Saunders was among a party of men evacuated from Crete by a British submarine in May 1942, and returned to Australia in October. He rejoined his old unit, the 2/7th Battalion, which had re-formed in Palestine and been brought back to Australia along with the rest of the 6th Division to help defend against the threat posed by Japan's entry into the war. In November 1942, Saunders' younger brother Harry, who had enlisted shortly after him in 1940, was killed in action while serving in New Guinea with the &lt;a href="2/14th%20Battalion%20%28Australia%29"&gt;2/14th Battalion&lt;/a&gt;. When Harry had joined up, Reg recalled, "I was angry because I was the only one that was supposed to go. ... with two of us there, one of us was going to get killed ..." The elder Saunders subsequently served in New Guinea as well, fighting in the Salamaua–Lae campaign in mid-1943 where, having again been promoted temporary sergeant, he took over command of a platoon when its commander was wounded in action. For his leadership, he was recommended for a commission by his commanding officer, Lieutenant Colonel Henry Guinn. When Guinn told him of his plan, Saunders laughed and said, "I don't want to be an officer ... I'd rather be Regimental Sergeant Major". Guinn responded, "Christ, they don't make boys RSMs".