NATIVE AFFAIRS

Otago Daily Times, Issue 22137, 15 December 1933, Page 12

NATIVE AFFAIRS

AUDITOR-GENERAL’S CHARGES FINDINGS OF SPECIAL COMMITTEE INQUIRY COMMISSION SUGGESTED (Per United Press Association.) WELLINGTON, December 14. The appointment of the commission to investigate not only the specific charges against the Native Affaire Department made by the Controller and Auditor-general (Mr G. F. C. Campbell), but the whole administration of the department, with particular reference to land development was advocated by the Public Accounts Committee in an important report which it presented to the House of Representatives this afternoon. The committee, which was instructed by the House to take evidence on the Auditor-general’s charges against this department and the Treasury Department, declared emphatically that although his report had created a feeling of uneasiness, actually the public accounts represented the "true and correct position of the financial administration of the Dominion. It recommended that an effort should be made by the Government departments concerned to reach an agreement on accountancy practice. Mr J. A. Nash (Palmerston) presented the report. , I The committee said the report had created an erroneous impression in dealing with more or less minor matters and had mistakenly created a feeling in the minds of those not well versed in public finance that the financial administration was at fault. The committee was of the opinion that the public accounts represented the true and correct position of the financial administration of the Dominion, and it felt that efforts should be made by the departments concerned to reach an, agreement as to the accountancy practice to be adopted. NATIVE LAND SETTLEMENT In reference to Native land settlement administration the committee reported as follows:

1. In view of the great expansion of its activities, especially in the execution of the policy of developing Native land, the administrative machinery of the Native Department has not been sufficient to keep pace therewith or to establish efficient control over details of the expenditure. " 2. That if the matters specifically indicated in the report of the Auditor-general as arising in the Rotorua and east coast districts are the only issues for investigation, the committee is satisfied with the view of the Controller and Auditorgeneral that the necessary investigations can be most efficiently carried out by his officers. But in view of' tlie great impbrtance ‘to the Maori race and the Dominion of the maintenance of the policy of assisting the Maoris to develop and farm their lands and the danger that may arise at this juncture from a misunderstanding of the difficulties under which they labour, dr of, their methods and customs in relation to the organisation of their labour and activities, and in view also of the disquiet in the minds of the taxpayers of the country, the committee is of the opinion that the scope of any inquiry should be much wider ,than these specified issues, and therefore recommends that a commission be appoirited to investigate, not only the matters arising out of the report of the Auditor-general, but also the whole of the administration of Native affairs, especially in regard to the development of Native land and the administration of the estates of Maori people. 3. The committee hopes that the steps already taken and in process of execution by, the Government will establish this Department of State, on a satisfactory and efficient basis. These steps are—(a) The establishment of a, Native Lands Development Board; (b)- the amalgamation of the control of the Native Department and the Native trustee and the appointment of a new departmental head to reorganise the whole of the joint activities; (c) a decision to rescind the various statutory powers in the hands of the Native Minister which are now transferred to the Development Board. C

A WRONG IMPRESSION Mr Nash said it had been impossible to have the evidence ready for presentation to the House that 'day, and he asked permission to table it to-morrow. He said the committee had agreed' that a wrong impression had gone abroad in regard to the public accounts. The comriiittce’s investigation had shown that the difference between the auditorgeneral and the Treasury was purely a matter of accountancy methods in presen ting, the accounts, and he was certain it would be adjusted as between these two departments. The committee was fully alive to the importance ‘of the Auditor-general’s office.

EVIDENCE BEFORE COMMITTEE In regard to the question of native land settlement, Mr Nash proceeded, Hu) committee had had before it a number of witnesses who had given evidence in detail, and there had'been no suggestion of hurrying them in any way. The Minister of Native Affairs himself had given evidence for no less than three hours.

Mr Nash said that in his opinion it was evident the position could be summed up by stating that the department had been under-staffed and there had not been sufficient accommodation. That had been proved. All these development schemes, numbering 42, had come into operation very quickly, and the result had been that some discrepancies had arisen. The Minister himself had had a very arduous task ,to perform and had undertaken a great deal of work that should perhaps have been done by others. Investigations were still being made by the Audit Department and one case was before the courts. It had not been possib 1 e for the committee to go fully into the question of the purchase of stock, seeds, manure, and so forth, but th.it would no doubt be done by another tribunal. NATIVE UNEMPLOYMENT The question of unemployment subsidies had loomed very largely, said Mr Nash, and this had also been discussed by the committee and evidence had been taken. From May, 1031, to May, 1032, a sum of £BOOO had. been granted by the Unemployment Board. In May, 19354, £24,000 had been granted and up to March 81 next provision had been made for a total of £70,000. There were 71 000 Maoris in New Zealand, and of these he thought that 68,000 were in the North Island, 51,000 being in the Auckland province. There were 15.800 Maori males between the ages of 20 and 64 years, and in June, 1031, there were 3650 contributors to the Unemployment Fund, By June, 1932, there were 7240, and in June last the number had increased to 11,000. In September last there were 3000 Natives on the Unemployment Board’s schemes, involving an expenditure of £166,000 per annum. He wanted to point out that Maoris working under the Native development scheme, particularly where the subsidy was being paid, were not receiving, the same rate ot pay as the pakeha.

Mr P. Fraser (Wellington Central) : What has that to do with the alleged defalcations?

Mr Nash said the committee’s attention had been drawn very forcibly to the psychology of the Maori race and its tribal differences, and it was evident they were a yery difficult race to handle. The country had a duty to the Maori and the Government was called upon to do all it possibly could and particularly to be sympathetic and helpful.

. THE REPORT DISCUSSED The Leader of the Opposition (Mr M. J. Savage) said the House was expected to discuss the report without having copies of it or copies of the evidence. He suggested that the discussion should be held over until members could peruse the report and the evidence. The Prime Minister (Mr G. W. Forbes) intimated that copies of the report could be made available by to-night and Mr Nash said that a substantial portion of the evidence would be ready for presentation by then. . , The debate was adjourned until 7.30 p.m. on the motion of Mr Savage. When the House resumed, Mr Nash intimated that the whole of the evidence placed before the Public Accounts Committee was now available and he laid it on the table. ~ Urgency was accorded the adoption of the formal motion presenting the committee’s report. Mr E. J. Howard (Christchurch South) said the main question before the committee had been the Auditorgeneral’s comments on the accounts of the Native Affairs Department. The evidence had shown that one individual who had had the job of obtaining signatures on vouchers had got the Natives to sign them without the amounts first bein" inserted. It had also been shown that” money from * the Unemployment Fund had been used for the purchase of seed to be placed on land occupied by persons who were not unemployed and chat the money had been spent on ploughing carried out by persons who were not employed. It would probably be found when'the commission had completed its duties that muddlement had been the foundation of the trouble. When there was muddle, the opportunity arose for those who had “sticky fingers,” and thieving had been going on. Mr D. G. Sullivan (Avon) commented on the order in which the sections of the committee’s repoH had been presented to the House and expressed the opinion that it might create a wrong impression. “If there was one thing that predominated it was a determination on the part of a majority of members of the committee that there should be no reflection on the Auditor-general and no whittling down of his report,” he said. Mr Sullivan contended that the reference to Native land settlement should have been placed first and should not have followed the paragraph referring to the accountancy methods. Mr Sullivan expressed the opinion that the committee s proceedings should have been open to the press and said he had made a suggestion to that effect. Mr Fraser: Did the Minister of Finance oppose it? Mr Contes: No. Mr Sullivan: Yes. Mr Coates: .1 pointed out that a resolution of the House would he necessary. Mr Sullivan: The Minister did not give any indication that he was anxious for the press to be present. Mr Coates; That is unfair. Mr Broadfoot: It is unfair and incorrect. LABOUR CRITICISM • ' Mr Sullivan said that 24 points had been submitted to the committee, and of these 22 had merely concerned professional differences as to the correct accountancy practices to follow. The other two points had referred to pensions and Native land settlement.

Dealing with pensions, Mr Sullivan said the Auditor-general had pointed out that some pensions reductions had been put into effect on April 1, 1932, instead of on May 10. The Labour members of the committee had definitely dissociated themselves from the decision of the committee in favour of the introduction of legislation validating the action in imposing the reduction at an earlier date. The explanation given by the Minister and Treasury had been that in their view it had been the intention of the House that all pension reductions should take place on April 1, but he contended that no one had been in a position to say what had been the intention of the House.

Dealing with Native land settlement, Mr Sullivan said 'that everybody realised the great effort the Minister had been making to educate his people in the productive methods of the pakeha, and it was desirable that the work should be carried on, but it was also in the interests of the Natives themselves and the Dominion as a whole that the work should proceed with the undesirable features that had emerged during the discussions eliminated. The statement made by the Auditor-general had been a very grave one, particularly as lie had found himself in the position of making .the same report two years in succession. Apparently nothing had been done to rectify the position. Mr Forbes: Legislation was passed. Mr Sullivan: But the very wide powers of the Minister, to which the Auditor-general referred, were not altered. Mr Sullivan contended that a very heavy responsibility rested upon the Government as a whole for not| staking up this matter, finding out what was wrong, and rectifying the position. It was now proposed to reduce the powers oif the Native Minister, but steps should have been taken previously to deal with the position. It had been pointed out that an undue load had been placed on the Native Minister.

“SACK BARRY” Mr Sullivan contended that this situation had had some unfortunate results, one of which had been the dismissal of an officer named Barry because he had conscientiously refused to sign certain vouchers and had characterised some of the schemes as uneconomic. The departmental head had communicated with the Minister, who, according to the evidence, had replied, “ Sack Barry.” “If ever an injustice has been done in the administrative history of the Dominion it was done to Barry,” said Mr Sullivan. “He was sacked for doing his duty.” Mr Sullivan added that he knew the answer would be that the Minister could only have the man removed from the Native Department and not from the Public but the fact remained that Barry had been dismissed from the public service. A select committee of the House had reported in favour of Barly’s reinstatement, but this had not been done.

Mr H. T. Armstrong (Christchurch East) said there was scarcely a department of State that had not been severely criticised by the Auditorgeneral. He could not understand why the Native Department alone had been selected as the subject for a commission. “I think we want a commission in respect of practically every department,” Mr Armstrong said. “ In fact, the comments of the Auditorgeneral are sufficient to cause the resignation of the Government, which should submit itself for the approval of the people. That is the sort of commission that is wanted to put things right.” MINISTER DEFENDED

Mr W. J. Broadfoot (Waitomo) said that os one who had lived all his life in Native territory he could pay tribute to the success of the Native Minister in his land development schemes, which had been the first genuine and practical attempt to solve the outstanding problems and differences between the Maori and the pakeha. The men required for field supervision work had to possess peculiar capacity, including a knowledge of the

psychology of the Natives and of their jealousies, tribal difficulties, and hates. Insinuations had been made, Mr Broadfoot proceeded, that the Minister had been responsible for the dismissal of a European officer, but the truth had been that there had been incompatibility of temperament between that officer and one of the leading Native women handling the settlement scheme. The question had been whether the scheme should be stopped or whether the man should be transferred to another department. The Public Service Commissioner had suggested that the man should go back to the Lands Department, and the only reason he had not been re-engaged bad been that there had been no vacancy. Throughout the development schemes, concerning which nearly 6000 Natives were employed in productive capacities, the main desire of the Minister had been to get , the. best out of the workers. By linking the unemployed with that productive work wonderful results had been obtained for the expenditure. When a full inquiry was made it would be found that the operations of the department would compare more than favourably with those of any other department in the State service. Mr Broadfoot said the i Auditor-general had not given any definite information (before the committee as to the question of alleged deficiencies or wrong-doings in the Native Department. He suggested to the House that in other sections of the Auditor-general’s report there were matters just as vital as the Native land development schemes which deserved serious consideration. It should be noted that there had been peculations in the Labour Department totalling £943, in the Justice Department totalling £3BB, and in the P. and T. Department amounting to £6OO. Against the High Commissioner’s Office in London were charged peculations totalling £2660. In that case, how- ■ ever, the report did not indicate that it had been an officer of the Audit Depart- - ment —the chief auditor in London and his chief assistant —who had been responsible. That omission had been a'grave oversight and unfair to the High Commissioner add his staff in London. — (Hear, hear.) s Continuing, Mr Broadfoot said he agreed there had been muddlement and inefficiency, but a modicum of this should have been expected. > Parliament had passed the legislation and every member had to take, a share of the responsibility for the empowering legislation. But in rapidity of growth of this extraordinary development scheme it was inevitable that there be lapses here and there. Had the Minister not had breadth of authority the scheme would have been strangled at birth. For what had happened the Development Board must take some responsibility. It was unreasonable to centre any attack on the Minister himself. Sir Apirhna Ngata had intimated his intention of retiring from politics at the end of the present term, and he had made earnest endeavours to train a band of men to take his place and carry on the good work. Mr Broadfoot said that when all the facts were known and the costa and losses were analysed, the House would have no misgivings so far as the Native lafid development schemes were concerned. The result of the findings of the Royal Commission would shoV that a magnificent effort had been made by the Minister and the Native Land Development Board and its staff, and any frailties would be of small account when compared with the size of the operations of the scheme. An indefinite charge had been made concerning grass seed. Last year 30,000 acres had been sown, and the committee had found that the charge boiled down to the disposition of one sack of clover containing 2001 b at Is a pound. Mr Broadfoot pointed out in conclusion that Mr Sullivan had had a good deal to do with the rewriting of the committee’s report, and it was hie own fault- if that document did not satisfy him. MAORI SPEAKERS

Mr E. T. Tirikatene (Southern Maori) said that the legislation on behalf of the Maoris had been put through too fast, but the Maoris were prepared to face up to the position and if necessary take their gruel. _ . Mr Walter Nash ’(Hutt) suggested that Sir Apirana Ngata should resign the position of Native Minister without resigning from the Cabinet in order that the officers of the Native Department could give their evidence before the commission freely and frankly. Mr T. Te Tomo (Western Maori) appealed for a full and open inquiry into all the circumstances, with the object of removing heart-burnings and eliminating misunderstandings. FULL INQUIRY WELCOMED The Prime Minister said he thought the recommendation! to set up a commission was a good one. There would be a feeling of doubt in the minds of the people of this country that in regard to the administration of the schemes the Maori people were not as reliable as one might have hoped. Mr Parry: That has not been suggested. Mr Forbes said that' by setting up a commission to investigate the whole position and to see what could be done to enable the prosecution of the settlement policy and a solution of the Maori problem generally advantageous results should be obtained. That was what the Native Minister had requested. It would constitute a stock-taking that wduld enable the Government to push on the work with, in his opinion, very great advantage to the Maori people. He, for one, would not like to see anything that would discourage the carrying out of that policy. Mr Forbes went on to say that members had referred to a previous complaint by the Auditor-general regarding Maori land settlement and had alleged that nothing had been done to meet the position. He emphasised that the Native Land Settlement Board had been set up specifically to meet this position and he had been under the impression that the board had been carrying out the duties imposed on it bv Parliament. He bad heard not one word to indicate that the board was not carrying out the work which it had been appointed tp perform. The board, however, had done nothing and the position had got into the state to which reference had been made. Mr Parry: Whose fault was thatt Mr Forbes: If things were getting into a state of muddle, surely it wan, for the beard to have reported the position to the Government when something could'' have been done. Continuing, Mr Forbes said the Auditor-general was not the last word. Parliament had the right to investigate charges made against any department. Beierring to pensions, Mr Forbes said it had been due to an oversight on the part of the law draftsman that the position had not been made clear in the Act as passed. It had always been the Government’s intention.that all the reductions should operate from April 1. POWERS OF COMMISSION

Mr Savage said that if a commission were set up the House would be justified in assuming that it would be a Royal Commission and that its repart would be, presented to Parliament instead of being lost in some blind alley. He also asked that someone in whom the country had confidence should preside over the commission; he suggested a Supreme Court judge. Mr Forbes; The president will have to go into all phases of Native affah's. Mr Savage: And he will have to weigh the evidence, which a Supreme Court Judge does every day. Mr Forbes: The Auditor-general is going into all the affairs of the department.

Mr Savage: I think it would be a good thing to have a Royal Commission that will have something to say about the Auditor-general’s report.

Sir Apirana Ngata thanked the House for the tone of the night’s debate. Ho emphasised the importance of an understanding in racial matters and said there had been an improvement in the tone of the discussion compared with a few days ago. If there had not been that improvement some queer things might have happened in New Zealand. The debate, jvas still proceeding when the Telegraph Office closed at 2 a.m.

evidence Before committee THE PRINCIPAL WITNESSES. (From Our Parliamentary Reporter.) WELLINGTON, December 14. The breakdown in the administration of Native affairs in New Zealand, which has resulted in extensive audit investigations in Gisborne and on the east coast of the North Island, and may now lead to the .appointment of a commission of inquiry,‘was investigated at length by the Public Accounts Committee on an instruction of the House to examine the Audi-tor-general’s report. Practically the whole of the evidence given before the committee, which was tabled in the House to-night, is devoted to this investigation. Many witnesses were called, including the Native Minister himself, who submitted to a three hours’ examination, and the Contrtdler and Auditor-general (Mr G. F. C. Campbell). AUDITOR-GENERAL’S EVIDENCE.

Mr Campbell said it was soon after the inauguration 'of the scheme for the development of Native lands under the Act of 1931 that the Audit Office had difficulty in obtaining the necessary information with regard to the authorisation of expenditure to enable it to pass the accounts of the department. His officers continually reported that when informar tion was sought from the department the department, though anxious to supply it, yet had not the information, or if it had the information it was not in a position -to supply it. Queries on vouchers were innumerable. They were referred to the department, and the only answer with regard to the authorisation of the expenditure was that it had been approved by the Minister under the powers granted him by the Native Land Act. Those powers were very ample, and had they been exercised in the usual way the present inquiry would probably not have been necessary. /

The Auditor-general went on to criticise the inadequacy of the department’s staffing. T]ie Audit Office, he said, had found it quite impossible td exercise the check over the expenditure which Parliament naturally expected. He had spoken several times to the Prime Minister, who had been shocked to find that proper accounts were not being kept and that extravagant methods of purchase had been in vogue, but did not look on the matter as being so important as it eventually proved. As a result of these conversations, he had written a memorandum to Mr Forbes on October 4 last, advising that the Minister’s powers should be placed in the hands of a board. In the meantime, Mr Campbell proceeded, audit inspectors were at work in the Waipu district, and one inspector had sent down a progress report that lie had discovered very considerable irregularities in the case of the Waipu Co-opera-tive Dairy Factory. He had purposely held back hi e report to Parliament to obtain something definite. He referred to cases of extravagance in dealings in stock and grass seed. He said he expected to be able to complete hia full report in three months. He would probably have a further report in a fortnight, but that would not be complete. He had read with some surprise the reference to the inaction of the Government.

Anything he had represented to the Government had been given the best of attention, and as soon as he told them the matter was serious they had acted promptly. _ _ On November 30, 1933, the Native Minister had written that he had received information of serious irregularities in the accounts and stores for Native, land settlement and unemployment. In this letter the Minister requested that a competent departmental committee of inquiry should be set up, that all the requirements imposed by the Audit, Treasury, or Stores Control Board should be fully complied with by the officers of the department, and that his own powers under the Native Land Act, 1931, should be fully assumed by the Native Land Development Board, Mr Campbell. said that the Native Minister had given him great assistance. He was firmly of the opinion that it would have been more economical for the Native Department to have had a larger staff. Lands had been purchased by the department without making due inquiry either of the Land Office valuer or the Valuergeneral. He mentioned one case in which the Native Department bad purchased a piece of land in the face of the Land Board’s advice and at a price considerably in excess of the valuation put on it. Vouchers for the purchase of land submitted to him had in one or two cases been out of_ order, • In reply to the chairman (Mr J. A. Nosh), Mr Campbell said that the Minister had done a great deal for the Natives in the, settlement of land, but he did not think the methods adopted had been business like or in the interests of economy, and that slackness and laxity had undoubtedly left the door open. Asked who would be responsible for the department's failure to supply the necessary information, he said he thought the answer must be that representations had not been made to the • commissioner for a proper staff. “My representations have been,’ continued the Auditor-general, “that there was an unnecessary amount of authority and power put in the hands of the Minister, and the Minister was exercising those powers without consulting the department, and the consequence Was that when we sent down to the department for information as to the authority for certain things we could get nothing. The only answer was that 'the Minister is approving, and that is the end to it.’ ” / RESPONSIBILITY ACCEPTED.

Sir Apirana Ngata said in evidence that in spite of the strictures of the Audit Department they had tried to permeate the service with the idea of carrying out the work as cheaply as possible and securing the largest possible output for the money spent. The money allotted had never been enough. Whatever else might come out of the investigation, he would like the Government to bear in mind that the Maori settlers who had been put on Native lands had been working under a severe strain, and had only been able to withstand it by the inspiration of the men who were leading them. Sir Apirana said that Rotorua had been a source of trouble, and he had more Treasury memoranda and Audit memoranda about Rotorua than about any other district. When the irregularities were fined down, he continued, they were of the class that Mr Campbell had told the committee about—the running of motor vehicles, the checking up of stores, the distribution of posts and fencing material, the keeping tab over hundreds of tons of manure that were being distributed to the schemes, and so on. “ I want to ’say,” the Minister continued, “ that all my evidence is an_ admission that the Controller and AuditorGeneral was right in his complaint that thez’e has been too much Minister and not enough department in the administration. I admit that at once. At the same time, I want to make the point that in new development work like this, when one is thrown into the ferment of a new policy in time of depression, there did not seem anything much else to do but to get on with the job in the best way possible, and I plead guilty to not having interested myself as the head of the administration in the establishment of those checks upon the expenditure which would have satisfied the Treasury and the audit, and which have led to a breakdown of the confidence of the two finance departments in the character of the administration of the Native Department.” OTHER EVIDENCE. A letter was submitted, written by Mt Verschaffelt to the Prime Minister, in which the Public Service Commissioner reported an interview he had had with the Native Minister to suggest a change in the administration of the Native Department. The Minister had informed him that in the event of the view winch Mr Verschaffelt expressed being carried out, he might have to consider his position as a member of the Government. In this letter Mr Verschaffelt recommended the retirement of Judge Jones from the under-secretaryship of the Native Department and the appointment of a new officer. Mr Verschaffelt said his impression had been that Sir Apirana. Ngata would .have to consider his position in the Government before making his reply.

The deputy chairman of the Unemployment Board (Mr J. S. Jessep) was examined at length by the committee. Discussing the general method of his report to Parliament, Mr Campbell said he considered that if there was the slightest thing wrong, no matter how insignificant it might seem, attention should, be called to it by his audit officers. Perhaps he had erred in that respect, but it was purely a matter of principle. He asked for an assurance that there was no suggestion in his report that was purposely intended to deal unfairly with anyone. i

Mr Coates gave him that assurance. The Minister said the difficulty was that, he was torn between two departments, the Audit Office, and the Treasury, but he thought the position was now much better understood than it had been. CONTROL OF LAND SCHEMES , CHANGES TO SECURE IMPROVEMENT. (From Our Parliamentary Reporter.) WELLINGTON, December 14. The steps which have been taken by the Government to, improve the administration of the Native land development schemes were outlined by the Treasury in a statement presented before the Public Accounts Committee during its consideration of the Controller and Auditor-general’s report. During the 1929 session, the statement begins, Parliament sanctioned a scheme for the development of unoccupied Native lands now known as the Native land development scheme. . The expenditure upon this for the yeajr ended March 31 had been as follows:—1930-31, £79,300; 1931-32, £218,500; 1932-33. £261,100; total, £558,900. The difficulties experienced by the Audit Department had arisen for the most part because of: 1. The rapid acceleration of the schemes to meet, the increasing demands of the Natives to have their areas brought under development. 2. The employment of district officers who, though experienced in the principal function for which they were appointed, in many cases had proved inexperienced in field accounting and administrative duties.

3. The problems inherent to the Native question 4. The wide powers vested fn the Native Minister under the Native Land Act, 1931, under which schemes had been pushed, forward without due regard to the institution of adequate store and accounting control. 5. Irregularities by certain employees, some of whom had been dismissed, while others were under audit investigation. The steps taken by the Government to meet the position had been as follows; — 1. Amending legislation abolishing the Native land settlement account and instituting a’, board of control. 2. Pending legislation, to curtail the powers of the Native Minister. 3. The appointment of a new permanent head, with the reorganisation of the staff and administrative machinery now in progress.