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Wednesday, 4 December 1935

Senator UPPILL (South Australia) .- I support, the bill. The features of the measure which I intended to deal with have been covered by Senator Hardy, and I endorse his remarks. In regard to the difficulties of occupants of war service homes whose repayments are in arrears, I point out that many of these homes were built between -1921 and 1929, at the peak of the building boom when prices were so high that the occupants, even many who were in constant employment, could not keep up their payments of interest and principal. Eight from the beginning, occupants of war service homes have found it difficult to keep up such payments, but when the depression came even those in permanent employment found it very hard to meet their commitments. Difficulties were also experienced because many purchasers were out of work, working only part time, or suffering from sickness. In cases where the death of a purchaser occurred, the widows were heavily involved. I congratulate the Government upon having introduced the bill, and I commend it for the policy which it proposes to pursue. This policy, however) appears to be entirely opposed to the report of the war service homes Commissioner, in which the State Bank of South Australia was severely criticized for administering the act on the lines now proposed in this bill. The report of the War -Service Homes Commissioner for the year ended the 30th June,, 1935, appears to be devoted largely to an attack upon the South Australian authorities for the manner in which activities were conducted in that State prior to the 1st January, 1935, when the administration was transferred to the War Service Homes Commission. It appears that every effort has been made to show matters in the worst possible light. Some of the comments in the report are not only unfair, but also deliberately misleading. Under the heading of "Arrears of rent" the following statement appears : -

In the case of one district it was discovered that the local agent had collected approximately £.155 in rent dating from December, 1031, which had not been paid to the bank. A sum of £05 was forwarded to the commission in January, 1035, and the balance in the following month.

Any one reading that statement would naturally infer that the War Service Homes Department made the discovery and collected the money, whereas the facts are these: The State Bank had been pressing the local agent for the remittance of rents collected, but owing to protracted illness, he pleaded, he had been unable to attend to his business and that his books were not posted to date. The bank continued pressure for a statement of accounts and a remittance, and finally on the 11th January, 1935, the State Bank received from the local agent a remittance of £95. Actually the State Bank collected the £95 which, with, the amount of £60, was paid to the department. In view of this_ fact the report appears to be deliberately misleading. The bank endeavoured to administer the act from a commonsense point of view, and it kept in close touch with the particular case. It concentrated on collecting the money without inflicting hardship upon the agent or upon .the individual householders. On page 6 of the report, under the heading " Financial Settlements," this statement appears -

It was arranged that the State AuditorGeneral, and the chief auditor for the Commonwealth in South Australia should prepare a statement on which adjustment of the financial position could be effected. Previously, however, the items of adjustment had been agreed upon between the parties, South Australia being represented by the Chairman of the State Bank Board of Management, who, as State Under -Treasurer, also acted for the Treasury. This proceeding was somewhat protracted on account of the. further claim submitted on behalf of the State, the complications arising from the use of State funds in connexion with Commonwealth homes and the expenditure of Commonwealth funds on State homes.

It was never arranged that the Auditor should prepare a statement on which adjustment of the financial position could be effected. The arrangement made was that the main principles of the transfer should be included in the agreement to be signed on behalf of the respective governments, and the details of the settlement were to be worked out by the War Service Homes Commissioner and the Under-Treasurer of South Australia. That procedure was actually followed.

Senator Sampson - Was the State Bank of South Australia acting as agent for the Commissioner?

Senator UPPILL - Yes. The War Service Homes Commissioner made certain claims for losses which South Australia was not prepared to concede, and also intimated that he would not take over the advances made on eleven leasehold securities. These unexpected demands naturally delayed . the settle- ment, and it was finally arranged that in consideration of the Commonwealth making an ex gratia payment of £7,000 South Australia would pay the rates owing on reverted war service homes and accept liability for the advances outstanding on the eleven leaseholds referred to. Sections 1 and 2 of the War Service Homes Agreement Act 1934 of South Australia read -

1.   In consideration of the Commonwealth permitting the Treasurer of the State to retain out of any moneys received by him on account of war service homes as defined in the agreement any sums owing to the State for water and sower rates payable on these homes, the Treasurer of the State may transfer the balance of the advances made by the State Bank on eleven leasehold securities from the war service homes account to the Advances for Homes account of the State, and may repay to the Commonwealth the balance of the principal sum outstanding in connexion with such advances.

2.   Upon the transfer to the advances for homes account of the State of the balances of the advance on leasehold securities referred to in sub-section 1 of thissection those advances shall be deemed to have been made under the Advances for Homes Acts of the State but without affecting any contract or rights as between the bank and the persona to whom the advances were made.

It will be admitted that the delay in the final settlement was caused mainly by the action of the War Service Homes Commissioner, and not by the UnderTreasurer of South Australia. South Australia was effected adversely by the depression, and the proportion of unemployment was greater in South Australia than in any of the other States. Prior to that time drought conditions prevailed between 1926 and 1931 which made the position even more acute. In these circumstances the collection of rents, interest and rates on war service homes was exceedingly difficult. If it could be shown that the State Bank had collected moneys on behalf of the State in respect of advances for homes, and neglected the war services homes business there would be legitimate ground for complaint, but such was not the case. The war service homes business was transferred on the 1st January, 1935 and the latest date at which a comparison can be made is the 30th June, 1934. The comparable figures relating to advances for homes in South Australia and war service homes under the State Bank of South Australia at that date were -


The percentages show that the record in respect of war service homes is better than in respect of advances for homes except as regards reverted properties. In view of the fact that the war service homes business started in 1921 while advances for homes started in 1910 it would naturally be expected that the depression would, more adversely affect the housing activities started in 1921 when property values were on a higher level than they were before the war. In regard to reverted properties, the following figures showing the position as- at the 30th June, 1934, are taken from the War Service Homes Commissioner's report for that year: -


As regards reverted properties it would appear that the administration of the State Bank bears more than favorable comparison with the record of the War Service Homes Commission itself. The report also shows that the War Service Homes Commission has invested £430,948 in "land purchased for future requirements " and no similar item appears in connexion with the administration by the State Bank of war service homes in South Australia. The conference in November, 1933, provided for a new agreement for five years in respect of war service home in South Australia on certain conditions. Although the South Australian Ministry agreed thereto and asked the Commonwealth Government to do likewise, the Commonwealth later intimated that the agreement arrived at. in the conference would not be proceeded with - even though this had been agreed upon - but that instead, the Commonwealth would take over the war service homes business from the State. The minutes of the conference of April, 1934, set out the general lines upon which the transfer of the business would be effected.

In regard to the general history of war service homes in South Australia, the following salient points are submitted : -

1.   Although the business commenced in 1021, the Commonwealth allowed South Australia no commission for conducting the business prior to the 1st January, 1024, although the State had paid the State Bank a commission for conducting the business and the State incurred a loss thereby.

2.   The commission paid to South Australia, from the 1st January, 1924, was 10s. per cent, on the outstanding advances. The commission paid to Western Australia and others was 15s. per cent, on outstanding advances. Had South Australia been accorded the same treatment as Western Australia, the additional commission payable to South Australia would have been approximately £90,000.

3.   South Austrlia bore a loss of £8,780 interest paid to the Commonwealth for the period from the 1st July, 1925, to the 13th June, 1929, in excess of the interest actually collected from the individuals purchasing war service homes.

4.   South Australia paid the War Service Homes Commissioner the sum of £7,145, being one-half of the profits from insurance of war service homes for the period from the 1st July, 1929, to the 31st December, 1934, inclusive.

5.   Certain other concessions were made in the final settlement which involved a refund to the 'Commonwealth of about £955 of the £7,000 esc gratia grant. At the final settlement the Commonwealth Auditor, Mr. D. E. Aikins, expressed the opinion that the concessions then made by South Australia were of a liberal nature.

I" submit that the tone of the report directed against South Australia is not reasonable and is quite uncalled for. We are prepared to admit our mistakes; but we resent, and do not admit a statement of this kind. I do not wish to embarrass the Government, but South Australia has had to suffer the effect of this report, which has been distributed throughout the Commonwealth. I have shown that the South Australian officials have endeavoured to administer the act fairly, and much on the same lines as is pro- posed in this bill. I support the second reading.

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