Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) Share this | Hansard source

This is indeed a very curious matter before the Senate. Perhaps quite inadvertently, what the government, with the support of the Greens, have done is draw attention to an issue that could have been very procedural, very matter-of-fact. We believe that a Senate economics committee inquiry could have been done very expeditiously given that the coalition understands at a first-principles level why a legislative course like this may be necessary. Much discussion has happened during the course of today about the merit of a Senate economics committee inquiry. That committee process, that level of scrutiny, has been denied to the Senate—not just to the coalition but to the whole Senate—but I want to draw attention to the second matter, and that is that a second inquiry, a standard feature of this Senate process, has also been denied on the bill and also denied to the Senate. That is the scrutiny of bills committee process.

For those that are unaware, every piece of legislation that comes before the parliament goes before the Senate Standing Committee for the Scrutiny of Bills. The Senate scrutiny of bills committee scrutinises—and I note that the Temporary Chair of Committees is actually a member of the Senate scrutiny of bills committee. Every bill goes before the committee, and each bill is assessed against some fundamental principles. The key point here is that every bill is assessed against those principles. The committee provides a report to the parliament on every bill in every sitting of the Senate. In more recent times, senators around the chamber have had cause to applaud the work of the Senate scrutiny of bills committee because it's done its scrutiny inquiries in a very expeditious manner, allowing the Senate the full disclosure of a whole range of various matters, some of them highly technical, that are drawn to the attention of senators so that they can improve their deliberation on a bill. If that Senate scrutiny of bills committee process were to have been allowed on this particular matter this particular week, I suspect a key issue that would have arisen in that scrutiny of bills committee inquiry process is the use by governments—plural; it's a feature of all governments—of disallowable instruments which are denied the ability to be disallowed by this Senate chamber.

This is a really fundamental issue in our system of government: we elect people to come to the Senate and to review legislation and to give very keen deliberation to whether this Senate chamber holds the ultimate authority around laws and regulations or whether, over time, that authority is given to regulators, to bureaucrats, and, over time, diminishes the ability of this Senate chamber and every one of its 76 senators to properly deliberate over a bill.

So I thought I would use the brief time that's available to me—others have canvassed the importance of the bill; others have canvassed other issues—to re-emphasise why I think it's the absence of the Senate's Scrutiny of Bills Committee process that is the more serious omission in regard to how the government has chosen to do this. I might make this observation also: when proper parliamentary scrutiny is observed, confidence is maintained—confidence in regulators, confidence in the decision-making of the Senate and confidence amongst stakeholders in the laws this chamber makes and passes. Transparency and scrutiny are always a good thing. It's very hard to recall instances when lack of transparency, lack of scrutiny, has been a public good.

Conversely, when scrutiny is diminished or transparency is denied, suspicion is born. And I might just say that in this particular case I'm someone who's a keen observer of the work of the Australian Competition and Consumer Commission. I'm quite an enthusiast of the work it does. I'm going to go to Senate estimates in a few weeks time and ask the chair: is this something she supported? Did she actively support the denial of the Senate to have proper scrutiny over this piece of legislation? What's happened is that we now think there is something being hidden from view. That's demonstrated by the fact that much of the Senate's time tonight has been taken up on this matter, and we will be back here tomorrow. And unlike Senate the estimates periods we've had in the last year, we have an extended Senate estimates period beginning in the next fortnight, so there will be plenty of time to ask the ACCC, to ask the Treasury and to ask ministers at the table why it was necessary to deny the Senate scrutiny.

In our political comings and goings, I have a saying. I say to people: 'That's okay. You don't have to tell Senator Smith now; you don't even have to tell Senator Smith next week. Nothing stays a secret forever.' And it's only a matter of time before the real truth in regard to the issues around this bill are revealed.

I want to share with the Senate what the Scrutiny of Bills Committee's position is in regard to the importance of allowing a disallowance. Regarding this bill, a key element of our criticism, a key element of our concern, a key element of what we would have explored more thoroughly, had an inquiry process been provided to us, is why the disallowance mechanism has been undermined. It's the published view of the Senate Scrutiny of Bills Committee that disallowance is important because it's the primary means by which the parliament exercises control over the legislative power it has delegated to the executive. Exempting instruments from disallowance therefore has significant implications for parliamentary scrutiny, and the exemption of disallowance is an element of this bill.

In June 2021 the Senate chamber itself acknowledged these implications and resolved that delegated legislation should be subject to disallowance unless exceptional circumstances can be demonstrated which would justify an exemption. In addition, the Senate resolved that any claim that circumstances justify such an exemption will be subject to rigorous scrutiny, with the expectation that the claim will only be justified in the rarest of cases—not in Senator Smith's view, not in Senator Colbeck's view, not in Senator Grogan's view but in the view of this Senate chamber. Just this year, digest 5 of the scrutiny of bills committee said:

The committee reiterates its view that a stated need for immediate and ongoing certainty is not an exceptional circumstance that alone justifies the exemption of a delegated legislation from disallowance.

It goes on to say that the Senate scrutiny of bills committee also considers that the explanatory memorandum should always establish what would be the consequence of disallowance, so that the Senate can properly measure the appropriateness and proportionality of its decisions.

Disallowance is important for a very important reason. It changes the behaviour of regulators and it changes the behaviour of officials. It forces them to think more consciously about the nature of the regulation, the importance of the regulation and the extent to which parliament should be denied its constitutional right and obligations.

Let me just put disallowance in context. We know that the existence of disallowance is a positive thing because it changes behaviour, and it changes behaviour towards transparency and accountability. It's important to note that the number and proportion of instruments in respect of which a disallowance notice is made is in fact low, with instances of disallowance themselves being rare. Of the 562 notices of motion to disallow legislative instruments between 2010 and 2025, only 55 have been successful, representing 9.8 per cent. What that demonstrates is that the existence of disallowance works, and disallowance as a mechanism in this chamber is rarely used. When it is used, it is often not successful because, in that intervening period of 15 days, discussion happens between senators, between executive government, between the regulators and between departments to get a better outcome.

So, for someone like me, the way that this bill has chosen to deal with the disallowance matter raises very significant concerns. It may well be that, when the minister comes back to the chamber, he or she can provide a very reasonable explanation. But guess what? That's an explanation that gets provided tomorrow—an explanation that could have been made available to a Senate committee inquiry tonight. These matters could have been more easily and more efficiently resolved.

The impact of COVID on Australia was significant. It lingers for a variety of reasons. My personal view is that the greatest and most lingering impact of COVID on our country is the level of trust that citizens have in governments and in government decision-making, and the level of trust that people have in regulators and regulatory decision-making. If we are to rebuild community trust, then episodes like this in the Senate today, this afternoon, are going to take us a very long way from re-establishing that level of trust from the community.

To reiterate, it was our view and it will continue to be our view that public scrutiny—because a Senate committee process is public—allows stakeholders, not just parliamentarians, not just senators themselves, to make contributions. A Senate inquiry would have added to the confidence around this particular legislation, because the risk now is that the legislation may pass with a much-diminished level of public confidence and a heightened level of public suspicion in regard to what this bill seeks to do. Our view, quite simply, was that a Senate inquiry would have tested whether the existing powers of the ACCC are genuinely inadequate, whether the Treasurer's declaration power is too broad, whether the ACCC's exemptions should be disallowable, whether transparency requirements are strong enough, whether the retrospective start date is justified, whether the powers are properly limited in time and scope and, finally, whether there should be stronger sunset and review mechanisms. This is a very disappointing episode.

I feel sorry for the Australian Consumer and Competition Commission. I feel sorry for them. I'm disappointed for them because I don't think that this is their preferred operating environment. I've always found them to be highly cooperative at Senate economics committee hearings. They're highly informed and always very available when dealing with competition matters that come to my attention as a result of constituent work. At this particular point in this particular debate on this bill, I've got to say the ACCC's diminished itself. But all is not lost. At Senate estimates, the chairman and officials will have an opportunity to redeem themselves. And like I said, nothing stays a secret forever.