He was commissioned as a pilot officer in December 1937 and was called up to the Royal Australian Air Force (RAAF) in September 1939 following the outbreak of World War II.

During the Japanese invasion of the Dutch East Indies, McFarlane was commanding officer of the RAAF base at Namlea on the island of Buru.

He and eight others remained behind to demolish the airfield, before completing an overland trek of 250 kilometres (160 mi) to a rendezvous on the other side of the island, where they were collected and evacuated to Darwin.

Instead, the government's Senate leader John Gorton intervened by tabling the relevant information, thus sparing McFarlane from damaging his own minister's reputation.

[4] According to Lenox Hewitt, McFarlane made "a very substantial contribution and brought a new set of ideals and standards into the working of the Public Service Board, particularly in its relations with government departments".

[5] He served on the executive for two years before retiring due to ill health, helping establish the authority's independence from the Public Service Board.