct attention to paragraphs c, d, and e of clause- 23 of the agreement, which read -

(c)   The bank will not require a- purchaser to comply with conditions, . of purchase which are less favorable to the purchaser than the conditions of purchase contained in the act and regulations; (d)The bank will not charge to a purchaser interest at a greater rate than the interest payable for the time being by purchasers under the act and regulations; and

(e)   While the control of the design and. the construction of homes shall rest, wholly with the bank, the Commonwealth shall at all reasonable times, by its officers . have access to, and may inspect any home completed orin course of erection by the bank under this part.

There are machinery provisions in clauses 24 and 25 to provide that where there is any conflict of interest, or where an" injustice is being done to returned soldiers by any administrative act of the bank, the Commonwealth may, by giving three months' notice, terminate the agreement. As the agreement has worked very satisfactorily hitherto, I have no hesitation in asking honorable senators to pass the bill.







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