Wednesday, 19 September 2018
Unexplained Wealth Legislation Amendment Bill 2018; Second Reading
Labor is committed to ensuring Australia maintains its strong and effective laws to combat serious and organised crime. Labor will be supporting the Unexplained Wealth Legislation Amendment Bill 2018, as it is the first step in a long process towards a national unexplained wealth regime. The Australian Criminal Intelligence Commission estimates that serious and organised crime costs Australia $36 billion each year. This is the equivalent of just over $1,500 out of every Australians' pocket each year. It adds an enormous 6.3 per cent to the average cost of living. A critical way that we can help take the profit out of crime as a parliament is by ensuring our law enforcement agencies have the powers and resources they need to crack down on serious and organised crime.
Before I turn to the substance of the bill, I'd like to acknowledge, on behalf of Labor, the extraordinary work that our agencies do to keep us safe. In particular, I want to acknowledge the Australian Federal Police. They are on the front line of the fight against serious and organised crime. They do tremendous work and must be supported in their role by the government. Unfortunately, at budget estimates earlier this year, the Commissioner of the Australian Federal Police confirmed that there would be a $205 million cut to resourcing for our AFP over the forward estimates because of Liberal government budget cuts. He confirmed that the AFP's work to tackle fraud, organised crime and antinarcotics are the areas that would be most affected by these cuts. Most shocking was the commissioner's confirmation that staffing at the AFP is predicted to fall from 6,448 personnel in 2018-19 to 5,881 personnel in 2021-22 because of budget cuts. This is an extraordinary reduction of 567 AFP personnel. If the government is committed to keeping Australians safe, it must explain why it has inflicted such savage cuts on the AFP.
Labor supports our law enforcement agencies and Labor will be supporting this bill. As we know, often those who benefit most from crime are not directly involved in the commission of a specific offence. They keep themselves at arm's length, profiting from the sidelines. Unexplained wealth orders are a powerful way for us to target these serious and organised criminals and confiscate their ill-gotten gains. Unexplained wealth orders allow authorities to confiscate assets when a person cannot demonstrate that their wealth has been lawfully obtained. Unlike other Proceeds of Crime Act orders, unexplained wealth orders do not require proof of a link to the commission of a specific offence. However, unexplained wealth orders at the Commonwealth level are currently limited because of the Constitution. In order to get such an order, authorities currently need to prove a link to a federal offence, a foreign indictable offence or a state offence that has a federal aspect. This undermines the key benefit of unexplained wealth orders. The establishment of a national unexplained wealth scheme would play a critical role in crime prevention and ensuring justice in the community. The bill would extend the existing Commonwealth unexplained wealth regime to offences referred by New South Wales and relevant offences in the Northern Territory.
A number of concerns were raised in the course of the Senate inquiry into the bill around the abrogation of privilege. These are valid concerns. However, it is important to note that this bill only extends our current regime to specific offences at the state and territory level. The concerns raised already exist under law. Importantly, all the existing protections at the Commonwealth level will apply to any state and territory offences picked up by the proposed national scheme. These include: judicial discretion to refuse to grant an order when it's not in the public interest or when the amount is less than $100,000; and the discretion to exclude certain property from the scope of the order or revoke an order where it is in the public interest or in the interests of justice to do so. This bill will apply this regime and these protections to a broader range of offences.
Labor believe that Australia should have a national scheme to combat unexplained wealth. We are absolutely committed to keeping Australians safe and providing law enforcement with the powers that they need to do their job. For these reasons, we'll be supporting this bill. Before I conclude, I want to note that this is just the start of a process towards a national scheme. At this stage, the only state to sign up to the regime is New South Wales. If the government want to implement a truly national co-operative scheme, then they need to work harder to get the other states and territories on board. Labor supports the bill and is happy to work with the government to implement a national unexplained wealth scheme.
The Australian Greens certainly understand the arguments that the government is putting here. But we need to be very careful when dealing with areas like unexplained wealth that we find the right balance, and we don't believe that the government has found the right balance here. I'll make a few points as I move through this speech about international human rights law and covenants that the Australian government has signed up to and how this legislation sits within that international legal framework.
Firstly, I want to talk about retrospectivity. It’s a very dangerous thing to come in and legislate with retrospectivity in this place. I note the Law Council's submission to the inquiry into this bill recommended that, if the bill were to be enacted, it only apply prospectively.
I also want to talk about the privilege against self-incrimination. This is a common law privilege that provides that a person cannot be required to answer questions or produce material which may tend to incriminate them. This is a substantive right, it's a longstanding right, it applies to both criminal and civil penalties and forfeiture, and it's a protection required by the International Covenant on Civil and Political Rights. It's protected repeatedly under Australia's legislative framework. I'm relating these comments to schedule 4 of this bill, which would allow a magistrate to make a production order compelling a person to produce certain documents or to make those documents available to a relevant authorised state or territory officer. That schedule, unfortunately, would remove that person's privilege against self-incrimination both at the time and potentially later as those documents could then be made available to other jurisdictions in relation to further criminal proceedings.
I want to make a comment here about how this current government treats Australia's international human rights and civil and political rights obligations. Basically, it doesn't care about them. It throws them in the bin regularly. We see, time after time, this government acting in breach of the Covenant on Civil and Political Rights, in breach of the refugee convention and in breach of a whole range of other international human rights covenants. Why bother signing up to these things if you're just going to ignore them?
There was a time when Australia was regarded internationally as one of the global leaders in human rights. What we've seen—and this has been accelerating rapidly in recent years—is a scenario where this government and, before it, Labor governments have progressively crab walked away from their responsibilities under international human rights law. It's not good enough. It's shameful and disgraceful. We are seeing, in countries around the world, an abrogation of responsibilities that countries have actually signed up to under things like the refugee convention and the International Covenant on Civil and Political Rights.
I sit on the Parliamentary Joint Committee on Human Rights in this parliament. I ask members to go and have a look at the reports of that committee. Time after time that committee finds that what the government is doing in the legislation that it introduces into this place, and what ultimately the Senate is doing by passing those pieces of legislation, is in breach—or likely to be—of Australia's international human rights obligations and obligations under things like the refugee convention and the International Covenant on Civil and Political Rights.
I know it's kind of trendy over on that side of the Senate to not worry about things like human rights, but let me tell those on the government benches this for nothing: once you start handing away other people's rights willy-nilly, which you are doing—and if you doubt that then I invite you to come with me next time I go to Manus Island; I'll introduce you to many people whose human rights you have trampled disgracefully over the years—and once you abandon the principles on which international human rights covenants are based, ultimately you will find yourself losing those rights yourselves. It's very dangerous to start giving away other people's human, civil and political rights because ultimately you will find that your own start to disappear.
I don't want anyone on the LNP benches, the government benches, to come into this place in five, 10 or 20 years squealing that their rights are starting to be eroded, because I will say to them, 'You started this; you were part of this when you gave away other people's rights.' There are people on Manus Island and Nauru and there are people in Australia's disgraceful onshore detention regime whose rights are simply being ignored and manifestly trampled.
This legislation also impinges on the presumption of innocence. That's a presumption that is absolutely central to our justice system and to the rule of law. Civil Liberties Australia noted in their submission to the inquiry into this bill:
Unexplained wealth laws are not conviction-based—
They are absolutely right about that—
They remove the need to prove a person has engaged in any criminal activity or indeed that any offence has even been committed. Unexplained wealth laws reverse the burden of proof by requiring a person to prove on the balance of probabilities that assets are not the proceeds of crime.
It's very clear what's happening here. This is an erosion of the presumption of innocence in this country. It is absolutely accurate to say that this law reverses the burden of proof, because, of course, it does place that burden on a person to prove on the balance of probabilities that the relevant assets are not the proceeds of crime.
What you'll find when laws like this are introduced into the parliament is that governments—and, in this case, also the Labor opposition—love to talk about organised crime. I want to tell you a story about my home state of Tasmania. We've got similar laws in Tasmania. It was argued at the time by the relevant minister in the parliament that these laws would target senior organised crime figures that used sophisticated and organised business models to hide their assets and involvement where existing conviction based confiscation and forfeiture laws were insufficient to bring them to justice.
I've talked about the departure from conviction based laws coming at a cost to fundamental human rights. It's important to know that, in Tasmania, when these laws were independently reviewed last year, data provided by my home state's department of public prosecutions showed that the unexplained wealth laws had been used to recover amounts of as little as $3,000 and that none of the people who these laws had been used against could be described even closely as a senior organised crime figure.
What's happening here is that we're giving away and eroding the presumption of innocence. We're forfeiting rights to privacy. We're rolling over on our international human rights obligations, and parliaments and the Australian people are being told that this is to take on senior organised crime figures when, in fact, as I've just illustrated in the context of Tasmania, these laws are mostly used to seize assets from people who in no way could be regarded as senior organised crime figures.
Human rights lawyer Ben Clarke, also from my home state of Tasmania, has written:
In a democratic society … depriving citizens of privately owned assets is a highly intrusive act of state. Such conduct is prima facie in conflict with norms such as the sanctity of property ownership, freedom of citizens from unnecessary interference by the state, and the right to privacy. The seizure of assets by organs of the state is a coercive exercise of power which should not be undertaken lightly.
I completely agree with Mr Clarke on those matters.
I make this warning to the Australian people: there have been over 200 pieces of legislation passed through state, territory and Commonwealth parliaments in the last 20 years that erode fundamental rights and freedoms that we use to send our people overseas to fight and die, to protect and enhance. We are giving them away, hand over fist, because it suits the political agenda of the Liberal-National government, and the Australian Labor Party are too weak and gutless to stand up to them. That's what's happening here. We are on a slow zombie shuffle down a road to an authoritarian state.
To anyone who saw the ABC program this week about what's happening in China regarding their social credit system and the surveillance of their citizens: I reckon that would have sent a shiver down the spines of most people who saw that program. But don't lift your eyes out of what's going on in this country, because, although we are nowhere near as far down the road as the Chinese Communist Party government, we are heading dangerously in that direction in this country. And it's time that parliaments stopped falling in screaming heaps and handing over more powers, more authority to governments, and it's certainly time that governments and parliaments stopped abjectly rolling over and handing away our human rights, our civil and political rights, on the basis of political advantage.
We urgently need a full review of all of the laws that have been passed in this country in the last 20 years in the name of counter-terrorism, in the name of national security, so that the government can actually be given the chance to make the case that handing away all these rights that we used to be so proud of and we used to fight to defend and enhance is actually making us safer at all, because the government has abjectly failed to make that case. We should have a white paper on counter-terrorism in this country, and part of that white paper should involve a comprehensive analysis of all of the human rights, the civil rights, the political rights, that have been handed away by parliaments in the last 20 years, and an assessment should be independently made about whether handing away all those rights has done one thing to make one person in this country any safer. And, remember, we've now got laws not yet through the Senate but in this place which are what I call the 'papers, please' laws, which basically authorise Australian Federal Police to go up to people in airports and demand to see their papers. I know that the Secretary of the Department of Home Affairs, Mr Pezzullo, doesn't like me calling them the 'papers, please' laws but they are 'papers, please' laws. They are not necessary to make our airports any safer. What they do is feed in to the command-and-control mentality, the authoritarian or even totalitarian mentality of some in this country who believe that we should throw away or subjugate a range of rights around individualism, around freedom, around privacy in this country, because the people who are introducing these laws and the people who are advising ministers to introduce these laws feel more comfortable if they can exert more control and more surveillance over the citizens of this country. It is a very, very dangerous path that we walk down.
The point that Mr Clarke made, which is that a coercive exercise of power should not be undertaken lightly, is central to the Law Council's repeated calls for a comprehensive review of the Proceeds of Crime Act 2002 as contemplated by the 2016 Australian Law Reform Commission's Traditional rights and freedoms—encroachments by Commonwealth laws report. This review, the Law Council argues, is necessary to ensure legislative consistency with fundamental rule-of-law principles. The Australian Greens share those concerns and we absolutely support that call.
Now, it is funny, you know: parliaments are very happy to continue handing over rights that we used to hold so dear, rights that we used to cherish, rights that we used to fight for, and that, tragically, many of our citizens, Australian people, have died to protect and enhance, and this government are happy to hand away those rights; at the same time, they're outsourcing the real decisions in this country out of parliaments into corporate boardrooms. And, again, this is a very dangerous path.
Power and authority in this country should be centralised in the parliament because, albeit imperfectly, every one of us in here is accountable to the Australian people. We've got to stop handing over power and authority to our law enforcement agencies and we've got to stop handing over power and authority to corporate boardrooms. Because what you get is a slow shuffle down the road to an authoritarian state and what you get by handing over power to corporate boardrooms are devastating impacts on the environment—exhibit A: climate change, but there are many other exhibits—and appalling outcomes for people who aren't lucky enough to be at the top end of town, to be at the top end of one of the big corporates that exert so much power in this country and that parliaments are basically happy to provide for on the basis of the corporate donations coming back into the major political parties.
Remember: the Liberal and Labor parties combined since 2012 have received over $100 million in corporate donations—$100 million. Now, those donations aren't being made from the goodwill of corporate boardrooms; they're being made because the corporates know they can buy outcomes with their political donations. And we've seen it time after time—the Labor Party receiving money from the big fossil fuel companies, and what happens? Oh, they support the Adani coalmine. What a surprise, Senator Watt, that Labor would support the Adani coalmine after receiving massive donations from fossil fuel companies, including fracking companies. And I can go through it—I've got it all in my office. If you want me to go through all the donations that the Labor Party's received from the fossil fuel lobby, just let me know.
The Liberal Party—I was about to say they're no better, but, astoundingly, and you wouldn't think it possible, they're actually worse. As a result, we're seeing the real power and authority in this country outsourced to corporations and, in the context of this legislation, we are seeing power and authority outsourced to our security agencies. We need to stand up against this, and we need to call it out whenever it's happening.
The last point I make before my time expires is that on my trips to Manus Island I've been privileged to meet and form friendships with some of the people whose rights have been abjectly ignored and destroyed by this government. When you sit down with these people and you can see for yourself the human cost of the erosion of fundamental rights, freedoms and liberties, it just makes you—and it just made me—more determined to stand up against it.
I rise to, once again, oppose legislation that allows the seizure of property of Australians, like you and me, who have not been suspected, charged or convicted of an offence—the Unexplained Wealth Legislation Amendment Bill 2018. The bill allows the seizure of a person's wealth if a court is satisfied that the wealth is unexplained and the person can merely be linked to a state or territory offence, possibly an offence committed by someone else. Currently, Commonwealth unexplained wealth legislation requires a link to a Commonwealth offence.
The bill allows state and territory authorities to apply to seize wealth under Commonwealth unexplained wealth legislation. This is despite the fact that the states and territories already have their own confiscation laws. This includes Western Australia where the Hon. Aaron Stonehouse, a member of the legislative council representing the Liberal Democrats, has successfully lobbied for the draconian laws to be reviewed. The idea that the Commonwealth should charge ahead with unexplained wealth laws while Western Australia is pulling back is ludicrous.
The bill before us today allows state and territory authorities to use surveillance powers under Commonwealth law for the purposes of pursuing unexplained wealth. State and territory authorities can already access Commonwealth surveillance powers for the purpose of investigating real crimes. Finally, the bill allows seized wealth to be shared between the Commonwealth, state and territory governments and any relevant foreign government. I call this 'the booty clause'. Perhaps 'the ill-gotten booty clause' would be better.
Unexplained wealth provisions are separate from the completely justified law dealing with the proceeds of crime. Unexplained wealth legislation does not discriminate between a person who commits a crime and a person who does not. Put simply, unexplained wealth legislation allows the government to seize assets from a person with no conviction simply because the origin of their wealth is not immediately obvious upon review of their tax returns. Unexplained wealth legislation requires no suggestion of criminal activity, no charge of criminal activity and no criminal conviction. The legislation forces a judge who is simply not satisfied that the wealth of an individual was gained by proper and legal means to confiscate a person's assets. Unexplained wealth legislation throws out the fundamental tenet of Western civilisation that citizens are presumed innocent until proven guilty. Assets are seized whenever a person is unable or unwilling to explain every detail behind their wealth. There are numerous reasons why a person might be unable to document the accumulation of their wealth and, more importantly, there are numerous reasons why a person might be unwilling to explain their wealth and should not be forced to—for example, if your wealth was gifted to you from a biological parent and you don't want it known that you were adopted; or if your wealth came from a lover who doesn't want it known you were having an affair. Those are just two possibilities.
Unexplained wealth legislation requires a person to justify to a judge that their wealth is legitimate, rather than requiring law enforcement to prove it was gained by unlawful means. The legislation essentially waives the requirement of evidence in order for punishment to be applied. Instead, it requires a person to provide evidence outlining how they have not broken any law when accumulating their wealth. We are not talking about the wealth of millionaires here either. Most seizures are of houses below the median house price and of cars below the average value of cars on our roads.
We are a Western liberal democracy, but unexplained wealth legislation and the seizure of assets without conviction is what you would expect from a despotic, undemocratic, authoritarian regime. This legislation is wrong and the Liberal Democrats oppose it.
I rise to speak on the Unexplained Wealth Legislation Amendment Bill 2018. I will address some of the issues raised by my colleagues in the Senate a bit later on in my contribution. The last 30 years has seen worldwide review of legal frameworks and approaches to addressing the issue of unexplained criminal wealth. In recent years, several governments have considered unexplained wealth laws and tools to enhance domestic efforts to tackle this issue; namely, to confiscate and forfeit wealth from individuals involved in illegal activities. Depriving criminals of their wealth is a key measure in combatting crime and is crucial in striking at the heart of organised crime.
The Australian Criminal Intelligence Commission estimates that the cost of crime in Australia is at least $36 billion per year. Unexplained wealth laws provide a valuable tool for law enforcement to confiscate the assets of criminals where they cannot demonstrate that this wealth has been lawfully obtained. We strongly believe it will deter would-be criminals by reducing the profitability of illegal activities. It may also prevent crime by diminishing offenders' ability to finance future criminal action.
Unexplained wealth laws are currently in place in the Northern Territory and Western Australia. I'll run through the current situation in Western Australia. It was in fact the first Australian jurisdiction to introduce unexplained wealth laws with the Criminal Property Confiscation Act 2000. This act was aimed at people who apparently live beyond their legitimate means of support. The legislation in Western Australia sets out the following processes whereby law enforcement and prosecutors can obtain information about criminally purchased assets. The Director of Public Prosecutions or police may require a financial institution to provide information about the transactions or the assets of a particular person. The DPP can apply to the courts for an order allowing them to conduct an examination of a suspected individual, which can require a person to furnish the court with information and documents. The DPP can also obtain documents relating to assets or property by applying for a production order. The DPP can apply to the court for orders requiring a financial institution to monitor or suspend a person's account and provide that information to the police or DPP. The police can detain a person if they have reasonable suspicion that the person has in their possession property liable to forfeiture or documents identifying or determining the value of a person's unexplained wealth. There are also provisions to ensure property remains available for forfeiture. In particular, the police have the power to seize property if they reasonably believe it was derived from or used in a crime and both the police and the DPP have the power to apply to the court for a restraining or freezing order which prevents property or assets from being used for a period of time.
As Senator McKim and Senator Leyonhjelm have raised, this area of law does raise a series of questions that we do need to confront. Laws such as these must always strike a balance, and unexplained wealth legislation cannot be drafted without considering its potential impacts. Such laws can have the potential to infringe people's rights to silence and the presumption of innocence. It could also be argued that a court's ability to determine a person's total wealth as being greater than their lawfully acquired wealth is problematic.
Whilst the government certainly acknowledges these concerns, this bill does represent an innovative legal tool and one that will become increasingly significant in the fight against illegally derived wealth and criminal activity. The scale and complexity of the criminal threat has necessitated an enhanced focus on cooperative, cross-jurisdictional responses by Australian governments. This is not just an issue of my home state of Western Australia; it is something that concerns the Northern Territory, South Australia and every other state. The bill creates a national cooperative approach, one that enables participating jurisdictions to work together to effectively remove one of the principle incentives of criminal activity—the accumulation of wealth—irrespective of the jurisdictions in which they operate.
One of the key features of this national scheme is it expands the Commonwealth regime. The bill allows the AFP to seize unexplained wealth where there is a connection to a broader range of state and territory offences. This will allow a single unexplained wealth order to target a national criminal syndicate, for example, instead of a patchwork of orders that would be sought by Commonwealth, state and territory authorities. It provides information-gathering powers. Law enforcement agencies in participating jurisdictions can apply for production orders or issue notices to financial institutions. These compel the production of information or documents to unexplained wealth investigators. It allows for the use of intercepted information. Officers in participating jurisdictions can use lawfully intercepted telecommunications information in unexplained wealth matters. In participating jurisdictions which contribute to the seizure of property or related criminal matters, they will generally receive an equal share of seized assets under the new equitable sharing arrangements, incentivising national cooperation.
The operation of the state and territory regimes has been preserved and, under the proposed intergovernmental agreement, jurisdictions must inform one another of operations or legislative changes that may impact in other jurisdictions. The scheme will be reviewed after four years. An important point and one that was raised by Senator Leyonhjelm is that the Western Australian parliament is currently reviewing its unexplained wealth legislation. It is important, when you are dealing with issues that do potentially infringe on the right to privacy and the right not to face a prosecution in this way, that these laws are regularly reviewed and considered for the impact they're having, how often they're being used and the types of cases they're being used on. That's why the government has included a four-year review of this legislation: to see how it is working, to see it's achieving its desired outcome and to make sure it is not overstepping the mark and infringing liberties in a way the government would not support. I think it is very important that we take that into account when considering this legislation.
Now, a national scheme, obviously, must always consider who is going to be a part of it. Obviously, we would like all states to be involved over time. New South Wales introduced legislation to refer powers to the Commonwealth. That was passed on 6 June 2018. The Australian Capital Territory and the Northern Territory are, of course, automatically bound by the scheme on passage of the bill. Being territories, no referral is required. Negotiations with the other states are ongoing. Given that at least Western Australia is undertaking a review, I imagine the negotiations will be taken in light of the findings of that review, and that's completely understandable. It is important that states come to this from a position of understanding what the national regime will involve and how it will potentially impact on their home states.
So why are we implementing a national scheme before all the states have bought in? This is a complex process. When you've got a number of jurisdictions involved, obviously there are a large number of stakeholders involved, particularly from the legal fraternity, but also stakeholders in other areas of society. It is a complex negotiation and one that will clearly take a significant amount of time. In fact, negotiations have been ongoing since 2014. We don't want to hold anyone back. Obviously, New South Wales is keen to be an initiator of the scheme. We certainly want to move forward with the potential for a national scheme, even though only New South Wales and the territories will be involved at the start.
The bill, along with the New South Wales legislation, will allow New South Wales, the Northern Territory, the Australian Capital Territory and the Commonwealth to all be part of the scheme immediately and realise some of its benefits. Discussions with the other states will be ongoing, and I expect over time, as they see the scheme in place, they will talk to the Commonwealth about how they can become involved in the national framework.
As part of this bill, states will be allowed to determine the offences to be referred. This ensures that states can refer offences in a way that is consistent with the unexplained wealth powers within each state. New South Wales unexplained wealth orders can only be sought where a property or person can be linked to a particular serious offence. New South Wales referrals have been limited to these serious offences to ensure the Commonwealth does not have greater power over New South Wales offences than would exist within the New South Wales unexplained wealth regime. Every offence added by the states extends the scope of the Commonwealth unexplained wealth orders and increases their effectiveness in addressing interjurisdictional criminal conduct.
This scheme, the bill currently under debate, was an election commitment of the coalition in 2013. The passage of this bill, assuming it receives support from this place, will mark the achievement of an election commitment. It implements key recommendations of the February 2014 independent report by the panel on unexplained wealth. I would also note that the final report of the National Ice Taskforce, which was endorsed by COAG, and the National Ice Action Strategy in 2015 also recommended a national scheme like the one we are debating today. The then Labor government, in February 2013, also agreed to seek referral powers from the states and territories, again for the purpose of legislating what this bill seeks: a national unexplained wealth scheme. That was in response to a 2012, I believe, Parliamentary Joint Committee on Law Enforcement inquiry into this matter, so you can see this is not something that was knocked up last week. It's something that's had a very long gestation; it's something that had been talked about, in the case of Western Australia, prior to 2000. In the national context, it's been talked about since around 2012. So, we have a situation where it's had an extraordinary amount of ventilation. It's had a lot of consideration, and you have seen a lot of input into what is a very complex area and one that does require a significant amount of work to make sure we get the balance right.
Again, I'll just return to some of the benefits of the bill that is currently before us. Serious and organised crime syndicates are operating in an increasingly fluid manner across jurisdictional borders, and that's not only within Australia, nationally, but also over international borders. Our national law enforcement efforts are increasingly frustrated by this fluidity. The Australian Federal Police said in its submission to the 2006 independent Sherman review:
Current criminal investigations can often be frustrated through lack of evidence against people with significant wealth and no apparent source of legitimate income.
Having distinct levels of unexplained wealth will ensure a targeted approach to combatting a specific crime. The Parliamentary Joint Committee on the Australian Crime Commission report in 2009 concluded:
… unexplained wealth laws appear to offer significant benefits over other legislative means of combating serious and organised crime…
The benefits of these laws include:
Before I conclude, I want to point out that, when considering these laws, we need to look at how often they are being used. In the first decade of use of the Western Australia unexplained wealth laws they were used 24 times. These are laws that are relatively rarely used in the context of inquiring into unexplained wealth. So it's not that the floodgates are suddenly going to be opened to the kinds of examples that Senator Leyonhjelm gave: people who have inherited wealth or gained wealth through a particular relationship that they don't want revealed. These laws are used relatively infrequently and they are clearly targeting criminal activity.
Again, what we're trying to do here is deter those who contemplate criminal activity by reducing the possibility that they gain or keep any profit from that activity. Obviously, the motive for a quick buck is a significant motivating factor in criminal enterprise and anything we can do, as a society, to reduce that temptation obviously makes society safer. It prevents crime by diminishing the capacity of offenders to finance future illegal activity. Again, this is very important. If we can, in any way, reduce the amount that criminal syndicates have to reinvest in criminal activity, that will improve the situation for all in society. It also prevents the unjust enrichment of criminals, whose profit is always at the expense of society.
So, this is a very important, powerful and effective tool in the fight against crime generally, and particularly in the fight against organised crime. It will play a significant deterrent role. It has been developed over a long period of time with consultation from the states and territories, from law enforcement agencies and from the legal profession. The government remains committed to working collaboratively with all governments across Australia to make sure that we strengthen, target and actively fight against the accumulation of illicit wealth and organised crime, and we do so with a very strong mind to make sure we maintain the rule of law, the basis of protection of privacy and the individual right to property that those on this side do hold very dear. So, I commend the bill to the chamber.
I rise to speak in support of the Unexplained Wealth Legislation Amendment Bill 2018. This bill, like the bill addressing issues of the black economy, is about ensuring that those people who rort the system and involve themselves in criminal activity don't get the benefit of their activities, because everyone in Australia is penalised by those who try to game the system in their own interests and against us all. For instance, the failure to collect due revenue has serious repercussions for the delivery of government programs that are important to be compassionate to people in our community who need it.
The point of this bill is to ensure that those people who have assets beyond their expected means that are suspected of being derived from criminal activity can be held accountable for that and may be liable to the forfeiture of those assets acquired as a consequence of being involved in crime.
It's interesting to reflect that, back in 1984, Frank Costigan QC in his report into the infiltration of organised crime on the waterfront in Victoria—the Royal Commission into the Activities of the Federated Ship Painters and Dockers Union—noted:
… the most successful method of identifying and ultimately convicting major organised criminals is to follow the money trail.
Justice Moffitt also recognised in the 1980s in his piece called A quarter to midnight, the Australian crisis: organised crime and the decline of the institutions of state that:
… the path to conviction is slow, torturous and expensive … The criminal justice system is not adequate to secure the conviction of many organised crime figures.
Bartels in her review—A review of confiscation schemes in Australia2010noted that in the first year of the Commonwealth's non-conviction measures, which was 2003-03, a mere $162,826 was collected from non-conviction measures compared with conviction based measures of $3,125,799. By 2008-09, this had significantly changed and conviction based recovery then amounted to $888,000 while non-conviction measures collected $18,313,516—an excellent demonstration of the success of the approach.
Unexplained wealth laws provide additional and very necessary weaponry in the fight against crime to the established proceeds of crime laws. It's estimated—just to give some sense of its size—that, in the period from 1995 to 1996 through to 2014, the confiscation of money through proceeds of crime actions amounted to some $623 million. This is compared to the estimation in this period by the then Australian Crime Commission, which believed organised crime cost the Australian economy $10 billion a year.
So, what are the general arguments in support of unexplained wealth laws? The Police Federation of Australia, in a submission, identified three objectives with explained wealth laws: firstly, they deter those people who contemplate criminal activity by reducing the possibility that they will gain or keep a profit from their activity, even if they might be later held criminally responsible; secondly, they prevent crime by diminishing the capacity of offenders to finance any future criminal activity that they might be considering engaging in; and, thirdly, they remedy the unjust enrichment of criminals who profit for themselves at society's expense.
The Australian Federal Police has noted that investigations can often be frustrated by a lack of evidence against people with significant wealth and no apparent source of legitimate income. The AFP has also acknowledged in the past that sophisticated criminals organise their arrangements carefully to maintain an arms-length relationship between themselves and the source of illegal income. The capacity to align income to a specific crime in those circumstances can be difficult. Professor Rod Broadhurst of the Australian National University has observed that tainted or unexplained wealth may be the only means to reliably identify criminal entrepreneurs whose involvement in organised crime is usually indirect in terms of actual commission. Unexplained wealth laws are one of the most effective means to investigate and prosecute the otherwise very difficult offences of corruption and bribery, which often facilitate serious crime.
Unexplained wealth provisions have been successfully used in Italy to counter problems with organised crime. The Italian government acknowledged that, while jail time is important, the deprivation of assets that are the products of crime is equally important, particularly when jail time can't ultimately be achieved. Other countries with unexplained wealth legislation include the United States of America, the United Kingdom, New Zealand and Switzerland. The schemes in those countries appear to have been effective.
I have some experience of these matters. Before coming to this place I served as a Commonwealth prosecutor. The Commonwealth Director of Public Prosecutions and the Australian Federal Police often worked together in attempting to seize the proceeds of crime from those who had been engaged in crimes such as drug importation, corporate crime and tax fraud, among other offences. In my view there was a real hobbling of the work of law enforcement. People with illegally obtained money were able to use it either to string out legal proceedings to their own advantage or to out-muscle the criminal justice process.
What will this bill do to make sure that these people who don't do the right thing are penalised? More particularly, how will it help us deal with the problem I have just mentioned? Unexplained wealth regimes allow courts to restrain a person's wealth where there are reasonable grounds to suspect that their lawfully acquired wealth is less than their total wealth. If the suspect cannot prove that their restrained wealth was lawfully obtained, such as through employment or legitimate business activities, they will be required to forfeit that wealth.
Due to constitutional limitations, however, the Commonwealth regime requires authorities to establish a link with a Commonwealth or foreign offence or a state offence with a federal aspect. The bill creates a national cooperative scheme on unexplained wealth, which will involve the states and which will overcome this limitation and enhance the unexplained wealth regimes of all jurisdictions.
What are the key features of this national scheme? The scheme will expand the existing Commonwealth regime. The bill allows the AFP to seize unexplained wealth where there is a connection to a broader range of state and territory offences. This will allow a single unexplained-wealth order to target a national crime syndicate, instead of having to go through a patchwork of orders that have until now been sought by Commonwealth, state and territory authorities separately. It will improve information-gathering powers. Law enforcement agencies in participating jurisdictions can apply for production orders or issue notices to financial institutions. These compel the production of information or documents to unexplained wealth investigators to try and help them get to the bottom of the problem they're trying to solve. It will allow officers in participating jurisdictions to use lawfully intercepted telecommunications information in dealing with unexplained wealth matters. Those participating jurisdictions which contribute to the seizure of property or related criminal matters will generally receive equal shares of the seized assets under these new equitable sharing arrangements. That will provide incentives for national cooperation on this issue. The current operation of state and territory regimes has otherwise been preserved. Under the proposed intergovernmental agreement, jurisdictions must inform one another of operations or legislative changes that may impact upon other jurisdictions. The scheme will be reviewed after four years. That's an important protection, but I note what Senator Brockman put before this chamber only a moment ago—that is, that they are used only rarely and sparingly, and not as a routine breach of privacy.
The jurisdictions which are joining this national scheme include New South Wales, which introduced legislation to refer their power to the Commonwealth on 6 June 2018. The Australian Capital Territory and the Northern Territory will automatically be brought into the scheme on the passage of the bill, not requiring a referral to effect that. Negotiations with the remaining states continue. There's a reasonable question that could be asked: why implement this scheme without having the support from all of the states already signed up? Well, there are some practical answers to that. Negotiations have been ongoing since 2014, and the government wishes to ensure that jurisdictions which are eager to join the scheme are not further delayed. The bill, along with the New South Wales legislation, will allow New South Wales, the Northern Territory, the Australian Capital Territory and the Commonwealth to join the scheme immediately and start to realise its benefits. Other states will continue to be encouraged to join the scheme, of course, to maximise these benefits and to provide a national, strong and united front against serious and organised crime.
A further question that could be asked is: why should we allow the states to determine the offences that will be referred to be dealt with under this scheme? Doing it this way ensures that states can refer offences in way that is consistent with the unexplained wealth powers that already exist within that state. For instance, New South Wales's unexplained wealth orders can only be sought where a property or person can be linked to particular serious offences. New South Wales's referral has been limited to these serious offences to ensure that the Commonwealth doesn't have greater power over New South Wales offences than would exist within the existing New South Wales unexplained wealth regime. Every offence added by the states extends the scope of Commonwealth unexplained wealth orders and increases their effectiveness in nationally addressing interjurisdictional criminal conduct.
The scheme has both political and expert support. It was a coalition election commitment in 2013, and I'm pleased to see our government delivering on it. The scheme implements the key recommendations of the February 2014 independent report of the panel on unexplained wealth. Implementation of the scheme was also recommended by the final report of the National Ice Taskforce and endorsed by the COAG process in the National Ice Action Strategy 2015. I'm not alone in saying that our community demands that we do all that is possible to deal with the scourge of ice in our community. The then Labor government in February 2013 agreed to seek a referral of powers from the states and territories for the purpose of legislating for a national unexplained wealth regime in response to the Parliamentary Joint Committee on Law Enforcement inquiry into Commonwealth unexplained wealth legislation arrangements.
To summarise, this bill establishes a national cooperative scheme on unexplained wealth which enables jurisdictions to work together to deprive criminals of wealth irrespective of the jurisdiction in which they operate. The Commonwealth, New South Wales, Northern Territory and ACT will participate in the scheme from the outset, and other jurisdictions will be encouraged to join over time. The bill will strengthen the ability of agencies to crack down on those who have unexplained wealth obtained from the proceeds of criminal activity by allowing the Commonwealth to use unexplained wealth orders in relation to a broader range of offences, including referred state offences and territory offences. It will allow law enforcement agencies and participating jurisdictions to compel persons and financial institutions to provide certain information that is relevant to understanding and advancing unexplained wealth cases. Law enforcement agencies and participating jurisdictions will have the ability to use lawfully intercepted telecommunications information to deal with unexplained wealth matters. It will allow greater coordination of unexplained wealth investigations as between various agencies and the states and territories with the Commonwealth, and it will allow participating jurisdictions to benefit from preferential treatment in the distribution of seized assets under the new equitable sharing arrangements. I support this bill because it sends a strong message to those who engage in criminal activity that the assets they obtain at the expense of our community won't be safe, no matter how well they think they can dodge law enforcement in this country.
I chair the Legal and Constitutional Affairs Legislation Committee, which conducted an inquiry into the Unexplained Wealth Legislation Amendment Bill 2018. The matter was referred to the committee at the end of June this year so that relevant groups affected by the bill were provided with an opportunity to raise concerns with the proposed scheme. The call for submissions resulted in submissions from seven submitters: the Adelaide Magistrates Court, the Civil Liberties Australia, the Legal Services Commission of South Australia, the Police Federation of Australia, the Law Council of Australia, Mr Edward Greaves and the Department of Home Affairs. I thank all of those submitters for their contributions, which did help the committee in coming to some conclusions and in recommending that the bill be adopted.
I note in passing that the Law Council of Australia, of which I was once a member and perhaps still am—I'm not quite sure—is always very helpful with the submissions it makes to the Legal and Constitutional Affairs Legislation Committee. It was able to get a report together in a few weeks, and as usual its high-quality reports are always welcome. I'm a little amused that, in the approach to look at the amalgamation of the Federal Circuit Court and the Family Court, which the government wants to do to try and address some of the enormous delays that occur in that court, the Law Council is being used, by people who seem to want to delay the progress of that family law consolidation and reform bill, as a reason to keep extending the dates because it supposedly needs more than three or four months to prepare a submission. I know that's not correct. I know the Law Council is better than that. It is able to get submissions in in a very short period of time.
This proposal to amalgamate the Federal Circuit Court with the Family Court has been around for a long time. The Law Council has had an early draft of the legislation, and I'm sure it is well aware of what its approach will be and what the approach of many of its members will be, although I do acknowledge that within the Law Council, which represents all lawyers across Australia, there will be many different views. But the universal problem that everyone knows of and wants to try and address is the huge delays in the Family Court, which are causing real distress to Australian families. People involved—and it's unfortunate they are involved—in the family law courts have enough problems as it is without having to wait for up to three years to get a decision on matters that came before the court. One of the reasons is that there are two courts that deal with family law matters in Australia: the Federal Circuit Court, which appears to have a record of dealing much more efficiently with work before it, and the Family Court of Australia, which seems to take a longer time to resolve matters. One of the problems is that very often matters are transferred between both courts, which have different structures and different rules, and that causes delays and expense.
What the government is proposing is that both courts continue to operate as separate courts but have the same administrative system and the same court rules and be headed by one chief judge, who would be the chief judge of both the Federal Circuit Court and the Family Court of Australia, so that a lot of the disparity between the two courts would disappear. It's thought by those involved in the area, practitioners and participants alike, that that will make it much quicker and cheaper to get results for those who are obliged to be involved in the Family Court system.
I mention in passing that I'm disappointed that the Labor Party and the Greens, for some reason, seem to want to delay this until next year, when we all know there will be an election. That means that, at the very best, if the Labor Party and the Greens get their own way on this, it will be at least another 12 months before any action can be taken to deal with the dysfunction of the two courts currently operating in the system. The very weak excuse used by the Labor Party and the Greens is that they are awaiting the Law Reform Commission's report into the family law system. But, as has been explained to them time and again, the Law Reform Commission is not looking at the structures of the courts. I'm pleased to say that my committee has invited the Law Reform Commission along to explain what it is doing in its research into the family law system to confirm that the structure of the courts is not something that it will be particularly focusing on and that it has other areas of focus for its inquiry.
All that means is that those unfortunate people who have had to be in the system won't get relief. We won't be able to do reforms to the court system, which would speed up matters and make them cheaper, for perhaps a year. For those who are concerned about this, I ask them not to ring me or come to my office or the office of any government senator or member of parliament but to go and see the Labor Party and the Greens and ask them why they are delaying these very worthwhile reforms to the Family Law Act.
This is not a matter of playing politics, which seems to be the approach of the shadow Attorney-General. This is about trying to bring real reform, real assistance and real justice to people who unfortunately have found themselves within a system that is currently inefficient and is taking up to three years to get results. If senators and members can put themselves in that position, where there is a dispute in a family law matter, people's lives are put on hold until the court comes in and makes a determination, which is what it is all about. Your life has to be put on hold for three years. That's unacceptable. Everyone acknowledges that.
Why the Labor Party, the Greens and Centre Alliance are part of a process that seems hell-bent on delaying this for another year, I cannot understand. I would urge anyone who has an interest in that matter, who is involved in the family law court system at the moment, to make those views known to members of the Labor Party, the Greens and Centre Alliance and ask them to at least let this first step towards efficiencies take place speedily. This proposal has been around for a long time. There are some entrenched interests who are opposed to it for various reasons, which they would know better than I, but it seems to me that this is a little step in the right direction that should be progressed.
While I have misdirected myself slightly from the subject before us, I simply do that in acknowledging that the Law Council of Australia do not need four or five months to prepare a submission on something that they've known about for a long time and which they've proved, as they did in this report, that they are very capable of dealing with expeditiously. They're assisting the committee and the parliament with worthwhile suggestions as to the veracity or the usefulness of various pieces of legislation that come before the parliament that deal with the legal and constitutional laws of our land.
In its submission to the committee, in relation to this unexplained wealth legislation, the Department of Home Affairs noted:
Serious and organised crime groups are increasingly operating in a more coordinated and organised manner and are frequently controlling activities that span national and international borders.
Given the challenges proposed by the increasingly sophisticated, coordinated and cross-jurisdictional operations of serious and organised crime groups, the Legal and Constitutional Affairs Legislation Committee considered it necessary and timely that the Commonwealth should seek to establish a national scheme to target unexplained wealth.
It's important to note that the bill is a result of consultations between the Commonwealth government and state and territory governments. Also, due to Commonwealth limitations, one or more states must refer their power to the Commonwealth. This will be achieved through a text referral of schedules 1, 2 and 4 from the New South Wales parliament. Therefore, these schedules cannot be amended. The committee does note that there is scope for amendments to be made after the bill has been enacted in its present form, but this can only occur if parties to the Intergovernmental Agreement on the National Cooperative Scheme on Unexplained Wealth unanimously agree to the amendments. Consequently, any amendments by the Commonwealth parliament to these schemes would place the national scheme on unexplained wealth in jeopardy.
The committee did note some concerns raised during the inquiry in relation to self-incrimination retrospectively into legal professional privilege; the exemption of the disallowance and immunity from liability; and significant matters in delegated legislation and also in relation to privacy issues. The committee noted that most of the provisions that relate to these concerns are contained in schedules 1, 2 and 4 of the bill, which, as I say, are not able to be amended in this parliament because they require unanimous agreement by all of the state parliaments.
As usual, the committee gave very serious consideration to those issues of concern that were raised. I won't have time to go through all of them, but I'll just indicate the committee's view in relation to some of those concerns that were raised. In relation to retrospectivity, the committee notes that the bill does not criminalise conduct that was otherwise lawful prior to the amendments. The committee was persuaded by the evidence provided by the department and others that it would be almost impossible for law enforcement agencies to prove the precise point in time when property or wealth was acquired. The committee also notes that another act of parliament contains a similar provision, and therefore the bill merely extends current provisions of that other similar act. So the committee thought that, in all of these circumstances, the retrospective application of the bill was justified.
In this bill there are a significant number of matters that could be dealt with in delegated legislation but, having noted the kind of person who may issue notices to financial institutions in self-governing territories, the committee was mindful that the scheme needs to maintain a degree of flexibility, particularly in light of the ACT currently not having an unexplained wealth scheme. The committee further noted that the regulation will be subject to rules of disallowance; so parliament has a view on delegated legislation that can be disallowed, should parliament so agree. It also noted that the operation of the new schedule 1, which includes notices to financial institutions, will be subject to oversight by the Parliamentary Joint Committee on Law Enforcement.
In relation to privacy concerns, the committee considered that the bill appropriately limits the circumstances where disclosure of information to specific authorities for a specified purpose is permitted. Furthermore, the committee is reassured that the use of powers under the relevant act will be reported to the minister annually and is subject to scrutiny of the Parliamentary Joint Committee on Law Enforcement.
In relation to other matters that were raised as a concern, I invite those who might be interested in this piece of legislation to refer to the Senate Legal and Constitutional Affairs Legislation Committee's report into this, which was tabled in this parliament in August of this year. It more fully goes into the concerns raised and the committee's view on those concerns, which were such that, whilst we acknowledge the concerns, there are reasons for them. The committee unanimously decided that those concerns were addressed by the bill or by practice and that, across the board, this was an appropriate piece of legislation.
The committee thought—like I think most Australians and most senators do—that the establishment of a national scheme to target unexplained wealth is very important. The committee came to the conclusion that this bill achieves the right balance between protecting the rights of individuals and providing law enforcement with sufficient tools to deprive serious and organised crime groups of their wealth. If we can do anything that deprives serious and organised crime groups of the huge wealth they've amassed from nefarious means then that is a good thing. That's why the committee came to the conclusion that this was a bill that should be passed by the parliament, and it recommended accordingly.
In conclusion, I again thank the secretariat—Dr Sean Turner, the committee secretary, Ms Pothida Youhorn, our principal research officer, and Ms Kate Morris, the administrative officer—for their assistance to the committee in sifting through the evidence and producing this report. I also thank other members of the committee, including the deputy chair, Senator Pratt, as well as Senator Molan, Senator McKim, Senator Hume and Senator Watt for their contributions to the conclusion the committee has reached. I certainly will be supporting the bill and urge all other senators to do likewise.
First of all, I'd like to thank all of my colleagues in this chamber for their contributions on the Unexplained Wealth Legislation Amendment Bill 2018. Before I address the specifics of this bill, I'd like to address some of the issues that I understand Senator McKim has raised in the course of this debate. I would acknowledge that, as Senator Macdonald has just said, Senator McKim was a participating member of the Legal and Constitutional Affairs Legislation Committee report that Senator Macdonald has just gone through and apprised the Senate of. I would also note that that Legal and Constitutional Affairs Legislation Committee report had no dissenting comments at the time or additional comments made to that report.
In relation to the specific issues that Senator McKim raised in protections and human rights considerations, I can advise this chamber that these orders have extensive protections to ensure they are only used where appropriate and, specifically, I'll highlight three of those areas. Firstly, a court can refuse to issue these orders on public interest grounds or where the unexplained wealth amount is below $100,000. Secondly, the court may also exclude property from the scope of these orders in a range of situations, including where it is in the public interest or in the interest of justice to do so. And, thirdly, a court may also allow for reasonable expenses to be paid from restrained assets. So I hope that these arrangements, which I know were extensively canvassed in the legal and constitutional committee—deliberations that he participated in—reassure Senator McKim.
I'd like to remind us all in this chamber that serious and organised crime syndicates never stand still and they're always seeking new ways to exploit jurisdictional gaps, and that is certainly the case here in Australia today. Serious and organised crime syndicates, we know, are operating in an increasingly fluid manner across all of our jurisdictional borders. In fact, the Australian Criminal Intelligence Commission estimated that it is costing the Australian community at least $36 billion a year. I'll just say that number again because many Australians might not realise that is the implication of having these jurisdictional gaps that serious and organised crime can exploit. It's costing the Australian community $36 billion a year. So depriving criminals of their wealth is a key measure in combatting these insidious individuals. Unexplained wealth laws provide a valuable tool for law enforcement to confiscate these assets of these criminals where they cannot demonstrate that this wealth has been lawfully obtained.
However, it's also important to keep in mind that the scale and complexity of this criminal threat have necessitated an enhanced focus on cooperative cross-jurisdictional responses by Australian governments. The Unexplained Wealth Legislation Amendment Bill 2018 will provide for the first time a truly national approach to targeting unexplained wealth. It will enable all participating jurisdictions to work together to effectively deprive these criminals of their wealth, irrespective of the Australian jurisdictions that they operate in. Through a referral of powers from participating states, the scheme will allow the Commonwealth unexplained wealth orders to be used where a person or property can be linked to a broader range of state and territory offences. This will allow the AFP to use a single unexplained wealth order to target criminal syndicates instead of the patchwork of orders that would otherwise be sought by the Commonwealth, state and territory law enforcement agencies. The scheme will also enhance the capability of state and territory agencies to contribute to national efforts by providing access to enhanced information-gathering powers and the ability to use lawfully intercepted telecommunications information in unexplained wealth matters.
The bill also incentivises greater cooperation between jurisdictions through the establishment of new equitable sharing arrangements. These arrangements will give participating jurisdictions preferential treatment in the distribution of seized assets. The scheme does not replace existing unexplained wealth schemes around the country but, rather, creates a more effective and more cooperative network of law enforcement working towards a single common goal. On behalf of the Commonwealth government, I thank the states and territories that have worked with the Commonwealth to design the national cooperative scheme on unexplained wealth. And I particularly take the opportunity to thank the New South Wales government, which should be acknowledged for the passage of its legislation in its parliament, which was done earlier this year.
The federal government will continue to negotiate with the remaining states to secure their support to ensure the benefits of the scheme are maximised nationally. The government urges its colleagues to support the passage of this critical legislation. Together, Australian governments can demonstrate they are committed to working collaboratively to strengthen unexplained laws and strike at the heart of serious and organised crime.
In conclusion, I again thank all of my colleagues here in this place who have spoken on this bill and those in this chamber who are supporting this bill. The bill does provide a national approach to targeting unexplained wealth, enabling participating jurisdictions to work together to effectively deprive these serious and organised criminal gangs of their ill-gotten gains, regardless of what jurisdiction they operate in and the jurisdictional boundaries they exploit. I commend the bill to the Senate. I also table an addendum to the explanatory memorandum relating to the Unexplained Wealth Legislation Amendment Bill 2018. The addendum responds to concerns raised by the Scrutiny of Bills Committee.