Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Hansard source

In concluding this debate before the Senate I will focus on some of the issues that have been raised specifically by those who have contributed to this debate.

Firstly, thank you to all those who have contributed to this debate. In relation to the comments by Senator Brandis and also Senator Barnett on the bills through the Legal and Constitutional Affairs Committee report, I can advise that a review of the calculation methodology is planned after five years—or earlier if there are material changes to the AUSTRAC operating environ­ment. However, AUSTRAC will monitor the cost-recovery approach on an ongoing basis.

I would make the general observation—and this is from experience in a number of other areas of financial regulation where levies have applied: insurance, superannuation and, in particular, through ASIC and APRA for companies—that when you apply cost recovery it is always very difficult to satisfy the various entities which are required to pay a levy. Some want to, obviously, pay little or nothing. Whether it is justified or not, some want to shift the levy-paying level from one area to another. That is not an unusual approach. To the best of my recollection, whenever we have been faced with levy bills in this place, there have been relatively common controversies and disputes around who should pay, how much and so on.

The AUSTRAC supervisory level will be set annually. Legislative instruments containing the details of the levy arrangements for the next financial year will be published in draft form after the Australian government budget is released in May and will be issued in a final form prior to the commencement of the financial year. The cost recovery impact statement, or CRIS—another exciting acronym; I quite like that one—will be reviewed over the next 12 months and a new CRIS will be prepared for 1 July 2012. Consistent with the Australian government cost recovery guidelines, a revised CRIS will also be developed should there be any material changes to the cost recovery arrangements.

In relation to small business—which Senator Barnett is interested in and, obviously, as the Minister for Small Business, is an area that I am interested in—the cost recovery model has been modified in a number of ways to reduce the regulatory impact on small business. As a result, many small businesses regulated by AUSTRAC will not be subject to cost recovery at all.

Let me give some examples of affiliates of a registered remittance network, which in the normal course of events you would expect to pay a levy. Affiliates are excluded on the basis that AUSTRAC's primary regulatory relationship will be with registered remittance networks rather than individual affiliates. This removes a range of small businesses from the operation of the levy—licensed post offices and newsagents, for example. This partly goes to Senator Xenophon's gambling amendment, if I could refer to it. We have reporting entities which have been exempted from part 7 of the AML/CTF Act on the basis that AUSTRAC does not incur substantial costs in regulating these entities. Those entities include small gaming venues with an entitlement to 15 or fewer gaming machines. They are exempt from part 7 of the act and would therefore not be subject to cost recovery.

In terms of our general approach to small business, it is correct, Senator Xenophon, that some gambling venues would not be paying the levy; and obviously we will debate the intent of your amendment when we get to that in the committee stage. So far as the government is concerned, it would be unreasonable to apply this levy to entities—including post offices, newsagents and gambling entities with fewer than 15 machines—of this size: We see that as inappropriate. This has been our approach to reduce the impact on what we call small business and, indeed, microbusiness.

We are removing from the levy non-employing entities, sole proprietorships and partnerships without employees, and microbusinesses—businesses employing fewer than five people, as defined by the Australian Bureau of Statistics. These are removed from the base component of the levy. This means that, of the entities which are subject to the levy, 6,800 are expected to be subject to only the base component of the levy, estimated to be $284 in the first year. I think we have taken a very reasonable approach with respect to small business and microbusiness.

AUSTRAC will monitor the impact on all businesses subject to the levy. To the extent that changes need to be made to improve the equity or efficiency of the cost recovery model, these considerations will be taken into account through the review process, to which I have already referred.

In terms of consultation on the proposed arrangements, extensive consultation has already occurred with affected stakeholders. I will make a general point. We often hear criticism and concern about lack of consultation. There has been very significant consultation. The bottom line is: some people do not to pay the levy. That is their attitude, but there can be no complaint about lack of consultation on this issue. Some people disagree. I respect them for that, but it is not a matter of lack of consultation. So often people use this line 'lack of consultation' when they do not agree. They should tell us they do not agree and why. There has certainly been significant consultation on this.

In November last year, AUSTRAC released a discussion paper and held three industry forums, in Melbourne, Sydney and Brisbane. Through the feedback received, the cost recovery model was further refined, and an exposure draft of a CRIS was released in February this year. In March AUSTRAC undertook further limited consultation on the 'large entity' definition of the model, and on 12 May AUSTRAC published a final CRIS on its website. In addition, a draft of the 2011-12 ministerial determination for cost recovery proposed details to be collected through the enrolment process, and a draft privacy impact assessment in respect of the enrolment obligation was also published for comment. Prior to invoices being issued in the 2011-12 year, a final ministerial determination will be made, and AUSTRAC will communicate with industry about the process and time frames for complying with both the cost recovery and mandatory enrolment processes.

Finally, in relation to late payment fees for the first year, invoices for the 2011-12 financial year are not planned to be issued until February or March 2012. Accordingly, there is no intention to issue late payment penalties in respect of cost recovery within the first three months following the passage of this legislation.

To conclude, we know that organised crime is a significant national security threat and it is a challenge. Through the Com­monwealth Organised Crime Strategic Framework, the government is ensuring that Commonwealth intelligence, policy, regu­latory and law enforcement agencies are working together to prevent, disrupt, investigate and prosecute organised crime. The Australian Transaction Reports and Analysis Centre, AUSTRAC, plays a very important and critical role in the fight against organised crime. Through its regulatory activities, AUSTRAC helps to mitigate the risk of Australian businesses being used for money laundering, terrorism, finance and other organised crime. This package is necessary to give effect to the 2010 budget commitment. Consistent with the govern­ment's cost recovery guidelines, AUSTRAC will recover the costs of its regulatory activities from 1 July 2011. This cost recovery process is entirely consistent with that of the former government. In fact, to the best of my memory, the former Liberal-National Party government established this cost recovery process. So it has been a consistent approach across a whole range of areas of government.

The collection bill enables AUSTRAC to collect the supervisory cost recovery levy and establish the necessary framework for administering the levy, including matters relating to collection, invoicing and dealing with late payments. It provides that the amount of levy payable for each financial year will be determined by the minister by legislative instrument and cannot exceed a statutory limit of $33 million in total, indexed. The collection bill also introduces a system of administrative review of a decision by the AUSTRAC CEO to waive a levy or late payment penalty. Significant consultation has occurred with industry around the structure of the levy. Through this process the government has listened to the concerns of business and has made significant adjustments to lessen the burden, particularly in the area of small business.

The consequential amendments bill amends the AML/CTF Act to introduce compulsory enrolment for all reporting entities regulated by AUSTRAC. This formalises current arrangements where AUSTRAC encourages entities to volun­tarily enrol. Mandating this requirement will mean that AUSTRAC can better identify its regulated population for the purposes of calculating and applying the AUSTRAC cost recovery levy. The consequential amend­ments bill also amends the current infringement notice scheme to allow the issuing of notices for failure to enrol and failure to appropriately maintain enrolment details. I commend this package to the Senate and I thank all senators for their contributions.

Question agreed to.

Bills read a second time.