23 APRIL 1994: WA1: RICHARD RAXWORTHY TALKING TO DENNIS HAGAN

What is your full name Mr Hagan?

DH:      Dennis Charles Hagan

What year were you born?

DH:      30 November 1934.

Where abouts?

DH:      Claremont in Western Australia.

Is that a suburb of Perth of not?

DH:      Yes, a suburb of Perth.

Did you grow up around there?

DH:      No, I grew up south of Perth actually, in a suburb called Spearwood and then South Fremantle.

What schools did you go to?

DH:      I went to Spearwood State School, South Terrace State School, Fremantle Boys’ High School. I left Fremantle Boys’ High School in 1949 as a boy of fourteen and a half to join the Customs Department in Fremantle.

The Boys’ High, what sort of influence do you think you got there? Anything in particular?

DH:      Well obviously it was a very good influence because for those lads who left school in 1949 we meet once a year to celebrate our leaving school. That group has been meeting for many, many years now. So obviously there was a great companionship or affinity with that school.

What sort of influence did you get from your family do you think?

DH:      Oh a very strong influence. A very friendly, happy, thoughtful, caring parents.

When you got your first job in Customs did you get involved in the union movement at all?

DH:      No. Not at that stage, no. Bear in mind I was only a boy of fourteen and a half.

I understand you did become involved in the union movement.

DH:      Yes, that is right. I became involved in the union movement in 1963 when I represented the Taxation Officers on the WA Branch Council of the Administrative and Clerical Officers Association.

You were in the ACOA then?

DH:      That’s right.

Had you already heard about credit unions or not?

DH:      Yes I did actually. The Australian Taxation Office in Perth had I think either the first or second credit union in Western Australia.

What was it called, do you know?

DH:      The Taxation Officers’ Credit Union I think.

I can probably look that up.

DH:      Yes. It was started by a chap called Tony Dowsett who has subsequently passed on. But the archives of that, if you try to get on to an Arthur Brown. If you rang the Australian Taxation Office in Perth they would put you on to a credit union reference. Actually I think Rod Todman is the Chairman of the Taxation Officers’ Credit Union.

It is still going is it?

DH:      Yes. A small in-house credit union which has withstood the ravages of time.

Were you a member of that credit union? Were you helping?

DH:      I joined that credit union, that was my first experience with credit unions. I borrowed three hundred pound from them.

You had moved from Customs to the Taxation Office?

DH:      That is right. I had a chequered career and have been a number of departments. But in 1961 or 1962 I transferred to the Australian Taxation Office. In 1963 I became involved in the credit union and it was around about that time that I took out this loan for three hundred pound to repair the engine of my motor car.

First loan to repair a motor car. At that time, do you remember other credit unions that were going?

DH:      No, not at that time. All I knew was that the Taxation had a credit union. The people who ran it were working in the Assessing area where I was working. That Assessing room, and I say Assessing room because there were about seventy, eighty, perhaps a hundred men all crowded in one big room just lined up with rows and rows of desks and they were assessing income tax returns. There was a camaraderie in that room that I had never experienced before and I have never experienced since.

Did you have a darg?

DH:      Yes, we certainly had a darg.

What actually were you, a clerk?

DH:      Yes Income Tax Assessor.

Right. What grade was that?

DH:      I went through to Grade 1/2, Grade 3 and at one stage I was a Grade 5 Assessor.

What about in the ACOA?

DH:      Yes I became involved in the ACOA in 1963 at the same time. I was encouraged to represent the Tax Office on Branch Council. In 1966 I became Vice-President of the WA Branch, 1967 became President and remained in that office until about May 1973 when I became the full-time Branch Secretary in Western Australia of ACOA. A position I occupied until January 1980.

So you were Branch Secretary of the ACOA in Western Australia from 1973?

DH:      Yes, 1973 to 1980.

Right. During that time did you have anything to do with credit unions?

DH:      Yes, I certainly did. In 1973 when I became Branch Secretary of ACOA I found that we shared premises with the Administrative and Clerical Officers Credit Society. I joined the Board one month and became Chairman the next month, about I am not sure whether it was five months or seventeen months after assuming office as WA Branch Secretary.

That was called the Administrative and Clerical Officers Credit Society?

DH:      Yes, A & CO Credit Society.

Not the credit union, they wouldn’t have that.

DH:      No, credit society that’s right.

Did you have much to do with people like Stan Imer?

DH:      Yes, I knew Stan Imer very well.

I have to interview him next week. What about Bill West, did you have anything to do with him?

DH:      Oh yes, Bill West is a very close friend of mine.

Well he is involved in the Historical Co-operative.

DH:      Yes, I am aware of that.

He occasionally sends me addresses of people to interview. It was he who sent me Stan Imer’s address. I had a wrong spelling Ima.

DH:      No it is Imer. It is S I Imer.

Actually I think he has got three initials in the phone book now. I had heard about him from other people.

DH:      Yes, he was the Assistant Federal Secretary of the ACOA. Under his portfolio or responsibility he had the co-ordination of ACOA sponsored credit unions.

Now were you involved in that in the early days or not?

DH:      When you say in the early days, no not in the establishment of it. I can’t claim credit for any of that. I certainly became involved in 1973.

What about people you knew? Were you involved in the Association at all, in the foundation of the Association?

DH:      No. That had been started in 1920s or something. What association are you talking about?

No, in 1966, the Credit Union Association.

DH:      Oh sorry the Credit Union Association of Western Australia.

The Credit Union League of Western Australia started in 1966.

DH:      Yes, the Credit Union League of Western Australia. At one stage I was the Director of that, just prior to it being disbanded.

Right. Well can you tell me about that period? It was disbanded and it became the Association did it?

DH:      That’s right.

Was there a faction fight there?

DH:      Yes there was.

Can you tell me about that?

DH:      No. I certainly was involved in my own little fight with the Credit Union League. I was a Director and our Western Australian Branch of the credit union, the ACOA Credit Union, had suffered a defalcation by a bloke called Sid Littledom. There was a loan from the WA League and in my opinion they tried to change the rules of the terms of the loan and I told them to go to buggery and withdrew from the League.

What year was that?

DH:      Around about 1975 probably, because it was recreated as the Association in 1976 or thereabouts.

What year did it actually close down, do you know, as the League?

DH:      1975 I think it was. Now you have been given Reg Beale’s name. I think Reg has got the Minute Books for those days.

Yes Reg Beale. I have still got his card in front of me, that is from Albury I think.

DH:      That’s right. Reg was actively involved there and he would know more about it.

He is the Western Australian Director for AICUM I think.

DH:      Is he now?

I think he is.

DH:      Well Fred Hughes I thought was.

Well he is out of it now, although I have got Fred Hughes but I haven’t got his address incidentally.

DH:      Well Fred Hughes was the Police Credit Union. Police Credit Society.

Fred Hughes, Police Credit Society.

DH:      Police Credit Society Limited, yes.

Were there other arguments about the end of the League? For instance at the stage when the League was changed over to the Association was there a Savings Protection Fund around, a voluntary one in case of any failure of credit unions?

DH:      Actually I think there was. I think it was used on a couple of occasions. Yes I think there was, but my memory of that is hazy.

Was there ever a compulsory reserve in Western Australia?

DH:      No.

I thought not. That was the argument in the end about the I & R Bank business and all the others wasn’t it? What about the insurance split that happened in 1972 in the eastern States, did that spread to Western Australia at all? Was there any sort of fall-out over there?

DH:      No actually.

Stan Arneil of course started the first credit union in Western Australia?

DH:      Stan Arneil when he came over founded the ABC one, yes.

The CSA was already going at that time.

DH:      No. I think ABC was first. I think Tax was second or third.

I have got three that year. ABC, Civil Service Association and CSA, which is the same, so that is two. The following year is the ACOA.

DH:      Well in actual fact the Tax, the Australian Tax one came in there. I think the Tax one must have been number three then.

Was it in 1960 or 1961, have you got any idea?

DH:      Yes it was 1961, I think.

There were fourteen in 1966 when the League was formed. The only firm information I have, apart from what I can glean from what was lying around, is that book, Credit Unions in the South Pacific, well there was an article done. A very brief article which mentioned very little on Western Australian credit unions at that time. That is virtually all we have got. I have looked in Parliamentary Papers for the Registrars Reports and of course they are very sketchy of the time too. So we don’t have a lot at all. Stan by 1972, when the insurance split happened, he was by that time Vice-President and Australian Manager for CUNA Mutual-CUMIS. Now that is what virtually caused the split, the fact that they changed the insurance over in New South Wales and Victoria because it was uncompetitive. Of course Stan was very hurt by all this and a number of the other credit unions, in New South Wales particularly, took his part. A number of others already had grievances so they ended up with five associations. Did anything like that at all happen in Western Australia?

DH:      Well there was always continual bickering. There was never, ever more than one association. There was people in the Association or out of the Association. Membership of the League and the subsequent Association was a very fluid affair. I was very actively involved in the establishment of the Association.

Were you a Director?

DH:      I was on the Inaugural Board and as a matter of fact I was Vice-Chairman. I was at an ACOA meeting and there was an Annual General Meeting and I came back to Perth and found that the new Association was on its death bed and I took over as President, a position I occupied from 1979 to 1985. I got people together again and I operated as President for those years.

Was there any dissension during that time?

DH:      Oh yes, continual dissension.

What were the problems?

DH:      Participation. We were always blessed here with series of independent-minded credit union Managers who didn’t want to have anything to do with AFCUL. Doug Caldow and I had to take the WA Association into AFCUL.

Back into AFCUL, because it was in earlier.

DH:      Oh in the League’s days. It had been a member of AFCUL for quite some time. As a matter of fact Doug and I attended AFCUL meetings sort of as advisers. Then the decision was made to affiliate with AFCUL. The majority of the industry wanted membership. Teachers’ Alex ????? was a bloody nuisance, he kept on hopping in and out of the Association according to how we defended him or not. There was a reluctance for mutual support in Western Australia. Everybody thought they were above it.

Was it the influence of BHP at all, or anybody like that?

DH:      No. BHP was non-existent here in the way of influence. The real power-shakers were Clark from Teachers’, Arthur Carter from Fremantle ????? Services. Geoff Mitchell at the time from Police, although Geoff spat the dummy over a conflict with me the way I conducted one Board meeting one night. We were really temperamental buggers over here, let me assure you.

Oh we have got some temperamental buggers over here too. What about some of the things they have done over here.

DH:      As a matter of fact I was part of the AFCUL team that went with Peter Timmins to get one of the splinter associations to re-join with New South Wales Association.

I have interviewed Peter Timmins. He is still living in Sydney.

DH:      Pete was a great man. I suppose people have already said that to you. But I think the present structure of the movement owes a lot to Peter Timmins and to a lesser extent Paul Laiff, who was his off-sider at the time.

In what way do you think the structure was changed during his period?

DH:      Oh, I think being a bureaucrat, coming out of Foreign Affairs, he realised the power that was in a centralised organisation. An organisation that was united round Australia. He was very much a political animal, as you would be aware, and you know took the Association into the political scene. In my days as President here I had a lot to do with the politicians here of various persuasions, Ministers and Premiers. It was a lot of Peter’s influence that rubbed off. So I think through Peter we achieved the cohesive, centralised structure and the political awareness, although to some extent it has lost its political acumen I think. I think Reg Elliott was a numbers man and Graham Loughlan is supposed to be the political guru, but he is not a patch on Timmins I don’t believe.

So Reg Elliott was intent on forging the whole of the system into one integral whole all over the country. I think it was a bad thing they weren’t paying attention to the ????? people creeping up to get the taxation knocked off.

DH:      Oh well it was always a threat, that taxation concession. Probably that statement by you confirms my earlier statement that we became from being politically astute we became politically naive.

Yes I think you are right.

DH:      Timmins was certainly politically astute.

But he did things that Elliott didn’t do, and Elliott did things that he didn’t do. They both had their job so to speak.

DH:      Oh well I think that Timmins created the fertile environment for Elliott to introduce his Elliott bank.

Of course they had done the ground work in the Association in New South Wales before they moved Elliott to AFCUL.

DH:      Oh well that was you know Elliott’s power-base. He came into the Association, introduced the centralised control there from New South Wales. Provided some very, very good financial support and guidelines to the industry. I mean, I must admit, in my opinion, Elliott cleaned up the industry in New South Wales. Made its reserves strong, he took it into a strong financial position. A lot of that astuteness rubbed off the industry over a period of time around Australia, but not to the same extent as New South Wales. I think, whilst I wasn’t too keen at the time, I think objectively he was a good man.

Tell me were you involved at all at the time when one big thing in Western Australia that got exported over to the east and they firmly latched on to it, Elliott and company over there, and that was the computer system which was developed?

DH:      No, I can’t claim credit for that. As a matter of fact one of the names you were given was Lew Louthean. To the best of my knowledge, Lew was the architect of that. He was working with Brian Dean and what is the other guy’s name?

I have got three names, but the only one I remember is Brian Dean.

DH:      There were a couple of other guys.

I understand they first did the program for a building society, then they adapted it for the credit unions.

DH:      They may very well have done this. But I know Lew was right up there on the cutting edge of that. I was a bit of a renegade as far as computers were concerned, because I had my own computer system.

Another Tom Kelly. Tom Kelly was like that in New South Wales.

DH:      Yes, well I had one. I had ?????? and an IBM Bureau and he provided me with an independence that some of the other credit unions envied, but they never had the balls to break the FCS shackle.

Yes well of course by that time they didn’t. Of course the Victorians nearly got themselves in financial trouble trying to compete with it with Teledata.

DH:      That’s right. They got it. When was that?

1980 something.

DH:      What was his name?

Steele. He was the developer of it.

DH:      The Head of the Association in New South Wales?

Ian Larsson was the President in the VCCA, Victoria.

DH:      But the full top guy was David Dinning.

Well David Dinning came in to clean that up afterwards. Mike Hildebrand was the one who was the real go-getter at the time. But Steele was the computer bloke. Unfortunately they couldn’t compete effectively with the FCS program and they started to use the Canadians and the Canadian end on it with floppy research and it cost millions. They couldn’t afford it. At the same time they had this business of Emerald Lake, a convention centre.

DH:      Oh yes that is when Victoria nearly went to the wall.

A very unfortunate situation. Anyway that is Victoria. Now let me think of things about Western Australia. What about delegates on the AFCUL Board. Were you ever on the AFCUL Board?

DH:      Yes. I was Vice-President of AFCUL one year.

What years, can you remember?

DH:      Probably 1981, 1982 there abouts, perhaps. That will be on the record. May even have been a bit later. I also chaired several AFCUL conventions. One in Canberra, one in Perth.

Do you remember the circumstances of Dermot Ryan’s retirement?

DH:      No I wasn’t party to any of those machinations on the eastern seaboard.

Well I had heard that leading up to that occasion, although it was ill-health too, that he lent money across to Western Australia. I am not sure whether it was to the League or whether it was to an individual credit union, without the authority of the Board and with no paper work.

DH:      Well that may have been something to do with that defalcation of the ACOA Credit Union in Western Australia. Because as I told you, when I told the League to go to buggery when they were trying to change the rules, there was money made available to our credit union through the Credit Union League. Actually it might have come from Sydney and had to be repaid.

I don’t think there was any trouble with it, they got the money back, but I believe there was a bit of a problem in between times and Dermot got lumbered.

DH:      Well I would think so. I know they got the money back. If it was that money, and it is probably the money that came to our credit union, I was the architect of it going back through the system. Because I spat the dummy when they tried to change the rules. Actually you have probably given me a bit of extra information there that I can take along and say they came to me, as Chairman of the Board at the time, to try and change the rules because they were in trouble themselves, the local League. I went and got the money from the R & I Bank and gave it back to the League and told them to go to buggery. So they probably then paid it back to Sydney, yes.

I think that is what happened. So you might have been responsible for Dermot’s downfall?

DH:      No, I can’t take the credit for that.

I know what you mean.

DH:      But I can take the credit for the money being returned.

End Tape 1A: 3569 Words: 1 hour 40 minutes.

23 APRIL 1994: WA1: RICHARD RAXWORTHY TALKING TO DENNIS HAGAN

DH:      I was sort of the raw prawn who had these clever fellows from the WA League front up and say this, this and this. I said, ‘Well hold on, my information was’ Mr Rodney Beaton, who was President at the time said, ‘No that wasn’t the terms of the agreement.’ So I got rather toey about the whole thing and accused them of being a dishonest mob of bastards. So I went and got the money from the R & I. Can’t think why they wouldn’t lend it to me at the time, it couldn’t have been that much. Off we went. Actually I think I chanced my arm and got the money from the R & I and sent it back to the League and told them to stick it up their jumper.

Well Dermot was in an unfortunate position already because I believe he put on a real turn for the Board on one occasion, being somewhat inebriated. and that was one of the things they beat him with.

DH:      And yet, at the end of the day, his decision resulted in one of the things that the credit union industry boasts about and that is the fact that there has never been an investment that has lost any money.

Well they have in New South Wales, two Kurri Kurri and SDA.

DH:      Well in Western Australian we always carried our own.

Well the government made that good I understand, the Teachers’ one.

DH:      That one they did.

The ones in New South Wales, the two that left the League and then went down when in was only a Savings Protection Fund, a voluntary scheme, were the Kurri Community and the SDA. The members ended up losing money. At the SDA they only got forty cents in the dollar.

DH:      Well fortunately that never happened in Western Australia and we had some ??????? along the way.

It is funny you know, New South Wales was right ahead there in bringing these schemes in but they were the only State in which members lost money. Even in Victoria the people got their money back so to speak, whereas it didn’t happen in New South Wales in those cases. Of course that was the catalyst for the Reserve Fund which became compulsory in 1978, which was the first one in Australia.

DH:      Yes.

Well that is interesting. I had a feeling that was one but I believe there was another one Dermot lent across a border. Unfortunately this was even worse because it was a Queensland border. I understand that the Queenslanders had rules about putting money across the border so there wasn’t any paper work whatever. But they got them both back.

DH:      I suppose in retrospect, from a selfish bias, I can only respect his judgement.

Oh Dermot was great. But on the other hand unfortunately he was hitting the bottle far too much and becoming a law unto himself.

DH:      There are a lot of people in the industry doing that.

Well there you go. But it was most unfortunate from Dermot’s point of view because he was very good-hearted. But he could be pretty tough too. Did you know him at all?

DH:      Not a great deal no.

Never mind. I have some wonderful stories.

DH:      Yes lots of people could tell you stories about him.

Do you have anything to do with AICUM or ICUD in Western Australia? Do you have anything to with that or the CUE Society? Credit Union Executive Society which was American originally.

DH:      No. I didn’t have anything to do with CUES. I just sort of knew that had been around at some stage. But with AICUM I certainly would have been involved in its original formation, being a participate in its original formation the Western Australian Branch. ICUD, it would have started here when I was President of the Association I think.

I think it would have had to, because it started in 1978 over the other side.

DH:      I am a bit hazy about that.

AICUM didn’t sort of come together as AICUM until about 1980, it was in two parts before that.

DH:      Yes, well our Managers here in Western Australia had always met once a month prior to that. So it was just natural for that group to become part of AICUM. They were all members of it. I think Geoff Mitchell was our first AICUM representative. Then he was replaced by Des Foggarty, who I think in turn was replaced by Fred Hughes. Des Foggarty was the General Manager of Fremantle Credit Union and Geoff Mitchell was the inaugural WA representative to AICUM, he was General Manager to the Police Credit Society.

Fred Hughes was Police and Nurses?

DH:      Yes. Fred took over as General Manager of Police when Geoff left.

You mentioned chairing AFCUL meetings in Canberra and Perth. Have you got any stories about those?

DH:      Well I suppose my greatest honour in Canberra was as Chairman welcoming Sir Ninian Stevens, the Governor-General at the time and the Papal Envoy, the senior representative of the Pope here in Australia, Monseigneur something or other, you will have to find that out. That was my greatest thrill there.

Are you a Catholic?

DH:      No, I am not. That’s why I don’t know this guy’s name.

What about the meeting in Perth?

DH:      Well as a matter of fact it was at a time that Brian Burke was in power and Peter Downing was the heir apparent. He came along and addressed us at one stage and it was my privilege to welcome him. We were very politically aware here in Western Australia. I suppose. Apart from rebuilding the Association here and taking it into AFCUL one of my greatest claims to fame, I like to think, was the public relations campaign that we embarked upon. We arranged a PR consultant and we became very politically aware here and accepted within political circles.

All right, is there anything else that you can think of?

DH:      No, not really I don’t think. You have talked to Mike McCarthy. I was President of the Association at the time, influential in the Association at the time that Ron Hudson and Ian Allen started off as it was then the CUAS Insurance Services, I helped get that established.

What about insurance in Western Australia? I mean was CUNA Mutual-CUMIS accepted in the early days?

DH:      I also had a fight with them too. So much so that my naivety at the time led John Granata to do something that he would never have done now. It was all to do with that money too. He came over and made all sorts of promises and when I took him up on it, he suggested I had misrepresented things. I found out he took away our cover.

Loans protection insurance?

DH:      Yes, and mortality cover, you know loans protection cover, that’s right. He just arbitrarily withdrew that and we went to MLC or someone at the time, National Mutual or something. We replaced them, fortunately. But then we subsequently went back to CUNA Mutual. I was young and inexperienced in those days and John put it over me, but he wouldn’t have wanted to try and have done it a bit later on.

What year was that?

DH:      That would have been probably 1975, 1976.

Ah yes. That is interesting isn’t it.

DH:      Yes. He was rotten skunk as far as I was concerned with what he did then.

Well of course he was trying to clean up after the initial debacle.

DH:      Oh I don’t think he was driven by anything other than a bruised ego.

He comes from Western Australia.

DH:      Oh he might have done years and years ago. I am not aware of his background.

I have interviewed him.

DH:      Yes, I guessed you would have.

He denied all knowledge of before he was in there. He said that was Stan Arneil’s day and he didn’t know anything about that. I talked to Stan on the telephone but he wouldn’t let me record him. He reckoned that was defamatory. He probably was too and I could have done something about that. But there we go. Did you know Stan?

DH:      No.

He was a character. It was so sad because all the characters that sort of started the movement up, they were all together and they were all on the same side. Then when things started going well they started falling out over things that they really believed in themselves.

DH:      Well, as we talked a while ago about the ultra egos that the leading lights within the industry suffer. None of us were immune from it.

But you know you get a situation where you are volunteer, then the job is offered and you take the job. I don’t think you realise that your situation has changed. You are still a volunteer with your own credit union, right, but you are the Manager of something else. So you immediately have a split loyalty. I don’t think that is apparent to you in the first instance, until something comes up. Then you have to sort of decide which side you are on. That must be very difficult.

DH:      The law of self-preservation then manifests itself.

Well that too. Yes I mean if you have got a whole lot of kids at private schools and you have got a large family. One thing after another. Big mortgage and so are you all of a sudden going to resign and risk that lot?

DH:      I was very lucky early on that I was sort of independent of the industry, being sort of Chairman. I was Chairman of ACOA Credit Union in Western Australia for about five or six years I suppose up to 1980. Because I was paid by ACOA and was financially independent I didn’t have to be beholden to anybody, which enabled me to take decisions which weren’t influenced by self-preservation.

So it seems that the ACOA and Stan Imer, was he the one who decided to finance the different credit unions around the country?

DH:      It certainly would have been the Federal Executive of ACOA, of which Stan was Assistant Secretary at the time. In actual fact, the President of the Association at the time was Norm Campbell in Western Australia. Actually he started the ACOA Credit Union in Western Australia and he was the Branch Secretary of ACOA and President at the same time. He was a great believer in the credit union movement and started it off. So the national influence of ACOA would have originated from Norm. Stan was always a very competent lieutenant. I have no doubt that Stan as Assistant Federal Secretary sort of picked up the responsibility. Stan always had control of the money in those days, as Assistant Federal Secretary, so he would have been the one that found the money to start off the credit unions in the various States.

I think they must have been fairly far-sighted because it meant they could get off the ground in the different areas without too much trauma. Premises as well. Up in Queensland as well they had premises up there as well and so on.

DH:      That’s right. There was always a close liaison between the union and the credit union. When I took over as Branch Secretary here I was able, perhaps wrongly, to indirectly subsidise the operations of the credit unions. The union was able to bear probably a disproportionate share of the overheads.

The defalcation that happened, what position did the person who perpetrated it hold?

DH:      He was the inaugural full-time Chairman. As a matter of fact you talked about that South Pacific book. If you look in there you will find an article by one R J Smith, I think. He was the guy. He knocked off a hundred grand, or just over a hundred grand. I was aware of the defalcation right from the start because this friend of mine who ran the computer bureau, a very close personal friend, he came to me, he was an accountant of course, and he said, ‘Look, there is problems with the accounts. There is a big suspense account sheet that doesn’t balance.’ I brought it to their attention and was told to mind my own bloody business and keep my nose out of it.

Were they using the Taxation computer?

DH:      Don’t get confused, this was a private computer in a bureau. It was a private computer bureau.

How much behind was it for the pay-roll deductions?

DH:      I didn’t say anything about pay-roll deductions.

Well you said they were behind. There was a suspense account which meant they must have been behind with the payments.

DH:      Well there was a suspense account that balanced off the liabilities.

Oh I see. Incidentally, that is something we haven’t discussed and that is pay-roll deductions. Did you get pay-roll deductions independently in Western Australia or did it come through centrally? It was actually Dermot who started negotiating that.

DH:      Well, I would have thought that ACOA had a big part to play in that, because ACOA fought very hard to get the pay-roll deduction facilities for unions. It was my understanding from folk lore that the relationship that they had, bearing in mind ACOA had its base in Commonwealth government departments, the same basis as the ACOA was involved in, if the ACOA had got the pay-roll deduction facility, a decision by government, it was logical for the credit union to come to flow on as a consequence. Now I would have thought, and I am creating a bit of licence here, that ACOA had a major contribution to make in terms of the development of the pay-roll deduction system, quite frankly, because it was logical that was the way it flowed.

Right, well there are two angles that I am asking this from. One is to find out more about the push towards pay-roll deductions, Commonwealth pay-roll deductions. The other thing was this, several of the defalcations, including a large one in Sydney which was about three times as much as the one you got there at Sydney County Council Credit Union, the Foundation Treasurer who became a paid Treasurer of the credit union, he was the only go-between between the Sydney County Council computer and the credit union. Everything was always behind, so consequently there was this great big print-out which he sort of controlled. That was the way he was able to sort of salami slice everybody’s account. It wasn’t picked up for a while. What is more he used to turn up at every internal audit meeting with this paper and all that sort of thing and they accepted something which of course with hindsight shouldn’t have been accepted. But it came about in the first instance because the pay-roll deductions were always behind.

DH:      Well see, the opportunity for that to occur in ACOA would have been rather limited, because of the nature of the pay-roll facility coming from the Commonwealth. It would have come in every fortnight.

You never had any negotiations with them re standard and variations?

DH:      No.

For instance, they would pay the standard wouldn’t they? What about the variations? Did they sort of give you a bulk percentage? Or where there no variations until they actually came through? Were there any negotiations about that?

DH:      No. What would have happened was that we had a facility, I mean the Commonwealth pay-roll system worked on the basis that you provided the Pay Master of a particular employee with a properly signed pay-roll deduction authority form. So what happened is the Pay Master deducted from an employee’s pay for the union and the credit union an amount specified on that pay-roll deduction authority form. That would have only been varied with a replacement bit of paper properly completed.

But I am talking about the bulk payment to the credit union, you see.

DH:      Well that came from Treasury then. What happens is where a government department conducted its own pay-roll, the cheque would come from then. But in those days Sub-Treasury handled the bulk of the paying facilities for Commonwealth departments. So you got one cheque from the Commonwealth Sub-Treasury, which is now the Department of Finance.

Right. Would that be spot on, or would it be delayed action?

DH:      Oh no it would have been spot on. The employees were paid by the Commonwealth every fortnight and the cheque for the deductions would have arrived from Treasury every second Thursday with monotonous regularity.

So it isn’t clear as to how the defalcation happened then?

DH:      I am not competent to talk about that.

Did he go to jail? Was there a court case and did he go to jail?

DH:      He did go to jail. My predecessor, as Chairman, had got Board approval to initiate action against the auditors. I was Chairman at the time that there was action against the auditors and accepted an out of court settlement.

The insurance didn’t pay out?

DH:      No, not at that time. There was no payments from insurance.

Would you believe that Sydney Electricity one, not only did the insurance pay out, but they got all the money back that was supposed to have gone from the bloke himself and his wife. He still was laughing when he came out from jail, so how much did he really get?

DH:      Yes.

They traced it back ten years, but they couldn’t any further than that.

DH:      Well this guy, well we didn’t have that length of time.

It is easy to look at it and think, ‘Accepting white-out on paper, accepting things like that?’ But you don’t realise how it happened. But it happened because there were always these variations that were getting through. Just literally that, just little brush strokes all over this print-out.

DH:      Well I have got no idea as to how this guy misled the Board or anything like that. I just don’t know.

It would be available on the record if it was a court case. All right, can you think of anything else?

DH:      No, I don’t think so. We were involved in the Credit Act. I don’t know if you are interested. The Credit Act was introduced here in Western Australia before anybody else got it.

What year was that do you think?

DH:      That must have come in here about the mid-1980s anyway. Actually it must have been in about 1986, because Teachers’ went bust in 1987. Clarkie was involved with me in debate on the discussion side. 1985, 1986 that would have been. Doug Caldow and I and Alex Clark had the dubious privilege of liaising closely with Community Affairs and the Government on the application of the Act. As a matter of fact we had its implementation deferred for I am not sure whether it was twelve months or eighteen months. We cried that it was not cricket, but in the end we lost it and we were the first ones that had the Credit Act applied to us, which was sort of the beginning of the end.

Yes of course the last one in 1986 was Queensland, that is why AFIC is up there.

DH:      That’s right. That was a flow-on from the sort of conferences that started off from consideration of the Credit Act. They were going to get a uniform Credit Act around Australia. Actually the architects of all that were Victoria, they were the bloody social engineers that developed it. We had a social engineer here who picked it up and Peter Downing ran with it, as Minister at the time, and implemented it.

Well I have got news for you, they were planning for that in New South Wales in 1972. I have got the report.

DH:      Oh it has been around a long, long time. It has been around in various forms.

Charlie Butler’s little red book.

DH:      But they couldn’t get any substance to it until the social engineers in Victoria got hold of it under the Caine Government. Now people here have picked it up and we had a guy in Consumer Affairs. The poor bugger is dead now, but he picked it up and ran with it and convinced Downing that it was a good thing.

When Dermot and Miller came back from the United States in 1967 they were talking about it, along with all the other things like Savings Protection Fund and Stabilisation. A uniform Credit Union Act for the whole country.

DH:      But I am not talking about a uniform Credit Union Act, I am talking about the uniform Credit Act, which is a different thing. In actual fact, we used in Western Australia as the model for our Credit Union Act that draft Act that was put together by people in Queensland.

In 1986?

DH:      No, I am talking about the Credit Union Act bought in here in Western Australia. Previously we were under the old sort of Friendly Societies Act. Credit Union Act 1977, or thereabouts.

As a matter of fact I have got the paper work here. I will have a look at it later.

End Tape 1B: 3572 Words: 1 hour 35 minutes.