Senate debates

Wednesday, 21 June 2017

Committees

Legal and Constitutional Affairs References Committee; Report

6:29 pm

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party, Shadow Parliamentary Secretary for the Environment, Climate Change and Water) Share this | | Hansard source

This afternoon, I present the report of the Legal and Constitutional Affairs References Committee on the Bell Group litigation, together with the documents presented to the committee.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

Today, as the Chair of the Legal and Constitutional Affairs References Committee, I have tabled a report into the nature and scope of any agreement reached by the Commonwealth and the Western Australian governments in relation to the distribution of the proceeds of the liquidation of and litigation concerning the Bell group of companies. In 2015, we found ourselves in a very invidious position, with the former Western Australian Liberal government passing the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act, which created a statutory authority to determine the distribution of some $1.7 billion that was owed to creditors, with a large sum being owed to the Australian Taxation Office. The legislation prioritised the WA government's claims for Bell Group liquidation funds before the claims of other creditors, including debts to the Commonwealth. This is no way to solve Western Australia's GST imbalance, particularly as it was proved to be unconstitutional.

At the time, the Western Australian Labor opposition raised concerns about the constitutionality of the Bell act and were assured by the former government, including then Treasurer of Western Australia and now opposition leader, Dr Mike Nahan, that the then government had struck a deal with the Liberal Commonwealth government, who had, according to them, undertaken not to intervene in any proceedings challenging the constitutionality of this act. With the Commonwealth having such a large amount of revenue at stake in the settlement of the Bell Group matter—at least several hundred million dollars—any consideration of making a deal with Western Australia to forego this revenue would be a serious matter and a matter of important national interest. It should be of great concern to us in this place and to the Australian people. It should be of great concern to this place if one of this country's most senior ministers, indeed the most senior law officer in the land, was planning to issue a direction which could prevent the Commonwealth from recovering these funds owed to it.

Throughout the course of this inquiry, the committee obtained information which indicated that the Attorney-General was indeed considering issuing a direction to the ATO. The ATO gave evidence to the committee that they heard rumours that the Attorney-General was considering issuing a direction which would prevent them from intervening in the High Court challenge to the Bell act. The committee was advised that the direction being contemplated was under the Judiciary Act and that it was either the Attorney-General, the Attorney-General's Department or the Attorney-General's office who were considering issuing this direction. As it turns out, the ATO were so concerned they sought permission from the Attorney-General's Department to seek advice from the Solicitor-General concerning the ATO's options should the ATO issue such a direction. Indeed, the committee believes it is fair to infer, from the proximity of the discussions about the intervention in the Bell Group litigation, that a previous direction issued by the Attorney-General was a consequence of the ATO's intervention in the Bell Group litigation. That matter has indeed been a matter of previous inquiry and debate in this chamber—the Solicitor-General's provision of assistance to the Australian Taxation Office and the Solicitor-General's strong view that the Attorney-General ought to intervene.

It also became clear to us throughout this inquiry that there were some in the government who did not want us to find out this important information. We faced, in this inquiry, a great many challenges—hitting roadblocks at every step. Government members have acted with disregard for the processes of the Senate throughout the conduct of this inquiry. The initial hearings were entirely run by opposition and crossbench senators, with the government withdrawing the capacity for us to contribute to quorums. When they did appear, they deliberately tried to interfere with the conduct of the inquiry by interjecting and attempting to stop the committee from asking questions. It is clear that all attempts have been made by the government to prevent the Senate from holding the Attorney-General to account on this issue. As was noted in the interim report, a significant number of questions taken on notice were delivered late, were often incomplete and contained insubstantial responses. The government still, despite motions and orders for production of documents to the Senate, refuses to provide documents requested by the committee.

The Attorney-General's has also made several claims of public interest immunity, and the report recommends that the Senate reject the assertions of the Attorney-General, which claim legal and professional privilege are, in and of themselves, a valid justification to refuse to provide this information. This has never been an accepted ground for the claim of public interest immunity, and it should be rejected. The report, indeed, recommends that the Senate condemn the Attorney-General's wilful defiance of these Senate standards. It is completely unacceptable that the Leader of the Government in this place should show disregard for us in this way. It is a complete breach of duty.

Perhaps most importantly, the report recommends that the Senate reminds senators of the need to always act in the best interests of the Australian people and to do so in a transparent manner, and that the Attorney-General should allow independent, statutory authorities to act without interference from the government. It should not be acceptable to us in this place that the Australian government—that our Attorney-General, Senator Brandis—would even consider acting outside the interests of the Commonwealth and the Australian people. It should not be acceptable to us, in this place, that the Australian government has shown such a complete disregard for the processes of the parliament and our committees, and made it difficult for the committee to inquire into such a serious matter. I commend the report to the Senate.

6:37 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

I regret to say that there is barely a skerrick of truth in what you have just heard from the chairman of this committee, and I have to say that even speaking on this report—if I could call it that—is an embarrassment to me. The report itself—the whole inquiry—is an embarrassment to the Senate. It diminishes the Senate that taxpayer's money has been spent in pursuing this political fascination that the Labor Party have with the Attorney-General. There have been a series of inquiries, instituted by this committee, solely for the purpose of trying to get a 'gotcha moment' on the Attorney-General. We went through that Solicitor-General inquiry—a complete and abject waste of money. Not one skerrick of evidence that the Attorney-General had done anything wrong came forward in that report. Similarly, with this inquiry, not a skerrick of evidence has come forward that suggests any wrongdoing by the Commonwealth government—the federal government—or, I suspect, the then Western Australian government. Other speakers will go into the background of the Bell issue. Suffice it for me to say that it all arose from corruption in the Labor government in Western Australia aeons ago, in the time of—what was the Premier's name?

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

Premier Burke. There was WA Inc., and all the corruption, all the lies, all the jailings of Labor politicians that followed that, and this happened 20 or so years ago. It has been the most complex, time-consuming and expensive inquiry into how to deal with the wind-up of the Bell Group. There was a lot of money at stake, but it is has been going now for 20 years, Senator Back, I think—

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

longer than 20 years—trying to work out how to wind up the Bell Group. The Western Australian government came up with a solution to try and save money, to try and pay the Western Australian government something out of the fiasco, and they passed an act of parliament which was taken to the High Court and proved to be unconstitutional. That is just a simple background; others will go into it in more detail.

This Senate Legal and Constitutional Affairs References Committee inquiry was set up by the Labor and Green's majority in this chamber, and the terms of reference were all about allegations that the Attorney or the Commonwealth, or someone, had done something wrong. They had a number of exhaustive hearings—and I say 'they' because, although Senator Pratt said coalition senators prevented the witnesses proceeding by interjecting, I can tell you, Mr Acting Deputy President Ketter, coalition senators rarely attended the hearings. So they were just hearings done by the Greens political party and the Labor Party, without any government senator even there.

I suspect very few Australians understand the complexity of this—or they do not really care. They could not follow it, even if they read the majority committee report. But, if anyone were interested, they should have a look at the dissenting report, which is the accurate account of this inquiry and the abject waste of money and Senate resources that followed from this inquiry achieving absolutely nothing.

Have a look at the report. The recommendations are ludicrous. Two of the recommendations are about lecturing fellow senators on how they should behave. How ridiculous that a group of three Labor senators and one Greens senator should presume to lecture other senators on how they should discharge their duties—absolutely ridiculous. There are two other recommendations which seem to accuse the Attorney-General of thinking about something. It is absolutely mind blowing that this could be submitted as the report of a serious Senate committee inquiry. I will try and turn them up, because they are absolutely laughable—the paucity of these recommendations in the majority committee report.

Senator Pratt said the ATO felt that they were being bullied into doing something, or the Attorney-General felt that he was under some pressure. Mr Acting Deputy President Ketter, if you look at the dissenting report, you will see where we have quoted from the evidence of Second Commissioner Mills. He says:

Whether or not people were having discussions outside of us, no-one ever sought to inappropriately influence the course of action that we—

that is the ATO—

had, continued and did.

That should have been the end of it. There, from the Taxation Office themselves, is a comment saying, 'Nobody tried to influence us; don't worry about it.'

Similarly, there was this ridiculous suggestion in the terms of reference about a direction to the Solicitor-General. Again, it is very clear that the evidence of Mr Anderson and another officer of the Attorney-General's department, in the clearest possible words, is that there is nothing in this; it did not happen. One would have thought that any reasonable committee, having those two bits of evidence, would have said, 'Okay, we've made a mistake; let's call it off.' But, no, this committee continued to waste Senate resources—taxpayers' money—in proceeding with this, mainly amongst themselves. As I say, there were very few occasions when government senators were there.

But then they came up with a series of recommendations that are just ludicrous. They accused the Attorney-General of thinking about something. I am not even sure that that is proved, but that is the extent of the report: the Senate should note that the Attorney-General thought about something. Gee whiz, that is going to take the governance of our country and the policy issues of this parliament a long way forward! This inquiry is a demonstration of why these sorts of references bring the Senate into disrepute. They are clearly not inquiries with any purpose apart from trying to get that 'gotcha' moment against the Attorney-General. Mr Dreyfus, the shadow Attorney-General, and his colleagues in this chamber are determined to try, in some way, to get some adverse finding against the Attorney-General, but all this inquiry has done is to completely exonerate the Attorney-General—not that he needed exonerating, I might say. If you have a look at the recommendation, I challenge anyone here to tell me a committee recommendation that has ever been less relevant, less important, less substantial or less able to justify the huge resource of the Senate and senators' time than this witch-hunt, which went absolutely nowhere.

Don't take the evidence of the Attorney-General if you do not want to, although it is clear, under his severe cross-examination both here and in estimates, that never once was anything suggested that was improper. But take the advice of independent public servants, including the Australia Taxation Office, who more or less said: 'This inquiry is a waste of time; it never happened.' One would have thought it would end there. But just have a look; I challenge anyone. Have a look at the recommendations, and, if you can show me a committee that has brought forward, in the 27 years that I have been here, a set of recommendations that are less substantial and less relevant to anything that happens in the governance of our country or any policy issue then I would be amazed. I ask anyone to show me recommendations that are less substantial. Have a look at them. Have a good laugh at them. But lament that we are wasting senators' time and the Senate's money— (Time expired)

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party) Share this | | Hansard source

It is very interesting listening to Senator Macdonald's contribution to this important report, because, on the one hand, he protests that this inquiry was a complete waste of time and delivered no evidence worth listening to, but, on the other hand, he likes to point out that he barely participated in the inquiry. I suppose that just reflects the level of contempt that he is increasingly showing for the committees of the Senate and the important work that they do.

Senator Ian Macdonald interjecting

He is sitting over there interjecting right now, despite the fact that I listened in complete silence to his contribution. Again, it just reflects the disruptive and disrespectful attitude that he has to committees. There is no better example than the Legal and Constitutional Affairs Legislation Committee, which he chairs, which has become a complete farce under his leadership. There is not one hearing of that committee that Senator Macdonald can chair these days without it descending into uproar in reaction to the way that he conducts himself in that committee as the chair. It is no wonder that so many senators on his own side of the chamber are embarrassed by his behaviour. He really should have a good, hard look at how he approaches these committees. He wants to be regarded as the Father of the Senate, a position of respect, and yet he behaves in a more childish manner than any other senator in this entire chamber. He has lost the respect of every single senator in this chamber.

Senator Ian Macdonald interjecting

He continues to interject now. He really needs to have, as I say, a good, hard look at his behaviour. If he wants to get the respect that someone who is the Father of the Senate gets—

Senator Ian Macdonald interjecting

There he goes interjecting again, because he is incapable of controlling himself. If he wants to have the respect that one would think that the Father of the Senate—or the Mother of the Senate, should there ever be a female in that position—would hold then he will need to radically change his behaviour and the way that he treats witnesses and other senators going forward.

Government senators interjecting

We will miss you, Senator Back, unlike Senator Macdonald.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

That's because I'm not going anywhere.

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party) Share this | | Hansard source

That is not what your LNP colleagues in Queensland say, but we will wait and see what happens there.

I will move on to the substance of this report. As Senator Pratt has already outlined, the origins of this inquiry were some very concerning reports about a deal that was clearly done between the Commonwealth government and their Western Australian counterparts when former Treasurer Joe Hockey was still in that chair. It was very clear from the evidence that was revealed at this inquiry that a deal was done which would have put the Commonwealth taxpayer, the hardworking men and women of Australia, below a range of other creditors, including the WA government, in the distribution of proceeds from the long-running Bell litigation. Letters were provided to the inquiry. They were letters between former Treasurer Hockey and his Western Australia counterpart which clearly demonstrated the existence of a deal which would have ripped off the Commonwealth taxpayer by several hundred million dollars. Again, further evidence was provided in the form of Hansard transcripts from the Western Australian parliament which showed that the Western Australian government had a very clear understanding that they had a deal with the federal government.

The reason this is so serious is that the Commonwealth taxpayer obviously would normally take a very high position in the distribution of any proceeds from a liquidation and would quite rightly get their money back. The highly questionable nature of the deal that was struck between the two Liberal governments was reflected in the submissions from the Solicitor-General when he was eventually given permission to intervene on behalf of the federal government in the High Court litigation where the Solicitor-General made very clear that anyone who was behind the Western Australian legislation which sought to elevate themselves above the Commonwealth taxpayer either knew nothing about tax law at all or had—I think this was the phrase—blithe disregard for it.

This was a shady deal. We will never know exactly why it was done. Those of us in other states suspect that it was probably to settle the long-running argument between the federal government and Western Australia about the GST distribution.

Senator Ian Macdonald interjecting

Senator Macdonald finds that funny. I am interested that a senator from Queensland is laughing at the idea of a deal between another state government and his own Commonwealth government to send it more GST money—but there you go. We will never know the reason for this deal, but the deal was done. There is no doubt about that.

A lot of this inquiry went to the conduct of the Attorney-General, both in his handling of this matter and his handling of the inquiry. Senator Brandis has stated that he was very reluctant to intervene personally as Attorney-General despite having a very strong case which was ultimately vindicated in the High Court. I cannot remember the exact phrase that he used, but he was persuaded ultimately that he did need to intervene as a result of very strong advice from the Solicitor-General. You really would think that an Attorney-General would understand that one of his or her main roles is to uphold Commonwealth law, but unfortunately in Senator Brandis we have an Attorney-General who needs to be persuaded through strong advice that he should actually do his job and uphold Commonwealth law and protect the Commonwealth taxpayer. Unfortunately that is the kind of Attorney-General we have in Senator Brandis.

Not only was Senator Brandis very unwilling to intervene personally as Attorney-General, but evidence emerged over the course of this inquiry that he did go to lengths to attempt to stop the Australian tax office itself from intervening in this litigation. We took evidence over the course of this inquiry from very senior tax office officials who said that they were aware of bureaucratic whispers and rumours through the Commonwealth—

Government senators interjecting

Again, we have government senators laughing about the fact that senior tax office officials were talking about their own government wanting to do a deal which would have deprived the Commonwealth of tax dollars. I do not think it is a laughing matter—I think it is important that Commonwealth ministers uphold the law and put the Commonwealth taxpayer first. It is unfortunate that we have some government senators, particularly Senator Macdonald, who think that this is a joke.

Tax office officials were conscious of discussions that were going on within the federal Public Service about the Attorney-General attempting to spike this litigation. It was interesting that finally, after a long-running battle with ministers and the tax office, only yesterday we finally obtained a copy of the email that was sent by the tax office to the Attorney-General's Department seeking permission from the Attorney-General's Department to get legal advice from the Solicitor-General to counter this concern that the Attorney-General was preparing to prevent them from intervening in this litigation. You have to wonder what was going on inside the Attorney-General's office and what directions they were giving to their department that would lead some of the most senior officials in the Australian Taxation Office to send an email to the Attorney-General's Department seeking permission to get advice from the Solicitor-General of this country to stop the Attorney-General from breaking the law. That is the kind of contempt that the Australian Attorney-General has for the law that he is supposed to uphold, and incredible efforts had to be undertaken by senior public servants, including the former Solicitor-General, to prevent him from breaking the law and trying to prevent the Australian Taxation Office from upholding the law. The inquiry was frustrated by the activities of the Attorney-General in refusing to answer questions on notice, claiming public immunity in circumstances far beyond what that provision intended.

The other infamous thing that arose in the course of this inquiry was the evidence that the Attorney-General had misled this chamber. Many of us might remember the Attorney-General's first statement on this matter to the Senate indicated that his first involvement in this case I think was on 4 March, at least in early March, 2016. Of course that was proven to be untrue as well by comments from the Western Australian Attorney-General from his own party which indicated that they had actually had a conversation about this sometime before. So yet again we have another situation where Senator Brandis misleads this Senate. He has contempt for the law, he clearly has contempt for the role, and the sooner he packs his bags and gets off to London the better we will be. This is a terrible episode in Australian public policy. It has left the Attorney-General's standing further diminished, and unfortunately in Senator Macdonald we have an outrageous chair of the Legal and Constitutional Affairs Committee. He does not want to do his job properly, he comes in and bullies people and now he just sits back thinking the whole thing is a joke. I commend the recommendations of this report.

6:57 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

The fact that Senator Watt spent a third of his time attacking Senator Macdonald is simply an indication that he knew very well he had nothing to say. This whole situation has been based around rumour and innuendo. Before Senator Dastyari goes, I have always thought innuendo was an Italian suppository, and that is where this richly deserves to be. Let us remember what the Bell issue was all about. Bell was about the lowest form of rotten corruption visited upon the state Western Australia by the then Labor Burke government. It was a government that was rotten to the core. It was a government that tried to jump into bed totally as a result of incompetence. Senator Gallagher raised the point about corruption between the state and the federal government. I pointed out in this place that there was such corruption—it involved the government of Mr Hawke and was occasioned by a meeting in Mr Burke's office between Mr Hawke, Mr Burke, Mr Alan Bond, Mr Laurie Connell and others. What were they trying to do? In receipt of the substance of money to the Western Australian Labor Party, they were trying to influence Mr Hawke into not charging royalties on gold in this country.

The Bell situation was probably the worst corporate case in Australia's history, and it was all to do with the corruption of the Burke Labor government. Why this federal opposition wants to raise all this is absolutely and utterly beyond me. We all know that the correspondence from the Western Australian government to the federal government, following legislation that was unanimously passed in WA, indicated that the first creditor should be the federal government of Australia—despite the fact that the federal government and other creditors put not one penny into the billions of dollars of litigation, all of which was funded by the Western Australian taxpayer. But the correspondence from the Western Australian government of the time to the Treasurer of Australia was to say that the first creditor would be the Australian government. At no time did Attorney-General Brandis ever involve himself in the process that found its way to the High Court of Australia. For Senator Watt to say so belies his credibility as a lawyer rather than as a senator. (Time expired)

Debate adjourned.