Official Hansard No

COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY DEBATES

SENATE Official Hansard No. 7, 2004 THURSDAY, 17 JUNE 2004

FORTIETH PARLIAMENT FIRST SESSION—EIGHTH PERIOD

BY AUTHORITY OF THE SENATE

INTERNET The Journals for the Senate are available at http://www.aph.gov.au/senate/work/journals/index.htm

Proof and Official Hansards for the House of Representatives, the Senate and committee hearings are available at http://www.aph.gov.au/hansard

For searching purposes use http://parlinfoweb.aph.gov.au

SITTING DAYS—2004 Month Date February 10, 11, 12 March 1, 2, 3, 4, 8, 9, 10, 11, 22, 23, 24, 25, 29, 30, 31 April 1 May 11, 12, 13 June 15, 16, 17, 18, 21, 22, 23, 24 August 3, 4, 5, 9, 10, 11, 12, 30, 31 September 1, 2, 6, 7, 8, 9, 27, 28, 29, 30 October 5, 6, 7, 25, 26, 27, 28 November 22, 23, 24, 25, 29, 30 December 1, 2

RADIO BROADCASTS Broadcasts of proceedings of the Parliament can be heard on the following Parliamentary and News Network radio stations, in the areas identified.

CANBERRA 1440 AM SYDNEY 630 AM NEWCASTLE 1458 AM GOSFORD 98.1 FM BRISBANE 936 AM GOLD COAST 95.7 FM MELBOURNE 1026 AM ADELAIDE 972 AM PERTH 585 AM HOBART 747 AM NORTHERN TASMANIA 92.5 FM DARWIN 102.5 FM

CONTENTS

THURSDAY, 17 JUNE

Parliament House: Art Collection ...... 24025 Petitions— Indigenous Affairs: Government Policy ...... 24029 Defence: Involvement in Overseas Conflict Legislation...... 24030 Medicare...... 24030 Health: Pharmaceutical Benefits Scheme...... 24030 Notices— Presentation ...... 24031 Business— Rearrangement...... 24031 Rearrangement...... 24032 Committees— Economics Legislation Committee—Meeting ...... 24032 Environment, Communications, Information Technology and the Arts References Committee ...... 24032 Educational Textbook Subsidy Scheme...... 24032 Notices— Postponement ...... 24035 Business— Rearrangement...... 24035 Women: Domestic Violence...... 24035 Renewable Energy Amendment (Increased MRET) Bill 2004— First Reading ...... 24036 Second Reading...... 24036 World Refugee Day ...... 24037 World Refugee Day ...... 24037 Human Rights: Burma ...... 24038 Committees— Foreign Affairs, Defence and Trade References Committee—Extension of Time...... 24038 National Capital and External Territories Committee—Meeting ...... 24039 Rural and Regional Affairs and Transport Legislation Committee—Meeting ...... 24039 Community Affairs Legislation Committee—Meeting ...... 24039 Community Affairs References Committee—Report...... 24039 Budget— Consideration by Legislation Committees—Reports ...... 24051 Workplace Relations Amendment (Award Simplification) Bill 2002, Workplace Relations Amendment (Better Bargaining) Bill 2003, Workplace Relations Amendment (Choice in Award Coverage) Bill 2004 and Workplace Relations Amendment (Simplifying Agreement-making) Bill 2004— Report of Employment, Workplace Relations and Education Legislation Committee ...... 24051 Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand and Other Matters) Bill 2003— Report of Rural and Regional Affairs and Transport Legislation Committee ...... 24051 Migration Amendment (Judicial Review) Bill 2004— Report of Legal and Constitutional Legislation Committee...... 24051 Business— Rearrangement...... 24051

CONTENTS—continued

Corporations (Fees) Amendment Bill (No. 2) 2003 and Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill 2003— In Committee...... 24052 Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2004— Second Reading...... 24080 Third Reading...... 24081 Farm Household Support Amendment Bill 2004— Second Reading...... 24081 Third Reading...... 24085 Export Market Development Grants Amendment Bill 2004— Second Reading...... 24085 Third Reading...... 24086 Medical Indemnity (Run-off Cover Support Payment) Bill 2004 and Medical Indemnity Legislation Amendment (Run-off Cover Indemnity and Other Measures) Bill 2004— Second Reading...... 24086 Third Reading...... 24086 Electoral and Referendum Amendment (Access to Electoral Roll and Other Measures) Bill 2004— Second Reading...... 24086 Third Reading...... 24089 Agricultural and Veterinary Chemicals Legislation Amendment (Name Change) Bill 2004— Second Reading...... 24089 Third Reading...... 24090 Bankruptcy (Estate Charges) Amendment Bill 2004 and Bankruptcy Legislation Amendment Bill 2004— Second Reading...... 24090 Third Reading...... 24091 Questions Without Notice— Iraq: Treatment of Prisoners ...... 24091 Indigenous Affairs: Funding...... 24093 Distinguished Visitors...... 24094 Questions Without Notice— Indigenous Affairs: Funding...... 24094 Iraq: Treatment of Prisoners ...... 24094 Family Services: Carers...... 24095 Iraq: Treatment of Prisoners ...... 24097 Youth: Homelessness...... 24098 Australia Council...... 24100 Foreign Affairs: Sudan ...... 24101 Sport: Drug Testing ...... 24103 Australian Electoral Commission...... 24104 Questions Without Notice: Additional Answers— Environment: Antarctica...... 24105 Youth: Homelessness...... 24106 Questions Without Notice: Take Note of Answers— Australia Council...... 24106

CONTENTS—continued

Committees— Reports: Government Responses...... 24112 Documents— Auditor-General’s Reports—Report No. 53 of 2003-04 ...... 24121 Parliamentary Zone— Proposal for Works ...... 24121 Cooperative Research Centres— Return to Order...... 24121 Budget— Consideration by Legislation Committees—Reports ...... 24122 Occupational Health and Safety (Commonwealth Employment) Amendment (Employee Involvement and Compliance) Bill 2002— Report of Finance and Public Administration Legislation Committee...... 24123 Committees— Membership...... 24123 Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill 2003— In Committee...... 24123 Budget— Consideration by Legislation Committees—Report...... 24169 Business— Rearrangement...... 24169 Anti-terrorism Bill 2004— Second Reading...... 24169 In Committee...... 24185 Adjournment— Queensland: Road Funding ...... 24203 Trade: Free Trade Agreement ...... 24206 Environment: Endangered Species...... 24208 Marriage ...... 24210 Documents— Tabling...... 24214 Questions on Notice— Commonwealth Scientific and Industrial Research Organisation: Appointment— (Question Nos 2871 and 2872)...... 24215 Copyright: Piracy—(Question No. 2875)...... 24216 Australian Volunteers International: Funding—(Question No. 2883 amended)...... 24217

Thursday, 17 June 2004 SENATE 24025

Thursday, 17 June 2004 cepted by the Speaker and me will not mean ————— that the work of new and emerging artists will cease to be acquired. It will, however, The PRESIDENT (Senator the Hon. mean that new acquisitions will not be re- Paul Calvert) took the chair at 9.30 a.m. and stricted solely to emerging artists. read prayers. The general criteria for selecting artworks PARLIAMENT HOUSE: ART for the rotational collection will be that the COLLECTION artist has appropriate professional standing The PRESIDENT (9.30 a.m.)—In June and that the work is suitable to be added to 2003 the Speaker and I commissioned Mrs that collection. The Department of Parlia- Betty Churcher AO to review a range of mat- mentary Services will develop detailed crite- ters relating to the Parliament House art col- ria for the suitability of artworks for the rota- lection. Mrs Churcher’s report was com- tional collection. This work will take account pleted in October 2003. On 1 December of the original development of the collection, 2003, copies were sent to all senators and the existing acquisitions guidelines and the members, and comments were invited. Hav- specific recommendations made by Mrs ing regard to the comments received, and Churcher, in particular the focus on better preliminary advice from the Department of representation of some currently underrepre- Parliamentary Services on some aspects of sented areas of Australia. We note, however, Mrs Churcher’s report, the Speaker and I that Mrs Churcher’s recommendations do not have made certain decisions about the future require any reduction in the acquisition of of the Parliament House art collection. artworks for the rotational collection. Fur- The Parliament House art collection has thermore, since artworks acquisitions will no five main components. These are the com- doubt continue to be constrained by funding missioned art works, commissioned art furni- limitations, works by new and emerging art- ture, the historic memorials collection, gifts, ists may well continue to represent a signifi- and the rotational collection. While Mrs cant proportion of acquisitions. The point Churcher’s review addressed issues relating should be made that the current acquisition to all aspects of the collection, the most im- guidelines express a preference for ‘first portant aspects of her review were those re- point of sale’ acquisitions, and this has effec- lating to the rotational collection. Having tively precluded consideration of the pur- regard to Mrs Churcher’s recommendations, chase of appropriate works from established and the comments of senators and members, artists, alive or dead. That limitation has now we propose a framework for a rationale and been addressed. an acquisitions policy for this collection. Separately from her recommendations The purpose of the rotational collection is about the rotational collection, Mrs Churcher to provide Australian artworks of suitable recommended the compilation of an ‘alterna- quality for senators’ and members’ suites, tive’ collection of reproductions that would and for the public and semipublic areas of be suitable for hanging in senators’ and Parliament House. The collection has never members’ suites. These reproductions would been intended to function as the basis of a not be accessioned into the Parliament House public art gallery, but it has in the past en- art collection. We have accepted Mrs couraged emerging artists. In view of the Churcher’s recommendation in principle, comments of some senators and members, I because we agree that senators and members should emphasise that the new approach ac- should have a broader choice of works avail-

CHAMBER 24026 SENATE Thursday, 17 June 2004 able to them to decorate their suites. An Art putting our artistic choice for the reproduc- Advisory Committee will continue. How- tive form ahead of a wonderful component of ever, we propose to supplement the member- this scheme which stimulates the Australian ship as proposed by Mrs Churcher so that the arts community and purchases from the art- Committee consists of the Presiding Officers ists who are currently working in Australia. as joint chairs, the Deputy Speaker, the Dep- You do not have to have much long-term uty President and Chairman of Committees, imagination to know that this scheme is the and the Secretary of the Department of Par- very best way of picking up original art- liamentary Services. The main role of the Art works and assisting the arts community. Advisory Committee will be to consider rec- The concept that this scheme should exist ommendations for acquisitions made by the for us to decorate our suites rather than to put art consultant, whose engagement was rec- on display the creativity of Australian artists ommended by Mrs Churcher. Several of Mrs is a silliness. It is simply remaking the con- Churcher’s other recommendations will be cept of a great scheme, which was above all implemented by the Department of Parlia- at the service of the arts and creativity of mentary Services, and the Speaker and I will Australia. It is not any longer; we are now advise senators and members of the details in headed in the direction of the members of the due course. day having reproductions which might deco- There is more work to be done in relation rate their suites—to quote you, Mr President. to the Parliament House art collection, espe- I think we are well paid, and we are well able cially in relation to the rationale and acquisi- to put reproductions that suit our own tastes tion policy for the rotational collection and in in our own suites. I do not think we should relation to funding for the extra commissions be decorating our own suites according to and the alternative collection recommended our own tastes—out of date as they might by Mrs Churcher. I will keep senators in- be—at the expense of the artistic creation of formed of developments in this area. Australia in the year 2004 or in whatever Senator BROWN (Tasmania) (9.36 future year it may be. This is retrograde. It is a.m.)—by leave—I move: very narrow-minded and it is very self- invested. Australia deserves better, and the That the Senate take note of the statement. Australian arts community deserves better. I thank you for the statement, Mr President. It indicates a very clear change in direction Senator RIDGEWAY (New South Wales) for the purchasing of artworks for the par- (9.39 a.m.)—I also want to make a few com- liament, and it does concern me. A key point ments on this motion, given that I have been here is the desire by some members at least heavily involved in providing comment on to hark back to past times and to have on the this issue as well as having been critical of walls of our Senate rooms and elsewhere some of the recommendations put forward reproductions from the past rather than have by Mrs Churcher, particularly in respect of original artworks from Australians, particu- the emerging artists program as part of the larly from those currently producing and cre- Parliament House art collection. Whilst it is ating their works in Australia. To divert appreciated that there has been a need to re- money to the purchase of reproductions to view the way in which the Parliament House put on the walls of members’ rooms and so art collection is comprised, we also must on from the fund’s ability to purchase art- take into account the intention at the time works from working artists is retrograde. It is Parliament House was opened. Philistine views have been expressed by others about

CHAMBER Thursday, 17 June 2004 SENATE 24027 what ought to adorn the corridors of Parlia- landscape in a traditional or colonial sense, ment House or what ought to be more avail- but I think all of us have come to appreciate able to the public. It seems to me to not be a what it stands for. I would be encouraging question of whether politicians ought to ap- the Art Advisory Committee that is to be es- praise the works of artists; I would be more tablished to keep in mind that it is a question interested in hearing an appraisal from artists of looking not just at individual choices but about what they think should be in Parlia- at what we want to represent in our collec- ment House. tion—which is shaped by our artists and, The fact that we have a parliamentary more particularly, by the design of the build- building that is different from the Old Par- ing. The building reflects a modern, living liament House down the road reflects a liv- and vibrant democracy. That ought to influ- ing, vibrant and dynamic democracy. Most ence it. We should be not looking backwards of all, it is about being forward looking. I but be able to look forwards. would suggest that, if people are looking for Senator ALLISON (Victoria) (9.43 reproductions or even for commissioned a.m.)—I join my colleagues Senator Ridge- works that may well not be reflective of what way and Senator Brown in cautioning is a young, vibrant and living democracy, against an approach which might take us they need only to go down the road to the away from the current art collection. I would Old Parliament House or to the War Memo- urge the Art Advisory Committee to consider rial to acquaint themselves with what is this as not just decoration for senators’ and available. People tend to lose sight of the fact members’ offices. That is not what this art that whilst this building may not necessarily collection is about. It is about emerging art- be a public gallery—and I accept that—the ists and it is about identifying those that have emerging and young artists program has been potential, and this collection has done that. It crucial to guaranteeing that we have been has done that in spades. It would be a great able to acquire works of many of our tal- pity if suddenly we saw that new works be- ented artists, who are only now being recog- ing acquired were botanical drawings and nised, at very cheap prices. I recall one piece highly predictable watercolour landscapes. that is sitting around in the ministerial wing, That is not what this collection is about. This which was originally purchased for some collection is challenging because it is new $1,500 and is now valued at $160,000. To art. We should not all expect to understand it have an appreciation we have to look at more or to even like it. That is not the point. The than just whether or not we like what is point is that this is art that is selected for this hanging on the walls. building, which is a very special place. It is It also goes without saying that it is in- not within the realm of most people in this cumbent upon us to look not just at a very place to make judgments about that art. narrow set of pieces adorning the wall that You do not have to select the most chal- may well fit the personalities of some people lenging art—that which you least understand in this place. It is more about recognising or dislike even. That art does not have to be that the building has to shape and influence in your office. There is such a broad collec- what is acquired as part of the artwork. I am tion of art available in this place that there is sure that similar comments were made in no reason why we should be saying that be- relation to the tapestry that now adorns the cause we cannot get the last of the botanical Great Hall and the work that led to that. You prints on our walls the collection is a load of would not describe that as an Australiana rubbish—and I have actually heard that said

CHAMBER 24028 SENATE Thursday, 17 June 2004 by people in this place. We do need to trust understand, that is okay; we do not have to those people who understand a bit about art have it in our offices, but please I urge you, and we do need to try and understand that Mr President, not to see this as a decoration art. exercise. This is not about decoration; it is I would urge whoever is to be on the Art about art. Advisory Committee not to bow to the kind Senator FAULKNER (New South of philistine approach to art which I have Wales—Leader of the Opposition in the Sen- heard expressed so often in this place, be- ate) (9.47 a.m.)—I will just speak briefly on cause this is not about our dining rooms or this issue of the Parliament House art collec- lounge rooms at home. This is not about tion. I do not pretend, in the comments that I what you put on your bathroom wall; it is am going to make, to speak on behalf of the about a very important collection of artwork opposition. I am not sure that the federal par- by new and emerging artists. Some of those liamentary Labor Party has taken a firm view artwork choices years on might not have on these matters; I am pretty sure that it has been that productive in their value, because not. Nevertheless, I would like to make a the whole nature of emerging artists is that couple of observations. they will not all emerge to be the most im- My first concern about this whole issue is portant artists in the world. In fact, to be an the motivation for the establishment of the artist who is well known in this country is a Betty Churcher inquiry, the review of the rare thing. Most artists struggle along for Parliament House art collection and art col- their whole lives producing wonderful work lections policy. What motivated it? It appears which does not get much recognition and that it was motivated by complaints from which certainly will not pay them a reason- coalition MPs. They had complained that the able wage. We need to have somebody who current artwork in Parliament House which can identify that art which is good—and is by living Australian artists, is—and I quote there are plenty of criteria for doing that— directly—‘avant-garde crap’ and the products and I think the selections that have been of sick minds. What did some of these com- made for this collection have been fantastic. plainants, like Tony Abbott, have to say? I remember on the first day that I came Tony Abbott and his key co-complainant, Mr here I was offered a choice from the art col- Ross Cameron MP, the member for Par- lection. I saw the entire collection on slides: ramatta, asked for a few more old—or, if not ceramics, sculptures, drawings and paintings. old, then old-fashioned—oil paintings and, if I did that because I could not choose as there possible, oil paintings of distinguished white were so many fantastic pieces that were men, around the building. That is what they available to us to have in our rooms. I urge wanted. They wanted those paintings to us not to go back to the past, not to yearn for adorn the walls of Parliament House. They the days of artwork which might be under- are entitled to their views. stood by people who do not care to under- Obviously Mr Abbott has had some suc- stand art. I urge us to make sure that our col- cess in this because we now know that for- lection is not watered down by some notion mer Governors-General adorn the walls of of reproduction. This would be a very serious Tony Abbott’s office. I have never been in- backward step. We should continue to buy vited there myself, and I know very few peo- art from emerging artists. Challenging ple who have, but the one or two who have though it may be for many people, we should gone along—such as the members from the try and understand it. If we do not want to

CHAMBER Thursday, 17 June 2004 SENATE 24029 fourth estate upstairs—tell me that that is the not critical of the Presiding Officers in these situation. That is what prompted this review. circumstances trying to see whether it is pos- It was prompted by complaints by people sible to assuage all of the concerns that some like Tony Abbott and Ross Cameron. Let us people have about the art collection. I have get that on the record first of all. described before these sorts of concerns in What has happened? We have a recom- estimates committee hearings as the concerns mendation basically that the collection aban- of ‘anal retentives’. That is what I think Mr don the previous convention of buying work Abbott is when it comes to the Parliament by living artists and correct the underrepre- House art collection. It is just not a priority sentation of what is described as the more political issue for any of us. Anyway, the traditional forms of art. One of the contribu- Presiding Officers have tried to keep those tions to the review, by of course an anony- who think the current collection is a good mous MP, was that we needed ‘more por- one satisfied and those who have these in- traits and landscapes—it is time to discard credible concerns, like Mr Abbott and Mr political correctness’. There we are: that is Cameron, satisfied. They try to keep every- what it is all about. People are entitled to body satisfied and, of course, that is not their views on this. I admit that I am not an achievable. I think the statement falls be- expert in these matters. I have been— tween two stools. I question the motivation perhaps not even unfairly—accused at times of the people who are behind these changes. of being a philistine on these matters, but I I think this is a huge waste of time and do worry about the motivation here. money, and I think the parliament ought to spend its time, frankly, on far more important Senator Ian Campbell—Did you enjoy issues. That is my view of it. Because I think the bird prints in the cabinet suite? That is we can be better occupied with our time I what I want to know. will sit down, and let us get on with the real Senator FAULKNER—The Gould prints business of the place. have, as you know, appreciated massively in Question agreed to. value. I just wish we had a government that could look after the Gould prints and not PETITIONS have them water damaged in leaks out of the The Clerk—Petitions have been lodged cabinet office! Mr President, it seems to me for presentation as follows: that we have a statement from you which Indigenous Affairs: Government Policy falls between two stools. On the one hand, To the Honourable President and members of the the Presiding Officers of the parliament do Senate in parliament assembled: not have the courage—because I think of this The petition of the undersigned shows; as political pressure—to stand by the mandate of collecting emerging artists for the That the current intention of the Government to abolish the rights of Aboriginal and Torres Strait Parliament House art collection at point of Islander people to exercise their right of self self- first sale. They do not have the courage to determination and self-management, will severely stand by that mandate and they do not have disadvantage Aboriginal and Torres Strait Islander the courage to go to a new mandate because people. of the huge expense that is involved. Your petitioners request that the Senate; We now have what is described as ‘repre- 1. oppose any legislation for the abolition of sentational’ artwork, which is an attempt to ATSIC unless and until an alternative elected try to satisfy everyone in the building. I am representative structure, developed and

CHAMBER 24030 SENATE Thursday, 17 June 2004

approved by Aboriginal and Torres Strait The Howard Government has been the first Gov- Islander peoples is put in place and which ernment in our history to go to war without ma- would, at the same time assume the function jority Parliament support. It is time to take the of ATSIC. decision to commit troops to overseas conflict out 2. oppose any move to appoint an advisory of the hands of the Prime Minister and Cabinet, committee as contrary to the rights of and place it with the Parliament. Aboriginal and Torres Strait Islander people by Senator Allison (from 38 citizens). to elect their own representatives. Medicare 3. oppose any move to diminish, dismantle, To the Honourable the President and Members of destroy and/or erode the principles of self- the Senate in Parliament assembled: determination and self-management since any such action would turn back the clock on The Petition of the undersigned are committed to hard won rights of Aboriginal and Torres Medicare, one of the world’s fairest and most Strait Islander people. efficient health systems. We are concerned that the current Government’s proposed changes to 4. strongly defend these rights of self- Medicare attempt to divide Australians according determination and self-management of to their income and ignore the fundamental phi- Aboriginal and Torres Strait Islander people losophy that underpins Medicare—a system previously supported by the Australian where taxpayers pay through their taxes for health Parliament. care that we can all enjoy at low or no cost at the 5. oppose any move to main-stream services for time of service. Aboriginal and Torres Strait Islander people Your Petitioners request that the Senate amend as this too would severely disadvantage any Medicare bills to preserve the unifying fea- Aboriginal and Torres Strait Islander people. tures of Medicare so that there is one system of by Senator Allison (from 25 citizens) access to doctors’ services. by Senator Jacinta Collins (from 76 citi- by Senator Allison (from eight citizens). zens) Health: Pharmaceutical Benefits Scheme by Senator Nettle (from 26 citizens). The petition of certain citizens of Australia Defence: Involvement in Overseas Draws to the attention of the House Conflict Legislation That sufferers of Osteoporosis are forced to pay To the Honourable the President and Members of large amounts for the supply of treatment, due to the Senate in Parliament assembled. the Criteria, which is enforced by the Government The Petition of the undersigned calls on the through the Pharmaceutical Benefits Board which members of the Senate to support the Defence states “A vertebral fracture is defined as a 20% or Amendment (Parliamentary Approval for Austra- greater reduction in height of the anterior or mid lian Involvement in Overseas conflict) Bill intro- portion of a vertebral body relative to the poste- duced by the Leader of the Australian Democrats, rior height of that body, or, a 20% or greater re- Senator Andrew Bartlett and the Democrats’ For- duction in any of these heights compared to the eign Affairs spokesperson, Senator Natasha Stott vertebral body above or below the affected verte- Despoja. bral body”. Presently, the Prime Minister, through a Cabinet Your petitioners therefore ask the Senate to decision and the authority of the Defence Act, has Please amend this criteria: We request that diag- the power to send Australian troops to an overseas nosis of Osteoporosis be sufficient to have treat- conflict without the support of the United Na- ment offered on PBS. tions, the Australian Parliament or the Australian by Senator Humphries (from 158 citi- people. zens).

CHAMBER Thursday, 17 June 2004 SENATE 24031

Petitions received. That the time for the presentation of the NOTICES interim report of the Select Committee on the Free Trade Agreement between Australia and the Presentation United States of America be extended to 24 June Senator Ridgeway to move on the next 2004. day of sitting: Senator Brown to move on the next day That the Lands Acquisition Amendment of sitting: Regulations 2004 (No. 2), as contained in That the Senate— Statutory Rules 2004 No. 82 and made under the (a) notes that 310 parliamentarians from 67 Lands Acquisition Act 1989, be disallowed. countries, including Australia, attended Senator Ridgeway to move on the next the international Parliamentary Forum on day of sitting: Renewable Energies in Bonn, Germany on That there be laid on the table by the Minister 2 June 2004; for Immigration and Multicultural and Indigenous (b) notes the resolution adopted by the forum, Affairs, no later than 3 pm on 23 June 2004, the which called for the shift to renewable following documents relating to the Lands energy and energy efficiency to be a key Acquisition Amendment Regulations 2004 (No. political priority in parliaments around the 2), as contained in Statutory Rules 2004 No. 82 world and included: and made under the Lands Acquisition Act 1989: (i) support for the establishment of an (a) any documents relating to the making of International Renewable Energy the relevant amendments to the Lands Agency as an intergovernmental Acquisition Regulations 1989; organisation which governments could (b) any advice provided in relation to the join at any time, decision to make the relevant amendments (ii) encouragement for countries that have to the Lands Acquisition Regulations not yet ratified the Kyoto Protocol to 1989; do so, (c) any advice provided in relation to the (iii) recognition that legislation is needed to continued government control of title develop the full potential of renewable currently held by Indigenous people energy, and through the Aboriginal and Torres Strait (iv) recognition that renewable energy can Islander Commission (ATSIC) after make a major contribution to ATSIC is abolished by legislation; and overcoming economic disparities in (d) any other advice relating to the decision to many countries and in the global make the relevant amendments. economy; and Senator Hutchins to move on the next (c) calls on the Australian Government to day of sitting: endorse the resolution of the Parliamentary Forum on Renewable That the time for the presentation of the report Energies and to implement the measures it of the Foreign Affairs, Defence and Trade recommends. References Committee on the performance of government agencies in the assessment and BUSINESS dissemination of security threats in South East Rearrangement Asia in the period 11 September 2001 to 12 October 2002 be extended to 5 August 2004. Senator IAN CAMPBELL (Western Australia—Manager of Government Busi- Senator Cook to move on the next day of ness in the Senate) (9.55 a.m.)—I move: sitting:

CHAMBER 24032 SENATE Thursday, 17 June 2004

That the following government business orders COMMITTEES of the day be considered from 12.45 pm till not Economics Legislation Committee later than 2 pm today: Meeting No. 6 Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Senator FERRIS (South Australia) (9.56 Bill 2004 a.m.)—by leave—I move: No. 7 Farm Household Support Amend- That the Economics Legislation Committee be ment Bill 2004 authorised to hold a public meeting during the No. 8 Export Market Development Grants sitting of the Senate on Friday, 18 June 2004, Amendment Bill 2004 from 9 am till 2 pm, to take evidence for the committee’s inquiry into the Superannuation No. 9 Medical Indemnity (Run-off Cover Budget Measures Bill 2004 and two related bills, Support Payment) Bill 2004 and the Tax Laws Amendment (2004 Measures Medical Indemnity Legislation No. 3) Bill 2004. Amendment (Run-off Cover Indem- Question agreed to. nity and Other Measures) Bill 2004 No. 10 Electoral and Referendum Amend- Environment, Communications, ment (Access to Electoral Roll and Information Technology and the Arts Other Measures) Bill 2004 References Committee No. 12 Agricultural and Veterinary Chemi- Senator FERRIS (South Australia) (9.56 cals Legislation Amendment (Name a.m.)—by leave—I move: Change) Bill 2004 That the Environment, Communications, In- No. 13 Bankruptcy (Estate Charges) formation Technology and the Arts References Amendment Bill 2004 Committee be authorised to hold a public meeting Bankruptcy Legislation Amendment during the sitting of the Senate on Friday, 18 June Bill 2004 2004, from 9 am, to take evidence for the committee’s inquiry into the Environment Protection Question agreed to. and Biodiversity Conservation Amendment (Inva- Rearrangement sive Species) Bill 2002. Senator FERRIS (South Australia) (9.55 Question agreed to. a.m.)—by leave—At the request of the EDUCATIONAL TEXTBOOK SUBSIDY chairs of three legislation committees, I SCHEME move: Senator FERRIS (South Australia) (9.57 That the following business of the Senate or- a.m.)—I seek leave to have the question on ders of the day be postponed till a later hour: general business notice of motion No. 881 (a) no. 2 relating to the presentation of the relating to the Educational Textbook Subsidy reports of the Economics Legislation Scheme be put again. It was put yesterday. Committee, the Employment, Workplace Relations and Education Legislation Senator MACKAY (Tasmania) (9.57 Committee and the Finance and Public a.m.)—by leave—For the edification of Administration Legislation Committee on senators who are here, this issue relates to a the 2004-05 Budget estimates; and motion moved by Senator Stott Despoja yes- (b) no. 6 relating to the presentation of the terday with respect to the Educational Text- report of the Finance and Public book Subsidy Scheme. I notice that Senator Administration Legislation Committee. Stott Despoja is in the chamber and she may Question agreed to. wish to make comment on it. Inter alia, the motion states that the government should be

CHAMBER Thursday, 17 June 2004 SENATE 24033 urged to extend the Educational Textbook opposition did query it twice, I think. At one Subsidy Scheme to prevent this further cost stage we had Senator Lightfoot saying, ‘Yes, burden on students and to hold true to their we are supporting this,’ and Senator Ian promise of no GST on education. Consistent Campbell in front of him saying, ‘No, we are with the opposition’s position, we will not not.’ I appreciate that tensions were high— support motions that relate to expenditure that was when the chamber was somewhat unless it is quantified. Whilst we have a lot fraught because people were waiting on of sympathy with the sentiments expressed Senator Hill’s ministerial statement. in the motion, consistent with our position Senator Ian Campbell—I think the peo- we opposed the motion yesterday. ple on your side— Given that we were waiting on Senator Senator MACKAY—The media interest Hill’s ministerial statement, and there was a and the interest of the people of Australia fair bit of angst around the chamber from all have vindicated the opposition’s desire and sides in order to get that facilitated, there exhortation to get this matter dealt with ex- seems to have been some error on the gov- peditiously, which is what occurred. The op- ernment side on this. I want to make this re- position will not be granting leave for this to quest before the opposition grant leave for be reconsidered pending an explanation be- this motion to be reconsidered. During that ing provided from the government, prefera- contretemps—the period in which this error bly by Senator Lightfoot himself, as to why happened—I on behalf of the opposition did this occurred. This is what we would do on query the government’s position. That was this side of the chamber. I would, if I had before the arrival of Senator Ian Campbell. I made a mistake. We are all human. Senator was told quite conclusively that the govern- Lightfoot probably is a bit more human than ment was supporting this motion. As I re- some of us. call—and I am happy to be corrected—the Senator Hutchins—Less human. government duty whip at that stage was Senator Lightfoot. I asked him whether this Senator MACKAY—More, because he motion was being supported and he indi- probably makes more mistakes than most of cated, yes, it was. This led Senator Stott De- us. But that is fine; we are all human. I spoja to being somewhat surprised and de- would appreciate Senator Lightfoot coming lighted that the government was supporting a in here and advising us of what happened. I motion which would hold the government to do appreciate that it was a difficult time and its commitment to Senator Stott Despoja— tensions were high. If that were me, for ex- and I must admit I was somewhat surprised ample, I would come in and provide the Sen- as well. ate with an explanation. I would say, ‘I am sorry to put you to this level of inconven- I do understand that the whip and deputy ience; I did make this mistake.’ If it were whips cannot be in the chamber 24 hours a Senator Ferris, I am absolutely sure that she day—and we often sit to that extent. On be- would do the same thing, and if it were any half of the opposition, we ask the govern- of our deputy whips I am sure that that ment this: if you are going to have junior would occur. That is a reasonable request. It whips in the chamber can they please be jun- is something that would be a matter of cour- ior whips with a modicum of competence? tesy to the Senate. Can they at least be aware of what the government’s policy may be and not put the My final comment is that after this minor Senate to this level of inconvenience? The fiasco Senator Lightfoot then sat there and

CHAMBER 24034 SENATE Thursday, 17 June 2004 screamed and interjected throughout Senator sion. Having said that, I got the impression Faulkner’s contribution in response to Sena- that the government, in order to save time, tor Hill’s statement, which I thought was changed their vote—or indeed there was a pretty rude given that he had just put the degree of confusion which has already been Senate to what would seem now to be a con- outlined—and thus voted for the motion. siderable level of inconvenience. Based on Hence the motion was passed. that we are asking Senator Lightfoot to come As I say, I was momentarily delighted to in here and provide an explanation about see the government’s change of position on what happened prior to granting leave. the textbook subsidy scheme. I do record Senator STOTT DESPOJA (South Aus- quite seriously my disappointment that it tralia) (10.03 a.m.)—By leave—I thank looks like their decision will be changed to- Senator Mackay for requesting on behalf of day. If there is a fairer or clearer explanation her party and the entire Senate an explana- as to what happened and why, I am sure the tion of what exactly did occur yesterday. Senate would like to hear it. For that reason I There is no doubt that in this place we all agree with the request from the opposition make mistakes so I am not about to enter into for a specific explanation as to what hap- a debate on the infallibility or fallibility of pened. But certainly, I would hate a vote to senators or indeed their level of humanity, as remain on record that in some way did not the case may be. I was quite surprised and reflect the will of the Senate so I totally un- delighted to receive government support for derstand and respect that the government the extension of the Educational Textbook wants to recommit this motion. It is not too Subsidy Scheme. For those who are querying late to recommit it and vote for it. quantification, on a yearly basis that is a $25 Senator IAN CAMPBELL (Western million expenditure. I am just sad that my Australia—Manager of Government Busi- delight is to be so short lived but I was ex- ness in the Senate) (10.06 a.m.)—by leave— pecting that there would be a move to re- Senator Stott Despoja very succinctly commit this motion. I am not suggesting that summed up what happened yesterday. When that process should be held up but I do ask we are dealing with formal motions—I think for clarification on record. we have between 10 and 15 of them this My understanding of what happened yes- morning—the PLO and the whip have a run- terday is—and this is without meaning to ning sheet with a series of instructions on it: reflect in any way on a vote of the Senate— to oppose motions on the voices; to support that when that vote was called the two major motions on the voices; to have a division; or parties indicated opposition to my motion to just let them go through. The government, and it was declared lost. I then indicated my as advised and as agreed, voted, as Senator preference to divide on that motion, albeit Stott Despoja said, on the voices against the that I was conscious that we were short for motion. The acting deputy whip who was on time—and as Senator Mackay has indicated duty made a wrong call, I am told. I did not the Senate was fraught yesterday in anticipa- hear it but when I was asked to clarify it I tion of Senator Hill’s statement. Nonetheless, made it quite clear that we voted against it. I I was keen to record not only that vote but sought an immediate recommittal of it and the vote of the crossbench senators who were we agreed not to have it because Senator not indicating their votes by virtue of not Faulkner and the rest of the chamber wanted being here. I thought that was an important to get on with another debate, which we did. right that the Democrats had to call a divi- We have now spent the time it would have

CHAMBER Thursday, 17 June 2004 SENATE 24035 taken to have a full division debating this. I Senator Brown—Yes. apologise on behalf of the acting deputy The PRESIDENT—There is an objec- whip for any confusion that was caused. tion. The PRESIDENT—Leave is being WOMEN: DOMESTIC VIOLENCE sought to recommit general business notice Senator ALLISON (Victoria) (10.09 of motion No. 881. Is leave granted? a.m.)—by leave—I, and also on behalf of Leave granted. Senator Stott Despoja, move the motion as The PRESIDENT—The question is that amended: general business notice of motion No. 881, That the Senate— moved yesterday by Senator Stott Despoja, (a) acknowledges that domestic and intimate be agreed to. partner violence comes in many forms and Question negatived. occurs in all sections of the Australian NOTICES community and across all cultures; (b) notes that: Postponement (i) the Victorian Health Promotion Items of business were postponed as fol- Foundation report of 16 June 2004 on lows: intimate partner violence revealed that General business notice of motion no. 895 physical and emotional abuse by a standing in the name of Senator Allison for partner was the leading risk factor for today, relating to nuclear weapons systems death, disease and disability and was and Colonel Stanislav Petrov, postponed responsible for 9 per cent of the total till 22 June 2004. health costs for Australian women aged General business notice of motion no. 896 between 15 and 24, standing in the name of Senator Allison for (ii) domestic violence affects between one today, relating to health inequities and their in three to one in five Australian socio-economic determinants, postponed families, till 21 June 2004. (iii) the 1996 Australian Women’s Survey General business notice of motion no. 898 found that more than one million standing in the name of Senator Allison for women had experienced some form of today, proposing that certain legislation physical or sexual violence from a committees reconvene to further consider current or previous partner, the 2004-05 Budget estimates, postponed (iv) more than 80 per cent of violence till 21 June 2004. experienced by women is not reported BUSINESS to police or other services, Rearrangement (v) men, women and children can be victims of domestic violence as well as Senator IAN CAMPBELL (Western perpetrators, however, the vast majority Australia—Manager of Government Busi- of intimate partner violence is ness in the Senate) (10.08 a.m.)—I ask that perpetrated by males, and government business notice of motion No. 1, (vi) domestic violence is not limited to which relates to the hours of meeting for to- physical and sexual violence but covers day and tomorrow, be taken as a formal mo- a wide range of abusive behaviours tion. such as bullying, verbal, emotional, The PRESIDENT—Is there any objec- social, and financial abuse, which are tion to this motion being taken as formal? often unrecognised by the community; and

CHAMBER 24036 SENATE Thursday, 17 June 2004

(c) calls on the Federal Government to: This Bill has a simple design. It increases the (i) return to the original violence against Mandatory Renewable Energy Target from the women campaign, ‘No Respect/No current target of 2% to a real 3.5% as part of the Relationship’ with its focus on young shift to reduce greenhouse gas emissions by the men and the need to develop respectful energy sector. relationships, The effect of the legislation is to place a legal (ii) provide extra funding through the liability on wholesaler purchasers of electricity to Supported Accommodation Assistance proportionality contribute towards the MRET Program agreement, and directly to target of 17,300 gigawatt hours (GWh) of renew- sexual assault services, to meet the able electricity per annum by 2010. demand that the campaign will The bill’s intent is to facilitate the development of generate for domestic violence and the capacity of the renewable energy industry by sexual assault support services, and ensuring that this technology is used. It strength- (iii) increase funding to state and territory ens the commitment to renewable energy genera- governments to allow for the tion and industry development. It will ensure implementation of the National Safe thousands more jobs are created in the renewables Schools Framework with a strong focus sector. on tackling bullying behaviour. The funding, encouraging, supporting and facili- Question agreed to. tating research into renewable energy or pilot projects for renewable energy are all well and RENEWABLE ENERGY AMENDMENT good. However, the only way to encourage gen- (INCREASED MRET) BILL 2004 eral use of clean fuels is to support that directly. First Reading This is why we must increase the target for the Senator LEES (South Australia) (10.09 volume of electricity to be generated from clean a.m.)—I move: sources such as solar, wind, hydro or co- generation. That the following bill be introduced: A Bill for an Act to set a higher target for mandatory The infant solar, co-generation and wind industries can not just jump directly into full competi- renewable energy requirements, and for related purposes. tion with the long established power generators who use black or brown coal. We must temporar- Question agreed to. ily intervene to help these fledging industries to Senator LEES (South Australia) (10.10 ensure they can establish themselves in the mar- a.m.)—I move: ket place. That the bill may proceed without formalities It is estimated that it will be 2015 before wind is and be now read a first time. competitive with coal, and 2020 for solar. It is estimated that there will be a cost increase to Question agreed to. electricity users of less than $3 for a typical fam- Bill read a first time. ily’s quarterly electricity bill. Second Reading Since MRET was implemented, over 90 per cent of the $1 billion in new generation is in regional Senator LEES (South Australia) (10.10 Australia. a.m.)—I move: It is estimated that an increase in the market share That this bill be now read a second time. of renewable energy from increasing the MRET I seek leave to have the second reading target to a real 3.5% would deliver: speech incorporated in Hansard. • around $5 billion in investment in new re- Leave granted. newable power generation The speech read as follows—

CHAMBER Thursday, 17 June 2004 SENATE 24037

• around 90% of this new investment would be adequately fund genuine community invested in regional and rural Australia release programs. • around 5000 new jobs Question put: • continued expansion and support for the ex- The Senate divided. [10.15 a.m.] port of renewable technologies and services (The President—Senator the Hon. Paul • has delivered around 6,000 jobs Australia Calvert) wide. Ayes………… 10 Australia is well placed to develop a renewable energy industry as it has natural advantage in Noes………… 42 solar energy. The costs of renewable power are Majority……… 32 decreasing and it represents a low risk way to reduce Greenhouse emissions. AYES Senator LEES—I seek leave to continue Allison, L.F. * Bartlett, A.J.J. my remarks later. Brown, B.J. Cherry, J.C. Greig, B. Lees, M.H. Leave granted; debate adjourned. Murphy, S.M. Murray, A.J.M. WORLD REFUGEE DAY Nettle, K. Ridgeway, A.D. Senator NETTLE (New South Wales) NOES (10.10 a.m.)—I move: Barnett, G. Bishop, T.M. That the Senate— Buckland, G. Calvert, P.H. Campbell, G. Campbell, I.G. (a) notes that: Chapman, H.G.P. Colbeck, R. (i) 20 June 2004 is World Refugee Day, Collins, J.M.A. Crossin, P.M. and Eggleston, A. * Faulkner, J.P. (ii) Australia has failed many asylum Ferguson, A.B. Ferris, J.M. seekers who are hoping to rebuild their Fifield, M.P. Forshaw, M.G. Harris, L. Heffernan, W. lives in safety and dignity; Hogg, J.J. Humphries, G. (b) condemns the Federal Government’s Hutchins, S.P. Johnston, D. treatment of asylum seekers, including: Kirk, L. Knowles, S.C. (i) the indefinite detention of asylum Ludwig, J.W. Lundy, K.A. seekers in harsh conditions, including Macdonald, J.A.L. Mackay, S.M. the denial of basic human rights, Marshall, G. McGauran, J.J.J. McLucas, J.E. Moore, C. (ii) the official discrimination and denial of Payne, M.A. Ray, R.F. services and rights to those asylum Santoro, S. Scullion, N.G. seekers found to be refugees but Stephens, U. Tchen, T. granted only temporary protection Troeth, J.M. Watson, J.O.W. visas, Webber, R. Wong, P. (iii) the Pacific Solution, which has left * denotes teller many asylum seekers abandoned on Question negatived. Nauru and Manus Island, and WORLD REFUGEE DAY (iv) the forced deportation of asylum seekers to the countries they have fled Senator KIRK (South Australia) (10.18 or to inappropriate third countries; and a.m.)—by leave—I move the motion as (c) calls on the Government to end amended: mandatory, non-reviewable detention of That the Senate— asylum seekers in Australia and (a) notes that:

CHAMBER 24038 SENATE Thursday, 17 June 2004

(i) 20 June 2004 is World Refugee Day, HUMAN RIGHTS: BURMA (ii) there are more than 20 million refugees Senator RIDGEWAY (New South Wales) and displaced people in the world, and (10.19 a.m.)—by leave—I, and also on be- (iii) acknowledges Australia’s long and half of Senator Stott Despoja and Senator proud record of resettling refugees in Faulkner, move the motion as amended: Australia as a signatory to the Refugee That the Senate— Convention; (a) notes that: (b) commends the United Nations High Commissioner for Refugees (UNHCR) for (i) 19 June is the birthday of Aung San the tireless work it undertakes worldwide; Suu Kyi, leader of the Burmese National League for Democracy (c) congratulates the UNHCR Australia post (NLD), for its ongoing work in assisting asylum seekers who were or remain a part of the (ii) 2004 marks the eighth birthday since Howard Government’s ‘Pacific Solution’; 1989 that Aung San Suu Kyi has been in detention under the Burmese (d) condemns the Howard Government’s military government (SPDC), and outsourcing offshore to foreign countries and an international company of (iii) 19 June is Women of Burma Day, and Australia’s immigration detention system events are being held around Australia through the ‘Pacific Solution’; on 20 June to commemorate this day; (e) notes the report of the Human Rights and (b) urges the SPDC to: Equal Opportunity Commission’s inquiry (i) release Aung San Suu Kyi and her into children in detention; deputy Tin Oo, who remain under (f) calls on the Government to: house arrest, and (i) acknowledge that it has presided over (ii) re-open all offices of the NLD and an immigration detention regime where allow all offices full access to the welfare, safety and health of communication with people both inside children has not been its primary and outside of Burma; and concern, (c) calls on the Australian Government to (ii) set the immigration detention system reconsider the policy of full diplomatic up for the future so that this cannot relations with the Burmese military happen again, and government until the release of Aung San Suu Kyi is ensured. (iii) release children from immigration detention facilities immediately, which Question agreed to. is within the power of the Minister for COMMITTEES Immigration and Multicultural and Indigenous Affairs (Senator Vanstone); Foreign Affairs, Defence and Trade References Committee (g) condemns the Minister for the production of the selective and ill-informed ‘Australia Extension of Time says YES to Refugees’ school kit; and Senator EGGLESTON (Western Austra- (h) commends the UNHCR for its activities to lia) (10.20 a.m.)—At the request of the Chair commemorate World Refugee Day 2004 of the Foreign Affairs, Defence and Trade and encourages Australian high school References Committee, Senator Hutchins, I students to participate in the UNHCR’s move: World Refugee Day writing competition. That the time for the presentation of the report Question agreed to. of the Foreign Affairs, Defence and Trade References Committee on current health

CHAMBER Thursday, 17 June 2004 SENATE 24039 preparation arrangements for the deployment of That the Community Affairs Legislation Australian Defence Forces overseas be extended Committee be authorised to hold public meetings to 5 August 2004. during the sitting of the Senate, from 9.30 am, on Question agreed to. the following days: National Capital and External Territories (a) Friday, 18 June 2004, to take evidence for the committee’s inquiry into the Family Committee and Community Services and Veterans’ Meeting Affairs Legislation Amendment (Income Senator EGGLESTON (Western Austra- Streams) Bill 2004; and lia) (10.20 a.m.)—At the request of the Chair (b) Friday, 25 June 2004, to take evidence for of the Joint Standing Committee on the Na- the committee’s inquiry into the tional Capital and External Territories, Sena- provisions of the Commonwealth tor Lightfoot, I move: Electoral Amendment (Preventing Smoking Related Deaths) Bill 2004 and That the Joint Standing Committee on the related bills. National Capital and External Territories be authorised to hold a public meeting during the Question agreed to. sitting of the Senate on Wednesday, 23 June 2004, Community Affairs References Committee from 5 pm to 8 pm, to take evidence for the Report committee’s inquiry into the adequacy of funding for Australia’s Antarctic Program. Senator McLUCAS (Queensland) (10.20 a.m.)—I present the report of the Commu- Question agreed to. nity Affairs References Committee on Hepa- Rural and Regional Affairs and Transport titis C and the blood supply in Australia, to- Legislation Committee gether with the Hansard record of proceed- Meeting ings and documents presented to the commit- Senator EGGLESTON (Western Austra- tee. lia) (10.20 a.m.)—At the request of the Chair Ordered that the report be printed. of the Rural and Regional Affairs and Trans- Senator McLUCAS—I move: port Legislation Committee, Senator Heffer- nan, I move: That the Senate take note of the report. That the Rural and Regional Affairs and I am pleased to present the report of the Sen- Transport Legislation Committee be authorised to ate Community Affairs References Commit- hold a public meeting during the sitting of the tee inquiry into hepatitis C and the blood Senate on Thursday, 17 June 2004, from 4.30 pm supply in Australia. Before we began this to 8.30 pm, to take evidence for the committee’s inquiry, my understanding of the nature and inquiry into the provisions of the Agriculture, the extent of this issue was limited and I Fisheries and Forestry Legislation Amendment think this lack of understanding is shared by (Export Control) Bill 2004. most Australians. I am fortunate that I have Question agreed to. been able to learn about the nature of the Community Affairs Legislation issues facing people who have contracted Committee hepatitis C through the blood supply. I hope Meeting that through this inquiry and report there will be a greater and broader understanding of Senator EGGLESTON (Western Austra- hepatitis C in this nation. I felt the lack of lia) (10.20 a.m.)—At the request of the Chair understanding of hepatitis C infection that I of the Community Affairs Legislation Com- had was telling. This lack of understanding is mittee, Senator Knowles, I move:

CHAMBER 24040 SENATE Thursday, 17 June 2004 itself part of the problem. The fact that we do changing disease. There are many debilitat- not know the number of people who have ing symptoms such as fatigue, pain and hepatitis C or how they contracted it is a commonly depression. Some people develop problem that needs to be overcome. cirrhosis of the liver, liver failure and even During the inquiry, we heard from the liver cancer. Many people with hepatitis C Australian Red Cross Blood Supply and cannot continue to work. For some it has CSL, from doctors and researchers working affected their relationships with their family in the hepatitis C field, from the hepatitis and their friends. We heard many sad and councils and from a range of groups who tragic stories, which were common stories, represent those who have contracted hepatitis unfortunately, of broken marriages where the specifically through infected blood. We also pressure of the disease affected the relation- heard from the Department of Health and ship to such an extent that it was not possible Ageing and very importantly from individu- to continue. als who shared their stories both confiden- People with hepatitis C also face igno- tially and publicly and who live day after day rance, discrimination and stigma. This is with the reality that they have contracted very distressing, particularly when it occurs hepatitis C through a simple ordinary medi- in health care settings. We heard many tragic cal procedure. I think that fact must not be stories about people who presented to the overlooked. People went to hospital to have medical profession but the lack of under- a baby or to undergo a normal procedure and standing of the nature of hepatitis C by the had to have blood. As a result of that medical medical profession meant that those people event, they now have a disease that is life were dealt with very poorly. As a result of changing for them. this discrimination, many people with hepati- We know that between 3,500 and 8,000 tis C often choose not to inform their family Australians who live with hepatitis C re- or their friends about their health status for ceived that infection through the blood sup- fear of rejection or ostracism. ply, including about 1,350 people who are The committee heard from a number of haemophiliacs. The tragedy, though, is that respondents who felt that Australia’s decision many people who have hepatitis C do not not to introduce surrogate testing—which know it. A recommendation in our report will was the only form of testing available prior hopefully assist with that identification. The to the introduction of more accurate antibody first recommendation of our inquiry asks the testing in 1990—for hepatitis C was wrong. Health Ministers Advisory Council to con- The committee was also very aware of the sider the introduction of a mandatory report- widespread controversy surrounding the use ing mechanism. It is mandatory to report of surrogating testing for hepatitis C in Aus- hepatitis C infections but that reporting oc- tralia. There is evidence that the relevant curs only between the doctor and the state. authorities in Australia could have begun Our committee recommends that a further surrogate testing for hepatitis C and that this mandatory reporting mechanism be instituted might have had a small benefit. However, the to ensure that a database is collected nation- committee was also presented with a great ally of people who, it is thought, contracted deal of compelling evidence as to why surro- hepatitis C through the blood supply. gate testing was not introduced. It seems to Hepatitis C affects all aspects of the in- the committee that it was open to the rele- fected person’s life. As I said, it is a life vant bodies, based on the information available at the time, to take the decisions that

CHAMBER Thursday, 17 June 2004 SENATE 24041 they did. The committee is confident that due post-transfusion hepatitis C committee with consideration was given to pertinent evi- the purpose of, firstly, formulating, coordi- dence at relevant times and that decisions nating and delivering an apology to those were reasonable in the circumstances. who have acquired hepatitis C through the The committee were also asked to con- blood supply. I acknowledge that the ARCBS sider the implications for Australia of the very recently met with some of those who world’s biggest inquiry into blood—the Ca- contracted hepatitis C—and people would nadian commission of inquiry chaired but have seen that in the media—to start that Justice Horace Krever. We considered that process. That is good. I encourage other par- report and, although the Krever report pro- ticipants in this discussion to be part of that vides a useful analysis of the state of knowl- process, including governments and poten- edge at the time, the committee believes tially including CSL. there was a different context between Canada This committee will also work with the and Australia in which those decisions were states, the territories, the Commonwealth and being made. The key difference is that in the Red Cross to establish an effective look Australia all blood is given on a voluntary back program. I am sure other speakers will basis whereas in Canada and in the United talk more about that. Most importantly, we States people are paid for their donations of recommend that a fund be established— blood. That is the significant difference. funded by the states, the Commonwealth and The committee were also asked to exam- potentially the Australian Red Cross Blood ine Australia’s involvement in compensation Service—that can be accessed by people schemes for people who contracted hepatitis who have contracted hepatitis C through the C through the blood supply. Compensation blood supply. We say: ‘If you think you got schemes exist in the states and territories for hepatitis C through the blood supply and you those who are infected with hepatitis C know you had a transfusion, let us help you. through blood. Witnesses pointed to the re- Let’s not go down the legal path; let us sim- strictive nature of these schemes and to con- ply get you some support.’ There are varying fidentiality requirements. There were calls to levels of support across the country, and increase and extend the compensation there are many people who are not getting schemes. While we acknowledge these calls, the level of support that they need. I com- stronger and louder calls were heard by the mend the report to the Senate. I put on record committee for greater access to health ser- my thanks to the committee and to Elton vices, including psychology and psychiatry, Humphery, Christine McDonald and Tim improvement of education of medical per- Watling for their service to the committee. I sonnel and support for research efforts to particularly thank those individuals who develop more effective treatments for hepati- have contracted hepatitis C through the tis C. blood supply and shared their stories with us. We have a range of recommendations in Senator KNOWLES (Western Australia) our report, which are in the overview at the (10.31 a.m.)—Today the Senate Community beginning of the document. I think the most Affairs References Committee’s report important recommendation and one that will Hepatitis C and the blood supply in Australia change health outcomes for people who have has been tabled. I have been on many com- hepatitis C is recommendation 6. The committees in my 20 years in this place, but this mittee recommends that we set up a national would have to rate among the three saddest committees I have ever been on. The issue

CHAMBER 24042 SENATE Thursday, 17 June 2004 has touched the lives of Australians in ways People are affected in a multitude of ways. in which many of us would never under- Some of them cannot manage day-to-day stand. I certainly did not understand the se- things such as getting out of bed or caring for vere implications of contracting hepatitis C their children. They have difficulty getting to until we got down to the nuts and bolts of appointments. Probably worst of all is that in this inquiry. The sad, horrible, graphic stories many cases they suffer discrimination. The that people told us cannot but touch hearts as lack of public awareness of hepatitis C we try to help our fellow Australians over- means sufferers can face enormous discrimi- come something they contracted through no nation, because people tend to think they fault of their own—there was no form of have contracted hepatitis C through unsafe stupidity involved or any rashness in their practices, body piercing or tattooing. The behaviour; they contracted a virus through a tragedy of it is that a lot of those practices blood transfusion. are still being engaged in by young people— It is enormously sad that people who have they do not know the risk that they are ex- been involved in traffic accidents or have posing themselves to today. undergone major surgery require blood trans- Another recommendation of the commit- fusions, because those people—the doctors tee is for a better public education and and everyone else—act in good faith, but awareness system whereby people who are haemophiliacs require blood products just to sick can be alerted to the fact that, if they had live. They too have been affected and in- a blood transfusion some years ago or if they fected by this virus, which is part of the rea- had undertaken some unsafe practices some son why the committee has recommended time ago, they might have hepatitis C. We that governments look at the availability of should help them identify and manage their the recombinant factor, in conjunction with problem and alert people to the practices that the plasma derived products, to ensure total can put them at risk in the future. The federal safety. Plasma derived products have been government has provided millions of dollars proven to be absolutely safe since the early to the states and territories for an education 1990s—I am not trying to create fear; I am campaign. To the best of my knowledge, the just saying that a number of people want an states and territories have put that money option. into identification and management pro- Another tragedy is that a lot of people in grams, which I believe should be undertaken the community do not even know that they by the colleges of general practice. Be that as have contracted hepatitis C. They know they it may, that money has been put into that are ill and they have sought help, but they area. It is, therefore, a recommendation of have not been identified as sufferers. That is the committee that we look at a better public where the system has fallen down in many education and awareness campaign that areas, insofar as many in the medical profes- would use the broad media, television, radio, sion seem unable to provide an immediate newspapers, and possibly even mail to every diagnosis for sufferers. People have been household. This situation is so serious that sent away, having been told that they have a we cannot just hope that it will disappear and virus or chronic fatigue syndrome or that that people might be more aware. We need to they are run down, whereas if they had tests undertake an education campaign to make that confirmed the problem they would be people more aware. able to access treatment. I think that looking for people to blame is a very natural response for these innocent

CHAMBER Thursday, 17 June 2004 SENATE 24043 people, but the overwhelming evidence was of understanding in the community, the dis- that, as Senator McLucas has said, people crimination by the community and sections wanted help. They wanted help to manage. of the medical community and allied profes- They said, ‘Just getting a huge dollop of sionals is something that we have to over- money is not going to help me look after my come. It is sad to see that people who have kids. It’s not going to help me access medi- contracted it this way, through blood prod- cation. It’s not going to help me get to ap- ucts, are firstly viewed as having contracted pointments.’ They want this help, and that is it through some other means. It all adds why we have recommended that considera- weight to the way in which we must educate tion be given to more help being available to the public to a far greater degree. the people who are affected. There is much more we could say, and I It has to be said that the ARCBS acted on know my colleagues to follow will say more. the best available advice at the time not to In the limited time I have got, I want to put introduce surrogate testing, and they have on the record my thanks to Senator McLucas recently provided an apology. I think the im- for her excellent chairing of this inquiry un- portant thing here is that the surrogate testing der very difficult circumstances with very has proved worldwide to give false positives sad stories, to my colleagues on the inquiry and false negatives at unacceptably high lev- and, of course, to the outstanding community els. Queensland was the state that did intro- affairs secretariat, whose praises I can never duce surrogate testing, and the committee sing enough. To Elton Humphery and his found that it had about a 70 per cent rate of team, thank you very much for all your assis- false negatives. As I said at the time in a tance. hearing, I would have been pretty angry if in Senator HUTCHINS (New South Wales) fact I had decided to go to Queensland for (10.41 a.m.)—Last year I moved in the Sen- treatment or knowing that I might need a ate that the terms of this inquiry be sent to transfusion to subsequently find that they the Senate Community Affairs References had 70 per cent false negatives. Seventy per Committee. That was the result of an ap- cent of the people who were given the surro- proach that was made to me by my very gate testing in fact had the virus, but it was good friend and the former member for Do- not identified by the testing. I think that it bell, Michael Lee. Michael asked me to has to be stated clearly that the ARCBS did speak to two men who had a particular prob- act on the best advice appropriate to Austra- lem with hepatitis. Like Senator McLucas, I lia at the time. Senator McLucas has already was not all that aware of hepatitis. I did not given an explanation of what ‘appropriate to realise there were five types of hepatitis, as I Australia’ means. do now. I am sure my colleagues now know, Regarding those who are seeking compen- as I do, a lot more about this disease, but I sation, the overwhelming majority want help was not as sure about hepatitis C. with their management. The compensation Michael asked me to see two men: Rever- systems that are available through the states end Bill Crews, head of the Exodus Founda- and territories have in some cases not been tion, and a chap called Charles MacKenzie, made known to some of the sufferers, and I head of the Tainted Blood Action Group. think they should be. The states and territo- They put to me the tales that both Senator ries should be more up front in saying that McLucas and Senator Knowles have detailed this compensation is available and allowing here today, tales of men and women—in par- people to access it. When we look at the lack

CHAMBER 24044 SENATE Thursday, 17 June 2004 ticular women who have been through child- titis C and would not have been transfused birth—who have had blood transfusions and into men and women who needed that blood who, as a result of those blood transfusions, transfusion. That is a fact. Throughout the have been infected with hepatitis C. I also 1980s, the blood authorities in this country— heard of men and women who had had car the state and federal authorities—grappled accidents in the 1980s, had had blood trans- with that idea. They continually rejected the fusions and had been infected with hepatitis idea of ALT testing. C. I also heard of people who had had elec- I understand the compassion my col- tive surgery in that period, had also required leagues have expressed here this morning in blood transfusions and had been infected relation to the decisions that were made. with hepatitis C. As a result of those ap- However, that is no comfort to the men and proaches to me and the consent of my col- women who got this disease following child- leagues, both Labor and non-Labor, we put birth, car accidents or elective surgery. Both together the terms of reference for this in- Senator McLucas and Senator Knowles have quiry. spoken eloquently about the damaging ef- You will see in the back of the report that I fects this disease has had on men and have made an additional statement. I did toy women, particularly women. Their relation- with the idea of making a minority report ships are finished. From the 1980s, men and and, towards the end of my speech, I will women have gone for many years wondering come to why I did not. My concern about the why they were lethargic, why they could not development of this disease is in some ways contribute to normal daily life and why they in contrast to the emphasis that my col- could not contribute to their jobs. These peo- leagues have used in this report. I do not be- ple lost their relationships—their husbands lieve that the medical authorities who sat or their wives—and they lost their jobs. down in the 1980s acted out of any malice or This has all come about as a result of the greed, but I reckon that in the 1980s the men infection that came into the blood system in and women in the medical authorities in this the 1980s. As I said, at a meeting in Wash- country made the wrong decision. There was ington on 9 January the US authorities iden- a test available for men and women who tified that this was a problem. On and off, as needed blood transfusions—a test that was I said, from that period onwards there was a inaccurate, as Senator Knowles has said, but hotchpotch approach by them to the intro- available. duction of this testing. We need to move on In 1981, the Americans identified a strain from there. This has occurred; we need to of hepatitis that they called non-A, non-B. In deal with what is happening now. January 1981, they sat down and discussed I believe that the trust that men and how they might deal with this. Later in the women in this country put in the authorities year, once again they discussed how they proved to be fallible. As a member of par- should deal with this problem. In a hotch- liament, I cannot for one moment look at potch fashion throughout the United States, a those people and say that there was not a system called ALT testing was introduced. It time when we could have acted differently was not totally accurate, but it was accurate and we did not. There was a time when we enough—as Senator Knowles herself ac- could have acted differently, and we did not. knowledged in relation to what happened in I do not blame the Red Cross in particular for Queensland—that maybe three out of 10 this. In the end, the federal and state authori- units that were tested were positive for hepa-

CHAMBER Thursday, 17 June 2004 SENATE 24045 ties were responsible for our blood supply. in the various states have not had effective They sat down and made these decisions. programs that allow us to identify where that As late as 1987, once again the blood blood came from and to whom it was trans- banks in this country met and said that they fused. In our inquiries, people made state- would not introduce this system. But by ments and submissions saying that they in- 1988, on the advice of Dr Catherine Hyland, advertently and accidentally donated blood the Queensland authorities did. Senator that was infected. Knowles has mentioned the ‘success’ where In the minute left to me, I want to say why they identified three out of 10 or the ‘non- I determined not to put in a minority report. success’ where they identified seven units Already in this country the state and federal out of 10 that were false—whichever you authorities are contributing to compensation call it. It does not matter now. What matters schemes for people who have suffered hepa- now is the fact that we have done this inquiry titis C and continue to suffer it. Already the and we have raised the level of public Commonwealth has contributed $7 million. knowledge of what has occurred in this very The period between 1986 and 1990 seems to despicable part of our medical history. I am be the window for which these settlements not necessarily satisfied that the recommen- are being made. Unfortunately, they are con- dations go as far as they should, but, thanks fidential. I did not put in a minority report to my colleagues, I have had a significant because I think it is significant that the two input into revising some of them. government senators were prepared to sign I want to talk about aspects of the com- up to a scheme that allowed for a fund to be pensation that has occurred in other parts of set up to assist the men and women who suf- the world and what is happening now in Aus- fer from this terrible disease. That is a sig- tralia. In Ireland, there are lump sum pay- nificant step and I applaud them for it. One ments at all stages of the disease; there is government senator has a long history of free medical care available; and tribunal de- involvement in the social security and health cisions are based on the loss of earnings, area; one is a former Chief Minister for the health care costs and quality of life. In Can- ACT, where this scheme is already operating. ada, there are lump sum payments based on Senator HUMPHRIES (Australian Capi- loss of income; there is free medical care for tal Territory) (10.51 a.m.)—The Senate items not covered by public and private Standing Committee on Community Affairs’ schemes; and there are incidental payments, inquiry into hepatitis C and the blood supply monthly payments and compensation for in Australia was certainly a matter that occa- dependants. In the United Kingdom, there sioned considerable concern among many are lump sum payments of £20,000, with people and great soul-searching among another £25,000 for liver disease. In particu- members of the committee that looked at this lar, there are special payments for those who issue as we appreciated that a great medical have lost their medical files. and social problem evident in Australia had The recommendations in this report make not been, in many respects, fully addressed reference to the look back program. It has and had certainly not been brought out into proven to be inadequate and ineffective, but the open to the extent that was required prior it is a good idea and it should be beefed up. to this inquiry being held. It was important to As a result of our inquiry, we have found that examine those issues and look at the ques- the blood authorities and medical authorities tions of whether adequate services and compensation were available to victims of hepa-

CHAMBER 24046 SENATE Thursday, 17 June 2004 titis C in this country—people who in many when things go badly wrong. In the case of cases had incurred that disease in circum- those infected with hepatitis C, things cer- stances that were entirely exculpatory for tainly did go badly wrong. The questions for themselves. They should have been able to us, however, were whether or not blame expect better while in the care of medical should be attached to the Red Cross Blood professionals, at whose hands they often, Service or to another party or parties in this unfortunately, contracted this disease. process, such as the Commonwealth Serum During this inquiry it became evident that Laboratories, and to what extent we would hepatitis C and its effect on victims have not judge their behaviour—in light of the chal- been fully understood. That is complicated lenge that was facing those organisations in by a number of factors. As members of the the late 1980s—as having been reprehensible committee have mentioned, diagnosis of this in some way. disease is not always immediate; some peo- At the end of the day, it is true that the ple go for years before being diagnosed. In committee felt that there was a great prepon- fact, many people incur the disease through derance of evidence pointing in a number of blood transfusions in traumatic circum- directions at the one time, making it unsafe stances: in childbirth, as a result of a car ac- to conclude that, in particular, the Red Cross cident and so on. Many sufferers are lumped had behaved reprehensibly in choosing not to together in the minds of other people with implement a system of surrogate testing in those who incur diseases such as hepatitis C most places in Australia. Surrogate testing, through unsafe behaviours, such as intrave- as members have pointed out, was employed nous drug use. Coupled with all of that, there in some places in Australia and in some other is a general lack of public understanding of places in the world, particularly in the United what hepatitis C is, how it affects you and States. It is also true that it was not employed how it can be contracted and passed on. in many places around the world and in most In all those circumstances, it was clear states of Australia. The uncertainty of the that more needed to be done. I am very effectiveness of that testing was the critical pleased that, as Senator Hutchins indicated, issue that we came to grips with. the committee has taken the step of recom- There was an ambiguity of evidence—an mending a number of changes to the way in inconsistency in the clarity of the evidence— which authorities deal with the victims of about whether surrogate testing would or hepatitis C infection and improve the ser- would not have effectively provided a tool to vices available to them and to their families. eliminate an inappropriately high level of A pivotal question the committee faced, risk of infection from hepatitis C. The nature however, was whether it was appropriate to of the challenge which the Red Cross and attach blame to the agency or agencies pri- others faced was best summarised by Profes- marily responsible for the transmission of sor McCaughan, who at length discussed the hepatitis C infected blood. The Australian question of what evidence was available and Red Cross Blood Service, of course, was a how it should have been assessed by parties key witness before the inquiry, and its evi- at the end of the 1980s. He cited the concept dence was examined very carefully indeed. of equipoise whereby: There is a propensity in our society to be- If on the balance of the evidence you do not know lieve that we need to attach blame and that what to do, then either choice is ethically accept- we need to find a person or party at fault able.

CHAMBER Thursday, 17 June 2004 SENATE 24047

Clearly, the suppliers of blood and blood tralia, over potentially a longer period than products in Australia at that time for the most the window during which surrogate testing part, with some exceptions, made the deci- was the only means of identifying suspect sion to continue to supply blood in those cir- blood, our health services and our blood cumstances. The fact that they did so led to transfusion services would have faced a real many people being infected. The part in the and a very significant crisis. process that bodies such as the Red Cross I believe, with the enormously beneficial played led to an apology to the people who capacity of hindsight, that it was appropriate were infected. I am very pleased that the to protect the whole of the blood supply and Australian Red Cross has seen fit to take that the capacity of people generally to access step. blood products when they needed them, par- I think it is a mistake, however, to assume ticularly in traumatic or critical circum- from that that there has been serious culpa- stances. I believe that the decision made by bility on the part of players such as the Aus- Red Cross in states other than Queensland tralian Red Cross in the way in which blood was appropriate. That does not mean to say products were supplied. They were facing a that it was inappropriate in Queensland. I difficult choice—a choice which, had any of believe that is not a conclusion you can us been facing it, we would have encoun- draw from that statement. As Professor tered exactly the same level of difficulty in McCaughan put to the committee, given the resolving. I believe the many challenges ambiguity of evidence and the lack of any which a body such as the Red Cross face in clear indication one way or the other, either these circumstances need to be borne in mind choice was ethically acceptable. I also wish when passing judgment many years later on to thank the other members of the committee their conduct, particularly where it has led to and the staff of the committee for the help such devastating consequences. they provided to us in this very difficult but A factor taken into account at the time— extremely important inquiry. and rightly so, in my opinion—was that a Senator LEES (South Australia) (11.01 testing regime, such as surrogate testing, a.m.)—I would like to begin by thanking the would have led to a very high number of secretariat of the Community Affairs Refer- false negatives, as Senator Knowles has sug- ences Committee. I particularly thank the gested. That would have had a serious down- other members of the committee. I believe side for other people—people other than all of us, government and non-government those who might have become infected ulti- senators, set out with the aim of getting a mately by such diseases as hepatitis C—in result. We put aside any party affiliations and the loss of many valuable and suitable dona- worked to see whether we could get some tions to Red Cross services around Australia. real support and assistance for those people Evidence brought before the committee was who are now facing life with a devastating that, even in Queensland, there were signifi- disease that affects not only them and their cant problems with loss of donors and find- relationships but also their families. So I put ing replacement donors for those who were on the record my thanks to everyone who being rejected—for the most part, falsely— was involved in the committee. because the testing suggested that they were I also thank those people who were pre- not suitable donors when in most cases, in pared to come before us and share a very fact, they would have been. If that problem personal part of their lives. Many people, had been replicated across the whole of Aus-

CHAMBER 24048 SENATE Thursday, 17 June 2004 obviously, have been affected in absolutely delivery, the support, the day-to-day counsel- every way possible, from their opportunities ling, the medical help, the welfare services et to have a family, because of the risks of pass- cetera are provided for people battling hepa- ing on the disease to children, to their em- titis C. Some of it is covered under Medi- ployment. All sorts of opportunities have care, but an awful lot of things are not cov- passed them by. They are not able to take ered: transport, alternative medications, non- part in sport or any activity that requires prescription items and a whole raft of issues stamina and endurance. So I thank those for families, such as counselling and support. people who put all of that aside and were Hopefully, the government will rapidly prepared to relive their experiences for the accept the final recommendations and, be- committee to help us understand what it is fore we go into the usual hiatus at election like to be hepatitis C positive. time, respond to the committee report, which I would also like to thank the Red Cross. is unanimous. That is unusual for references Obviously the committee does not want to do committees, unfortunately. The government anything—indeed we did not do anything— should now move on and do two things: that would in any way put at risk the future firstly, respond to the specific recommenda- blood supply by discouraging people from tions and help those people who are battling donating. As a donor, I know all the extra hepatitis C and, secondly, with the states procedures that the Red Cross has put in look at better prevention measures across the place over the last year or so. We all have our board. Whatever way hepatitis C is transmit- own cards now that have to be scanned as we ted, we need to stop it. We need to reduce, if donate. I acknowledge the frank and open not eliminate, the passing on of hepatitis C. evidence of the Red Cross before the com- From improving the Lookback program and mittee and the way they have worked to supporting the Red Cross as it further secures make sure that these types of devastating Australia’s blood supply, so nothing like this mistakes do not occur in the future. can be passed on in the future, to needle ex- I was aware of hepatitis C and how viru- changes and education campaigns—it all has lent it was, but I was not aware of how many to be put in place so that no Australian in the people had been infected by tainted blood future contracts this terrible disease. I close throughout the 1980s and 1990s. I was cer- by again saying thanks to all those people tainly not aware of the effect this was having who are hepatitis C positive who came be- on so many in our community. All of us on fore the committee and shared their experi- the committee—and here I particularly ences with us. commend Senator Hutchins for his passion Senator MOORE (Queensland) (11.06 on this issue and for bringing it to our atten- a.m.)—I add my voice to those of the other tion—wanted a result. We wanted to work senators who shared in the experience of the for what would actually make a difference to hepatitis C inquiry by the Community Affairs the lives of the people who are out there hav- References Committee. None of us who par- ing to deal with hepatitis C on a daily basis. ticipated in this inquiry in any way remained Hopefully, the government will now respond unaffected by this experience. We learnt a lot positively to our recommendations. Perhaps about hepatitis C. Many of us did not have recommendation 6, dealing with the way the that knowledge before we started this activ- committee is set up, is the most important. ity. We learnt a lot about the history and We must do the Lookback program properly various causes of the condition. Amazingly and then make sure that the necessary service detailed medical evidence was presented to

CHAMBER Thursday, 17 June 2004 SENATE 24049 the inquiry as to how this condition could be back program. We all know that it is not acquired and how, throughout the 1970s and working. We know that it must work better 1980s, across the world people were strug- because people have a right to know their gling to identify this particular strain of the medical histories and to find out the cause of very serious disease of hepatitis. We learnt a their condition, if that can be discovered. The lot about the medical causes. We learnt a lot Lookback program has not been able to en- about the science. But, for many of us, I able them to do that because of the complex- think the real experience of this inquiry was ity and the interrelationship of the different to learn about the effects of hepatitis C. record-keeping systems across the country. No-one could remain untouched by the In 2004 that is something we must learn. stories of the people who came before our That kind of complexity and confusion must inquiry who had acquired this disease be addressed. We as citizens have the right to through a range of different ways. All of the know our medical histories and to be able to other senators on the committee have men- trace them. I do not know how far we can go tioned the different experiences of the people back, but we should be able to say that from who came before us. We also heard from 2004 records about us should be accurate. their families, from their carers and from Another clear lesson from this process is their friends. They were all sharing the pain. that there must be understanding and better The pain was not just in finding out that they support from the medical services. I was were ill. In many cases, the pain was in being amazed to hear that some of the worst cases ill for years and in not understanding why of discrimination against people who had they were not able to relate to their families, hepatitis C were perpetrated by people in the why they were not able to work effectively in medical profession. This came out particu- their businesses and why their friends were larly in New South Wales but not only in not able to relate to them anymore because New South Wales. There seems to be a sig- they were not the same person. I will always nificant lack of effectively trained and sensi- remember the woman who sat in front of us tive people across the range of medical pro- and said she did not know herself anymore; fessions who can provide the immediate she used to be someone different. She said medical help and the personal support the that 10 or 11 years ago she had lost herself. patients need not only at the time of identifi- One lesson out of this inquiry is that we as a cation but through the whole process of their community must help all of those people condition—and not just for the patients refind themselves so they no feel longer iso- themselves but also for their families. As lated or afraid due to the condition we now Senator Hutchins said, we heard very sad know as hep C. cases where families had been destroyed by Another lesson from this inquiry is that this condition, where people had lost their organisations must be able to keep better families as well as themselves. These groups records. I was amazed to hear how people in our community need sensitive support and learnt about this condition in the seventies counselling, not just immediately and not and eighties. People were in hospital, people just for a short time but into the future. This were seeing doctors, people were donating counselling should be done in such a way blood and when we tried to find clear evi- that it is flexible so people can access it dence from that time from the doctors, from when they need it without too many barriers the hospitals and from the blood banks it was or obstacles. That must be one lesson we not all available. We heard about the Look- learn from this process.

CHAMBER 24050 SENATE Thursday, 17 June 2004

We should have an education campaign sad thing was that up until this inquiry they for the wider community. In one hearing seemed not to have been talking to each someone said to me that, if one thing could other. People had been isolated not only by be achieved out of our inquiry, it would be their condition but also by the people with an effective across-the-board education pro- whom they needed to communicate. They gram so that people could understand what had felt rejected and there was a wide gap this condition is all about, the various ways through which there did not seem to be any in which it can be acquired and that people way of communicating. If people could just who have it are living beside us on a daily listen to each other instead of closing their basis and are not somehow unclean or not minds and their hearts to what people are able to be communicated with. Over and saying, we would actually know where to go over again we heard that people who had hep after the inquiry. I think that has been C felt that they had been rejected by their achieved in some way, because I do believe community, that somehow they no longer that this inquiry at least got the various had a role to play in the community, that they groups talking to one another without imme- had been isolated and that in many ways they diately going into battle lines. felt betrayed. An education program is not There must be acceptance in the process just something in a paper; it is not just a sign that follows that there is not a typical person in a doctor’s office. In this day and age in with hepatitis C. Everybody has different 2004 there is a wide range of education pro- needs and everybody has different expecta- grams available. We should be able to come tions of where we should go next, but one up with something that actually works. It is thing this Senate inquiry has done is to let important that, when we are developing these the community know that they have a right programs, we involve the people with the to be heard, that this is an issue that must be knowledge. The people who came to our talked about publicly and that people should inquiry have the knowledge. They have had not be labelled and isolated because of a the pain, they have had the experience and, medical condition that they have acquired. I moreover, they have had the courage to say: hope that the lessons that we have learnt ‘Look at me. I have this condition and I am from this inquiry are that there is no-one in here. Learn from me, and we can grow to- the community that needs to be totally iso- gether in a community and be stronger and lated, that we have opportunities to work better.’ together and that we have opportunities to We heard during the inquiry that some had learn and move forward. That is not to stop acquired the condition. We heard that some any litigation or process that is going on— wonderful people and organisations had set because everyone has a right to that as up support groups to work with the commu- well—but we must be able to do what the nity. The Tainted Blood Product Action spokesperson from the Red Cross said: Group in New South Wales has done amaz- What we would now like to focus on is the pre- ing work to get people to connect with each sent and the future and we would like to discuss other and to understand and feel as though with you today how we are able to move forward they have a right to be heard. We also heard beyond the Senate inquiry. from people from the various medical pro- We are keen to work together, we are keen to fessions and from the Australian Red Cross. listen to each other and, somehow through There was goodwill around our inquiry. Peo- all of this, the Senate inquiry will have done ple wanted to find a way forward. But the its job and we will have awareness and some

CHAMBER Thursday, 17 June 2004 SENATE 24051 way forward so that hepatitis C is known, 2002 and three related bills, together with the understood and supported. I seek leave to Hansard record of proceedings and docu- continue my remarks later. ments presented to the committee. Leave granted; debate adjourned. Ordered that the report be printed. BUDGET CIVIL AVIATION LEGISLATION Consideration by Legislation Committees AMENDMENT (MUTUAL Reports RECOGNITION WITH NEW ZEALAND AND OTHER MATTERS) BILL 2003 Senator McGAURAN (Victoria) (11.16 a.m.)—Pursuant to order and at the request Report of Rural and Regional Affairs and of the Chairs of the respective committees, I Transport Legislation Committee present reports of the following legislation Senator McGAURAN (Victoria) (11.17 committees on the 2004-05 Budget esti- a.m.)—On behalf of the Chair of the Rural mates: Community Affairs, Environment, and Regional Affairs and Transport Legisla- Communications, Information Technology tion Committee, Senator Heffernan, I present and the Arts, Legal and Constitutional, and the report of the committee on the provisions Rural and Regional Affairs and Transport of the Civil Aviation Legislation Amendment Legislation Committees, together with the (Mutual Recognition with New Zealand and Hansard record of proceedings and a docu- Other Matters) Bill 2003, together with the ment presented to the committee. Hansard record of proceedings and docu- Ordered that the report be printed. ments presented to the committee. Ordered that the report be printed. WORKPLACE RELATIONS AMENDMENT (AWARD MIGRATION AMENDMENT SIMPLIFICATION) BILL 2002 (JUDICIAL REVIEW) BILL 2004 WORKPLACE RELATIONS Report of Legal and Constitutional AMENDMENT (BETTER Legislation Committee BARGAINING) BILL 2003 Senator McGAURAN (Victoria) (11.18 WORKPLACE RELATIONS a.m.)—On behalf of the Chair of the Legal AMENDMENT (CHOICE IN AWARD and Constitutional Legislation Committee, COVERAGE) BILL 2004 Senator Payne, I present the report of the WORKPLACE RELATIONS committee on the provisions of the Migration AMENDMENT (SIMPLIFYING Amendment (Judicial Review) Bill 2004, AGREEMENT-MAKING) BILL 2004 together with the Hansard record of proceedings and documents presented to the commit- Report of Employment, Workplace tee. Relations and Education Legislation Committee Ordered that the report be printed. Senator McGAURAN (Victoria) (11.17 BUSINESS a.m.)—On behalf of the Chair of the Em- Rearrangement ployment, Workplace Relations and Educa- Senator ELLISON (Western Australia— tion Legislation Committee, Senator Tierney, Minister for Justice and Customs) (11.18 I present the report of the committee on the a.m.)—At the request of the Manager of provisions of the Workplace Relations Government Business in the Senate, Senator Amendment (Award Simplification) Bill Ian Campbell, I move:

CHAMBER 24052 SENATE Thursday, 17 June 2004

That— circulated in the chamber yesterday, I under- (1) On Thursday, 17 June 2004: stand. (a) the hours of meeting shall be 9.30 am The TEMPORARY CHAIRMAN to 6.30 pm and 7.30 pm to 10.30 pm; (Senator Marshall)—The question is that (b) consideration of general business and the bill stand as printed. consideration of committee reports, Question agreed to. government responses and Auditor- General’s reports under standing order CORPORATE LAW ECONOMIC 62(1) and (2) not be proceeded with; REFORM PROGRAM (AUDIT REFORM (c) the routine of business from not later AND CORPORATE DISCLOSURE) BILL than 4.30 pm shall be government 2003 business only; Bill—by leave—taken as a whole. (d) divisions may take place after 4.30 pm; The TEMPORARY CHAIRMAN—The and question is that the bill stand as printed. (e) the question for the adjournment of the Senator CONROY (Victoria) (11.21 Senate shall be proposed at 9.50 pm. a.m.)—The Corporate Law Economic Re- (2) The Senate shall sit on Friday, 18 June form Program (Audit Reform and Corporate 2004 and that: Disclosure) Bill 2003 is affectionately (a) the hours of meeting shall be 9 am to known as CLERP 9. During the second read- 4.25 pm; ing debate I spoke on the following issues: (b) the routine of business shall be: empowering shareholders, proxy voting, dis- (i) notices of motion, and closure of beneficial ownership, analyst in- (ii) government business only; and dependence and conflicts of interest. I do not (c) the question for the adjournment of the propose to comment on these issues in depth Senate shall be proposed at 3.45 pm. again. Instead, I would like to comment on Question agreed to. the other provisions of the CLERP 9 bill which I did not mention yesterday. These CORPORATIONS (FEES) provisions include the transparency in rela- AMENDMENT BILL (No. 2) 2003 tion to the FRC, audit reform, penalties and CORPORATE LAW ECONOMIC ASIC’s power to issue infringement notices. REFORM PROGRAM (AUDIT I will also discuss our amendments relating REFORM AND CORPORATE to shareholder approval of termination pay- DISCLOSURE) BILL 2003 ments which exceed one year’s salary. Be- In Committee fore I discuss these amendments, I would Consideration resumed from 16 June. like to respond to the press release of the Parliamentary Secretary to the Treasurer CORPORATIONS (FEES) AMENDMENT which he issued yesterday. In his press re- BILL (No. 2) 2003 lease he called Labor’s amendments ‘last Bill—by leave—taken as a whole. minute, prescriptive and unnecessary’. Senator IAN CAMPBELL (Western I will also discuss our amendments relat- Australia—Minister for Local Government, ing to shareholder approval of termination Territories and Roads) (11.19 a.m.)—I table payments which exceed one year’s salary. a supplementary explanatory memorandum Before I discuss these amendments I would relating to the government amendments to be like to respond to the press release of the moved to this bill. The memorandum was

CHAMBER Thursday, 17 June 2004 SENATE 24053

Parliamentary Secretary to the Treasurer, Mr tary secretary’s office make such unfounded Ross Cameron, which he issued yesterday. In allegations in his press release, which re- his press release he called Labor’s amend- ceived some coverage in today’s papers. ments ‘last minute, prescriptive and unneces- I wish to put on the record that we have sary’. extensively consulted on this stage of the Senator Murray—Very unfair! bill, more so than at any other stage of this Senator CONROY—I will take that in- lengthy bill. We have attempted to cooperate terjection, Senator Murray. Anyone who has with the government. We think this bill, al- followed the CLERP 9 debate has been fully beit that it does not go far enough, is an im- aware of Labor’s amendments since October portant bill. We have sought to facilitate the 2003, when we released our first discussion passage of this bill. In the next week and a paper on CLERP 9 and indicated the issues half that remains of this parliamentary ses- which Labor believed should form part of the sion before the implementation date we seek, bill. Since then we have tested our proposals again, to facilitate the passage of this bill. We through the Parliamentary Joint Committee hope that the government will take its head on Corporations and Financial Services in- out of the sand and not unilaterally reject all quiry into the CLERP 9 bill. We received of our amendments, Senator Murray—the widespread support for many of our amend- government is refusing to support every sin- ments from a variety of groups, including the gle one of them. Australian Shareholders Association, the I hope that the Senate sees it a little differ- Australian Council of Superannuation Inves- ently and that the government will ultimately tors and Corporate Governance International. be willing to make sensible amendments to After completing the inquiry we publicly the bill, which covers some areas where the released a document called Labor’s guide to government did not want to go. That is all I the CLERP 9 amendments. This guide, which wanted to say in the committee of the whole we released on 30 May this year, set out the stage. I will pass on to anyone else who amendments which Labor proposed to move wants to talk in general, then we can have to the bill. some discussion on individual amendments. In the same week that we released the Senator MURRAY (Western Australia) guide, we released the text of our draft (11.25 a.m.)—I support those remarks. I amendments and specifically emailed a copy have noticed in the past with some commit- to Mr Cameron’s office. Mr Cameron’s of- tees that I am on and some issues that I deal fice had the majority of Labor’s amendments with that the media have remained ignorant for at least two weeks. We released the text of many of the issues that have been can- of the draft amendments to allow further vassed and put out by senators—floated and consultation. We have received feedback on assessed by witnesses in advance, really sig- the draft amendments and made changes ac- nalling their intentions. That is not true of cordingly. The revised amendments were this occasion. The media have followed the sent to Mr Cameron’s office on Tuesday CLERP 9 bill very closely and reported it night. We have received widespread support rather well, I thought. So there is no excuse for releasing the text of our amendments and for anyone out there thinking that the issues for consulting on them. We have had an ex- that Senator Conroy has put in his amend- cellent response to that consultative process ments, or that I have put in my amendments and it is disappointing to see the parliamen- on behalf of the Democrats, have not been

CHAMBER 24054 SENATE Thursday, 17 June 2004 well signalled and well canvassed in ad- plex and interactive as this, you need to be vance. flexible and prepared to address amend- It is entirely proper for the government to ments. I do not think it is unreasonable that disagree with either my amendments or those Senator Conroy has put out a large number of Senator Conroy. But that is a policy de- of amendments which reflect Labor’s policy bate. It does the government no good to put concerns. I do not think the government out press releases which the community— should demean—and I am sure the minister which is closely involved with this process— at the table, Senator Ian Campbell, does not knows to be wrong. It makes the government take that view—the process by which those look less than competent. It is unfair, I think, amendments are produced. By all means op- to members of the Treasury and advisory pose the policy, but I think the process has bodies that have been assisting the govern- been proper. ment in this matter as well, because they I want to conclude these remarks with a have paid a great deal of detailed attention. I question under the general process we are in hope that following this debate the govern- at the moment. I think that in this case the ment’s response and views will be consid- government has perhaps been at a disadvan- ered and will not represent an automatic kind tage to the committee in that we have been of mentality: ‘We’re the government, we’ve living with where we have been going for a been elected, we deserve to run the show as while and the reports have just come out. we see fit.’ With respect to those 27 recommendations The other point I want to make in general from part 1 of the committee’s report and the as we begin is that the Parliamentary Joint 34 from part 2, how does the government Committee on Corporations and Financial propose to handle those? I would assume that Services have produced two reports on this you will amend what you can at present and bill, after lengthy, detailed and comprehen- may come back with further amendments to sive consultation. They have produced a the bill at a later date. Perhaps you could let large number of recommendations to address us know what process you propose. what they felt were areas that needed im- Senator IAN CAMPBELL (Western provement or areas which needed further Australia—Minister for Local Government, amendment. In the part 1 report there were Territories and Roads) (11.31 a.m.)—It will 27 recommendations from the committee. not be any surprise to Senator Murray or to That does not mean they are all matters for Senator Conroy to say that we have picked this bill today, because a number of those up a couple of recommendations which I recommendations did affect ASIC processes think have been agreed—the due diligence and those sorts of things. defence for continuous disclosure breaches In the part 2 report there are a further 34 and the beneficial ownership provisions. recommendations—a nearly unanimous set They have come straight out of the report. of recommendations in many cases. The Par- There are a couple of others that Senator liamentary Joint Committee on Corporations Chapman raised with me this morning that and Financial Services has members of the he was keen to see progressed. The recom- Liberal Party, the Labor Party and the De- mendations from the second part of the re- mocrats on it, and it has produced 61 rec- port, which I understand was tabled only just ommendations. That indicates that, when you over 24 hours ago, I do not think we could are dealing with an issue as difficult, com- sensibly progress within this legislative structure.

CHAMBER Thursday, 17 June 2004 SENATE 24055

I think even Senator Conroy agrees that But my party would look on that with favour once we resolve our policy differences it is and would be prepared to move those extra very much in the interests of Australia to amendments. We are suggesting to you that, have CLERP 9 enacted within the next cou- to ensure the law comes into place by the end ple of days, if that is possible—today, if pos- of this month, we would be happy to see a sible. Apparently the second reading speech small noncontroversial bill come through says that the federal government will thor- provided it is agreed between the three of us. oughly review the joint statutory committee’s Senator IAN CAMPBELL (Western recommendations and then progress amend- Australia—Minister for Local Government, ments that flow from those recommendations Territories and Roads) (11.35 a.m.)—That it in the next available legislative vehicle. As is a very useful and constructive suggestion Senator Murray and Senator Conroy would that has been put forward by Senator Murray. know, there are probably at least a couple of The practical and political reality here which times a year when we have a couple of days will emerge over the next few hours is that dedicated to improving the financial services there is a fundamental policy difference be- legislation so there will always be opportuni- tween the government and the opposition on ties. I presume that my new financial ser- how you approach some parts of this legisla- vices colleague, Mr Cameron, will be pro- tion. The reality is that probably 95 per cent gressing CLERP 8 at some stage—the for- of CLERP 9 has the full support of every- gotten CLERP, I like to call it. That will body in the chamber. There are differences of again be a very important measure of reform achieving similarly desired outcomes in rela- that will come before the parliament in the tion to things like analyst independence and not too distant future. That is at least one so forth. The government has had, as every- opportunity that springs to mind to progress one would attest, significant and lengthy those amendments. consultation—so lengthy in fact that when I Senator MURRAY (Western Australia) was in charge I was criticised. I was pleased (11.33 a.m.)—What I am about to say is as to see that the joint committee also took its much for the advisers in the box and the par- time and did a diligent job at reviewing it. liamentary secretary in that distant place as The process that we have gone through as for you, Minister. I have in fact addressed a legislature and as a government has been a only one of the committee’s recommenda- far better process than, for example, what tions in my sheets. I am looking at possibly occurred in the United States, where they trying a few more but I would appreciate it if rushed in a bunch of measures because of the a decision were made on that. looming congressional elections, I suspect, The real point I want to make to you is the politics around it all and a desire for that this: if the government were able to produce administration to get it off the political some, I am not suggesting all, of the easiest agenda. In hindsight what we have done here amendments arising from the committee re- is a lot better way to approach issues that ports and agree them with my office and were front page news, highly politicised and Senator Conroy—it would need to be three highly focused on by people. When you are way—we as a party would be more than making changes to the Corporations Law happy for those amendments to be intro- you should not really be looking at responses duced to the Senate as a noncontroversial bill that are quick political fixes or that look next Thursday. I cannot speak for Senator good for a few weeks. You really have to Conroy; he would need to speak for himself. think about how it is going to affect the way

CHAMBER 24056 SENATE Thursday, 17 June 2004 business is done in Australia and how we Here is the Labor position. Should a Labor interact with the rest of the world for, I government be elected, this is what we will would like to think, 10 to 20 years in ad- do to change the law.’ Literally within vance. months they could come back, if they win The process we have gone through has the election, and make the law in the shape been a very good one, both from the gov- they want it to be, undoubtedly with the sup- ernment’s point of view when I was running port of the Democrats. I presume, Senator it and when we handed across the legislation Murray, you will be indicating support for and the joint committee started the legisla- some of their amendments. So I think there is ture process. So I think it has been a good a democratic solution to this. I presume that process. But, as Senator Conroy has indi- we will have a debate here. It will be a well- cated—and he has put his views out there for informed debate because of the work we the world to see well in advance and he has have done in our own ways. If the Senate come up with amendments which reflect that amends the legislation in a way that is unac- Labor policy—there will be substantial dif- ceptable to the government, I presume that in ferences in this debate. I think what will oc- the other place the government will seek to cur—and I guess it is in our hands here—is send it back to the Senate. I hope that the that there will be some amendments we will CLERP 9 legislation can be enacted in the agree to and there will be some we will not form in which we get it out of this place. As I agree to. The Labor ones we have strong ob- said, if Labor win the election, they can jections to, and Mr Cameron has indicated bring it back here. that publicly in his own way. So that is one In terms of the report of the joint statutory reality we have to deal with. committee and the process you have out- The other reality is that we are now, by lined, Senator Murray, I will energetically everyone’s assessment and according to the see whether the government is able to pick normal political timetable, within a few up some of the easier amendments from the weeks or months of an election. Most people report and put them through the proper proc- would expect an election before Christmas. esses. They are amendments or changes that The political and practical realities—which I think, without having studied them closely, tend to merge right now—are that Labor would probably need to go through normal have stated a very clear policy in this area. It government processes. That is not to say is one of the few areas in which they have that, in an environment of cooperation and in actually stated a policy, to be frank. They the spirit of progressing reform, we cannot have, to their credit, supported the majority seek to go down the course that you have of the CLERP 9 approach, but they have outlined. If it is possible to do that, I will made some significant differences. I think I certainly seek to do it, because it will show speak for Mr Cameron and Mr Costello that the government is fair dinkum about when I say that we would like to see CLERP getting the guts of CLERP 9 in place for the 9 enacted as close as possible to the govern- benefit of Australian businesses who will ment policy, with some minor amendments. have the certainty of knowing what the law will be in the coming financial year. I think We will not be accepting any of the Labor your suggestion is a positive one, Senator amendments, and that will be frustrating for Murray. I will seek from my perspective to Senator Conroy. The reality is that he will be progress that. What I have sought to do in able to say: ‘I have tried to amend this law. this intervention is to describe the way I

CHAMBER Thursday, 17 June 2004 SENATE 24057 think the process should go over the next few to go there, due to President Reagan’s fu- hours. neral, Senator McGauran. Senator MURRAY (Western Australia) The TEMPORARY CHAIRMAN (11.42 a.m.)—To conclude, I make the fol- (Senator Watson)—Address your comments lowing points. Obviously, the committee through the chair please. itself has consulted. So, in a sense, that does Senator CONROY—Thank you. I accept much of the work that you might otherwise your admonishment, Mr Temporary Chair- think you would have to do. Secondly, those man. I note Senator Ian Campbell’s com- recommendations were unanimous. There- ments about how it was a far more ‘thorough fore, that should give you a signal that they process’ and less rushed here in Australia. will be supported in the chamber. Thirdly, Some would even suggest that the govern- apart from you, the parliamentary secretary ment was dragged to this kicking and and those within the Treasury who are ex- screaming, in fact, and that the only reason perts in this area, the committee is the next this bill has emerged at all is that there is an expert body. Therefore, you are getting ex- election looming. The government is doing pert advice. The last point to make is that the the minimum amount that it can to remain government have found time to at least ad- credible, in its eyes, on corporate governance dress some of the recommendations—very issues. few, but some of the recommendations—in This bill represents a watering down of part 1 of the committee’s report. They have the government’s own commitments. The said that they have not had enough time to Treasurer, Peter Costello, appeared on na- address part 2. I cannot conceive that none of tional television on the 7.30 Report and in the 34 recommendations would be accept- relation to the HIH Royal Commission rec- able to the government. I understand that the ommendations said, ‘We will implement cabinet meet on Monday or Tuesday. It them all.’ This bill falls well short of that. would seem to me that, if you put some skids Even though Senator Campbell has moved under the Treasury advisers, they could cer- on to higher things now, he was a key par- tainly get at least one or two forward. That ticipant at the time of the drafting of this bill. gives more certainty to the law and would This represents Senator Campbell undermin- reflect things the committee is concerned ing the Treasurer. When the Treasurer goes with. The offer I am making is that we will on national television and says, ‘We will im- be cooperative in that process. plement every single one of these recom- Senator CONROY (Victoria) (11.43 mendations,’ and Senator Campbell turns up a.m.)—I note Senator Ian Campbell’s com- a year later with a bill that undermines the ment that the Sarbanes-Oxley Act in the US Treasurer in such a public way, you have to was rushed. I can only say, having met Sena- say this government is determined to do as tor Sarbanes last week in Washington, that he little as it can to try and address these issues. does not think that at all and he had already I would not want Senator Murray to feel had a bill on the table for some months. that his offer would not be taken up by La- Senator McGauran—Did you meet bor. Many of the amendments that we George? He likes you! drafted actually cover the recommendations Senator CONROY—Unfortunately, the that were agreed to in the second report. White House was closed on the day we were While I accept that the government, based on its track record, needs about three years to

CHAMBER 24058 SENATE Thursday, 17 June 2004 move on to the next stage, in actual fact Senator IAN CAMPBELL—by leave—I many of the amendments are available right move: now to be acted upon. They were unani- (9) Schedule 1, item 9, page 5 (line 16), omit mously agreed to, and we can deal with those “(b)”, substitute “(a)”. here. I take note of Senator Murray’s offer (10) Schedule 1, item 9, page 5 (line 18), omit “; and his indication that he wants to work or (c)”, substitute “(aa)”. closely with government and Labor and that (11) Schedule 1, item 9, page 5 (line 19), at the we need a tripartite agreement on these is- end of paragraph (c), add “or”. sues. I welcome that offer; I wish it had been (12) Schedule 1, item 17, page 10 (line 15), after around yesterday when the Democrats cra- “FRC”, insert “, acting on behalf of the venly caved in to IFSA and the government FRC,”. on fee disclosure issues. I wish that tripartite (13) Schedule 1, item 17, page 11 (line 3), after spirit had been available yesterday. Perhaps “FRC”, insert “, acting on behalf of the we would have got a better outcome for con- FRC,”. sumers in this country if Senator Murray’s (14) Schedule 1, item 17, page 11 (line 33), after goodwill and good spirit had been available “FRC”, insert “, acting on behalf of the yesterday. However, as I want to move on to FRC,”. the amendments, I will allow the government (15) Schedule 1, item 17, page 12 (line 1), before to move the first of its amendments. “the FRC”, insert “the Chair of”. Senator IAN CAMPBELL (Western (16) Schedule 1, item 17, page 12 (line 8), before Australia—Minister for Local Government, “the FRC”, insert “the Chair of”. Territories and Roads) (11.47 a.m.)—Before (17) Schedule 1, item 17, page 12 (line 18), after I move the amendments I want to correct the “at that time that”, insert “the Chair of”. record. The HIH Royal Commission report (18) Schedule 1, item 17, page 12 (line 20), after came down in mid-April last year. Mr Cam- “that”, insert “the Chair of”. eron, Mr Costello and I presented the (19) Schedule 1, item 32, page 21 (after line 13), CLERP 9 legislation in October—less than after paragraph (e), insert: six months after the HIH Royal Commission (ea) is made to APRA for the purposes of report came down—and that legislation has its performance of its functions; or been in the hands of the joint statutory com- These amendments relate to audit oversight, mittee ever since. It was in the hands of the and I am told that they are basically technical committee in November, December, January, amendments. February, March, April, May and June. The government has worked very strenuously to Question agreed to. get a sound legislative regime in place. Some Senator CONROY (Victoria) (11.49 said we should have done it quicker, but the a.m.)—by leave—I move opposition result will be a far finer piece of corporate amendments (1) to (11) and (13) on sheet regulation than would have occurred if it had 4216 revised: been rushed. I genuinely thank those in this (1) Schedule 1, item 14, page 7 (line 5), omit chamber, and those in the other place, who “approving and monitoring”, substitute have helped with that—certainly Senator “providing feedback on”. Murray for his constructive approach. I seek (2) Schedule 1, item 14, page 7 (line 11), omit leave to move government amendments (9) paragraph 225(2)(c). to (19) on sheet PK247. (3) Schedule 1, item 14, page 7 (line 12), omit Leave granted. “directions, advice or”.

CHAMBER Thursday, 17 June 2004 SENATE 24059

(4) Schedule 1, item 14, page 8 (line 3), omit ; and (f) to determine its broad strategic “approving and monitoring”, substitute direction. “providing feedback on”. (10) Schedule 1, item 18, page 13 (after line 25), (5) Schedule 1, item 14, page 8 (line 9), omit at the end of subsection 227B(1), add: paragraph 225(2A)(c). ; and (f) to determine its broad strategic (6) Schedule 1, item 14, page 8 (line 10), omit direction. “directions, advice or”. (11) Schedule 1, items 19 and 20, page 14 (line (7) Schedule 1, page 10 (after line 2), after item 17 to 20), omit the items, substitute: 14, insert; 19 Section 232 14A Subsection 225(5) Omit paragraphs 232(a) and (b). Repeal the subsection, substitute: (13) Schedule 1, item 22, page 15 (lines 24 and (5) The FRC does not have the power to: 25), omit paragraph 234C(a). (a) direct the AASB in relation to the (15) Schedule 1, item 26, page 17 (line 10), omit development, or making of a the item, substitute: particular standard; or 26 Paragraph 236A(3)(a) (b) veto a standard made, formulated or Repeal the paragraph. recommended by AASB; or Schedule 1, item 28, page 17 (lines 23 to (c) determine the AASB’s broad 26), omit subsection 236E(2), substitute: strategic direction. (2) The AUASB shall hold its meetings in (8) Schedule 1, item 16, page 10 (lines 8 to 11), public except to the extent that a omit subsections 225(7) and (8), substitute: meeting considers: (7) The FRC does not have the power to: (a) matters relating to the appointment (a) direct the AUASB in relation to the or retirement or performance of development, or making of a members of a subcommittee of the particular auditing standard; or AUASB; or (b) veto a standard made, formulated or (b) matters which are of such a sensitive recommended by AUASB; or nature that a public meeting would (c) determine the AUASB’s broad be inappropriate. strategic direction. The opposition also opposes schedule 1 in (8) The FRC shall hold its meetings in the following terms: public except to the extent that a (14) Schedule 1, item 26, page 17 (lines 9 and meeting considers: 10), TO BE OPPOSED. (a) matters relating to the appointment These amendments increase transparency in or retirement or performance of relation to the operation of the Financial Re- members of the FRC, AASB or porting Council. The FRC is a body that op- AUASB; or erates in secrecy. It does not hold its meet- (b) matters which are of such a sensitive ings in public, it does not have appropriate nature that a public meeting would consultation processes and its secretariat is be inappropriate. provided by the Treasury. During the inquiry (9) Schedule 1, page 12 (after line 25), after conducted by the PJC, the ex-chair of the item 17, insert: AASB, Mr Keith Alfredson, shone some 17A At the end of subsection 227(1) light into the operation of the FRC. He ad- Add: vised the committee: … the 2005 decision—

CHAMBER 24060 SENATE Thursday, 17 June 2004 this is in relation to international accounting by four countries in the European Union. For standards— those who say that parliament is not the was made without any FRC paper that firmly place where accounting standards should be debated the issues or all of the arguments in fa- discussed, that it should be a rubber stamp vour and against. I had a paper on a late edition— for this process, let us make it clear: four … … … countries, led by France, have put a massive I do not recall a comprehensive paper that set out hole in the middle of the process of the inter- the arguments for and against, and the issues and national accounting standards. Vested busi- implications. ness interests in Europe are sabotaging the He went on to say: adoption of international accounting standards. That is really serious. It has left a huge All I am saying here is that I think the whole hole. process lacked robust and formal consultation. IS39 underpins many of the other stan- … … … dards. Without No. 39 being endorsed, it … if you compare our process with what hap- calls into question where we will get to with pened in New Zealand and the UK you would the rest of the standards that this country is have to say it was not as robust. going to adopt. However, it does say that we The gravity of these comments should not be are entitled to have a robust process, to con- underestimated. It was always a political fix. sider these standards on their merits and, It was always a committee controlled by the particularly after this decision, to reconsider government. The decision to move to inter- the start date. We cannot proceed to adopt national accounting standards is one of the international accounting standards with the most significant decisions that has been huge hole that has been put into this process. made in relation to Australia’s financial re- It may be that we decide we want to adopt porting regime. Yet it appears the decision IS39 in its own right. That standard has was made without appropriate consideration much merit and, as I said, many others hang or consultation. off it. We need to look at the gutting of the I think Senator Murray was present when role of the Australian Accounting Standards we had a discussion with the then deputy Board and we need to have a robust debate in chairman but now chairman of the FRC, Mr this country about where we go next. Charles Macek. Mr Macek basically had to Unfortunately, because of the way the concede all of Mr Alfredson’s points. He had government have put in the fix, we are not to concede there was no paperwork, there going to be able to have that debate. It is a was no serious consultation, there was no bit like Groundhog Day—back to 28 June appropriate discussion or documentation and 1998, and a round-up of the usual suspects: he was embarrassed by that. At least I think Senator Campbell, Senator Murray and he was embarrassed by that because he Senator Conroy. You can see the far-reaching clearly conceded that sort of process could effects of the decision taken by this chamber, not happen again. by the government—and, tragically, sup- This is a footnote. Senator Campbell and ported by Senator Murray—to give the FRC Senator Murray, I know you are very inter- the power to direct the International Ac- ested in these issues. There is a report in to- counting Standards Board. Six years later, day’s paper that one of the international ac- we are living with the consequences. Senator counting standards, No. 39—which is critical Murray, I implore you to support the to the whole framework—has been vetoed amendments that I am moving today. It will

CHAMBER Thursday, 17 June 2004 SENATE 24061 not rectify the mistakes of the past, Senator had to do. They all understood that the FRC Murray, but it will go some way towards was in fact dictating the content of Australian that. accounting standards and that it expects the Our amendments ensure that important Australian parliament to just rubber-stamp it. decisions such as those I have been discuss- The government say that the CLERP 9 bill ing are taken with the appropriate consulta- will enhance transparency, yet it fails to do tion. Labor’s amendments require the FRC to so in relation to the standard setting frame- openly consult on key issues and to hold its work. It should be independent because that meetings in public—of course, subject to the is the way it was set up statutorily. Under the consideration of certain sensitive issues such CLERP 9 bill, the FRC will remain shrouded as the appointment of members to the AASB in secrecy unless the government and hope- and the AUASB. The powers of the FRC to fully the Democrats support Labor’s set the strategic direction of both the AASB amendments. and the AUASB have come under heavy Senator IAN CAMPBELL (Western criticism during the PJC inquiry. A number Australia—Minister for Local Government, of witnesses questioned how the FRC could Territories and Roads) (11.58 a.m.)—The set the broad strategic direction of these bod- government will not be accepting the Labor ies without also encroaching on the technical amendments. I understand the Joint Statutory content of the standards. Accordingly, our Committee on Corporations and Financial amendments remove the powers of the FRC Services has made some recommendations to set the broad strategic direction of the about the direction setting powers of the AASB and the AUASB and modify the pow- FRC. I have already given an undertaking ers of the FRC to approve the priorities, that the government will review those rec- business plans, budgets and staffing of the ommendations as quickly as possible and AASB and the AUASB. As I said, we cannot that, if there is an agreement, we will bring undo the damage that has been done. in amending legislation. Senator Murray has I have said publicly before and to the then suggested that we bring it here next Thurs- chair and now to the current chair of the FRC day and make it non-controversial. That that I believe the FRC have acted illegally. I would suit me in my other job as Manager of believe they have broken the law on a num- Government Business in the Senate. I have ber of occasions by giving directions about given an undertaking to do that. the adoption of technical content. If directing Senator Conroy remarked that the FRC re- the adoption of a set of standards is not di- forms that came in here as part of the first recting the technical content, I do not know CLERP legislation were designed to modern- what is. On a number of occasions the FRC, ise the accounting standards setting in Aus- following strong criticism of it at the Senate tralia. This parliament passed a law that gave estimates process, has gone back and a very clear direction that as a country we amended its directions because it has con- wanted to move to international accounting ceded that it has stepped across the line. The standards. It is in the law. It asks the FRC to FRC has gone back and reconsidered a direc- take a lead role in that. They have done that. tion on content. It has then withdrawn its There are a lot of people in the accounting direction and just left it as a suggestion. We profession who—to use Senator Conroy’s all know that was a joke. Everyone got the words—have been dragged kicking and message. AASB’s membership is appointed screaming towards the concept of Australia by the FRC. They all understood what they being part of a single global set of account-

CHAMBER 24062 SENATE Thursday, 17 June 2004 ing standards. It is a significant change. ences from time to time, but my strong view Anyone has looked at the complexities of is that the structure we set in place here is it—and I know Senator Conroy and Senator one that has served Australia very well—so Murray have—could not regard it as an easy well that CLERP 9 seeks to enhance that. We change to make. It is not an easy thing to do. were ahead of the world with what we did in If you take away the hijinks and the beat- 1998 and, through CLERP 9, we seek to take ups that have occurred, the reality is that the best of that reform in 1998 and to pick up since 1998 both the FRC and the AASB have the concepts that were incorporated in the done enormous work. There has been some PCAOB in the United States but in a way friction, but it has been very minor friction. that I think is better. When you look at the task that those two The ALP amendments would be a retro- bodies undertook, they have achieved a re- grade step, and quite frankly I think they are markable amount. We reformed it in a genu- motivated by a bit of payback—it is probably inely reformist way to bring the accounting being a little uncharitable—by a few people standards out into the open and to expose who are ideologically opposed to moving to international accounting standards for scru- international accounting standards. They tiny by the nation and the international would like us to have a cute little set of stan- communities. It would not have happened if dards here in Australia—two per cent of the this parliament had not taken the lead. It was global market—instead of winning the ar- an ‘out there’ move when we did it; it was a gument about the desirability of Australia to dramatic thing to do. We could have just be part of a single, global set of accounting fumbled along and said: ‘Let’s leave it; let’s standards, but they have decided to turn on not do it. Let’s get to international account- the process and say, ‘Let’s not talk about the ing standards when they get there.’ We desirability of international accounting stan- would still be talking about it if the govern- dards; let’s talk about how they got there.’ It ment—and, to this parliament’s credit, the defies the facts to say that there was not an parliament—had not said, ‘Let’s see Austra- informed debate in the FRC, the AASB or in lia use whatever leverage and credibility it the accounting or business communities has in this area,’ which is enormous, ‘to take about the move to international accounting a constructive role and create a lead in this standards. This debate has been vigorously international effort to get to a single, global going on in the FRC, the AASB, the profes- set of accounting standards.’ sional accounting bodies, the business com- Senator Conroy is quite right: there will munity, the international business commu- be setbacks. There are vested interests in all nity and the international corporate regula- of the jurisdictions who will try to stop this, tory community since the mid-1990s. To say but Australia’s role has been absolutely fan- that the FRC came up with some unin- tastic. The late Ken Spencer; Warren formed, bizarre, secret, out-of-the-blue deci- McGregor; Jeff Lucey, the chairman of sion is an insult to the people on the FRC ASIC; Keith Alfredson and all of those very and all of the other people who have taken good people on the FRC and the AASB part in the debate. worked through differences. As a result of Senator CONROY (Victoria) (12.04 the reforms, Australia’s credibility on these p.m.)—I want to correct the record. Senator issues, which was very high back in 1998, is Campbell, I know it was six years ago, al- even higher now. So it is a great credit to all most to the day, but in fact you are wrong. of those people. Yes, they will have differ- Back in 1998, as the then parliamentary sec-

CHAMBER Thursday, 17 June 2004 SENATE 24063 retary, you attempted to pass a law through serves support because Sir David Tweedie this parliament directing the adoption of the has his heart, his mind and his intellectual international accounting standards, and it rigour in the right place. He wants to stand was defeated. It was actually removed. To up to vested interests. He wants an interna- suggest that there was some process is in fact tionally credible set of standards. But let us wrong. You tried to mandate the adoption, not forget that, back in 1998, this board was and this parliament rejected your attempt. a joke. Senator Ian Campbell and this gov- You stand here today and say some sort of ernment tried to foist on this country a set of process has been gone through, but there was standards that was considered to be a joke. no process. You tried to mug the rest of the One of the reasons it was defeated was that a country by foisting your view about the ac- very credible set of people in this country counting standards Australia should adopt. who understood the issues said, ‘You can’t You tried to move it in parliament. There was adopt this process. It is a joke. The quality of no process. You had been convinced by a the standards that you’re asking us to adopt few mates at the Stock Exchange that this is a joke. The International Accounting Stan- was what we needed to do. dards Board itself does not have the re- For the record, Labor has consistently sources or the intellectual grunt to do it.’ supported moving to international account- Why is that? It is because here in Australia ing standards, as has Senator Murray on be- we actually do have a whole string of people half of the Democrats. We are not motivated who are internationally credible on account- by some desire to stop us getting there. We ing standards. We have punched above our have consistently supported the adoption of weight for many, many years, and we have international accounting standards. Funda- done that because we have had a rigorous mentally Senator Murray, Labor and the domestic standard-setting process. My con- government have supported the time frame cern about the new regime that we are mov- of 2005, albeit with warts on. But some of ing to is how we are going to retain that set the developments in the last 48 hours do of credible people. Already many people cause us to think about where we are going have resigned from the Australian Account- and where we are pushing on to. Let us be ing Standards Board. It is a miracle and a clear about this: back in 1998 the Interna- credit to David Boymal and those who are tional Accounting Standards Board was a soldiering on on that board that they can be joke. It had no funding. It was a part-time bothered, because they have got the message operation and the quality of the standards from this government and from the FRC that that existed in 1998 was considered to be a they are simply to adopt whatever standard is joke. That is not my opinion; that is a broad approved by the International Accounting international opinion. Standards Board. It is a credit to all involved that the Inter- The good news is that most of the stan- national Accounting Standards Board has dards being put forward are of a sufficient been professionalised. Sir David Tweedie is quality to deserve our support. But there are somebody who deserves our support. He has some, as has now been proved with IAS 39, met with Senator Murray, he has met with which are of a good quality and which are me—both here and in London on numerous not going to be part of this process. If we go occasions—and I know he has met Senator down the path that we are blindly going Ian Campbell and Parliamentary Secretary down at the moment, we will adopt standards Cameron since then. Sir David Tweedie de- that are not necessarily better than the stan-

CHAMBER 24064 SENATE Thursday, 17 June 2004 dards we currently have. That is a matter that study the proposal, and it was just a resolu- this parliament should be concerned about, tion. There were no supporting documents. because our ability to attract capital to this There were no quality arguments taking country, keep our markets liquid and allow place. This is admitted by the FRC’s new our good ideas to be converted into commer- chair. I am not making this up; he said it on cial operations is critical. We will be increas- the public record. He would not allow that ing the cost of capital in this country if we process that took place to take place again, blindly adopt these standards, particularly Senator Campbell. So do not just stand up with the hole that now exists in them. here and repeat your arguments from 1998. It I know people keep saying, ‘We’ve just is six years on and a lot has happened—a lot got to blindly adopt these and it will lower of good things have happened—but do not the cost of capital.’ I say to you: no, Australia try and defend this process. is a price-taker on this issue. We are not a big Under the new structure you are propos- component of the world market. We must be ing—as has been explained—the chair of the at the cutting edge of accounting standards. FRC’s first recommendation for increased We must have a better set of standards than transparency is to sack most of the board and most other countries so that international replace them with six or seven people. That investors know they can come to this coun- is the first recommendation. He wants to try, pick up a set of financial reports and neck the board and say, ‘We don’t need all know that they are meaningful—something these representatives from all these different they cannot do in many countries in the organisations; we just need a commercial world at the moment. Many countries that operation, run like a board of a company. are signed up to the international accounting There will be no representation from interest standards have no intention of implementing groups and no representation from users of them. The quality of the financial reports and financial reports—nothing at all. That is the the investors that we need to attract to this structure we’re moving to.’ I say: let us put it country will depend on the choices that un- out, let us shine the light on it and let us at fortunately are not being made by the Austra- least have a transparent process so that peo- lian Accounting Standards Board, with all ple can make an informed decision. The FRC the qualities of the people that are on it; they have got a couple of tough decisions to make will be determined by a group of people who in the next few months about where they go really have no serious qualifications and now, what they do about IAS 39 and what have had no serious discussion. they do about the undermining of the rest of I repeat again to Senator Ian Campbell: the international standards. read the evidence, read the testimony. I know David Tweedie will be shattered today, he has many other responsibilities now, but following that vote and that veto in the he is behind the times. The testimony of the European Commission, because he has Chair of the Australian Accounting Standards fought hard to get decent standards interna- Board, then a participant on the FRC and tionally and he has been done over by the now the chair, confessed—agreed—that recalcitrance of vested business interests in there was no process, there was no consulta- Europe and by the French. That is what has tion and there was no paperwork. There was happened. Let us make sure that Australia no paperwork at the FRC that was circulated can defend itself from bad outcomes interna- more than 24 hours beforehand, which meant tionally. Let us make sure we maintain some nobody read it. Nobody had time to actually integrity and transparency in our processes.

CHAMBER Thursday, 17 June 2004 SENATE 24065

Let us try to support those standard-setters in favour of Australia’s adoption of interna- on the Australian Accounting Standards tional accounting standards. Board. Give them some power. Senator Ian Having said that, we have to test the Campbell, I urge you to listen to this. I urge proposition that the debate and the votes go- you to understand that, if we just make the ing on in Europe right now shake the founda- Australian Accounting Standards Board a tions of Australia’s commitment and in- rubber stamp, no-one will bother to serve on volvement. I am not certain as to that. I will it. That intellectual grunt that we have devel- qualify my remarks by saying that, of course, oped over many, many years will be frittered I am no expert in the detail of accounting away because everyone knows there is no standards. I very much doubt that any of us point in being on the board if we have to would make that claim. There are about 40 adopt what we are told to adopt internation- international accounting standards, and there ally. So let us shine some light and restore are two that are fundamentally at issue. The some independence and integrity to the Aus- one that Senator Conroy has referred to is tralian Accounting Standards Board. It is international accounting standard 39, which faced with challenging times. It deserves our very much attaches to the way in which fi- support. It does not deserve to be gagged and nancial instruments and assets are dealt with. directed by people who are not competent to As with all accounting standards, that has be giving it orders. interrelationships with other accounting Senator MURRAY (Western Australia) standards. (12.14 p.m.)—We are dealing with opposi- We should also say how many countries tion amendments (1) to (11), (13) and (15) are affected by this. In the European Union, on sheet 4216 revised and their opposition to the intention is that 25 countries should schedule 1, but, in addressing these, we are adopt the standards. As I understand it, 38 quite properly addressing the philosophy, the out of the 40 standards are home and hosed background and the history that attach to the with those 25 countries. That is pretty good. FRC and AUASB institutions. It is proper to If we join with 25 out of the 200 countries in put into the context of this the question of the the world to adopt 38 out of 40 standards—at IASB and the question of the harmonisa- least that many, and perhaps the other two— tion—in fact, the adoption—of international that is a tremendous advance. Twenty-five accounting standards. Strangely, as often out of 200 is not a real reflection of the per- transpires in these debates, both sides are in centage; the percentage is actually far fact in furious agreement. There are un- greater, because we are mostly talking about doubtedly immense benefits from adopting leading first-world OECD countries. Austra- common international accounting standards. lia itself is one country out of 200, or 0.5 per We are a huge trading country; we have cent, but our place in the world economy is many, many cross-border relationships of an over one per cent. That is the statistical story. economic and business nature. It is abso- I am alert to an analogy which may be lutely essential for the future growth, produc- false but I will describe it anyway. To me it is tivity, efficiency and effectiveness of our a bit like the common European currency, business community that we move to com- the euro. Three of the 25 countries in the monality, to a common language of account- EU—the others are coming on now—have ing standards world wide. Therefore I put on decided not to adopt the common euro cur- record again—as I have time and time rency. That does not stop the European Un- again—that the Democrats and I are strongly

CHAMBER 24066 SENATE Thursday, 17 June 2004 ion working effectively, adopting common that, in the introduction of these new institu- processes and so on. I can see a possibility tions and new structures, the government that they may seek to resolve this issue— was entitled to trial them and get them under certainly in the short to medium term—by a way. Six years later, we have the evidence as number of countries adopting standard 39 to how they have operated, an understanding and others not doing so. When we are talking of the strengths and the weaknesses, and a about the number of countries that are at- background as to how well people have per- tached to international accounting standards, formed their duties and to what extent they we should also be aware that many more have been able to fulfil the original policy hang off the back of them and pretty well run objectives of the government. What emerges their own state systems with reference to is that it is an entirely good idea to retain the them. That is largely because most countries institutions but that they do need fundamen- do not have the depth or range of people to tal adjustment to strengthen them. develop their own standards. There is a de You will note from the Parliamentary Joint facto process emerging. Committee on Corporations and Financial For anyone following this debate, I must Services’ reports on CLERP 9 that the com- say that I think that Senator Conroy is right mittee took evidence and unanimously re- to raise an alarm, but I do not yet see the fire solved that there needs to be a fundamental bursting over the mountain range. I think we change in the services and the financing of have to be aware that there is smoke, take those institutions. Firstly, it is undesirable to proper precautions and be very alert to how have part-time Treasury officials seconded to Australia reacts. The situation should not these bodies; you need permanent, independ- shake our commitment to, our belief in and ent, career based staffing. Secondly, you our preparedness to compromise and sacri- need very secure funding. Thirdly, you need fice somewhat to achieve international com- a separation of powers in which the AUASB monality which will have immense benefits has their role and the FRC has their role, and in other respects. Senator Conroy is exactly the two must respect each other. The opinion right that what we are seeing here is the most of the committee is that the FRC needs to be formidable alliance of vested interests who moved from a governing body to an over- are really aggressively trying to undermine sight body—a watchdog and an assessment areas of change which will affect their bal- operation. I think that is a very good role for ance sheets, their share prices and how much it to play. I am not suggesting that the institu- money they take home in their pockets. We tion and the relationships should be undone, must be aware of those motives. That is eas- but we need to introduce some greater integ- ily understood. rity in the relationship. I turn to the question of the FRC’s rela- Senator Conroy’s amendments on behalf tionship with the AUASB. Senator Conroy of Labor, in fact, accord with the thrust of the will take some pleasure in recalling his committee’s unanimous views. I am a mem- words in the debate in 1998 and his concern ber of that committee. I heard the evidence, that the relationship might impede independ- read the submissions and sat through the ence and the proper execution of the duties hearings. I have been a participant in these of those respective bodies. At that time, hav- debates for many a long year and I would be ing carefully listened to the government’s surprised if the government, once it has con- proposition and the opposition’s proposi- sidered the committee’s report more fully, tion—both well informed—I took the view did not end up agreeing with the committee.

CHAMBER Thursday, 17 June 2004 SENATE 24067

It would be a very strange thing to reject an (2) An application under this section: approach which does not undercut or bring (a) must be lodged with ASIC; and undone the government’s initiative in 1998 (b) must contain such information as is and what it was trying to achieve. This ap- prescribed in the regulations; and proach does not threaten or criticise the (c) must be in the prescribed form. achievements that have occurred through (21) Schedule 1, item 54, page 31 (lines 10 to those institutions but, in fact, strengthens the 13), omit the note. policy and the program. (22) Schedule 1, item 56, page 32 (lines 15 to For those reasons, which are soundly 22), omit subsection (1), substitute: based and were not formulated on the run, (1) A person who is a registered company these amendments deserve to be supported. auditor must, within one month after The Democrats will support them. When the end of: they come back from the House, we hope (a) the period of 12 months beginning that the government will not have rejected on the day on which the person’s them. If it has any adjustments, obviously we registration begins; and will consider those on their merits. But the (b) each subsequent period of 12 heart of the matter is that we want the gov- months; ernment to accept that the committee was lodge with ASIC a statement in right—the committee’s consultation and respect of that period. judgment have been right, and these amend- (1A) A statement under subsection (1): ments will advance and strengthen the insti- (a) must contain such information as is tutions concerned without eroding the gov- prescribed in the regulations; and ernment initiatives and policy objectives as originally constructed. They were to advance (b) must be in the prescribed form. Australia’s decision-making ability in terms I think these amendments will unanimously of Australian accounting standards and to be agreed to, so I will not go into detail. achieve a strong position in pushing through They basically go to the requirements about a common approach to international account- lodgment of forms for auditor qualification ing standards so that we can talk a common issues, approval of auditing competency language in our financial statements in terms standards by ASIC and annual statements by of the raising and the cost of capital and in auditors. the way in which matters are reported inter- Question agreed to. nationally to shareholders who have cross- Senator IAN CAMPBELL (Western border relationships. Australia—Minister for Local Government, Question agreed to. Territories and Roads) (12.28 p.m.)—by Senator IAN CAMPBELL (Western leave—I move government amendments (24) Australia—Minister for Local Government, to (76) on sheet PK247: Territories and Roads) (12.27 p.m.)—by (24) Schedule 1, item 73, page 36 (line 22), omit leave—I move government amendments (20) “audit”, substitute “auditor”. to (22) on sheet PK247: (25) Schedule 1, page 43 (after line 8), after item (20) Schedule 1, page 30 (after line 5), after item 90, insert: 50, insert: 90A After subsection 300(2) 50A Subsection 1279(2) Insert: Repeal the subsection, substitute:

CHAMBER 24068 SENATE Thursday, 17 June 2004

(2A) If subsection (2) is relied on to not (ii) if consolidated financial state- include in the directors’ report for a ments are required—any entity financial year details that would that is part of the consolidated otherwise be required to be included in entity; that report under paragraph (11B)(a) or paid, or is liable to pay, for each of (11C)(b), that report must specify , in those non-audit services. the section headed “Non-audit (34) Schedule 1, item 91, page 44 (lines 3 to 7), services”, where those details may be omit paragraph (11D)(a), substitute: found in the company’s financial report for that financial year. (a) advice provided by the listed company’s audit committee if the (26) Schedule 1, item 91, page 43 (line 18), omit company has an audit committee; or “amount paid”, substitute “amounts paid or payable”. (35) Schedule 1, item 95, page 49 (line 8), after “company”, insert “or registered scheme”. (27) Schedule 1, item 91, page 43 (line 19), omit “by the auditor during the year”, substitute “, (36) Schedule 1, item 95, page 56 (after line 17), during the year, by the auditor (or by another after subsection 324CA(1), insert: person or firm on the auditor’s behalf)”. Individual auditor or audit company to (28) Schedule 1, item 91, page 43 (line 21), omit notify ASIC “by the auditor during the year”, substitute “, (1A) An individual auditor or audit company during the year, by the auditor (or by another contravenes this subsection if: person or firm on the auditor’s behalf)”. (a) the individual auditor or audit (29) Schedule 1, item 91, page 43 (lines 25 and company is the auditor of an audited 26), omit “by the auditor during the year”, body; and substitute “, during the year, by the auditor (b) a conflict of interest situation exists (or by another person or firm on the in relation to the audited body while auditor’s behalf)”. the individual auditor or audit (30) Schedule 1, item 91, page 43 (line 29), at the company is the auditor of the end of subsection (11B), add “If audited body; and consolidated financial statements are (c) on a particular day (the start day): required, the details and statements must relate to amounts paid or payable to the (i) in the case of an individual auditor by, and non-audit services provided auditor—the individual auditor to, any entity (including the company, becomes aware that the conflict registered scheme or disclosing entity) that of interest situation exists; or is part of the consolidated entity.”. (ii) in the case of an audit (31) Schedule 1, item 91, page 43 (line 30), after company—the audit company “paid”, insert “or payable”. becomes aware that the conflict of interest situation exists; and (32) Schedule 1, item 91, page 43 (lines 31 and 32), omit “by the auditor during the year”, (d) at the end of the period of 7 days substitute “, during the year, by the auditor from the start day: (or by another person or firm on the (i) the conflict of interest situation auditor’s behalf)”. remains in existence; and (33) Schedule 1, item 91, page 43 (lines 34 to (ii) the individual auditor or audit 35), omit paragraph (11C)(b), substitute: company has not informed ASIC (b) the dollar amount that: in writing that the conflict of interest situation exists. (i) the listed company; or Note 1: For conflict of interest situation, see section 324CD.

CHAMBER Thursday, 17 June 2004 SENATE 24069

Note 2: If the audited body is a public Contravention by member of audit firm company or a registered scheme (39) Schedule 1, item 95, page 58 (after line 12), and the notice under this after subsection 324CB(1), insert: subsection is not followed up by Member of audit firm to notify ASIC a notice under subsection 327B(2A) or (2C) (public (1A) A person (the defendant) contravenes company) or 331AAA(2A) or this subsection if: (2C) (registered scheme) within (a) an audit firm is the auditor of an the period of 21 days from the audited body; and day the notice under this (b) a conflict of interest situation exists subsection is given, the audit in relation to the audited body while appointment will be terminated the audit firm is the auditor of the at the end of that period. audited body; and (1B) A person is not excused from informing (c) the defendant is a member of the ASIC under subsection (1A) that a audit firm at a time when the conflict of interest situation exists on conflict of interest situation exists; the ground that the information might and tend to incriminate the person or expose the person to a penalty. (d) on a particular day (the start day), the defendant becomes aware of the (1C) However, if the person is a natural circumstances referred to in person: paragraphs (a) and (b); and (a) the information; and (e) at the end of the period of 7 days (b) the giving of the information; from the start day: are not admissible in evidence (i) the conflict of interest situation against the person in a criminal remains in existence; and proceeding, or any other proceeding (ii) ASIC has not been informed in for the recovery of a penalty, other writing by the defendant, by than proceedings for an offence another member of the audit firm based on the information given being or by someone else on behalf of false or misleading. the audit firm that the conflict of (1D) If the individual auditor or audit interest situation exists. company gives ASIC a notice under Note 1: For conflict of interest situation, paragraph (1A)(d), ASIC must, as soon see section 324CD. as practicable after the notice has been received, give a copy of the notice to Note 2: If the audited body is a public the audited body. company or a registered scheme and the notice under this Conflict of interest situation of which subsection is not followed up by a individual auditor or audit company is notice under subsection 327B(2B) not aware (public company) or (37) Schedule 1, item 95, page 57 (after line 27), 331AAA(2B) (registered scheme) before subsection 324CA(6), insert: within the period of 21 days from Relationship between obligations under the day the notice under this this section and other obligations subsection is given, the audit appointment will be terminated at (38) Schedule 1, item 95, page 57 (after line 35), the end of that period. before subsection 324CB(1), insert: (1B) A person is not excused from informing ASIC under subsection (1A) that a

CHAMBER 24070 SENATE Thursday, 17 June 2004

conflict of interest situation exists on (b) a conflict of interest situation exists the ground that the information might in relation to the audited body while tend to incriminate the person or the audit company is the auditor of expose the person to a penalty. the audited body; and (1C) However: (c) the defendant is a director of the (a) the information; and audit company at a time when the conflict of interest situation exists; (b) the giving of the information; and are not admissible in evidence (d) on a particular day (the start day), against the person in a criminal the defendant becomes aware of the proceeding, or any other proceeding circumstances referred to in for the recovery of a penalty, other paragraphs (a) and (b); and than proceedings for an offence based on the information given being (e) at the end of the period of 7 days false or misleading. from the start day: (1D) If ASIC is given a notice under (i) the conflict of interest situation paragraph (1A)(e), ASIC must, as soon remains in existence; and as practicable after the notice is (ii) ASIC has not been informed in received, give a copy of the notice to writing by the defendant, by the audited body. another director of the audit Conflict of interest situation of which company or by the audit another member of audit firm is aware company that the conflict of interest situation exists. (40) Schedule 1, item 95, page 58 (after line 30), before subsection 324CB(4), insert: Note 1: For conflict of interest situation, see section 324CD. Conflict of interest situation of which members are not aware Note 2: If the audited body is a public company or a registered scheme (41) Schedule 1, item 95, page 59 (after line 13), and the notice under this before subsection 324CB(6), insert: subsection is not followed up by a Defence notice under subsection 327B(2C) (42) Schedule 1, item 95, page 59 (after line 23), (public company) or before subsection 324CB(7), insert: 331AAA(2C) (registered scheme) Relationship between obligations under within the period of 21 days from this section and other obligations the day the notice under this subsection is given, the audit (43) Schedule 1, item 95, page 59 (after line 31), appointment will be terminated at before subsection 324CC(1), insert: the end of that period. Contravention by director of audit (1B) A person is not excused from informing company ASIC under subsection (1A) that a (44) Schedule 1, item 95, page 60 (after line 11), conflict of interest situation exists on after subsection 324CC(1), insert: the ground that the information might Director of audit company to notify tend to incriminate the person or ASIC expose the person to a penalty. (1A) A person (the defendant) contravenes (1C) However, if the person is a natural this subsection if: person: (a) an audit company is the auditor of (a) the information; and an audited body; and (b) the giving of the information;

CHAMBER Thursday, 17 June 2004 SENATE 24071

are not admissible in evidence (i) those circumstances remain in against the person in a criminal existence; and proceeding, or any other proceeding (ii) the individual auditor has not for the recovery of a penalty, other informed ASIC in writing of than proceedings for an offence those circumstances. based on the information given being Note: If the audited body is a public false or misleading. company or a registered scheme (1D) If ASIC is given a notice under and the notice under this paragraph (1A)(e), ASIC must, as soon subsection is not followed up by a as practicable after the notice is notice under subsection 327B(2A) received, give a copy of the notice to (public company) or the audited body. 331AAA(2A) (registered scheme) Conflict of interest situation of which within the period of 21 days from another director of audit company the day the notice under this aware subsection is given, the audit (45) Schedule 1, item 95, page 60 (after line 31), appointment will be terminated at before subsection 324CC(4), insert: the end of that period. Conflict of interest situation of which (1B) A person is not excused from informing directors of audit company not aware ASIC under subsection (1A) that the circumstances referred to in paragraph (46) Schedule 1, item 95, page 61 (after line 15), (1A)(b) exist on the ground that the before subsection 324CC(6), insert: information might tend to incriminate Defence the person or expose the person to a (47) Schedule 1, item 95, page 61 (after line 25), penalty. before subsection 324CC(7), insert: (1C) However: Relationship between obligations under (a) the information; and this section and other obligations (b) the giving of the information; (48) Schedule 1, item 95, page 63 (after line 18), are not admissible in evidence after subsection 324CE(1), insert: against the person in a criminal Individual auditor to notify ASIC proceeding, or any other proceeding (1A) An individual auditor contravenes this for the recovery of a penalty, other subsection if: than proceedings for an offence (a) the individual auditor is the auditor based on the information given being of an audited body; and false or misleading. (b) a relevant item of the table in (1D) If the individual auditor gives ASIC a subsection 324CH(1) applies to a notice under paragraph (1A)(d), ASIC person or entity covered by must, as soon as practicable after the subsection (5) of this section while notice has been received, give a copy the individual auditor is the auditor of the notice to the audited body. of the audited body; and Strict liability contravention of specific (c) on a particular day (the start day), independence requirements by the individual auditor becomes individual auditor aware of the circumstances referred (49) Schedule 1, item 95, page 64 (after line 19), to in paragraph (b); and before subsection 324CE(5), insert: (d) at the end of the period of 7 days People and entities covered from the start day: (50) Schedule 1, item 95, page 64 (table item 2, cell at column 2), omit the cell, substitute:

CHAMBER 24072 SENATE Thursday, 17 June 2004

a service company or trust acting for, (b) a relevant item of the table in or on behalf of, the firm, or another subsection 324CH(1) applies to a entity performing a similar function person or entity covered by subsection (5) of this section while (51) Schedule 1, item 95, page 65 (table item 7, the audit firm is the auditor of the cell at column 2), omit the cell, substitute: audited body; and an entity that the auditor (or a service (c) the defendant is a member of the company or trust acting for, or on audit firm at a time when the behalf of, the individual auditor, or circumstances referred to in another entity performing a similar paragraph (b) exist; and function) controls (d) on a particular day (the start day), (52) Schedule 1, item 95, page 65 (table item 8, the defendant becomes aware of the cell at column 2), omit the cell, substitute: circumstances referred to in a body corporate in which the auditor paragraphs (a) and (b); and (or a service company or trust acting (e) at the end of the period of 7 days for, or on behalf of, the individual from the start day: auditor, or another entity performing a similar function) has a substantial (i) the circumstances referred to in holding paragraph (b) remain in existence; and (53) Schedule 1, item 95, page 66 (lines 26 to (ii) ASIC has not been informed in 29), omit all the words from and including writing of those circumstances by “by the auditor” to the end of paragraph the defendant, by another 324CE(7)(d), substitute: member of the audit firm or by by the auditor, other than: someone else on behalf of the (i) an arrangement providing for audit firm. regular payments of a fixed pre- Note: If the audited body is a public determined dollar amount which company or a registered scheme is not dependent, directly or and the notice under this indirectly, on the revenues, subsection is not followed up by a profits or earnings of the auditor; notice under subsection 327B(2B) or (public company) or (ii) an arrangement providing for 331AAA(2B) (registered scheme) regular payments of a dollar within the period of 21 days from amount where the method of the day the notice under this calculating the dollar amount is subsection is given, the audit fixed and is not dependent, appointment will be terminated at directly or indirectly, on the the end of that period. revenues, profits or earnings of (1B) A person is not excused from informing the auditor; and ASIC under subsection (1A) that the (54) Schedule 1, item 95, page 67 (after line 19), circumstances referred to in paragraph after subsection 324CF(1), insert: (1A)(b) exist on the ground that the Member of audit firm to notify ASIC information might tend to incriminate the person or expose the person to a (1A) A person (the defendant) contravenes penalty. this subsection if: (1C) However: (a) an audit firm is the auditor of an audited body; and (a) the information; and (b) the giving of the information;

CHAMBER Thursday, 17 June 2004 SENATE 24073

are not admissible in evidence indirectly, on the revenues, against the person in a criminal profits or earnings of the firm; or proceeding, or any other proceeding (ii) an arrangement providing for for the recovery of a penalty, other regular payments of a dollar than proceedings for an offence amount where the method of based on the information given being calculating the dollar amount is false or misleading. fixed and is not dependent, (1D) If ASIC is given a notice under directly or indirectly, on the paragraph (1A)(e), ASIC must, as soon revenues, profits or earnings of as practicable after the notice is the firm; and received, give a copy of the notice to (60) Schedule 1, item 95, page 71 (after line 19), the audited body. after subsection 324CG(1), insert: Contravention of independence Audit company to notify ASIC requirements by members of audit firm (1A) An audit company contravenes this (55) Schedule 1, item 95, page 68 (after line 6), subsection if: before subsection 324CF(5), insert: (a) the audit company is the auditor of People and entities covered an audited body; and (56) Schedule 1, item 95, page 68 (table item 2, (b) a relevant item of the table in cell at column 2), omit the cell, substitute: subsection 324CH(1) applies to a a service company or trust acting person or entity covered by for, or on behalf of, the firm, or subsection (9) of this section while another entity performing a similar the audit company is the auditor of function the audited body; and (57) Schedule 1, item 95, page 69 (table item 8, (c) on a particular day (the start day), cell at column 2), omit the cell, substitute: the audit company becomes aware An entity that the firm (or a service of the circumstances referred to in company or trust acting for, or on paragraph (b); and behalf of, the firm, or another entity (d) at the end of the period of 7 days performing a similar function) from the start day: controls (i) those circumstances remain in (58) Schedule 1, item 95, page 69 (table item 9, existence; and cell at column 2), omit the cell, substitute: (ii) the audit company has not a body corporate in which the firm informed ASIC in writing of (or a service company or trust acting those circumstances. for, or on behalf of, the firm, or another entity performing a similar Note: If the audited body is a public function) has a substantial holding company or a registered scheme and the notice under this (59) Schedule 1, item 95, page 70 (lines 23 to subsection is not followed up by a 26), omit all the words from and including notice under subsection 327B(2C) “by the firm” to the end of paragraph (public company) or 324CF(7)(d), substitute: 331AAA(2C) (registered scheme) by the firm, other than: within the period of 21 days from (i) an arrangement providing for the day the notice under this regular payments of a fixed pre- subsection is given, the audit determined dollar amount which appointment will be terminated at is not dependent, directly or the end of that period.

CHAMBER 24074 SENATE Thursday, 17 June 2004

(1B) If the audit company gives ASIC a within the period of 21 days from notice under paragraph (1A)(d), ASIC the day the notice under this must, as soon as practicable after the subsection is given, the audit notice has been received, give a copy appointment will be terminated at of the notice to the audited body. the end of that period. Strict liability contravention of specific (5B) A person is not excused from informing independence requirements by audit ASIC under subsection (5A) that the company circumstances referred to in paragraph (61) Schedule 1, item 95, page 72 (after line 21), (5A)(b) exist on the ground that the after subsection 324CG(5), insert: information might tend to incriminate the person or expose the person to a Director of audit company to notify penalty. ASIC (5C) However, if the person is a natural (5A) A person (the defendant) contravenes person: this subsection if: (a) the information; and (a) an audit company is the auditor of an audited body; and (b) the giving of the information; (b) a relevant item of the table in are not admissible in evidence subsection 324CH(1) applies to a against the person in a criminal person or entity covered by proceeding, or any other proceeding subsection (9) of this section while for the recovery of a penalty, other the audit company is the auditor of than proceedings for an offence the audited body; and based on the information given being false or misleading. (c) the defendant is a director of the audit company at a time when the (5D) If ASIC is given a notice under circumstances referred to in paragraph (5A)(e), ASIC must, as soon paragraph (b) exist; and as practicable after the notice is received, give a copy of the notice to (d) on a particular day (the start day), the audited body. the defendant becomes aware of the circumstances referred to in Strict liability contravention of specific paragraphs (a) and (b); and independence requirements by director of audit company (e) at the end of the period of 7 days from the start day: (62) Schedule 1, item 95, page 73 (table item 2, cell at column 2), omit the cell, substitute: (i) the circumstances referred to in paragraph (b) remain in a service company or trust acting for, existence; and or on behalf of, the audit company, or another entity performing a similar (ii) ASIC has not been informed in function writing of those circumstances by the defendant, by another director (63) Schedule 1, item 95, page 74 (table item 8, of the company or by the audit cell at column 2), omit the cell, substitute: company. An entity that the audit company (or Note: If the audited body is a public a service company or trust acting for, company or a registered scheme or on behalf of, the audit company, or and the notice under this another entity performing a similar subsection is not followed up by a function) controls notice under subsection 327B(2C) (64) Schedule 1, item 95, page 74 (table item 9, (public company) or cell at column 2), omit the cell, substitute: 331AAA(2C) (registered scheme)

CHAMBER Thursday, 17 June 2004 SENATE 24075

a body corporate in which the audit situation has, or those circumstances company (or a service company or have, ceased to exist before the end trust acting for, or on behalf of, the of the period (the remedial period) audit company, or another entity of 21 days from the start day. performing a similar function) has a (2B) An audit firm ceases to be auditor of a substantial holding company under this subsection if: (65) Schedule 1, item 95, page 75 (lines 31 to (a) on a particular day (the start day), 34), omit all the words from and including ASIC is: “audit company” to the end of paragraph (i) informed of a conflict of interest 324CG(11)(d), substitute: situation in relation to the audit company, other than: company under subsection (i) an arrangement providing for 324CB(1A); or regular payments of a fixed pre- (ii) informed of particular determined dollar amount which circumstances in relation to the is not dependent, directly or company under subsection indirectly, on the revenues, 324CF(1A); and profits or earnings of the audit (b) ASIC has not been given a notice on company; or behalf of the audit firm, before the (ii) an arrangement providing for notification day (see subsection regular payments of a dollar (2D)), that that conflict of interest amount where the method of situation has, or those circumstances calculating the dollar amount is have, ceased to exist before the end fixed and is not dependent, of the period (the remedial period) directly or indirectly, on the of 21 days from the start day. revenues, profits or earnings of (2C) An audit company ceases to be auditor the audit company; and of a company under this subsection if: (66) Schedule 1, item 96, page 90 (lines 23 and (a) on a particular day (the start day), 24), omit paragraph 327B(2)(d), substitute: ASIC is: (d) ceases to be auditor under (i) informed of a conflict of interest subsection (2A), (2B) or (2C). situation in relation to the (2A) An individual auditor ceases to be company under subsection auditor of a company under this 324CB(1A) or 321CC(1A); or subsection if: (ii) informed of particular circum- (a) on a particular day (the start day), stances in relation to the the individual auditor: company under subsection (i) informs ASIC of a conflict of 324CF(1A) or 324CG(1A) or interest situation in relation to the (5A); and company under subsection (b) ASIC has not been given a notice on 324CA(1A); or behalf of the audit company, before (ii) informs ASIC of particular the notification day (see subsection circumstances in relation to the (2D)), that that conflict of interest company under subsection situation has, or those circumstances 324CE(1A); and have, ceased to exist before the end (b) the individual auditor does not give of the period (the remedial period) ASIC a notice, before the of 21 days from the start day. notification day (see subsection (2D) The notification day is: (2D)), that that conflict of interest

CHAMBER 24076 SENATE Thursday, 17 June 2004

(a) the last day of the remedial period; (2B) An audit firm ceases to be auditor of a or registered scheme under this subsection (b) such later day as ASIC approves in if: writing (whether before or after the (a) on a particular day (the start day), remedial period ends). ASIC is: (67) Schedule 1, item 96, page 90 (lines 27 to (i) informed of a conflict of interest 30), omit subsection 327B(4)(4), substitute: situation in relation to the scheme (4) If an audit firm ceases to be the auditor under subsection 324CB(1A); or of a company under subsection (2) at a (ii) informed of particular circum- particular time, each member of the stances in relation to the scheme firm who: under subsection 324CF(1A); (a) is taken to have been appointed as and an auditor of the company under (b) ASIC has not been given a notice on subsection 324AB(1) or 324AC(4); behalf of the audit firm, before the and notification day (see subsection (b) is an auditor of the company (2D)), that that conflict of interest immediately before that time; situation has, or those circumstances have, ceased to exist before end of ceases to be an auditor of the the period (the remedial period) of company at that time. 21 days from the start day. (68) Schedule 1, item 100, page 96 (lines 22 and (2C) An audit company ceases to be auditor 23), omit paragraph 331AAA(2)(d), of a registered scheme under this substitute: subsection if: (d) ceases to be auditor under (a) on a particular day (the start day), subsection (2A), (2B) or (2C). ASIC is: (2A) An individual auditor ceases to be (i) informed of a conflict of interest auditor of a registered scheme under situation in relation to the scheme this subsection if: under subsection 324CB(1A) or (a) on a particular day (the start day), 324CC(1A); or the individual auditor: (ii) informed of particular circum- (i) informs ASIC of a conflict of stances in relation to the scheme interest situation in relation to the under subsection 324CF(1A) or scheme under subsection 324CG(1A) or (5A); and 324CA(1A); or (b) ASIC has not been given a notice on (ii) informs ASIC of particular behalf of the audit company, before circumstances in relation to the the notification day (see subsection scheme under subsection (2D)), that that conflict of interest 324CE(1A); and situation has, or those circumstances (b) the individual auditor does not give have, ceased to exist before the end ASIC a notice, before the of the period (the remedial period) notification day (see subsection of 21 days from the start day. (2D)), that that conflict of interest (2D) The notification day is: situation has, or those circumstances (a) the last day of the remedial period; have, ceased to exist before the end or of the period (the remedial period) of 21 days from the start day. (b) such later day as ASIC approves in writing (whether before or after the remedial period ends).

CHAMBER Thursday, 17 June 2004 SENATE 24077

(69) Schedule 1, item 100, page 96 (lines 26 to require any debate. They are basically tech- 29), omit subsection 331AAA(4), substitute: nical amendments relating to auditor ap- (4) If an audit firm ceases to be the auditor pointment, independence and rotation re- of a registered scheme under quirements. subsection (2) at a particular time, each Senator MURRAY (Western Australia) member of the firm who: (12.28 p.m.)—I notice on the running sheet (a) is taken to have been appointed as that we are dealing with amendments (24) to an auditor of the scheme under subsection 324AB(1) or 324AC(4); (76). We have left out amendment (23), and which is fair enough. But the bottom of the running sheet says: (b) is an auditor of the scheme immediately before that time; NB Govt (70) to (76) [sheet PK247] above in conflict with Opp (22) ... ceases to be an auditor of the scheme at that time. I do not know whether Senator Conroy in- (70) Schedule 1, item 111, page 101 (table item tends to address that later or whether he has 116CB, cell at column 2), omit the cell, changed his mind and is going to agree to substitute: amendments (70) to (76). Subsections 324CA(1A) and (2) The TEMPORARY CHAIRMAN (71) Schedule 1, item 111, page 101 (table item (Senator Watson)—The question is that 116CB, cell at column 2), omit the cell, government amendments (24) to (76) be substitute: agreed to. Subsections 324CB(1A), (2) and (4) Question agreed to. (72) Schedule 1, item 111, page 101 (table item The TEMPORARY CHAIRMAN—The 116CF, cell at column 2), omit the cell, question is that item 65 of schedule 1 stand substitute: as printed. Subsections 324CC(1A), (2) and (4) Question negatived. (73) Schedule 1, item 111, page 101 (table item 116DB, cell at column 2), omit the cell, Senator Conroy—I seek advice from substitute: you, Mr Temporary Chairman. Which item Subsections 324CE(1A) and (2) did we just vote on? (74) Schedule 1, item 111, page 101 (table item The TEMPORARY CHAIRMAN— 116EB, cell at column 2), omit the cell, Item 65 of schedule 1. The noes have it. Has substitute: that clarified it? Subsections 324CF(1A) and (2) Senator Conroy—No—which amend- (75) Schedule 1, item 111, page 101 (table item ment was that? 116FB, cell at column 2), omit the cell, The TEMPORARY CHAIRMAN—No. substitute: 23. Subsections 324CG(1A) and (2) Senator Conroy—We oppose that. (76) Schedule 1, item 111, page 101 (table item 116FD, cell at column 2), omit the cell, The TEMPORARY CHAIRMAN— substitute: That will be in accordance with the government’s wishes as well. Subsections 324CG(5A) and (6) Senator Conroy—So we are putting gov- I understand that these amendments will all ernment amendments at the moment? be unanimously agreed to and should not

CHAMBER 24078 SENATE Thursday, 17 June 2004

The TEMPORARY CHAIRMAN— executive directors—is not independent and Correct. that an auditor is not independent if either is Senator Conroy—So the government is subject to the patronage or direction of a voting against its own amendment? dominant shareholder. Senator Ian Campbell—If required, we We have not given a definition of a will come back to it. The noes have it at this ‘dominant shareholder’ because there is no stage, but I am happy to recommit it later. penalty attached to this and because it is a matter of judgment. We see this amendment Senator MURRAY—I assume, therefore, as preventing people passing themselves off that item 65 will be revisited later— as independent when they are not. We say amendment No. 23 on sheet PK247. that if, as we were advised, a dominant The TEMPORARY CHAIRMAN shareholder is present in 52 per cent of ASX (Senator Marshall)—It is government listed companies and dominant shareholders amendment No. 23 on sheet PK247. are present in many of the others, and their Senator MURRAY—That will be revis- vested interest, their selfish interest or their ited? personal interest is able to dominate the The TEMPORARY CHAIRMAN—If board and dominate the audit committee—or, necessary. If there is still some confusion, we indeed, the auditor appointed by the audit will come back to it. committee or by the board—then there is a risk to independence. Senator MURRAY—I move Democrat amendment (1) on sheet 4214 revised: The second part of the amendment says that an auditor is not independent if the audi- (1) Schedule 1, item 73, page 36 (line 23), at the end of the definition of audit indepencence tor provides non-audit services of a kind requirements of this Act, add: prohibited in Australia, the European Union “and includes the following specific or the United States of America. The reason requirements: we have chosen those is that the European Union and the United States of America have (a) an audit committee is not independent and an auditor is not already moved in a different direction from independent if either is subject to Australia. Regardless of decisions made on the patronage or direction of a CLERP 9 today, and I recognise that some dominant shareholder; and amendments will be moved later which deal (b) an auditor is not independent if the with non-audit services, all of the auditors auditor provides non-audit services who audit ASX listed companies—certainly of a kind prohibited in Australia, the the top 300 and possibly the top 500—do European Union, or the United have cross-border relationships into the States of America.” European Union or the United States of That is what you would describe as a princi- America, and we need to find some way in ples based amendment. It does not seek to which those conflicts are resolved. We al- interfere. Auditors continue to audit with ready know that one of our big four has had whomever they wish. It just seeks to ensure the American SEC visiting Australia to deal that they do not misrepresent themselves as with this very issue. Throughout the process being independent when they are not. The of the committee hearing, the committee dis- amendment says that an audit committee— cussion and so on, I found people assuming which, generally speaking, in my experience independence, claiming independence, when and understanding, is composed of non-

CHAMBER Thursday, 17 June 2004 SENATE 24079 under no circumstances was full independ- enhancing the audit independence require- ence apparent. ments and the law surrounding those. If you In my supplementary remarks to the sec- look at the history of CLERP 9, you will see ond part of the committee’s report on this that it was very much founded in the Ramsay legislation, I dealt at length with the inde- report. Probably my first job when I came pendence issue. I would commend those re- back into the portfolio after a three-year sab- marks to all interested observers because I batical in communications was to address the tried to address the really fundamental un- Ramsay report, which was in my in-tray. I derpinnings which should lie behind any is- determined that rather than just respond to sue of independence. I made reference to that we would broaden the policy reach, cre- paragraphs 1.23 to 1.30, at pages 6 and 7, of ate CLERP 9 and look at accountability, ac- the Joint Committee of Public Accounts and counting oversight and a whole range of Audit report 391 in my speech on the second other things. This is the core business of reading yesterday. I will repeat the JCPAA CLERP 9. We are bringing in strict new pro- remarks today: visions in relation to auditor independence requirements. ... the Committee has explored a number of mechanisms to enhance independence. However, The amendment Senator Murray has a core set of mechanisms and criteria in each of moved is problematic in that defining ‘pa- the following areas, are common to enhancing the tronage’ and ‘dominant shareholder’ is diffi- independence of each group: cult. The dictionary meaning of patronage • appointment; includes ‘the power to control appointments • security of tenure; to office’. Would appointment of the audit • termination; and committee by the board of directors where the composition of the board is controlled by • remuneration. one or more major shareholders—which is If those are not addressed in a way which quite often the case, as Senator Murray guarantees independence, then an auditor— says—fall within the meaning of patronage or a director, I might say—is not independ- of a dominant shareholder? In that case, the ent. If directors are subject to the patronage proposed amendment would spell trouble for or direction of a dominant shareholder, they the appointment of audit committees by the cannot claim to be independent. I have de- boards of many of Australia’s companies. Do vised this as a method of establishing in law the words ‘patronage’ and ‘power’, for ex- a principle: it is not a matter of establishing ample, cover indirect power held by a major when you are independent; it is determining shareholder over the board of a company? I when you are not independent. For those suspect Senator Murray would say yes. We reasons I think this would be a useful addi- have approached the same difficulty with the tion to the law. No penalties are attached, but specific legislative requirement of making a just do not start describing yourself as inde- declaration of auditor independence under pendent when you are not. section 307C, where the auditor must declare Senator IAN CAMPBELL (Western that there have been no contraventions of the Australia—Minister for Local Government, auditor independence requirements of this Territories and Roads) (12.39 p.m.)—Quite act in relation to the audit or the review. clearly Senator Murray’s amendment is If an auditor were to make that required aimed at dealing with the very problem that declaration under the new law and that decla- is dealt with at the core of this bill—that is, ration were false, then that auditor would be

CHAMBER 24080 SENATE Thursday, 17 June 2004 in breach of section 1308(2) of the act which tween the FRC, ASIC and the PCAOB and attracts a penalty of $11,000. We have said the SEC in the US, our system will deliver that saying you are independent when you the outcome that Senator Murray wants. know you are not is a breach of the law. Fur- Senator CONROY (Victoria) (12.45 ther than that, the bill is going to add a re- p.m.)—While Senator Murray well knows quirement that auditors give a report to the my support of the principles that he is es- regulator—that is, to ASIC, the Australian pousing, at this stage we will not be support- Securities and Investments Commission—in ing him—for some of the reasons that have relation to any matter that, in the opinion of been outlined by Senator Ian Campbell but the auditor, constitutes an attempt to unduly also because we are proposing our own influence, coerce, manipulate or mislead the amendments to try and address these issues. auditor in the conduct of the audit. We are, I But, as always, I welcome the debate and the think, seeking the same end with what some issues that Senator Murray is pushing. I people would regard as fairly harsh—and know that he and I are committed to trying to some may even say draconian—measures to get this issue resolved and working in a way ensure that auditors have not only a very that is suitable for shareholders and the strong requirement to declare and to make a broader investor community. So, reluctantly, declaration but also a positive requirement to we will not be supporting this amendment. report to ASIC where there is that coercion We are hoping to resolve these issues by pur- or manipulation that Senator Murray quite suing our own amendments. properly alludes to. Progress reported. We are strongly opposed to paragraph (b) TAX LAWS AMENDMENT of the amendment, which would basically (MEDICARE LEVY AND MEDICARE require Australian auditors to have reference LEVY SURCHARGE) BILL 2004 to the content of overseas legislation, over which the Australian parliament has abso- Second Reading lutely no control. It raises very strong issues Debate resumed from 15 June, on motion going to sovereignty and the supremacy of by Senator Troeth: this parliament. At the practical level, this That this bill be now read a second time. approach raises very difficult problems. Senator TROETH (Victoria— There are the questions of amendments to Parliamentary Secretary to the Minister for overseas legislation, the granting of relief or Agriculture, Fisheries and Forestry) (12.46 exemptions under overseas legislation and p.m.)—The Tax Laws Amendment (Medi- different definitions in each of the jurisdic- care Levy and Medicare Levy Surcharge) tions. We have worked very closely with the Bill 2004 will increase the Medicare levy major jurisdictions on these issues. It is ob- low-income thresholds for individuals and viously very important for Australia’s entities families in line with increases in the con- that report in the US, for example, that we sumer price index. The low-income threshold are given some form of accreditation under in the Medicare levy surcharge provisions the PCAOB’s processes. We have ap- will similarly be increased. These charges proached the issue, for example, of non-audit will ensure that low-income individuals and services in a way that is different from the families will continue not to have to pay the way the US does but in a way that is re- Medicare levy or surcharge. I commend the garded in the US as very robust. I am very bill to the Senate. confident that, through the cooperation be-

CHAMBER Thursday, 17 June 2004 SENATE 24081

Question agreed to. Farmers are currently required to arrange a Bill read a second time. financial assessment of their farm businesses within a three-month period. Under the new Third Reading system, they must undertake the financial Bill passed through its remaining stages assessment of their farm businesses and de- without amendment or debate. velop an activity plan before their income FARM HOUSEHOLD SUPPORT support can commence. An approved finan- AMENDMENT BILL 2004 cial adviser must now assess the farmer’s Second Reading prospects of getting additional finance. Debate resumed from 15 June, on motion These changes also provide for this as- by Senator Troeth: sessment process to be varied for people in That this bill be now read a second time. severe financial hardship. To qualify for this provision, the liquid assets of a person and Senator O’BRIEN (Tasmania) (12.47 their partner at the time of the application p.m.)—The opposition will be supporting the must not be greater than the total amount of passage of the Farm Household Support Newstart allowance that would have been Amendment Bill 2004. The purpose of the payable in the immediately preceding six bill is to extend the government’s Farm Help weeks. Hardship provision recipients will be program. The bill extends the program to provided with income support for a period of 30 June 2008. The bill also proposes a num- up to three months while they undertake their ber of amendments that will tighten the ad- financial assessment and develop their activ- ministration of the Farm Help program. ity plan. Income support will cease if they These changes to the administration of the have not done this within the three-month program will shift its emphasis from welfare period. The recipient will then be assessed in support to structural adjustment. order to qualify for the remainder of their The Farm Household Support Amendment income support. Bill 2004 follows the announcement con- The proposed changes will also enable retained in this year’s budget that the program views to be conducted of re-establishment would be extended. The program provides up grant recipients to determine whether they to 12 months income support at the Newstart are complying with their undertakings not to allowance rate, a grant for professional ad- re-enter farming within a five-year period. vice to assist recipients in making decisions There is also a provision to terminate Farm about their future in farming and funding for Help income support if a person or their re-establishment grants to assist people who partner is in receipt of an exceptional cir- have no option but to leave farming. The bill cumstances relief payment. The government also introduces a number of administrative has advised us that this clause is designed to changes to the program that flow from a re- remove the possibility of a person receiving view of its performance, and a report from Farm Help income support and the excep- the Australian National Audit Office in 2003. tional circumstances relief payment at the New requirements for income support and same time. The re-establishment grant will re-establishment grants mean that a person also be increased to $50,000, up from the will have to undertake financial advice and current $45,000. Whilst this is not a magnifi- develop their activity plan prior to receiving cent increase, Labor supports these amend- income support, except in cases of hardship ments to the program. prior to receiving a re-establishment grant.

CHAMBER 24082 SENATE Thursday, 17 June 2004

Senator STEPHENS (New South Wales) and emphasises that these extend far beyond (12.50 p.m.)—I, too, rise to speak briefly to the farm gate. As part of their research into the Farm Household Support Amendment the New South Wales communities of Bill 2004. Senator O’Brien has outlined the Bourke, Condobolin and Deniliquin, mem- purposes of the bill and the main issues. I bers of farm families, small business owners, draw the attention of colleagues to the im- service providers and other key members portance of this bill in supporting rural and were interviewed. Focus groups were also regional communities and highlight the fact conducted. These consultations revealed the that we support the package because it does significant stress that is being caused by this help people to make crucial changes to their one in 100 year drought. We know there have situation. The important changes to the bill been many economic analyses of drought include the access to legal and business ad- impacts. But what is so important about this vice and up to 12-months income support for report is its groundbreaking findings that these families. That will provide some res- social impacts of the drought extend, as I pite from the terrible pressures that are cur- say, far beyond the farm gate. They include rently being experienced by those families. things like the serious erosion of income for Once again, I raise the issue of drought, farms and small businesses in regional com- drought affected farmers and farm communi- munities, an extraordinary increase in rural ties. This bill is part of the government’s poverty, increasing workloads—both on and AAA package. It is an important suite of off farms—the need to seek alternative in- measures to support families and farms cur- come, pressures on health and welfare ser- rently in drought situations. I do not know vices, lack of access to services in regional whether you are aware, Mr Acting Deputy communities and declining educational ac- President, but we still have 80 per cent of cess. There are very specific issues for dif- New South Wales in drought. That is often ferent groups of people, including young forgotten by people on the east coast, who people and ageing people in those communi- are experiencing great showers at the mo- ties. ment. We have a very desperate situation in But what comes across loud and clear in New South Wales for those families. Drought the findings of the report is the increase in has taken an extraordinary toll on the emo- stress, depression and isolation that people tions and health of farm families. The incor- are feeling. Many farming families are poration in the package of funding for rural strained to near breaking point. In each in- financial counsellors will address some of terview the emotional impacts of the drought the issues that farming families are experi- were clearly evident. They all noted the de- encing. Counsellors have played an extraor- moralising impact on themselves or their dinary role in easing the hardship of those families and their communities resulting families who are experiencing such an ex- from the consequences of the drought. The tended drought period. men interviewed talked about their links to I have spoken previously of the report the land, the stock and the distress caused by produced earlier this year by Professor Mar- watching both the land and their stock suffer. garet Alston and Jenny Kent from the Centre The women interviewed talked about the for Rural Social Research at Charles Sturt emotional impacts of having no income—the University. They released their study into the struggle to support their families and to keep social impacts of drought, and their report their children in school and the sheer energy- highlights the often forgotten social impacts sapping efforts associated with their roles.

CHAMBER Thursday, 17 June 2004 SENATE 24083

Children were also interviewed—some as for their services. A normal three-month pe- young as nine and 10—and they provided riod for a full-time counsellor would usually extraordinary insights into the pressures on include 35 clients. In the three months prior them to perform as little adults, taking on the to the researcher’s visit, the counsellor had in responsibility of making up for the lack of fact seen 135 clients. The demand is high hands on the farm. Many children found that and the pressure is intense. These people are their education was suffering because their much needed and valued members of farm- work on the farms interfered with their ing communities. One farmer interviewed, homework and their concentration at school. said: You can see that these people are living un- I’ve known— der enormous strain. I would commend any the rural counsellor— measure that provides them with some spe- cialist legal and business information to help for a long time. But you can come down here when you are a bit depressed, come down and them get back on track with their farm or, if have a couple of beers with and a yack. You al- necessary, to move on to another, hopefully, ways go home sort of sparked up again. And she’s better life. as good as a counsellor and a neighbour and eve- I ask that the government also consider rything else. extending rural financial counselling services The rural financial counsellors provide help to incorporate access to social services as with form filling and with applications for recommended in Professor Alston’s report. assistance. They do home visits and help run The increased incidence of depression, stress the farm family gatherings. It has been and, very sadly, suicide rates among farmers feared, particularly by the Condobolin com- needs to be addressed immediately. The re- munity that, when the drought finally breaks, port, when dealing specifically with rural it will see the loss of these positions, despite financial counselling services, states: the need felt in the community to continue The Rural Financial Counselling services are funding them through a recovery period. appropriate and accessible for financial counsel- Farming people need to be reassured that ling but are stretched. These workers also find they will not be abandoned the moment the themselves called on for social and emotional government declares that the drought is over. counselling, tasks for which they are inadequately trained. Rural Financial Counselling services I have been disappointed to hear that the have proved to be excellent rural service models government has not really valued the vital and should be funded for ongoing service provi- work of the Rural Financial Counselling sion. However there is an urgent need to expand Service. I have received numerous letters and these services with social work services. phone calls from this service prior to the Rural financial counselling services are in- budget, desperately seeking some assurance credibly important to communities most af- that funding for the program would be con- fected by drought. The process to apply for tinued. But, in fact, the rural counsellors the available government support is very were left in suspense about whether their complicated, and most people interviewed funding would continue and whether they did not feel capable of applying without the would have jobs until a few weeks before assistance of their local counsellors. During their contracts were to end. I think this the time of the research for this report the showed great insensitivity to what is really Deniliquin counselling service, for example, happening in rural communities. had seen a massive increase in the demand

CHAMBER 24084 SENATE Thursday, 17 June 2004

So the government actually waited until while they take action to improve their long- the May budget to announce the continuation term financial situation by improving the of the program. I commend the continuation financial performance of their farm enter- of the program; it is very important. We had prise, to find alternative sources of income or had a series of pre-budget announcements, to re-establish themselves outside farming. and this should have been one of them—$5 This object encourages a continuous proc- million to fund 85 services supporting ess of considering options and decision mak- around 9,000 families would surely have ing. It gives farm families the best opportu- been better value than a nearly $6 million nity to fulfil their own stated goals that they advertising campaign. have made in their activity plan and achieve I will finish my remarks by honouring the improved financial security. The new provi- work of all those involved in contributing to sion to stop suspension of Farm Help will the long-term sustainability of their regional ensure that farmers have a continuous period communities. The survival of our bush and on the program. It aims to maximise the ad- farming heritage depends on those people justment benefits of the program. A person or committed enough to stand by each other and their partner is still able to apply for excep- get though this traumatic period. They de- tional circumstances relief payments after serve our respect and our support. They de- their completion of the Farm Help program. serve genuine partnerships with government This provision will not be retrospective be- to ensure that regional Australia has a viable yond the commencement of schedule 2 of the future. Farm Household Support Amendment Bill Senator TROETH (Victoria— 2004. It will apply to people who apply for Parliamentary Secretary to the Minister for Farm Help after the commencement of these Agriculture, Fisheries and Forestry) (1.00 amendments. p.m.)—in reply—Before I make some com- I also want to comment on Senator ments on the Farm Household Support Stephens’s comments regarding rural finan- Amendment Bill 2004 I would like to correct cial counselling. Rural financial counselling some incorrect statements and clarify some is provided through the Department of Agri- inconsistencies made by the opposition in culture, Fisheries and Forestry and sup- their remarks. ports—in conjunction with state govern- Firstly, Senator O’Brien incorrectly stated ments and community based management that the amendment is to ensure that farmers committees—61 services and over 80 coun- cannot receive exceptional circumstances sellors. In addition to that purely financial and Farm Help payments at the same time. service, which is provided to supply farmers There is provision in the Farm Household with financial assistance, there is social ad- Support Amendment Bill 2004 to end the justment counselling provided through the opportunity for a person or their partner to Department of Family and Community Ser- suspend their Farm Help income support to vices—and indeed community programs access exceptional circumstances relief pay- such as Lifeline. Farmers have immediate ments and then return to Farm Help income access to these programs if they need addi- support. This reflects the adjustment focus of tional counselling beyond financial counsel- Farm Help. The amendments to the objects ling. of Farm Help income support state that in- In addition, I would like to point out to come support is provided to farm families Senator Stephens that the government will

CHAMBER Thursday, 17 June 2004 SENATE 24085 not be determining when the drought stops; extend the closing date for applications for obviously climatic conditions will determine the re-establishment grant to 30 June 2007 when the drought stops. Until climatic condi- and to increase the maximum re- tions prove that the drought has stopped, establishment grant to $50,000. The dairy government support for farmers suffering the type grant has also been increased to effects of drought will be ongoing. Our pro- $50,000. A regulation is currently being de- gram is a needs based program. There is al- veloped to detail who can provide financial ways an opportunity to apply for exceptional assessments under the program. circumstances and other forms of income The Farm Help program provides a support, and that support will be ongoing. proven, effective safety net for farm families Senator Stephens should also be well facing severe financial difficulties. It helps aware that on budget night I faxed confirma- Australian farmers to build their capacity to tion of a four-year program of funding to manage risk, to adopt new practices and to every Rural Financial Counselling Service in improve strategic planning and decision Australia. So those services knew on budget making. I appreciate the bipartisan support night that they had an additional four years that the Farm Help program receives and the of funding to ensure the continuity of their recognition of the valuable role that this pro- services. They have all been funded with gram plays in many rural communities. I rollover funding until June 2005. During the commend the bill to the Senate. next 12 months an assessment will be made Question agreed to. of the services that will be provided after that Bill read a second time. time until June 2008. Third Reading I turn now to the bill. This amendment bill will give effect to our 2004 budget commit- Bill passed through its remaining stages ment to extend the Farm Help program until without amendment or debate. 30 June 2008. In the 2004-05 budget $134.9 EXPORT MARKET DEVELOPMENT million over four years is allocated to the GRANTS AMENDMENT BILL 2004 Farm Help program. It will deliver im- Second Reading provements to the program to support the Debate resumed from 15 June, on motion adjustment of families on farms in severe by Senator Troeth: financial difficulties, it will strengthen mutual obligation and it will assist them in their That this bill be now read a second time. decision making. Senator TROETH (Victoria— The changes to the disallowable instru- Parliamentary Secretary to the Minister for ments established under the Farm Household Agriculture, Fisheries and Forestry) (1.07 Support Act 1992 are currently being drafted p.m.)—The federal government commits to implement the program enhancements. $154.4 million each year to assist thousands These cannot take legal effect until the rele- of Australian businesses to develop sustain- vant amendments in the Farm Household able export markets through the Export Mar- Support Amendment Bill 2004 are in force. ket Development Grants Scheme. The coali- The instrument is to be amended to specify tion does not believe that these EMDG funds the operational details of the Farm Help ad- should be paid to persons who may be vice and training grant. The re-establishment viewed by the Australian community as be- grant 1997 instrument is to be amended to ing inappropriate to represent and promote the public interest of Australia in relation to

CHAMBER 24086 SENATE Thursday, 17 June 2004 trade overseas. This bill will ensure that they will have access to indemnity cover on grants are not payable where the applicant or their retirement, without any need to pay any the applicant’s associates are deemed by further premiums once they retire and that Austrade to be not fit and proper persons to the cost of any claims which may arise will receive a grant according to ministerial be guaranteed to be paid by the government. guidelines. The proposed changes are to take Patients can also feel reassured that their effect for EMDG claims from the 2003-04 claims can be paid, even if the doctor has grant year—that is, for applications received retired. This is a good outcome for doctors; and grants paid from 1 July 2004 onwards. this is a good outcome for patients. I com- This bill will ensure that EMDG funding is mend these bills to the Senate. not provided to individuals or businesses that Question agreed to. do not merit government recognition or tax- Bills read a second time. payer support. The funding, however, remains focused, as always, on assisting small Third Reading and medium businesses to build sustainable Bills passed through their remaining export markets. I commend the bill to the stages without amendment or debate. Senate. ELECTORAL AND REFERENDUM Question agreed to. AMENDMENT (ACCESS TO Bill read a second time. ELECTORAL ROLL AND OTHER MEASURES) BILL 2004 Third Reading Second Reading Bill passed through its remaining stages without amendment or debate. Debate resumed from 15 June, on motion by Senator Troeth: MEDICAL INDEMNITY (RUN-OFF COVER SUPPORT PAYMENT) BILL That this bill be now read a second time. 2004 Senator MURRAY (Western Australia) MEDICAL INDEMNITY LEGISLATION (1.11 p.m.)—The Electoral and Referendum AMENDMENT (RUN-OFF COVER Amendment (Access to Electoral Roll and INDEMNITY AND OTHER Other Measures) Bill 2004 seeks to amend MEASURES) BILL 2004 the Commonwealth Electoral Act 1918. I rise today to speak as the Australian Democrats Second Reading spokesperson on electoral matters. The ac- Debate resumed from 15 June, on motion cess bill amends the Commonwealth Elec- by Senator Troeth: toral Act and the Referendum (Machinery That these bills be now read a second time. Provisions) Act. Many of the amendments Senator TROETH (Victoria— are technical and are directed at eliminating Parliamentary Secretary to the Minister for discrepancies between the Electoral Act and Agriculture, Fisheries and Forestry) (1.09 the referendum act. We happily support the p.m.)—This legislation represents the final passage of the bill and have no problem with elements of the government’s medical in- most of the provisions, but there are a couple demnity package. The Run-off Cover on which I should make remarks. Scheme is an important measure for both One provision of concern is with the doctors and patients and will come into ef- broadcasting of political material at polling fect from 1 July 2004. It will provide secu- booths. Currently the Electoral Act prohibits rity to practising doctors by ensuring that numerous activities at the entrance to or

CHAMBER Thursday, 17 June 2004 SENATE 24087 within a polling booth or within six metres of Standing Committee on Electoral Matters, of a polling booth or polling booth entrance. which I am a member, but also by the Aus- That measure is designed to ensure good tralian Electoral Commission. The govern- order and good conduct. Prohibited activities ment has had many opportunities to raise include canvassing for votes, soliciting the these matters in the form of legislation over vote of any elector, inducing any elector not many sitting weeks instead of pushing this to vote for a particular candidate, inducing bill through to us and having another one any elector not to vote at the election or ex- hanging around on the eve of a looming elec- hibiting any notice or sign relating to the tion. The government has lacked initiative in election. this area, and we see piecemeal legislation The provisions in this bill seek to add to coming very late in the electoral cycle. We that list of prohibitions to include circum- urge the next government in the next parlia- stances where a person engages in any of mentary cycle to adopt a more coherent pol- those activities more than six metres from icy on introducing electoral law reform to polling booths but by means of various allow the Senate to regularly debate these specified public address systems, radio issues. equipment or a device for broadcasting and The last issue I want to raise with refer- where the activity is audible within the poll- ence to this bill is the question of the elec- ing booth or within six metres of the polling toral roll. The bill seeks to amend the Elec- booth. There could be potential problems toral Act to provide that the Commonwealth with this proposed provision, as has been electoral roll is no longer available for sale in highlighted in the Bills Digest, and it might any format. The amendment arises from the be necessary for the AEC to produce clarify- June 2003 report, The 2001 federal election, ing material on the matter. The main issue by the parliament’s Joint Standing Commit- arises because of the inclusion of radio tee on Electoral Matters. In evidence to the equipment or broadcasting devices in the committee, the Australian Electoral Commis- provision. If a radio station broadcasts a po- sion had noted an earlier conclusion by the litical advertisement on the day of the elec- Commonwealth Auditor-General that ‘there tion and a person has a radio turned on inside is a risk that commercial use of information or within earshot of a polling booth, does the provided by citizens to meet their electoral radio station breach this section? The digest responsibilities could bring the electoral ad- is of the opinion that, as presently drafted, it ministration into disrepute with electors, and might seem so. The person authorising the that citizens might not enrol in order to pro- advertisement and perhaps the radio station tect their privacy’. itself might be technically liable to the pen- The AEC proposed, and the committee alty provided for under the provision. I am unanimously agreed—and I remind the Sen- sure it is not the intention of the government ate that there are four parties represented on that that be so, but the AEC should clarify that committee—that the electoral roll should that matter. no longer be available for sale in any format, I want to take this opportunity to express, given the ease with which modern technol- as well, the fact that I regret that the oppor- ogy can be used to extract electors’ informa- tunities to amend the Electoral Act are so tion on a purchased copy of the roll for few and far between. This is despite numer- commercial purposes. The government has ous recommendations that flow on from the supported this recommendation, in addition excellent work done not only by the Joint to the committee’s recommendations that roll

CHAMBER 24088 SENATE Thursday, 17 June 2004 information continue to be publicly available Senator O’BRIEN (Tasmania) (1.17 in the following forms: first, that printed p.m.)—Senator Faulkner would normally copies of the roll be available for inspection speak to this legislation on behalf of the op- at AEC offices; second, that public access to position, but if I can put some matters on the the roll in AEC offices be provided by a record for the opposition, that will suffice, I regularly updated electronic list of all names think. The Electoral and Referendum and addresses of electors enrolled for the Amendment (Access to Electoral Roll and relevant electorate, with the provision of all Other Measures) Bill 2004, which I shall call other electorate rolls at particular AEC of- the access bill for ease of reference, is rela- fices such as the state head office; and third, tively uncontroversial, dealing essentially that an Internet inquiry facility be provided with technical reforms to the Commonwealth whereby electors can verify their own en- Electoral Act. Labor will be supporting all rolment details and as much of the detail of the measures in the access bill. However, the any elector’s enrolment as the inquirer is Electoral and Referendum Amendment (En- able to provide. rolment Integrity and Other Measures) Bill While an inability to purchase a copy of 2004, which I will call the enrolment bill, is the roll—or a commercial database based on much more controversial. It was originally to the roll—may impose some administrative be dealt with at the same time as this bill but and marketing inconvenience on for profit will now be dealt with later. That bill, the organisations, not for profit organisations enrolment bill, provides for the disenfran- and charities, I can assure the Senate, as a chising of many young Australians by clos- member of the committee, that evidence to ing the electoral roll as soon as an election is us indicates that the use of roll information called, a bureaucratic and unmanageable for direct mail and telemarketing generates electoral enrolment regime which will con- considerable public anger. The community’s fuse people and will not deter fraud, the hid- clear expectation is that information which ing of many political donations by raising the electors are compelled to provide to the AEC disclosure threshold for political donations will not be used by non-government organi- from $1,500 to $3,000, the complete removal sations to—as they see it—invade their pri- of voting rights for prisoners and a number vacy. In addition, there are enrolment con- of other measures which will make it harder siderations. It is hard enough to get many for disadvantaged people to exercise their Australians to enrol as it is, and we agree democratic right to vote. with the committee that they do not need a The opposition will be opposing those disincentive such as having their names and measures in due course. We note the com- details used by for profit, not for profit and ments by Senator Murray in relation to some charitable organisations, which undoubtedly aspects of this bill which are less clear than many people would rather did not happen. they should be. However, we will be sup- We understand, of course, organisations’ porting what are the essentially uncontrover- concerns and are not unsympathetic to the sial electoral matters in the bill that is cur- problems they find themselves now having. rently before the Senate. However, we believe the competing interests Senator TROETH (Victoria— of the public at large should be heeded by us, Parliamentary Secretary to the Minister for and the Australian Democrats will therefore Agriculture, Fisheries and Forestry) (1.19 support the provisions in the bill and support p.m.)—in reply—I thank honourable sena- the bill as a whole. tors for their contribution to the debate and

CHAMBER Thursday, 17 June 2004 SENATE 24089 for their support of the Electoral and Refer- dible within close proximity of polling endum Amendment (Access to Electoral Roll places and allowing the temporary suspen- and Other Measures) Bill 2004. I would also sion of polling under certain circumstances. like to thank the chairman and the members These measures will improve the operation of the Joint Standing Committee on Electoral of the electoral process, and I commend the Matters on the committee’s comprehensive bill to the Senate. report on the 2001 federal election. This bill Question agreed to. gives effect to a number of the committee’s Bill read a second time. recommendations. With this bill and the Electoral and Referendum Amendment (En- Third Reading rolment Integrity and Other Measures) Bill Bill passed through its remaining stages 2004, the government remains committed to without amendment or debate. improving the robustness of the electoral AGRICULTURAL AND VETERINARY process and the integrity of the Common- CHEMICALS LEGISLATION wealth Electoral Act. Measures relating to AMENDMENT (NAME CHANGE) BILL the electoral roll will improve clarity of who 2004 has access to the roll and the information that Second Reading can be provided to those entitled to the roll. Public access to the electoral roll will be im- Debate resumed from 13 May, on motion proved. A copy of the most up-to-date ver- by Senator Ian Campbell: sion of the roll will be available for inspec- That this bill be now read a second time. tion at all offices of the Australian Electoral Senator O’BRIEN (Tasmania) (1.22 Commission. p.m.)—The Agricultural and Veterinary The bill will also enable the Australian Chemicals Legislation Amendment (Name Electoral Commission to keep pace with the Change) Bill 2004 changes the name of the latest technology and improve access to the National Registration Authority for Agricul- roll in new and more accessible forms, such tural and Veterinary Chemicals, known as the as via the Internet. Removal of the electoral NRA, to the Australian Pesticides and Vet- roll from sale will close a loophole and en- erinary Medicines Authority, which will be- sure that it is not used for unintended pur- come known as the APVMA. The NRA is poses, including for commercial use. The currently the authority responsible for the extension of end use restrictions to all forms national system of registration and approvals of the roll should increase the community’s of agricultural and veterinary chemicals. The confidence that the information on the roll government has stated that the present title of can be used only for the purposes permitted the organisation does not adequately reflect under the Commonwealth Electoral Act. its purpose and that the use of the acronym The other measures in the bill will en- NRA to refer to the authority has caused hance arrangements for the lead-up to, and some confusion apparently in the United operation of, polling on election day and in- States where it is confused with the National clude clarification of nomination procedures, Rifle Association. It is also apparently incon- allowing sitting independent members and sistent with current practice within the senators to nominate with one signature OECD. rather than 50, allowing scrutineers to be The bill also amends the Agricultural and present at pre-poll voting centres, prohibiting Veterinary Chemical Code Act 1995 to pro- broadcasting of political material that is au- tect the name and logo of the organisation.

CHAMBER 24090 SENATE Thursday, 17 June 2004

The current national registration system for this organisation. It is a very difficult and agricultural and veterinary chemicals is one complex task. In the future we are going to of the many achievements of the Hawke La- have significant debates about the role of bor government. In 1993 the National Regis- chemicals and residues in agricultural prod- tration Authority for Agricultural and Veteri- ucts. There is certainly a debate in the com- nary Chemicals was formally established. munity at the moment about food safety, and The ability of previous Labor agriculture this organisation will be very important in ministers Kerin and Crean to work through assuring consumers in the future about rather complex legal and technical issues chemical residues in food products. Labor is with state coalition and Labor governments happy to support this legislation in the cir- at that time really does stand in stark contrast cumstances. with the failure of the current Minister for Senator TROETH (Victoria— Agriculture, Fisheries and Forestry in that Parliamentary Secretary to the Minister for regard. I understand that the amendments in Agriculture, Fisheries and Forestry) (1.26 this bill are not expected to have any finan- p.m.)—The Agricultural and Veterinary cial impact on the Commonwealth budget. Chemicals Legislation Amendment (Name The NRA has provided for the amendments Change) Bill 2004 is very simple bill con- to its letterhead and web site, and the indus- taining two basic and uncomplicated meas- try is not obliged to carry out a label change ures. It changes the name of the National to accommodate the new symbols and name. Registration Authority to the Australian Pes- The Australian Pesticides and Veterinary ticides and Veterinary Medicines Authority Medicines Authority has an important role in and it protects the new name, the initials and evaluating the performance and safety of the symbol of the new organisation from chemicals used on farm and elsewhere and in misuse. They reflect common terminology protecting the health and safety of farmers, within the international community and I farm workers and, indeed, all who come into believe will help foster greater awareness of contact with agricultural and veterinary the new organisation and its objective of safe chemicals. It has, therefore, an important role and responsible chemical use by all users and not just in protecting those who work with manufacturers. I commend the bill to the the chemicals but also our environment and, Senate. in addition, protecting our food supply from Question agreed to. contamination. Australian consumers have Bill read a second time. become increasingly concerned about contamination of food products and are now Third Reading very keen to consume food that, as they per- Bill passed through its remaining stages ceive it, is clean, free from undue contamina- without amendment or debate. tion, and green—that is, produced in an envi- BANKRUPTCY (ESTATE CHARGES) ronmental circumstance that is not the sub- AMENDMENT BILL 2004 ject of undue or unnecessary pollution. They BANKRUPTCY LEGISLATION certainly do not want increasing levels of AMENDMENT BILL 2004 pesticides in their food. This authority plays an extremely important role in that regard in Second Reading monitoring the food chain. Debate resumed from 13 May and 15 May The opposition commends the staff of the respectively on motions by Senators Ian authority for the important role they play in Campbell and Troeth:

CHAMBER Thursday, 17 June 2004 SENATE 24091

That these bills be now read a second time. Third Reading Senator TROETH (Victoria— Bills passed through their remaining Parliamentary Secretary to the Minister for stages without amendment or debate. Agriculture, Fisheries and Forestry) (1.28 Sitting suspended from 1.30 p.m. to p.m.)—The Bankruptcy Legislation Amend- 2.00 p.m. ment Bill 2004 and the Bankruptcy (Estate Charges) Amendment Bill 2004 will make QUESTIONS WITHOUT NOTICE important changes to part X of the Bank- Iraq: Treatment of Prisoners ruptcy Act 1966. Part X arrangements pro- Senator FAULKNER (2.00 p.m.)—My vide a formal alternative to bankruptcy, al- question is directed to Senator Hill, Minister lowing debtors to come to binding arrange- for Defence and Leader of the Government ments with creditors for payment or settle- in the Senate. Does the leader of the gov- ment of outstanding debts. The improve- ernment recall the Prime Minister telling the ments to be made by these bills will increase Australian people on 1 June that he had in- confidence in part X arrangements and en- structed his defence minister to make: sure that part X arrangements continue to ... a detailed statement to the Senate when it have an important place in Australia’s per- meets again about the chain of events, the knowl- sonal insolvency system. edge of and involvement in and communication The reforms generally have three objec- with the ICRC, the CPA, communications back to tives: to increase the disclosure requirements Australia and the timelines involved in all of that. of debtors, creditors and trustees involved in Why then did the minister so conspicuously part X arrangements; to simplify the process fail to meet the Prime Minister’s commit- by replacing the three current types of ar- ment—by his refusal yesterday to detail the rangements with a single form of arrange- chain of events and Australian knowledge of ment to be called a ‘personal insolvency involvement in or communication with the agreement’; and to provide a simpler and Red Cross or the CPA and certainly by giv- more consistent process for setting aside and ing no time line for who in Defence knew of terminating part X arrangements. Many of which specific concerns? the issues which may undermine the integrity Senator HILL—This is really getting of part X can also arise in relation to post- rather ridiculous. We have had four full days bankruptcy schemes of arrangement and of estimates on this issue so far, two with compositions under division 6 of part IV of Defence and then two with Foreign Affairs the act. Therefore, the bill also includes and Trade. Mr Rudd, the shadow spokesman, amendments to those provisions particularly has been out this morning saying, ‘Foreign in relation to the disclosure obligations of affairs cannot clear itself of this.’ He failed to debtors, creditors and trustees. The bill will appreciate that foreign affairs appeared for also make some minor and technical two days before the Senate estimates com- amendments to improve the operation of the mittee on these issues. We have had four full Bankruptcy Act and correct a drafting error days of detailed questioning so far. We are in the transitional provisions contained in the going to start again this afternoon and go Bankruptcy Legislation Amendment Act into tonight, so that will be five full days of 2002. I commend the bill to the Senate. questioning. Question agreed to. Senator Robert Ray—That is because Bills read a second time. you wanted to go to Singapore; be fair!

CHAMBER 24092 SENATE Thursday, 17 June 2004

Senator HILL—I am not quarrelling with from the Labor Party in the second half of five full days of questioning if that is what last year or the first part of this year on the the Labor Party wants to do, if that is the subject? What was the interest of the Labor Labor Party’s priority. We have not had a Party? Was the Labor Party saying, ‘What is question on the estimates yet. There have the Howard government doing about this been four full days so far and another full Amnesty report?’ Since then we have heard day starting later today. There has not yet about the Human Rights Watch report. How been a question on the estimates. All the many questions were there from the Labor questions have been on the subject matter Party on that? There were none. that Senator Faulkner is talking about today. Then we hear about the ICRC report of In addition to that we have had questions in February. How many questions were asked this place, questions to the Prime Minister about that? We all know now that the United and yesterday I put down the statement with States was investigating abuses from Janu- three detailed attachments, I referred to all ary. We know that because it went on to references of these issues back to Australia CNN. In the first session of this parliament and gave a full list of every ADF person who how many questions were there from the had been embedded within the coalition au- Labor Party on what Australia knew about thority, the joint command or other multilat- these issues or what representations Australia eral bodies within Iraq. had made? Of course, there were none. Everything the Prime Minister said, every- Why? Because they were allegations against thing the Labor Party has asked for has been American servicemen. Australians did not delivered in spades. Yet the Labor Party is run the prisons. Australians did not interro- still determined to somehow find a connec- gate prisoners. Australians did not have that tion between those abuses and the ADF. That job to do in Iraq. The targeting was against is what it amounts to. The shadow spokes- Americans who had abused prisoners. And man for Defence, Senator Evans, went on the that is what it all amounts to. (Time expired) ABC and in effect said, ‘We know it is there; Senator FAULKNER—Mr President, I it’s just a matter of finding it.’ Now that it ask a supplementary question. Given that has become a bit more politically compli- outrageous answer, the minister can perhaps cated they have twisted and turned and are confirm to the Senate that it actually took now saying that they are not actually accus- opposition senators less than 48 hours to un- ing the ADF of anything. If the ADF have cover all the facts that are currently on the not acted improperly in Iraq, what is there to public record about what government agen- be reported back that indicates improper cies knew about prisoner abuse and when conduct? they knew it. It was a result of opposition They talk about the ICRC report—the Red questioning. Why then, Minister, at least Cross report; it was not delivered to Austra- eight months after Australian officials knew lia. The working paper was not delivered to of abuses in Abu Ghraib is the defence min- Australia. We still cannot get it from the Red ister still not able to comprehensively correct Cross. Why? Because it was not directed to the public record and honour the Prime Min- Australia; it was directed to the occupying ister’s commitment for a full detailed state- powers and to the coalition authority, not to ment to the Senate at the first available op- Australia. They talk about an Amnesty Inter- portunity? Why have you still not, after eight national report. It was made public in July of months, fronted up and answered these im- last year. How many questions did we get portant questions?

CHAMBER Thursday, 17 June 2004 SENATE 24093

Senator HILL—Mr President, nobody most disadvantaged Australians—namely, knew of the allegations of criminal abuse Indigenous Australians. This government until January. When the allegations were will spend $2.9 billion in 2004-05 on Indige- made to the United States, the US com- nous specific programs—39 per cent more menced an investigation. It made public the than Labor did. That bears repeating: 39 per fact that it was conducting that investigation, cent more than Labor did. We are getting and it led to prosecutions for criminal abuse. results, but we want better results. Indige- Perhaps that is why questions were not being nous Australians want better value for asked on that. What I can confirm is that money. there was no interest in this subject from the No-one who has asked the question ‘Is Australian Labor Party until, of course, the what is happening now the very best Austra- photos were published at the beginning of lia can do for Indigenous Australians?’ could May, because that was the first time that possibly answer yes. Surely we need to people became aware that these abuses actu- change our ways. We want more of the ally had occurred—not just allegations that money to hit the ground and we want local were being investigated in January. In May communities to have a real say in how the we all knew. The whole world knew that money is spent. We want to stop government abuses had occurred, and then finally there departments working in an unconnected way. was an interest in the subject matter and a We want to remove layers of bureaucracy determination by the Labor Party to find a that stand between Indigenous Australians on connection with the ADF. They have not the ground and government. We want to get found that connection, because Australians rid of the rorters. We want state and territory did not detain and did not interrogate the governments to do their bit, rather than have prisoners. (Time expired) the focus simply on what can come from the Indigenous Affairs: Funding Australian government. The states must be Senator SCULLION (2.08 p.m.)—My responsible to ensure that all communities question is addressed to the Minister for Im- have fresh water—as everyone here turns on migration and Multicultural and Indigenous the tap and gets fresh water—and that com- Affairs, Senator Vanstone. Will the minister munities have appropriate policing so that inform the Senate of how the government is they are as safe as the people in this cham- working to ensure that all Indigenous Austra- ber. Health and education are basic services lians receive value for money from govern- that all Australians should expect from their ment spending? Is the minister aware of any state governments and not be denied simply alternative policies? because they are Indigenous Australians. Senator VANSTONE—I thank Senator It appears all Labor wants to do is play Scullion for the question. As one of the sena- politics. On the one hand we have Mr tors representing the Northern Territory— Latham saying that he supports the abolition which has a high proportion of Indigenous of ATSIC, but when it comes to the crunch Australians in its population—he, along with he cannot bring his party to deliver. On many others, understands the situation facing 30 March Mr Latham said: Indigenous Australians, especially in re- ATSIC is no longer capable of addressing en- gional and remote areas. One of the most demic problems in Indigenous communities. It important tasks that any government can has lost the confidence of much of its own con- have is to reduce the disadvantage of the stituency and the wider community.

CHAMBER 24094 SENATE Thursday, 17 June 2004

Only weeks later Labor decided to delay the Honourable senators—Hear, hear! government’s bill to scrap ATSIC, by refer- QUESTIONS WITHOUT NOTICE ring it to a Senate committee. That speaks Indigenous Affairs: Funding loudly of Mr Latham’s ability as the nation’s alternative leader to get his agenda through. Senator SCULLION (2.12 p.m.)—Mr It will mean that taxpayers will be forced to President, I ask a supplementary question. I cop a $52,000 a week bill just to cover the thank the minister for informing the Senate salary package cost of commissioners who about how we are going to give better value will not in fact have very much to do. In to- for the dollar in the delivery of our programs tal, the board costs $120,000 a week now, to Indigenous Australians. Could you further plus the ATSIC support staff that we will inform the Senate on the undertakings of the now have to provide at about $50,000 a ministerial task force and your communica- week, so that is about $170,000 a week to tions with Indigenous people? delay. That could buy you an Indigenous Senator VANSTONE—I thank Senator house every week. This approach will cost Scullion for the question. Yes, I can. The task more money. force that met yesterday was probably one of We will do everything we can to make the very few occasions—if not the first occa- sure that that cost is cut right back, but it is sion—when such a large group of the heads an indication of what Labor is prepared to of departments and ministers have focused sacrifice. We are pushing ahead anyway. on nothing but Indigenous affairs, getting Programs and staff will go to the new de- better service delivery to individual commu- partments on 1 July. Indigenous coordination nities and listening to what communities centres will be established, and a new and want. The other side of this chamber might better way of doing business on the ground be interested in arguing about who gets a job with regional communities—with Indigenous as a spokesperson, dividing up the spoils and people directly—will come into being. The who is going to get paid. There might be ministerial task force on Indigenous affairs some interest in that. As I said here weeks met for the first time yesterday—10 minis- ago, my task is to ensure better service deliv- ters sitting down talking about nothing but ery on the ground. The focus we will have Indigenous affairs. We are committed to a with Indigenous Australians is not ‘What do future where Indigenous Australians, wher- you want tomorrow? What do you want next ever they live, will have the same opportuni- week?’ but ‘Where do you want your chil- ties as other Australians to make informed dren to be in 10, 20 or 30 years time? Where choices about their lives, to realise their full do you want to take this community? What potential and to take responsibility for man- can we as the Australian government do with aging their own affairs. (Time expired) you to get your community there? What will you do in return?’ (Time expired) DISTINGUISHED VISITORS Iraq: Treatment of Prisoners The PRESIDENT (2.12 p.m.)—Order! I draw the attention of honourable senators to Senator COOK (2.14 p.m.)—My ques- the presence in the President’s Gallery of the tion is addressed to Senator Hill, Minister for President of the Legislative Council of West- Defence. I draw the minister’s attention to ern Australia, the Hon. John Cowdell. I wel- the answers to estimates questions on notice come you to the Senate, President, and I tabled last night and I specifically refer to the hope you enjoy your stay here. series of questions relayed from the minister’s office to Defence on 11 May asking for

CHAMBER Thursday, 17 June 2004 SENATE 24095

‘advice about prisons, prisoners, the ADF Faulkner and repeated by Senator Evans the role in detention and what, if any, obligations following day—and I said our obligations Australia had’. Aren’t these issues amongst are set out in the third and fourth Geneva those that neither the minister nor Defence conventions as they relate to prisoners of war officials were able to clearly answer when and civilian detainees. We accept an overall questioned in the estimates committee two obligation that if there is the detention of a weeks ago? Can the minister now, five party that does not fit within either of the weeks after requesting such advice, inform conventions, then that party should neverthe- the Senate precisely what, if any, obligations less be treated humanely. That is the obliga- Australia has and what authorisation was tion of Australia; that is the obligation we given for the ADF role in detention, includ- accept. ing the capturing of Iraqi prisoners of war? Senator COOK—Mr President, I ask a Senator HILL—As I have said, we have supplementary question. It is on the question been answering these questions at length. I of obligations. Does the minister acknowl- started asking questions after 11 May be- edge any obligations at all on the part of the cause obviously that was when the photos of Australian government towards detainees in gross and criminal abuses came out in the Iraq—obligations arising from Australia’s press. Whilst I could not see any connection participation in the invasion of Iraq, from our with Australia because I knew we did not run membership of the coalition of the willing or the prisons and I did not believe we were from our strong support of US actions in involved in any of the interrogations, I nev- Iraq? What specific obligations do we ac- ertheless believed I should specifically ask knowledge? those questions in case there was something Senator HILL—There is no legal obliga- that had not been drawn to my attention. tion on Australia because it is not the detain- I am pleased to say that the detailed inves- ing party. As I said, it did not run the prisons tigation has clearly shown not only those and it did not interrogate the prisoners. I facts but also that there was no improper be- would like to think that the whole interna- haviour by any Defence official. Further- tional community accepts responsibility. I more, it would seem that certain ADF per- have said in the past that Australia accepted sonnel, lawyers in particular, acted positively responsibility to contribute towards the stabi- and constructively towards improving the lisation of Iraq, the rebuilding of Iraq and the conditions for prisoners in Iraq. They facili- transfer to an Iraqi government. Out of that it tated meetings between the joint command can be argued that includes the proper treat- and the International Committee of the Red ment of those who might be detained during Cross and they facilitated meetings between that period or those who are under the deten- the Red Cross and the Coalition Provisional tion of authorities during that period. But Authority, particularly in the delivery of the that is part of what I would see as an interna- February report. Out of that investigation, I tional moral obligation. I do not believe it is was pleased to find the constructive and a legal obligation. positive contribution that ADF personnel had Family Services: Carers made. Senator KNOWLES (2.19 p.m.)—Mr Australia’s obligations are set out in the President, my question is to the Minister for conventions. I have been asked questions on Family and Community Services, Senator that for the last two days—first by Senator Patterson. Will the minister please inform the

CHAMBER 24096 SENATE Thursday, 17 June 2004

Senate of how the Howard government is people on a carer pension. Those people on a recognising and assisting carers within the carer pension will receive a $1,000 payment community? Can the minister also inform the in their bank accounts this week. About Senate of any other options for these im- 700,000 families received payments yester- mensely valuable people in our society? day, another 400,000 receive them today and Senator PATTERSON—I thank Senator over 500,000 will receive them tomorrow. Knowles for her question. I know she has Recipients of carers allowance will receive taken a very keen interest in this area during $600 for each eligible person for whom they the time she has been a senator. The Howard care. This is being made in recognition of the government recognises the vital role that enormous contribution that carers make to carers play in our society. They are the un- our community. sung heroes and heroines of our community With regard to the Commonwealth-state who selflessly look after people, whether disability agreements, the Commonwealth they are children with a disability or older has played its part in looking after the issue people who have ailments such as Alz- of employment of people with disabilities. heimer’s. They are the backbone of our soci- Last year in the budget we increased spend- ety. We provide carers with direct payments ing in disability services and this year we totalling almost $1.6 billion per annum, have put in another $99 million to ensure which is an 85 per cent increase since 1999. that nobody will lose their jobs in the process There has been a significant increase in as- of reform as they move forward in providing sistance to carers. The carer payment is pro- pro rata based wages. For their part, the vided to approximately 81,000 Australians, states have not adequately come up to the which amounts to about $800 million a year, plate in providing accommodation for people and the carer allowance is paid to over a who have a disability. They have failed dis- quarter of a million carers—about 290,000 of mally. When you go to Western Australia and them—which accounts for about $760 mil- meet, as I did, a woman who is 76, who is lion a year. caring for two people—one is in accommo- The federal budget is designed to keep our dation and the other lives with her—and who economy strong. As I said yesterday, it is has not had a holiday for 27 years, you have about supporting the backbone of Australian to question what the states are doing about society—the family—and this budget par- providing care for people who require ac- ticularly provides support for families where commodation. In this budget, we have put there are carers and where there are people $72.5 million into an area, which the states who require care. The Howard government ought to be looking after, to shame them into will spend an additional $461 million for giving at least one month’s respite for carers carers in this budget. It has been able to do over 70 who are caring for their ageing sons that because of the social dividend that it and daughters. The states ought to do their gets from managing the economy well. From job. We are doing ours in employment— reducing Labor’s $96 billion debt, from pay- (Time expired) ing back $70 billion of debt and from saving Senator KNOWLES—Mr President, I almost $6 billion in interest it has been able ask a supplementary question. Could the to give a social dividend to families and car- minister please inform the Senate of the pro- ers. Part of the $461 million will be in the visions for people who care for those with form of a one-off payment for carers—that is whom they do not live and of whether any $255 million in a lump sum payment for such payments as she has already described

CHAMBER Thursday, 17 June 2004 SENATE 24097 and is about to describe were ever paid by prisoners completely naked and in total previous governments? darkness, being punished by wearing Senator PATTERSON—As I said, we women’s underwear on their heads, sleep are giving $72.5 million and asking the states deprivation, handcuffing causing wounds to commit to matching that so that we can and lesions and being handcuffed naked to provide accommodation for sons and daugh- cell doors? ters of older carers who need respite. The Senator HILL—I did say that the Red states ought to be doing something about Cross working paper set out allegations of ensuring that older people have some secu- what it described as ill-treatment of prison- rity into the future. We have indicated that ers. The purpose of the report was obviously we will be working with the states to address to bring these allegations to the attention of the issue of succession planning in terms of the joint military command and to ask them where parents can look to for care for them- to attend to the matters. There is no secret in selves as they age and for their children as that. Some of these allegations of ill- they age. One of the things I am very proud treatment were repeated in the February re- of is the provision in the budget of $27 mil- port, the formal report of the ICRC, to the lion for young carers—13-, 14- and 15- occupying powers and to the Coalition Pro- year-olds who are caring for a parent with a visional Authority and are now on the Web. I disability. We have young people like that. think it is paragraph 27. They will now get five hours respite a week The point I was making yesterday was during term time and two weeks full-time that there were not allegations of the type of respite during the year, which they can criminal abuse which subsequently became commute into smaller amounts. This is the known. We may not have known the details first time these people have had this sort of but we knew that there were allegations of assistance, and I hope that it means some of criminal abuse in January of this year. At the them will now be able to finish school. We end of April, early May, we knew exactly have also extended the carers allowance to what those allegations were in the form of people who do not live with the person they photographs—proof of the actions having are caring for—(Time expired) taken place—that were published. The dis- Iraq: Treatment of Prisoners tinction I was making there is that there is a Senator HOGG (2.25 p.m.)—My ques- significant difference in the characterisation tion is to Senator Hill, the Minister for De- of the ICRC’s working documents and its fence. Does the minister recall in his state- reports from its visits and that which led to ment to the Senate yesterday that he set out a criminal prosecutions as a result of American long list of what he claims the Red Cross actions. October working papers did not contain? In Whilst the Labor Party’s criticism is one satisfying himself that those reports did not of inaction, it is interesting that, as soon as contain those allegations, did the minister the Americans became aware of the allega- himself scrutinise those working papers? tions of criminal abuse, they immediately Why did the minister choose yesterday not to instigated an inquiry, and those investiga- disclose that the Red Cross had visited Abu tions have promptly led to prosecutions. That Ghraib in October 2003 and that it had re- is the process that should have taken place. ported the serious concerns at the time to the In relation to generally improving the condi- coalition authorities, which included keeping tions of the jails, nobody is arguing that there

CHAMBER 24098 SENATE Thursday, 17 June 2004 was no need for improvement in the condi- work that it had done not only in relation to tions of the prisons during last year. But it Abu Ghraib but also in relation to other pris- has to be put in circumstances that existed in ons, the methods of detention, the methods Iraq at that time, and it would seem that the of arrest and so forth. (Time expired) Australian officials who had contact with the Youth: Homelessness ICRC assisted them in getting their message Senator BARTLETT (2.31 p.m.)—My across. question is to the Minister for Family and Senator HOGG—Mr President, I ask a Community Services and the Minister repre- supplementary question. Does the minister senting the Minister for Children and Youth recall that in tables he produced yesterday Affairs. Is the minister aware of the report there is a reference to a situation report cov- published by the Institute of Health and Wel- ering the period 9 to 15 February 2004 which fare which states that almost half of all refers to the ‘ICRC report delivered to homeless people seeking help through the Bremer during the week, which is detailed, Supported Accommodation Assistance Pro- comprehensive and highly critical’? Can the gram are children? It also states that last fi- minister now inform the Senate of what ‘de- nancial year nearly 54,000 children were tailed, comprehensive and highly critical’ receiving assistance from SAAP because concerns were contained in this situation they were homeless or at imminent risk of report which was received by the Strategic homelessness. In addition, these agencies Operations Division of Headquarters Austra- had to turn away valid requests for immedi- lian Defence Force, the Defence Legal Ser- ate accommodation from around 200 accom- vice and the International Policy Division of panying children every day? Does the gov- the Department of Defence in February this ernment accept that it has a responsibility to year? address this major problem? Given that these Senator HILL—I want to check the re- figures show no improvement from the pre- cords, and I will be able to do that during the ceding years, what extra action has the gov- course of the many hours of the estimates ernment taken? committee hearing that we will have later Senator PATTERSON—I thank the hon- today. My recollection is that there were no ourable senator for his question. Of course details of the allegations. The February re- the Australian government takes homeless- port was not handed to Australia. It was not ness amongst children very, very seriously. I delivered to Australia because Australia was welcome the Australian Institute of Health not responsible for remedying the alleged and Welfare’s report because it provides very defaults. valuable information which we will use to Senator Faulkner—He’s talking about improve the Supported Accommodation As- the sit rep. sistance Program. We are moving towards Senator HILL—If it is the sit rep he is the next agreement with the states on that. talking about, it referred to the fact that the The report shows that SAAP is well targeted, February report had been delivered to but we are not complacent about the numbers Bremer, who headed up the CPA, which in of accompanying children receiving SAAP effect was the de facto government of Iraq, services. and pointed out problems that the ICRC had Senator Bartlett, I think you have to look encountered in its work from March through at the issue of homelessness amongst chil- to November last year—in other words, the dren and families with children across a

CHAMBER Thursday, 17 June 2004 SENATE 24099 broader scale. There are issues surrounding lion in this budget to the issue of domestic the SAAP provision, but there are other areas violence among Indigenous families. A huge that cause families to be homeless. We have amount is being done, but the states need to increased funding in family relationships come up to the plate and do more than they counselling. We have assisted families are doing—for example, spending some of through our very creative homelessness pre- the money from the windfall from gambling, vention pilots. These have been extended in stamp duty and land taxes on an issue which this budget to over $10 million to assist ought to be of concern to all of us. We are families at risk to reduce the likelihood of doing a huge amount by contributing 60 per homelessness by giving them assistance in cent of the funding of SAAP services. The financial planning, dealing with household states ought to be doing better. organisation and maintaining their homes. Senator BARTLETT—Mr President, I As the minister responsible for leading the ask a supplementary question. I thank the debate on the effects of problem gambling, it minister for her answer. The report also dismays me that, although the states are states that highest proportion of unmet needs making huge profits from gambling, not one for children were in the areas of support for state spends more than 0.5 per cent on deal- sexual and physical abuse. Is the government ing with problem gambling. That would be going to provide specific extra funding tar- one of the causes of homelessness. The states geted at this vital area? In relation to the are getting a huge windfall from gambling minister’s comments about the states needing and I would expect them to spend at least a to step up to the plate, why is it that just yes- reasonable amount of that—certainly more terday the state of Victoria claimed that it than 0.5 per cent. The Commonwealth gov- was required to put in an additional $280 ernment contributes 60 per cent of the fund- million over and above the total CSHA ing for SAAP services, and the states con- agreement to make up what it claims are cuts tribute 40 per cent. The states have had a and a shortfall from the Commonwealth windfall in land taxes and stamp duty, and I level? Will children with unmet needs be the would expect them to come up to the plate victims in yet another finger-pointing exer- and do better than they are in delivering cise between the state and federal govern- SAAP services and contributing to the fund- ments? ing of them. The Commonwealth takes Senator PATTERSON—I think that, homelessness seriously, but the states do not when you look at our record and when you contribute 60 per cent. We contribute 60 per look at the way in which we have managed cent of SAAP services funding. We have this economy and reduced interest rates— contributed more than $830 million to SAAP, from 17 per cent at the highest and 10 per which is an increase of 18 per cent, or $115 cent when we came into government—to million, on the previous agreement. reasonable levels, you have got to look We are working on a number of fronts to across the board at all the factors that affect find suitable solutions. A number of pro- homelessness. When you have got an interest grams complement SAAP and are aimed at rate of 17 per cent, you are likely to lose addressing the problem of relationship and your house and not be able to pay your mort- family breakdown—for example, Partner- gage. When you have got a million people ships Against Domestic Violence. A total of out of jobs, you are more likely to lose your 230 programs have been rolled out across the house. As I said to the honourable senator, country, and we have committed $37.5 mil- there are a multitude of factors which cause

CHAMBER 24100 SENATE Thursday, 17 June 2004 homelessness. The Commonwealth contrib- lunch the great enthusiasm of the Australia utes $1 for every 13c on average that the Council for the work of this government and states put towards housing. The states need the great progress that this government has to actually contribute their fair share and use made in the arts. some of that money from gambling. As I Senator Lundy, you raised the issue of the said, less than 0.5 per cent of their take from Melba Foundation. I can tell the Senate I gambling is spent on problem gambling. have had a great deal of correspondence on Many of the families that you are concerned the Melba Foundation and the initiative in about, Senator, and I am concerned about are the budget. People have forwarded me letters victims of problem gambling, and they are which have been sent to the Melba Founda- victims of other areas in which the states tion, and one letter particularly pleased me. It have particular responsibility. (Time expired) came from a gentleman by the name of Barry Australia Council Jones. Yes, it was the future and previous Senator LUNDY (2.37 p.m.)—My ques- president of the Labor Party! Barry Jones tion is to Senator Kemp, the Minister for the praised this particular initiative to the Melba Arts and Sport. Is the minister aware that Foundation. He welcomed greatly the initia- section 6B(4) of the Australia Council Act tive that the government had taken, which 1975 prohibits the minister from giving any will benefit Australian artists. Senator, I am a direction to the Australia Council in relation bit worried that you are tending to be a bit to ‘the making of a grant, the lending of churlish on this issue, because I would have money or the provision of a scholarship or thought that this was a bipartisan approach. other benefit’? How has the minister taken When someone as distinguished as Mr Barry account of this legislative prohibition in di- Jones makes his views known, it rather sug- recting the Australia Council to make the $5 gests that it is a pretty good program. million grant to the Melba Foundation-Melba This government is elected to govern. This Records? Has the minister received any legal government makes decisions. This govern- advice on whether he breached the Australia ment is quite happy to take initiatives in rela- Council Act in directing this grant to be tion to the arts and, indeed, every other area. made? If he has not done so, will the minis- Senator Lundy, you would be aware that one ter now undertake to seek this legal advice? of the important initiatives in this budget was Senator KEMP—Thank you to Senator Playing Australia. This was a government Lundy for the question. It is a rare pleasure initiative, and this was an initiative which to get a question from Senator Lundy, so it is was widely welcomed throughout the arts particularly welcome. Senator Lundy, you community. Another initiative that we an- and I were at a lunch today barely an hour nounced in the budget was the Melba Foun- ago. It was an Australia Council lunch. The dation and $5 million over five years. This CEO of the Australia Council stood up and was a government initiative, and we have made some comments. You were there, Sena- asked the Australia Council to administer tor Lundy, and you were smiling and nod- that particular grant. Equally, Senator, you ding. My memory was that the substance of would be aware that in the past other gov- what was said was what a good job this government initiatives like Books Alive, which ernment had done. Modesty prevents me was very much welcomed by the publishing from making any comments about the minis- industry— ter involved, but you would have seen at that

CHAMBER Thursday, 17 June 2004 SENATE 24101

Senator Lundy—Mr President, I rise on a ommendation on the basis of a possible point of order. I have given the minister three breach of the Australia Council Act 1975? minutes to come to the substance of the Senator KEMP—I would really have to question, which related to him seeking legal say—and I say this in a kindly and caring advice about the eligibility of this grant. Can way, Senator—and I regret to say that I think you please draw his attention to relevance? you are struggling. You are struggling big- The PRESIDENT—I remind the minister time here. Senator Lundy, let me remind you that he has one minute remaining to answer that the Melba Foundation grant in the the question, and I would think that that is budget has been widely welcomed, includ- possible. I also remind him to address his ing, I might say, by Mr Barry Jones and a remarks to the chair. range of others— Senator KEMP—I was reminding Sena- Opposition senators interjecting— tor Lundy that another important government Senator KEMP—Robert Ray says, ‘Well, initiative was Books Alive, which we asked who cares what Barry Jones says?’ If that is the Australia Council to administer. I do not your view, Robert, let us record it in the know whether you felt that it was improper Hansard, but that is not my view. for us to ask the Australia Council to admin- The PRESIDENT—Order! Minister, ig- ister Books Alive. Equally, Senator Lundy, nore the interjections and address your re- you would be aware of the Myer report into marks to the chair. the visual arts and crafts—again, important initiatives which the government endorsed Senator KEMP—I think Mr Barry Jones and which were administered by the Austra- does make an important contribution, and I lia Council. Senator, this is a good program. welcome his support. This is something which is going to benefit Foreign Affairs: Sudan Australian artists. It does, I regret to say, typ- Senator BROWN (2.44 p.m.)—My ques- ify the negative and carping approach that tion is to Senator Hill, representing the Min- the Labor Party, and indeed Senator Lundy, ister for Foreign Affairs. I ask about the eth- do take from time to time on important ini- nic cleansing taking place in Darfur in Su- tiatives, but let me tell you, Senator, I have dan. What action has the Australian govern- received many letters of support in relation ment taken—either unilaterally or through to this particular initiative—and why global agencies such as the UN—for imme- wouldn’t I? In the end, the bottom line is it diate intervention to stop the slaughter that is will be Australian artists and musicians who occurring in Darfur? Will the government will be benefiting. (Time expired) consider the advice of a former US Assistant Senator LUNDY—Mr President, I ask a Secretary of State, Susan Rice, that there supplementary question. Will the minister should be immediate international pressure confirm whether the Department of Commu- through the United Nations, including an oil nications, Information Technology and the embargo on Khartoum, until this potential Arts specifically recommended against di- genocide is brought to a halt? recting the Australia Council to make this Senator Lightfoot—We would like to grant to the Melba Foundation? If so, what parachute you in there, Senator Brown. was the basis for this departmental recom- Senator BROWN—I object to that inter- mendation against the making of this direc- jection on this matter. tion to the Australia Council? Was this rec-

CHAMBER 24102 SENATE Thursday, 17 June 2004

The PRESIDENT—I am sorry, I did not urgently in the United Nations for a United hear that interjection. Nations response which involves potentially Senator BROWN—I ask you to consider an oil embargo and an air flight embargo on that interjection and to deal with it. US military planes bombing villages before the people are slaughtered by the Arab Jan- The PRESIDENT—I cannot consider jaweed militia which is being funded and what I did not hear, but I will review the supported from Khartoum. I ask the minister Hansard. whether the government will go into action Senator HILL—Obviously, I want to re- on what is the world’s greatest humanitarian fer the question to the foreign minister in crisis at the moment and see what unilateral relation to any specific action he might have action it can take by stimulating the United taken, but I can say in general terms that Nations into action. (Time expired) there have been good stories and bad stories Senator HILL—I think it is fair to say coming out of Sudan in the last few months. that the UN is able to play a peacekeeping, The good story is that it looks as if there may rebuilding role, but it has not been particu- be a conclusion to the horrible civil war that larly effective in intervening in such circum- has lasted for so long and that has resulted in stances and bringing the violence to an end. literally millions of deaths—and there has The international community has looked to been the contribution of the international coalitions of the willing to do that, and in community in bringing that to an end. The nearly every case it has expected that coali- efforts that have been made and the efforts tion to be led by the United States. Most of that are being made by the United Nations to the international community does expect the consolidate that peace are to be applauded. US to do the heavy lifting. When the US On the other hand, there have been the bad does that, what appreciation does it get? It stories of the abuses in Darfur that have also continually gets pounded by such as Senator been in the press in recent times. You obvi- Brown because it will never meet his stan- ously must feel great sympathy for the Suda- dards. nese as they go from one crisis to another. Exactly how the international community as Senator Brown—Mr President, I raise a a whole is responding, I am not sure. Obvi- point of order on relevance. The one-minute ously there is not a response that Australia answer here should be addressing the ques- can take as an individual party that is going tion of what the Australian government is to make a significant difference, but I would doing on this matter. hope that, as part of an international commu- The PRESIDENT—I cannot direct a nity, every influence is being brought to bear minister how to answer a question. He has 17 to bring that brutality to an end. I will seek seconds remaining; if he wishes to avail him- the details of that from the foreign minister. self of that time, he can. Senator BROWN—Mr President, I ask a Senator HILL—If Senator Brown is call- supplementary question. I am surprised at the ing for some form of pre-emptive strike minister’s lack of information on Australian based on humanitarian grounds, I would be initiatives on what is described by the United interested to hear him actually say that. That Nations as the world’s greatest humanitarian would be very interesting. There is this de- catastrophe. Given the gravity of the situa- bate in the international community on the tion, I ask the minister to check that Australia right to intervene militarily on humanitarian cannot act on this by, for example, moving grounds. Simply cutting off fuel to Khartoum

CHAMBER Thursday, 17 June 2004 SENATE 24103 is going to hurt the poor as much as— (Time matter which is turning the minds of this expired) government. I will look closely at the matters Sport: Drug Testing that have been raised and see whether there are any other matters that I will have to bring Senator FAULKNER (2.50 p.m.)—My back to the Senate. question is directed to Senator Kemp, the Minister for the Arts and Sport. I refer the Senator FAULKNER—Mr President, I minister to the recent decision of the Court ask a supplementary question. I am disap- of Arbitration for Sport regarding the posses- pointed that the minister cannot answer a sion of drugs by a young Australian Institute very important question for the Senate: of Sport cyclist. Has the minister received a whether the minister has received a compre- comprehensive briefing on this case by the hensive briefing on this case by either the Australian Sports Commission and/or the Australian Sports Commission or the Austra- Australian Institute of Sport? Has the Chair- lian Institute of Sport. He ought to be able to man of the Sports Commission, Mr Bartels, answer that question. I ask again whether the been kept informed of the details of this minister can say this afternoon to the Senate case? Is the minister satisfied with the way that he, as minister, is satisfied with all as- this case was handled by the Australian pects of the Australian Sports Commission’s Sports Commission, including the investiga- handling of this recent case of allegations of tion of all the circumstances, and with the drug use by a member of the AIS cycling way the ASC complied and presented the team. In the light of the circumstances of this case to the court? Can the minister assure the case, together with the recent allegations of Senate that this case has been scrupulously ASC mishandling of allegations against an- handled throughout, from the initial discov- other AIS athlete—on that occasion, it was in eries to the finalisation of the case? the athletics program—what action has the minister taken regarding the handling of Senator KEMP—This government takes drugs cases by the Sports Commission and antidoping in sport very seriously. Indeed, the AIS? (Time expired) this government has a record which I believe is second to none in dealing with drugs in Senator KEMP—If Senator Faulkner is sport issues. I would argue that this govern- so interested in this case, it is a great pity that ment has, in fact, led the world in many ar- he did not come before the Senate estimates eas, in promoting antidoping in sport and in committee and join in the questioning that ensuring that our procedures are as strict as Senator Lundy undertook over quite a long possible. Senator Faulkner has drawn an is- period of time. I take these issues very seri- sue to my attention. I was not aware of any ously. In relation to the latter matter Senator problems associated with this particular Faulkner mentioned to do with athletics, my breach. I will certainly look closely at the view is that Senator Lundy’s tedious ques- matters he has raised in his question. If there tioning on this matter did not reveal any new are issues that I have to bring back to the information. In relation to the other case with Senate, I will certainly do so. the cyclist, I am aware of that particular case. In the first part of Senator Faulkner’s ques- It is important that we make sure that our tion, he raised particular concerns. I will look procedures in antidoping are up to date. The at those concerns and see whether there is Senate would be aware that we are looking at anything that I can bring to the attention of a variety of procedures to deal with antidop- the Senate on that matter. I am well used to ing in sport. An independent tribunal is a allegations being made by Senator Faulkner

CHAMBER 24104 SENATE Thursday, 17 June 2004 and by others, but let me say that the Austra- him if he does not tell them where he lives? lian Sports Commission has a very proud Mr Garrett blames the bureaucrats, yet when record. (Time expired) I challenged him to allow the Electoral Australian Electoral Commission Commission to release his enrolment records he refused. How hard could it be? I asked the Senator MASON (2.55 p.m.)—My ques- Electoral Commission for my records and tion is to the Special Minister of State, Sena- received them within a day and a half, to- tor Abetz. Will the minister advise the Senate gether with confirmation that I voted in of initiatives being undertaken by the Austra- 1996, 1998, 1999 and 2001. Mr Garrett lian Electoral Commission, such as Rock could do exactly the same. Enrol, to encourage people to enrol to vote? Is the minister aware of claims that the sys- What is he trying to hide? What does he tem ‘glitches’ people off the electoral roll? Is have to fear? Mr Garrett does not want the the minister also aware of instances where official AEC records to come out because he people have been claiming that they are vot- undoubtedly knows what they will tell us. ing, when they are not even on the roll? After a full week, he still cannot get his story What happens to votes in these circum- straight and claims he needs even more time. stances? One day he said he became a silent voter in 1984 because he was running for the Senate Senator ABETZ—Senator Mason is right on the pro-Trotskyite Nuclear Disarmament to congratulate the Australian Electoral Party ticket and he was concerned for his Commission on their various initiatives to family. That is a bit strange because, accord- encourage enrolment, including attending ing to Who’s Who, Mr Garrett did not have a citizenship ceremonies, school visitations family until 1986—two years after the 1984 and the Rock Enrol initiative where officials election and one year after he left the Nu- attend the Big Day Out encouraging young clear Disarmament Party. people to enrol. This initiative should not be confused with Labor’s ‘all rock and no enrol’ The following day Mr Garrett told us he candidate, Mr Garrett. I am aware that Mr might, in fact, have become a silent voter in Garrett lamely sought to explain his absence the late eighties or early nineties after he got from the electoral roll as follows. He said: out of the NDP. Later in the same interview he said that it might have been in 1994. Yet ... it’s one of these things in the system that has glitched me. according to media reports he was enrolled in Mackellar with his address on the roll be- If you fail to enrol, you are breaking the law. tween 1990 and 1994. The stories and ex- It is not a glitch. It is not a technical error. cuses become more fantastic and unbeliev- The system is not to blame. Mr Garrett is no able by the day. I am sure that the AEC could victim. If you fail to enrol, you are breaking clarify the position once and for all and tell the law. So when a person moves house—to us whether he was enrolled as a silent elec- pick a hypothetical example, from Balgow- tor, or indeed whether he was enrolled at all. lah to Mittagong—they are obliged by law to inform the Electoral Commission of their This Garrett debacle is another clear ex- new address. ample of Mr Latham’s policy of headlines before homework. Mr Garrett’s short mem- I am aware that Mr Garrett has been ory makes it appropriate that he tells me the claiming that the AEC never told him that he truth about the forgotten years. I table docu- was not on the roll. It is not their job to do ments that confirm my enrolment and recent so. How are the AEC supposed to contact

CHAMBER Thursday, 17 June 2004 SENATE 24105 voting history. Mr Latham must do the same Heritage Convention provides that a State Party for Mr Garrett. may submit to the World Heritage Committee an inventory of suitable property forming part of the Senator MASON—Mr President, I ask a cultural and natural heritage that is ‘situated in its supplementary question. The minister has territory’. As the Australian Antarctic Territory spoken of claims that some glitches have (AAT) does not encompass the whole of the Ant- taken people off the electoral roll. Is there arctic continent, Australia is not in the position to any evidence that gremlins have taken peo- nominate the whole of Antarctica for inclusion in ple off the electoral roll? the World Heritage List. Senator ABETZ—If the matter were not The Australian Government regards the legal so serious it would be laughable. Mr Garrett regime provided by the Antarctic Treaty and as- and the Labor Party are asking us to believe sociated instruments as the most effective way to that there are certain gremlins at work that manage the Antarctic region and protect its glob- ally significant environmental values. have victimised poor old Mr Garrett. The simple fact is that when the TV cameras are Regarding the issue that Senator Brown raised about global warming, the Government is aware on Mr Garrett will take himself into a polling that Antarctica plays an important role in global booth but he will not put himself onto the ocean currents and climate systems, and that electoral roll. If there is a stunt in it, he is changes are occurring in Antarctica. there. One wonders where he gets it from—a Antarctica is a dynamic place with constant stunt a day. Of course, it is from his past cre- changes occurring through iceberg calving, break- dentials with the Greens. He is now trans- up of ice-shelves and changes to sea-ice extent. porting that to the Australian Labor Party. However, the extent to which these changes are There are no gremlins. Mr Garrett has to take natural phenomena or human-induced is not clear. responsibility, as does Mr Latham, for Mr For example, the Ross Ice Shelf has calved a Garrett’s behaviour. number of massive icebergs in the past few years, Senator Hill—Mr President, I ask that but the area of the ice shelf and the position of its further questions be placed on the Notice front are still well advanced from the historical minimum. Similarly, a major part of the Larsen B Paper. ice-shelf in the Antarctic Peninsula region broke QUESTIONS WITHOUT NOTICE: up in 2002, releasing approximately 720 billion ADDITIONAL ANSWERS tonnes of ice into the Weddell Sea, but an exami- Environment: Antarctica nation of the sediments underneath the broken-up Larsen B ice shelf suggests that break-up and Senator IAN MACDONALD (Queen- reformation have occurred several times during sland—Minister for Fisheries, Forestry and the last climate cycle (of about 100+ thousand Conservation) (3.02 p.m.)—On 11 March years). Senator Brown asked me a question as Min- The Australian Government is funding consider- ister representing the Minister for the Envi- able work aimed at gaining a better understanding ronment and Heritage concerning Antarctica. of the role of Antarctica in global climate sys- The Minister for the Environment and Heri- tems. This is a major area of study for the Austra- tage has provided an answer, and I seek leave lian Antarctic Division and the Government has to have it incorporated in Hansard. provided $25.7m over seven years for the Antarc- tic Climate and Ecosystems Cooperative Re- Leave granted. search Centre. This research is contributing to the The answer read as follows— international efforts to analyse present and past In relation to Australia nominating Antarctica for changes in the Antarctic ice sheet, ice shelves and World Heritage listing, article 11 of the World sea ice, and numerical modelling to assess possible future changes.

CHAMBER 24106 SENATE Thursday, 17 June 2004

Youth: Homelessness no answer was forthcoming. My very spe- Senator PATTERSON (Victoria— cific question was whether the minister had Minister for Family and Community Ser- taken into account this legislative prohibition vices and Minister Assisting the Prime Min- in directing the Australia Council to make ister for the Status of Women) (3.02 p.m.)— the $5 million grant to the Melba Founda- In answer to a question today by Senator tion-Melba Records. I also asked the minister Bartlett concerning youth homelessness, I whether he had received any legal advice on was talking about the amount of money the whether this could possibly constitute a states were spending as a proportion of their breach of the act. The minister comprehen- gambling revenue on dealing with problem sively failed to address the issues of sub- gambling. I may have said that they spend stance in my question, which only begs the ‘0.05 per cent’, but it is less than 0.5 per question: what was the process that the gov- cent. I want to clarify that in Hansard in case ernment embarked upon that culminated in I did say ‘0.05 per cent’ in my excitement. It the awarding of this $5 million grant? is less than half a per cent. We have no objection to the money going QUESTIONS WITHOUT NOTICE: to support Australian opera or classical mu- TAKE NOTE OF ANSWERS sic, but why on earth did the government use this unusual process? Why didn’t the money Australia Council go to the Australia Council and have Melba Senator LUNDY (Australian Capital Ter- apply to the Australia Council so that the ritory) (3.03 p.m.)—I move: merits of that project could be assessed along That the Senate take note of the answer given with the merits of other companies compet- by the Minister for the Arts and Sport (Senator ing for the same sort of funding for similar Kemp) to a question without notice asked by projects, like ABC Classics or Tall Poppies Senator Lundy today relating to Australia Council or the many others doing good work in this grants. area? How was the $5 million arrived at? The key issue here is whether the direction There does not seem to be any evidence by the Minister for the Arts and Sport to the around of a due process being followed. Australia Council breaches the statutory in- We know that the minister is in possession dependence of the Australia Council. If so, it of a large number of testimonials relating to would be the first instance of this occurring the various merits of this grant, but testimo- since the Australia Council’s inception some nials do not constitute due process as far as a 30 years ago. The purpose of statutory inde- merit assessment by the Australia Council pendence is to ensure that funding decisions goes or, indeed, the government. As far as we are not subject to the political agendas of the know, this type of grant being provided government of the day, whichever party, or through the Australia Council is unprece- the personal preferences of arts ministers or dented. The minister drew an analogy with other ministers of the government. This in- Books Alive, but that was not a dispropor- dependence, or arms-length principle, is ex- tionately large grant to a single company. tremely important for the robustness and in- This has not been done before. I believe it tegrity of the Australia Council. Hence my represents a new step in the undermining of questions today. the cultural independence of the Australia I asked the minister very specifically Council. about his decision in relation to section 6B(4) of the Australia Council Act, but alas

CHAMBER Thursday, 17 June 2004 SENATE 24107

This is not in any way a reflection on this rious attitude she has adopted to this. I think project. I do not actually know whether it is we are in agreement that a lot of people think meritorious or not, but I would like the gov- this is an excellent initiative. It has been ernment to provide an answer to this parlia- widely praised by people from both sides of ment about how it assessed the project’s mer- the spectrum, and I think that is a good thing. its. I think that is fair, in respecting the integ- Senator Lundy has not come to a conclusion rity and commitment of the Australia Coun- herself yet. I do not know how much longer cil and all of the applicants, particularly in Senator Lundy needs to come to a conclu- this similar area, relating to music and CDs. sion, but this is an important initiative which They deserve the level of respect of an ex- in the end will benefit a significant number planation about this grant. It is important to of Australian artists. I think that is a good understand the maths of this—$5 million to thing. fund 35 CDs. If you break it down in simple Senator Lundy is worried that somehow mathematical terms, it equals $143,000 per this government initiative was done as a CD. The maximum grant given by the Aus- budget initiative and not, for example, as tralia Council previously for a CD is $7,000. money that the Australia Council may have The other point worth making is that this granted from its own uncommitted funds. is a significant policy shift by the govern- There is the interesting issue—I suppose it is ment. It is quite an unusual grant. I know a philosophical issue—that this government issues have been raised—I have certainly does take decisions, as I said in question raised some—about the involvement of other time. Governments are quite entitled to take cabinet ministers in this decision. I would decisions in relation to the arts. When you go like the minister to take on notice the ques- around the states and ask to look at the arts tions that I have asked today and provide a grants that state Labor governments make, it proper explanation to the chamber. I am par- is interesting to ask yourself: is there an Aus- ticularly interested in an answer to the sup- tralia Council process in relation to state plementary question relating to the involve- governments? The answer is that there is not, ment of the Department of Communications, largely. There may be one or two states, but Information Technology and the Arts in mak- the advice I have is that my home state of ing recommendations against providing the Victoria does not have an Australia Council grant to Melba Records in this way. Melba process. may well be worthy and reputable, as the Senator Lundy—No, but we do federally, authors of the many testimonials in the min- so why don’t you respect it? ister’s possession attest, but the opposition Senator KEMP—My understanding— has given the minister plenty of opportunities which you can correct if I am wrong—is that to establish Melba’s credentials and he has these grants are generally signed off by the chosen to ignore them. (Time expired) state minister for the arts in Victoria. Senator KEMP (Victoria—Minister for Senator Lundy—Why don’t you follow the Arts and Sport) (3.08 p.m.)—I did stay the procedure of the Australia Council? behind to give Senator Lundy the courtesy of listening to what she had to say. It is not a Senator KEMP—We have the Australia courtesy that was often extended to me by Council, and in my view it performs valuable ministers when I was in opposition, I might work. This government has been supportive say, but I was interested to listen to the ex- of the Australia Council, but at the same time planation that Senator Lundy has for the cu- there are other areas where the government is

CHAMBER 24108 SENATE Thursday, 17 June 2004 entitled to take initiatives—for example, supported by your colleagues. That is what Playing Australia. There was not an Australia happens. This government was pleased to Council assessment of Playing Australia. The take this important initiative in the arts government decided to give a very signifi- budget. It is only one item in the arts budget, cant increase to Playing Australia. which was a very good arts budget. Senator Senator Lundy—It doesn’t go through Lundy would know, because we were to- the Australia Council. gether at lunch time, of the important range of programs that we have funded through the Senator KEMP—Senator Lundy, I lis- arts. (Time expired) tened to you in silence and I think you should listen to me in silence. The govern- Senator COOK (Western Australia) (3.13 ment decided that this was an important ini- p.m.)—I have always thought that there was tiative and we decided to significantly in- something sinister about the born-to-rule crease the money available to Playing Aus- mentality. The conservatives who hold that tralia. There was not a word of criticism— view mostly exhibit it through arrogance and that was the process. I am sure the Treasurer through contempt of lesser mortals. But there agreed with that, or I would not have got it is a dark side of the born-to-rule mentality, through, as indeed did cabinet. They felt that and we have just had an example of it here this was an important initiative. Equally, we this afternoon from the Minister for the Arts considered submissions from a whole range and Sport, Senator Kemp. That explanation of areas, one of which was from the Melba given to the Senate just does not wash. There Foundation. The government are quite enti- is a term that the government should be tled to see whether this is a worthwhile pro- aware of: good governance. Good govern- ject that should be funded. The government ance means we live up to certain exemplary decided that this was a project that should be standards of how we manage government. funded and we made that decision. We are Governments have institutional structures to entitled to make that decision and we have distribute money. The money in the Com- asked the Australia Council to administer it. monwealth budget does not belong to Sena- Senator Lundy thinks this is something terri- tor Kemp or Treasurer Peter Costello to give ble. It is not something terrible; it is good out to whomever they favour. There are news for artists and musicians. It is actually a structures and filters to make sure that gov- good news item, not a bad news item. It does ernment money—taxpayers’ money—is dis- astonish me, Senator Lundy, that you find it tributed fairly and openly to the deserving, impossible to give unqualified support to this with a case, to achieve the objectives that are further boost for the arts that the Australian set for it. In the arts and cultural field, the government gave. I think that is a pity. mechanism that does that is the Australia Council. For arts and culture grants, where Senator Lundy, as you would find if you there are a lot of struggling artists, there are ever became a minister, you are entitled to always more people applying for a bit of as- seek advice from a wide range of areas. You sistance to lift Australia’s profile in arts and are entitled to do that, and you should. If you culture than there are funds available to meet are going to be an effective minister, you their needs. should seek advice from a wide range of areas; and, on that basis, you reach your con- I understand that the Melba Foundation clusions. You make a recommendation and and Melba Records put out a handful of CDs you hope that your recommendation will be each year. They are of established artists who are mostly operating overseas and making a

CHAMBER Thursday, 17 June 2004 SENATE 24109 quid for themselves. They are not for the the funds were granted? Do they have con- young, struggling artists who, in the next nections with the Liberal Party that we do decade, will become household names where not know about? Do they have some other public policy can properly reach down and sort of insider-trading advantage over every give them a hand up. It publishes material other arts group in Australia? We have had from established artists. It did not approach thrown back at us, by way of explanation, the Australia Council for funds; it lobbied that the former President of the Labor Party, ministers direct. Everyone else who had a Barry Jones, regards the quality of the classi- fair case in this field was bypassed. Every- cal music that this company produces as one else who has to demonstrate the merit of good and that he is prepared to testify to that. their application did not get a look in. If you That is a misuse of Barry Jones’s reputation. knew the minister and can make your case, He is an aficionado of classical music and a in this case you got $5 million. And a $5 mil- good critic of it too, so you can accept his lion grant in the arts field is a big lick of word on that—and I am sure it is true—but money indeed. Barry Jones is also an upholder of democ- We are entitled in this chamber to ask: on ratic principles and institutions in this coun- what basis is $5 million of taxpayers’ money try and would insist on everyone being handed to this organisation when everyone treated fairly and properly. (Time expired) else has to jump through the hoops of trans- Senator JOHNSTON (Western Australia) parency, accountability and proof that they (3.18 p.m.)—I am left wondering, having spend the money for the purpose for which it heard the speakers, what the motivation is is given? This organisation does not have to. for this motion to take note today. It begins What is its business case? What is it actually to dawn on me that we have had a little bit of going to do with this money? We know, a complaint put at the feet of the opposition given the qualification published, that it members here. One of the Labor Party’s little works out at $143,000 per CD that it brings secular, vested interest, arts, commune type out. If you are an applicant to the Australia groups is complaining that their application Council, per CD you get $7,000. Why does has been rejected. The Labor Party’s great this company get $143,000? Why is it that contribution to the arts, when they were in the Treasurer and the arts minister are not government, was their support for the great prepared to subject this company to the scru- initiative that was the design of surfboards tiny of the Arts Council, along with everyone for women, to which they committed a num- else? What do they know about this that the ber of millions of dollars, as I recall. arts experts in Australia do not know and Is it enough to come here and attack the will not be advised about? They are serious government’s record and achievements on questions in terms of good governance. And the arts and national heritage? Let us talk the issue that the opposition rises on over about what we have done. In the 2004-05 this is that of good governance and fairness budget the government announced some to not just some artists but all artists and $398 million of triennial funding towards the people wishing to make a profession out of Australia Council’s enhancement of various cultural expression in this country. artists, production infrastructure and other This system fundamentally works if it is assistance. This is in addition to the in- transparent. Why is it that the Treasurer, who creased funding of $18.3 million over four apparently knows this company, is not pre- years given last year to the Australia Council pared to put on the public record the reasons for visual arts and crafts in response to the

CHAMBER 24110 SENATE Thursday, 17 June 2004

Myer report. This is just good government in riginal communities—Port Hedland, Kar- action. In 2001 the Howard government pro- ratha, Carnarvon, Onslow et cetera, a very vided an additional $19½ million for arts and large number of places, such that the people art activity, including boosted funds for the of regional Western Australia had the benefit Australian Business Arts Foundation and for of experiencing a tremendous and important Australia’s museum and art collections. It project funded by the Australian government. also provided a further $44 million funding Playing Australia is a huge success story. increase to the Australia Council for major The Melba Foundation, launched in 2003, performing arts companies following the has a mission to promote Australia’s per- 1999 Nugent inquiry. formers at home and overseas through inter- Then we go to further budget initiatives national distribution of Australian classical wherein this government provided a further recordings. Founder, Maria Vandamme, is $44 million over the coming four years for reported to have said, ‘It will create a perma- the Educational Lending Right scheme, nent and priceless legacy of Australian clas- which in the first four years of operation has sical artists.’ What on earth is wrong with provided $38 million to authors and publish- that? I would have thought, given our track ers in recognition of the use of their works in record of what we have achieved in stark educational lending libraries. The govern- contrast to the opposition, it is a great pro- ment renewed its commitment—and this is a ject. (Time expired) very important aspect from the point of view Senator MARSHALL (Victoria) (3.23 of Western Australia, my home state—to the p.m.)—I rise to take note of the answer given regional art fund. In the last budget it re- by Senator Kemp. It is always slightly inter- ceived $10.7 million to be provided over the esting and amusing to hear Senator Kemp try next four years. A program was established to answer questions, particularly from Sena- to provide funding of $2.5 million each year tor Lundy on matters to do with the arts. He to assist local-level arts and cultural projects always starts off by saying: ‘It is a rare pleas- throughout regional Australia. What a fantas- ure indeed to receive a question from Senator tic concept and what a fantastic contribution Lundy.’ I have heard that so many times. I do this government has made. That is in stark not know how rare it can be these days. I contrast to what the states are doing. have never heard him, when he talks about I had the pleasure yesterday of a visit to these ‘rare pleasures’ actually getting to an- my office here in Canberra by Mr Andy Far- swer one of the questions asked. Today was rant, from Country Arts WA, who is charged simply no exception. Senator Johnston just with the responsibility of administering one asked: what is the motivation for these ques- of the great initiatives of this government— tions? The motivation and the issue at hand that is, Playing Australia. The last project today, which we are discussing, are transpar- that Playing Australia brought to Western ency and due process. I would have thought Australia was the Aboriginal singing and arts that is a very important thing for all senators, group called Nabarlek. They toured a dozen particularly ministers, to be very concerned Aboriginal communities throughout central about—that is, the process of spending tax- Western Australia—a fantastic troop with payers’ money. some $60,000-worth of sound equipment, Here we have $5 million being provided going from place to place and all funded by way of a grant which seems to have no largely by the Howard government. They justification on merit and, if there is, the visited Punmu, Warburton—numerous Abo-

CHAMBER Thursday, 17 June 2004 SENATE 24111 minister seems unable to put that before the The Australia Council also has the exper- Senate or refer to it in any way whatsoever. tise in making the decision based on merit. We are left without any knowledge about Again, there is no evidence at all that this why this organisation, in an unprecedented was merit based. I cannot say for sure that it way, has been granted through the budget was not—I just don’t know. But if it was, process $5 million. Labor do not understand why can’t the minister provide the detail of how this has happened. The minister simply that? Why can’t he, as he was asked in the refuses to justify the grant and that is of sig- supplementary question, give us the docu- nificant concern to us. mentation or the detail of the department’s I can understand why Minister Kemp may recommendation for this grant? The minister be unconcerned about $5 million, compared simply failed to answer that question. It was to the billions of dollars this government is a very specific question: can he provide the currently throwing around the country pork- department’s recommendation? He refused barrelling for the election. Indeed, $5 million to answer it. We had another little whimsical does not sound much compared to that. But walk around the track. We heard about his $5 million is a lot of money and $5 million lunch and he talked about bipartisan issues, does need to be accounted for. The proper government initiatives and all that is nice. process of giving grants to the arts is going Quite frankly, if it is an important govern- through the Australia Council. The Australia ment initiative, it has to be based on some- Council is a statutory independent body that thing. The decision has to be made against is designed to deal with these matters so some test. What is the merit for it? Can he there can be no political interference. It is not document the process for that? there to establish an arms-length decision- The Australia Council knew nothing of making process from the government of the this grant before it was announced in the day—either party in government. That proc- budget papers. There was no discussion with ess has been well established and the prece- it, there was no discussion of the merit, there dent has always been to move these grants was no process of consultation. Yet, once the through the Australia Council. We do not $5 million is allocated in the budget, who is want grants being made that do not properly then responsible for administering the reflect the arts needs of our community. money? The Australia Council. The govern- We do not need political interference, like ment is imposing a process on the Australia we have seen in Parliament House recently, Council in which the Australia Council had where a small group of parliamentarians no role to play and no position to play in the want to influence the sort of art that is en- original decision of granting that $5 million. joyed through this building and want to take Labor say there has to be proper process and us back to 16th or 17th century art. They transparency when spending taxpayers’ dol- want to move away from contemporary art lars and this government, and this minister in and the very important role that the parlia- particular, has not met the most basic stan- mentary art department plays in supporting dards of accountability required by this par- young, developing and new artists of this liament. (Time expired) country. That is a very important process. Question agreed to. Again, that is why it is important when government money is being spent that it is done at an arms-length distance from the government of the day.

CHAMBER 24112 SENATE Thursday, 17 June 2004

COMMITTEES reflects the common law and Commonwealth Reports: Government Responses policy position that a person should only be guilty of an offence if the prosecution can Senator HILL (South Australia— prove fault (intention, knowledge, reck- Minister for Defence) (3.28 p.m.)—I present lessness or negligence) for each element of three government responses to committee the offence. The only exceptions to this reports as listed on today’s Order of Busi- position are where there is express legislative ness. In accordance with the usual practice, I provision that an offence or element of an seek leave to incorporate the documents in offence carries absolute or strict liability. Hansard. 5. The Government generally supports the recommendations and principles set out in Leave granted. the Committee’s Report. The responses read as follows— 6. The Committee made four recommendations. Government Response to the Senate Standing This response addresses each one. Committee for the Scrutiny of Bills Sixth Substantive responses to each Recommendation Report of 2002 of the Sixth Report Application of Absolute and Strict Liability Of- 1. The Committee recommends that the fences in Commonwealth Legislation Criminal Code provisions relating to strict and Executive summary of Government response to absolute liability are appropriate and adequate the Sixth Report of 2002 and do not require amendment at this time. 1. The Government welcomes the Sixth Report Government response to Recommendation 1: of 2002 by the Senate Standing Committee accepted for the Scrutiny of Bills (the Committee), 2. The Committee recommends that the entitled ‘Application of Absolute and Strict Legislation Handbook should require agencies to Liability Offences in Commonwealth abide by the principles regulating the application Legislation’. of strict and absolute liability set out in the Report 2. The use of strict and absolute liability is when developing new or amending legislation necessary in certain circumstances for which includes strict and absolute liability; the ensuring the effective application and Attorney-General’s Department should coordinate prosecution of Commonwealth offences. this process. However, the Government recognises that Government response to Recommendation 2: “no fault” liability should be applied only in partially accept instances where it is necessary and The Government recognises the merits of regulat- appropriate. ing the application of strict and absolute liability 3. Guidelines reflecting the Commonwealth’s by principles such as those set out in the Commit- policy on strict and absolute liability formed tee’s Report. The Legislation Handbook already part of the Attorney-General’s Department requires agencies to consult with AGD on legisla- (AGD) submission to the Committee. The tive provisions that create criminal offences and Committee’s views have figured prominently impose pecuniary or imprisonment penalties, in the development and evaluation of empower officials to enter premises or examine Commonwealth policy on such matters over property or documents, reverse the onus of proof, many years. or empower a person to certify conclusively that 4. The Government recognises and values the certain facts exist. The Government also requires need to maintain fundamental concepts of agencies to seek agreement from the Minister for criminal law liability, such as the need for the Justice and Customs on the criminal law aspects prosecution to prove beyond a reasonable of new legislative proposals. The guidelines on doubt both the physical and fault elements of strict and absolute liability submitted to the criminal offences. The Criminal Code Committee guide ministerial decisions on legisla-

CHAMBER Thursday, 17 June 2004 SENATE 24113 tive proposals. Most of the guidelines are the offence will pose a serious and immediate threat same as or consistent with the principles set out in to public health, safety or the environment. the Committee’s Report. • absolute liability offences should be rare and The Government does not accept the need to re- limited to jurisdictional or similar elements quire agencies to comply with the principles. De- of offences; in contrast to the present Com- cisions should continue to be made by reference monwealth policy absolute liability should to the specific provisions of each piece of legisla- not apply to offences in their entirety in relation. However, any departure by an agency from tion to inadvertent errors including those these principles should be justified to the Minister based on a mistake of fact for Justice and Customs when seeking his ap- The Government does not agree to limit the use proval and in the Explanatory Memorandum to of absolute liability to jurisdictional or similar the relevant Bill. Parliamentary scrutiny allows elements of offences. The Government may want Government decisions to be reviewed. to apply absolute liability to all elements of an The Government generally supports the principles offence to deal with matters where an offender’s set out in the Committee’s Report subject to the mistake of fact should not be an excuse. Such following comments. matters might relate to national security, health, • strict liability should, wherever possible, be safety or the environment. subject to program specific broad-based de- Any proposal to apply absolute liability in such fences in circumstances where the contraven- circumstances would still be subject to Parliamen- tion appears reasonable, in order to amelio- tary scrutiny and justification in the relevant ex- rate any harsh effect; these defences should planatory material (as per the Committee’s First be in addition to mistake of fact and other Report of 2003 at page 20). defences in the Criminal Code. • agencies should acknowledge that there may The Government considers the defence of mistake be areas where existing strict liability of- of fact (in relation to strict liability) and other fences or the way they are administered may defences in Part 2.3 of the Criminal Code to be be unfair; in these cases agencies should re- sufficient safeguards for strict and absolute liabil- view the offences under the general coordi- ity offences. nation of the Attorney-General’s Department • strict liability offences should, if possible, be The Government supports the ongoing review of applied only where there appears to be gen- legislation to ensure its appropriateness. Such eral public support and acceptance both for reviews are the responsibility of individual agen- the measure and the penalty cies. However, it is a requirement that agencies The Government supports this recommendation consult with the Attorney-General’s Department and considers that its consultation mechanisms and seek the agreement of the Minister for Justice combined with Parliamentary scrutiny processes and Customs on the criminal law aspects of new (including Parliamentary legislation committees) legislative proposals. protect the public interest sufficiently. • the Attorney-General’s Department should • strict liability offences should be applied coordinate a new major project to analyse the only where the penalty does not include im- substantive policy merits of existing harmo- prisonment and where there is a cap on nised strict and absolute liability offences; monetary penalties; the general Common- the object of the project should be to amend wealth criteria of 60 penalty units ($6,600 for these provisions where necessary to achieve an individual and $33,000 for a body corpo- consistency of safeguards across all agencies rate) appears to be a reasonable maximum The Government does not believe such a project The Government supports this general principal. is warranted. The Criminal Code Harmonisation However, a higher maximum pecuniary penalty Project has already achieved a significant degree may be appropriate where the commission of the of certainty and consistency in the application of strict and absolute liability. The requirement that

CHAMBER 24114 SENATE Thursday, 17 June 2004 agencies consult with the Attorney-General’s to renew a licence because of a breach of a li- Department and seek the agreement of the Minis- cence condition is an administrative sanction, not ter for Justice and Customs on the criminal law a criminal one. aspects of legislative proposals continues to pro- The Government notes that the Attorney-General mote greater consistency. referred to the Australian Law Reform Commis- • strict liability offences should be designed to sion matters relating to civil and administrative avoid the likelihood that those affected, par- penalties including the level of those penalties, ticularly by the issue of an infringement no- enforcement of the penalties and their relationship tice, will pay the lower penalty simply be- with criminal law. The Commission’s report was cause it is easy and convenient to do so, tabled in Parliament in March 2003 and covers rather than spend the money and time to pur- matters raised in relation to licensing schemes. sue what might be a legitimate defence; any • Comprehensive internal review procedures agency which encouraged this tendency are an essential safeguard for strict liability; would be acting improperly as with other aspects of administration of The Government disagrees. Infringement notices strict liability these should be transparent and linked to strict or absolute liability offences give detailed, clearly providing a process which is individuals a choice between paying the penalty both independent and credible and defending the charge in court. Such notices The Government disagrees. Strict and absolute are used for relatively minor offences with low liability offences are criminal matters. The ques- penalties and they alleviate pressure on over- tion of whether a person has breached an offence crowded State and Territory criminal justice sys- of this type is determined by the criminal courts tems; freeing that system up to deal with more on proof of evidence presented by the prosecu- serious offences. tion. Internal review procedures are not appropri- • external merit review by the AAT or other ate. independent tribunal of relevant decisions • consultation with industry is essential before made by agencies is a core safeguard of any any decision to introduce or vary strict liabil- legislative or administrative scheme; every ity, with the valid concerns of industry being agency which administers strict liability of- taken into account; industry consultation fences should review those provisions to en- should be genuine, not a formality to legiti- sure that this right is provided mise plans already finalised The Government disagrees. Strict and absolute The Government supports this recommendation liability offences are criminal matters. The ques- and considers that its consultation mechanisms tion of whether a person has breached an offence combined with Parliamentary scrutiny processes of this type is determined by the criminal courts (including Parliamentary legislation committees) on proof of evidence presented by the prosecu- sufficiently protect industry interests. This protection. Merit review by the AAT or other tribunal is tion is enhanced further by the Government’s not appropriate. policy on best practice process for regulation • licence holders who hold a licence on condi- announced in the Prime Minister’s More Time for tion that they comply with an Act may be Business statement on 24 March 1997. The policy prejudiced by the inappropriate use of strict requires a regulation impact statement (RIS) to be liability to vary, suspend, cancel or not renew prepared for all proposed new or amending legis- their licence; processes in relation to licences lation which directly affects business or which should be conducted in a transparent manner has a significant indirect effect on business or with adverse decisions subject to external in- restricts competition. The Office of Regulation dependent merits review Review in the Productivity Commission is re- It is possible for the breach of a licence condition sponsible for advising agencies on RIS require- to be an offence or element of an offence. How- ments, and assessing and reporting on compliance ever, varying, suspending, cancelling or refusing with those requirements.

CHAMBER Thursday, 17 June 2004 SENATE 24115

• every scheme of strict liability should be pects of legislative proposals, which pro- administered through detailed, binding motes greater consistency, guidelines which should be agreed between • all existing strict and absolute provisions the relevant agency and industry and tabled have been the subject of Parliamentary scru- in both Houses; breach of the guidelines by tiny, and an agency should preclude prosecution of • those affected by the breach no evidence is available to support a conclusion that any of the existing strict and abso- The Government does not support this proposal. lute liability schemes are operating in a way Criminal offences are created by legislation and which was not intended at the time of pas- should not be modified in their operation by in- sage of the relevant enabling legislation. ternal agency guidelines. 4. Agencies should take into account the above Decisions on prosecution are made by the Direc- principles in the day-to-day administration of tor of Public Prosecutions in accordance with the strict and absolute liability. The principles Commonwealth’s Prosecution Policy, which in- should be included where applicable in cludes considering whether there is sufficient agency guidelines. evidence to establish that an offence has been Government response to Recommendation 4: committed. partially accept • every scheme of strict liability should be Subject to the comments made in the Govern- subject to an independent review 12 months ment’s response to recommendation 2, the Gov- to two years after its commencement, with ernment agrees that agencies should take into further review depending on the findings of account the principles outlined in the Commit- the first review; industry should be given the tee’s Report. However, any decisions on how fullest opportunity to participate in each re- those guidelines should be adopted or promul- view gated within an individual agency should rest The Government believes that the merits of a with that agency. statutory review mechanism for strict liability ————— schemes should be assessed on a case-by-case basis. AUSTRALIAN GOVERNMENT RESPONSE TO THE PARLIAMENTARY JOINT 3. The Committee recommends that the COMMITTEE ON CORPORATIONS AND Attorney-General’s Department should FINANCIAL SERVICES INQUIRY INTO coordinate a new project to ensure that THE DISCLOSURE OF COMMISSION ON existing strict and absolute liability RISK PRODUCTS provisions are amended where appropriate to provide a consistent and uniform standard of INTRODUCTION safeguards. This should also be included in The importance of disclosure the Legislation Handbook. Disclosure is an essential element of the con- Government response to Recommendation 3: not sumer protection rationale underlying the Finan- accepted cial Services Reform Act 2001 (FSR Act). The This is not warranted because: Government considers it fundamental that consumers of financial services receive adequate • the Criminal Code Harmonisation Project information on which to base decisions to acquire achieved a significant degree of certainty and financial services or invest in financial products. consistency in the application of strict and absolute liability, Disclosure of commissions and other benefits is a key component of the disclosure regime estab- • it is already a requirement that agencies con- lished under the FSR framework, especially sult with the Attorney-General’s Department where consumers are being provided with per- and seek the agreement of the Minister for sonal advice recommending that they acquire a Justice and Customs on the criminal law as- particular product or make a particular invest-

CHAMBER 24116 SENATE Thursday, 17 June 2004 ment. The disclosure of information about com- or remuneration (including commissions) missions provides consumers with information that might reasonably be expected to be or which is relevant to, and of potential value in, have been capable of influencing the provid- reaching their decision on, for example, whether ing entity in providing the advice. they should acquire a particular financial product. • At or before the time that a person actually The FSR disclosure requirements recognise that if acquires a product, the person should receive consumers are to rely on advice from other par- a Product Disclosure Statement (PDS). The ties, it is appropriate that they be aware of any PDS is specific to the product being ac- potential bias or influence on the advice provided. quired, and includes information relating to Consequently, in relation to the provision of per- the benefits and risks of the product, any sonal advice the FSR legislation requires com- costs such as fees and charges, as well as in- mission to be disclosed only where it might rea- formation about remuneration to the extent sonably be expected to be or have been capable of that it will impact on any returns to the per- influencing the providing entity in providing the son generated by the product. advice. At other points in the provision of finan- It is important to emphasise that different pur- cial services and products, different disclosure poses are served by each stage of disclosure re- requirements apply (see below). flecting the links in the ‘chain’ of delivery of fi- The FSR legislation was the subject of detailed, nancial services. The FSR disclosure require- extensive and lengthy consultation and issues ments are specifically tailored to recognise these surrounding the disclosure of commission were differences. carefully considered throughout that process. • In relation to the PDS, the directed disclosure Disclosure under FSR approach within the legislation recognises Disclosure under the FSR regime applies in re- that information material to an investment spect of financial services supplied to retail cli- decision includes costs to the person of the ents, and operates at 3 stages: product being acquired. Therefore, commissions that represent a cost (or lower the re- • When a person first contacts the provider of turn) to the person need to be disclosed at a financial service, they should receive a Fi- this stage. nancial Services Guide (FSG), which may be a relatively generic document identifying the • However, at the SoA stage disclosure is di- service provider and describing the types of rected at informing the person of any poten- services it provides. The FSG should also in- tial conflicts of interest or influences that clude information regarding remuneration ar- may impact on the advice they receive— rangements that are attributable to the provi- advice which should be tailored to their par- sion of the relevant financial services, or ticular circumstances (ie. personal advice). conflicts of interest or associations that might - The presence and amount of reasonably be expected to be capable of in- commission payable to the adviser, to fluencing the providing entity in providing the extent that it might reasonably be any of the relevant financial services. expected to be or have been capable of • When a financial service provider gives per- influencing the advice provided, is a sonal advice (which is defined as advice that relevant factor to the person receiving takes into account a person’s objectives, fi- the advice. nancial situation and needs) they should pro- - Hence, the legislation is intended to vide a Statement of Advice (SoA). The SoA ensure the person is put in a position to is a more individually tailored document than make an assessment and appropriately the FSG. It sets out the actual advice given weight this potential for influence and and information about the basis for that ad- this can only be done where the vice. It is also required to include informa- information is provided to them. tion about conflicts of interest, associations

CHAMBER Thursday, 17 June 2004 SENATE 24117

- Unlike disclosure made at the point of should provide an exemption for the commission acquisition of the product (the PDS component paid in respect of back-office func- stage), at the point where personal tions performed on behalf of the product issuer or advice is being provided, it is irrelevant provider. whether the payment of commission will Response affect the cost of the product or the The Government does not accept this recommen- return—what is important is whether the dation. payment may have influenced the advice. The Government does not support giving revenue derived from ‘back-office’ functions any special RESPONSE TO MAJORITY REPORT or different treatment beyond that already pro- RECOMMENDATIONS vided under the FSR Act. Accordingly, it believes Recommendation 1 that payments for such functions should be dis- The Committee recommends that the Department closed in the FSG if they are received in respect of the Treasury and ASIC: of, or are attributable to, the provision of the rele- • investigate claims that there could be disclo- vant financial services. In the case of the SoA, sure abuses on packaged products where such payments should be disclosed if they might commission disclosure requirements vary on reasonably be expected to be or have been capa- the products involved; and ble of influencing the providing entity in providing the personal financial product advice. • where the potential for such abuses is confirmed, should take the appropriate action to The Commentary on the Draft Provisions of the close off this potential. Financial Services Reform Bill released by the Treasury in February 2000 states, in relation to Response the disclosure of payments for ‘back office’ func- The Government notes that the Australian Securi- tions in the SoA (at page 203): ties and Investments Commission (ASIC) was “Where financial service providers and product provided with significant additional funding total- issuers enter into an arrangement that the service ling $90.8 million over four years to enhance its provider will perform ‘back office’ functions on enforcement and compliance capacity, including a behalf of the issuer and the payment for perform- dedicated amount of $69 million for the imple- ing those functions is included in the commission mentation and enforcement of the FSR legisla- paid in respect of the individual products, then tion. this component of the commission does not need In accordance with its responsibility for regula- to be disclosed.” tion of consumer protection and market integrity However, the Commentary then goes on to say: in relation to the financial services industry, ASIC will continue to monitor and promote compliance “The basis for this is that this component of with the commission disclosure requirements of commission represents payment by a product the legislation. issuer to a financial service provider for the performance of services that would otherwise be The Government agrees with the views expressed performed by the product issuer, for example by supporters of commission disclosure that con- underwriting. These services could not be said to sistent disclosure requirements across all financial influence the giving of advice where the payment products, whether or not they are risk or invest- for the service equals the cost of performing the ment-based, will reduce the likelihood of abuses service.” (underlining added). of disclosure where ‘packaged’ products are involved. Thus it has always been the intention under the legislation that commission received for the per- Recommendation 2 formance of back office functions is not ‘auto- The Committee recommends that the disclosure matically’ exempt from disclosure, but only provisions for the Financial Services Guide and where the payment of commission does not influ- the Statement of Advice—at the very least— ence the giving of the advice. The Commentary

CHAMBER 24118 SENATE Thursday, 17 June 2004 provides some guidance by indicating that this manner that is clear, concise and effective and criterion could, for example, be satisfied where easy for the client to understand (see Corpora- the payment for the service equals the cost of tions Subregulations 7.7.04(4) and 7.7.07(4)). performing it. Such information must also, of course, be accu- More generally, there is by no means a consistent rate and any statements that might refer to other definition across the financial services sector of advice providers (such as salaried advisers) would what constitutes a ‘back-office’ function. It is not need to be carefully worded so that they do not appropriate or practically possible to exempt a unfairly portray that advice delivery mechanism, range of functions/activities that are ill defined. or include unsubstantiated claims about a particu- However, the Government notes that industry and lar product provider or adviser. ASIC have been discussing how to address prac- Recommendation 3 tical issues that may arise in relation to commis- The Committee recommends that the Government sion disclosure in a FSG or a SoA, such as defin- amend the Corporations Act 2001 so that licen- ing the range of services or functions to which it sees and authorised representatives are required to applies. disclose in the Financial Services Guide the na- The Government notes the comments of Senator ture of their remuneration (i.e. whether salary, Murray (at page 67 of the Committee’s Report): commission, etc.) but are exempted from the re- “To mitigate the impact on small business, it may quirement to disclose details (i.e. quantum) of be appropriate to include with the commission commissions on risk insurance products in the disclosure some commentary that the commission Financial Services Guide and Statement of Ad- includes a back-office, salary and service compo- vice. The present remuneration disclosure re- nent that would not normally be included in the quirements for Product Disclosure Statements commission of a salaried employee of the product should be retained. manufacturer or owner. In this way, small busi- Response ness operators in regional areas would be helped The Government does not accept this recommen- in justifying their commissions to consumers to dation. demonstrate that the price of the risk product is not significantly different despite the nominally The FSG and SoA provisions in the Act and regulations reflect the Government’s longstanding higher commission.” position that remuneration disclosure is a key The disclosure requirements do not preclude the component of the information needed to assist providing entity explaining how remuneration consumers make informed decisions which is in (including commissions) is used, or the purposes turn a central policy objective of the FSR frame- to which it is put. For example, the provision in work. the Corporations Act 2001 (the Act) relating to SoAs given by an authorised representative spe- The purpose of the FSG is to ensure consumers receive information, which can assist them to cifically acknowledges that the SoA may also include other information (see paragraph make informed decisions about whether or not to acquire a financial service before that service is 947C(5)(b)). obtained. In contrast, the purpose of the SoA is to The Treasury has previously indicated to the As- provide more specific information in relation to sociation of Financial Advisers that it would be the provision of a particular financial service, possible, and indeed well may be helpful to cli- namely personal advice, at the time or as soon as ents, for advisers to provide a breakdown of their practicable after the advice is provided. commission payments showing what amounts or Disclosure in the Financial Services Guide percentages are attributable to overheads and other business expenses. In line with its purpose, a key element of the Such information would need to meet the re- FSG’s required content is the disclosure of information about the remuneration (including com- quirement that information relating to remuneration included in a SoA must be provided in a mission) that would be received by the person providing a financial service. This ensures con-

CHAMBER Thursday, 17 June 2004 SENATE 24119 sumers have information before the event of how, Nevertheless, the operation of the law should not and how much, remuneration would be payable to result in a need to provide an onerous amount of the service provider (both directly and indirectly) information concerning remuneration in the FSG. in the event they proceed to receiving a financial The Government notes the extensive guidance service. The provisions in the law are consistent provided by ASIC through Policy Statement 175. with the objective of providing consumers with Further, the regulations provide that where a de- information to assist them make an informed de- scription of remuneration needs to be given, this cision, including information to facilitate a com- should only be ‘to the extent relevant’ (see Corpo- parison of services on offer from service provid- rations Subregulations 7.7.04(3) and 7.7.07(3)). ers. Disclosure in the Statement of Advice The substantive legal requirements in relation to The Government notes that the Committee has remuneration disclosure in a FSG have been in recommended on previous occasions that disclo- place since October 2001. Amendments to Corpo- sure of the quantum of commission on risk-based rations Regulations made in July 2003 do not insurance products not be required in the SoA. detract from, and were intended to remove any potential uncertainty about, the operation of these In making this recommendation once again, the Committee majority report has accepted the im- primary remuneration disclosure obligations. The release in June 2003 of ASIC Policy Statement portance of disclosure for consumer protection. It also acknowledged that evidence addressing the 175 Licensing: Financial product advisers— conduct and disclosure provides guidance to in- issue of whether there is a link between commission, self-interest and consumer detriment tended dustry through indicating how ASIC will administer these requirements. to be anecdotal (see paragraph 3.18 of the Com- mittee’s Report). Nevertheless, the report of the The Government always intended that, in line Committee majority appears to have relied on the with its purpose, information about remuneration anecdotal evidence of those opposed to commis- must be included in an FSG. As contemplated in sion disclosure to formulate its position. paragraph 942B(4)(c) of the Act, regulations introduced in October 2001 (such as Corporations In particular, the Committee majority seems to have accepted the claim that commission disclo- Regulations 7.7.04 and 7.7.07) deal with the level of detail and presentation of the required remu- sure will inevitably result wholly in a move from ‘up-front’ to ‘level’ commissions. The Govern- neration information. These regulations in draft form were subject to public consultation in Au- ment understands that it has not been the experience in relation to other types of financial prod- gust and September 2001. ucts that disclosure of commissions has resulted The phrase ‘does not limit the generality’ in these in the demise of up-front commissions. Similarly, regulations was intended to ensure that the level the Government feels that the Committee major- of information required to be provided was rea- ity has too readily accepted the claims of oppo- sonable and did not result in an overbearing nents of commission disclosure regarding the amount of detail being contained in a FSG. The effect on the income of advisers. regulations were amended to remove any possibility of doubt about their effect as, notwithstand- The Government continues to hold to the view that the consumer protection benefits of the FSR ing the intent of section 942B of the Act, some industry members took the view that this phrase commission disclosure requirements justify their uniform application across all financial products, allowed information about remuneration to not be disclosed, beyond the fact that a generic form of including insurance products, whether they be risk or investment based, or a combination of the remuneration would be received. This interpreta- tion was a factor in the Government’s decision to two. It does not accept the argument that disclosure of commissions on risk-based products is too amend these regulations in July 2003. These amendments were subject to public consultation complex for consumers to understand and/or may lead them to make poor choices. It also does not in June and July 2003. accept the proposition that disclosure will result in the type and scale of change to remuneration

CHAMBER 24120 SENATE Thursday, 17 June 2004 structures and commission levels suggested by versely affecting the quality and independ- those opposed to disclosure. ence of advice available to consumers. The Government notes that broadly comparable The report should formulate a remedial program commission disclosure requirements have been in to correct any identified areas of market failure. place for some considerable time in relation to the Response pre-FSR securities dealers’ licensing regime The Government does not accept this recommen- without encountering the difficulties cited by dation. opponents of disclosure. The Government acknowledges the importance of It also notes that insurance advisers currently the issues mentioned in the recommendation. It have an obligation to inform clients of their does not, however, accept that they are directly commission payments, which arises in the case of relevant to the introduction of the FSR Act and insurance agents and brokers if the client requests sees no present need for a review such as that this information, and requires that they have the suggested. Having said that, the Government will means to meet such requests. The Government is closely monitor the impact of the new regulatory not aware of any arguments that insurance agents framework across the whole of the financial ser- and brokers are unable to comply with requests to vices sector (not only risk insurance businesses) disclose their commissions under existing re- to ensure that its objectives are achieved, includ- quirements. Thus, the argument that the FSR re- ing that its consumer protection benefits are fully quirements that commission be disclosed without realised. the need for a request from the client will be too difficult and/or complex to comply with suggests ————— that such advisers presently cannot—and perhaps Government Response to Report 52 of the do not—meet the requirements of existing law Joint Standing Committee on Treaties and industry codes. Singapore—Australia Free Trade Agreement Recommendation 4 (SAFTA) The Committee recommends that the Government Recommendation 1: review and report on the extent and likely effect That, in recognition of the concerns held by of consolidation and restructuring in the financial members of the Australian public and non- sector to determine its effect on the delivery of government organisations, there be an opportu- risk insurance services in metropolitan and re- nity for greater public involvement, specifically gional Australia. The review should place empha- including local government, in the consultation sis on: process leading up to the first review of SAFTA. • whether there is sufficient competition in the The Government will ensure that local govern- industry to promote outcomes that are bene- ment bodies and other relevant stakeholders, par- ficial for consumers in terms of: ticularly State and Territory governments, are - the quality of risk insurance advice consulted on the incorporation of reservations (taking into account issues of adviser covering regional (State, Territory and local) gov- independence and expertise); ernment measures to the principal obligations in - availability of face-to-face risk the chapters on Trade in Services and Investment. insurance advice; Incorporation of these reservations will be the - product diversity; main item requiring additions or modifications to the Treaty that will be considered at the first re- - services including claims handling; and view of SAFTA. - price; MARPOL 73/78: Annex IV—Regulations for the • the role and viability of small risk insurance Prevention of Pollution by Sewage from Ships businesses; and (revised) • whether increasing numbers of ‘tied’ advisers or the increasing use of direct selling are ad-

CHAMBER Thursday, 17 June 2004 SENATE 24121

Recommendation 4: leave—I give notice that, on Monday, The Committee recommends that the role of the 21 June 2004, I shall move: Committee be recognised by ensuring that, unless That, in accordance with section 5 of the Par- notice or reasons are provided, the Committee liament Act 1974, the Senate approves the pro- conclude its review of proposed treaty actions posal by the Department of Parliamentary Ser- prior to the introduction of any enabling legisla- vices to enhance the security around Parliament tion. House. The Government acknowledges the Committee’s Senator BROWN (Tasmania) (3.31 concern and its role in the treaty process and will p.m.)—by leave—I have not seen that pro- make every effort to ensure that the Committee posal; I presume it relates to the white plastic has due time to consider all treaty actions before the relevant implementing legislation is intro- defences. duced. The Government notes, however, that in Senator Mackay—He is only giving no- the national interest, this may not always be pos- tice so we can talk about it later. sible. It remains open for Parliament to delay Senator BROWN—Yes, but I notice that considering such legislation until the Committee has reported. the time frame is very short—the 21st. I hope that the proposal involves feasible and pru- The Government notes that the Committee in- dent alternatives so that we actually have tends to write to all Ministers drawing their attention to its concerns. The Department of the Prime options to debate on this matter rather than Minister and Cabinet will follow these letters just a single proposal with no options can- with advice to portfolio Legislation Liaison Offi- vassed and not the homework done that cers about treaty enabling legislation. should be presented to parliament. It is going DOCUMENTS to potentially be a long-term change to the whole ambience of this place, which may Auditor-General’s Reports well be avoided by other security measures. Report No. 53 of 2003-04 The DEPUTY PRESIDENT (3.32 The DEPUTY PRESIDENT—In accor- p.m.)—This is a little unusual but, Senator dance with the provisions of the Auditor- Brown, as a member of the Joint House General Act 1997, I present the following Committee I can advise you that yesterday report of the Auditor-General: Report No. 53 there was a briefing of the Joint House of 2003-04—Performance Audit—The Im- Committee and senators and members as per plementation of CrimTrac. invitation on this very issue. It might assist PARLIAMENTARY ZONE you to seek out the briefing that was given Proposal for Works yesterday. I understand it will be available on The DEPUTY PRESIDENT—In accor- the website shortly. I am not trying to enter dance with the provisions of the Parliament into the debate; I am just trying to assist you as to where you might look. Act 1974, I present a proposal by the De- partment of Parliamentary Services for COOPERATIVE RESEARCH CENTRES works within the Parliamentary Zone, to- Return to Order gether with supporting documentation, relat- Senator HILL (South Australia— ing to projects to enhance the security around Minister for Defence) (3.33 p.m.)—by Parliament House. leave—This statement is on behalf of the Senator HILL (South Australia— Hon. Peter McGauran MP, Minister for Sci- Minister for Defence) (3.30 p.m.)—by ence. The order arises from a motion moved by Senator Brown and as agreed by the Sen-

CHAMBER 24122 SENATE Thursday, 17 June 2004 ate on 15 June 2004 and relates to the provi- Senator BROWN (Tasmania) (3.35 sion of documents relating to the Coopera- p.m.)—by leave—I move: tive Research Centres program and certain That the Senate take note of the statement. Australian Greenhouse Office briefs. I wish I thank the minister for the documents which to inform the Senate that in relation to the have been forthcoming today. It is no small CRC program I have interpreted paragraphs matter. I would have thought that there (a) and (c) of the Senate order to refer to the would be no impediment to all of the docu- current 2004 selection round. ments requested being tabled today. These In relation to paragraph (b), no applica- documents are about the funding of coopera- tions have been approved for funding at this tive research centres for a number of matters stage of the current selection round. In rela- in Australia, not least into renewable energy tion to paragraphs (d) and (e) the documents and alternative energy for such things as were requested from the Australian Green- geosequestration. All the documents should house Office. The Hon. David Kemp MP, be on the public record. I will have a look at Minister for the Environment and Heritage, the documents; I am glad they are on the has provided the following response in rela- public record. I will also look at the docu- tion to those documents: ments which the minister has not tabled. He One of these documents falls within the classifi- says that they are either protected under cation of cabinet in conference and in line with cabinet-in-conference or for some other rea- long-standing practice is exempted from tabling. son should not be put before the public gaze. The other document contains information pre- I frankly cannot think of an excuse for this pared to assist ministers in the deliberative proc- withholding of documents. I will look at ess of government. In accordance with estab- them and consider the matter over the next lished practice those portions of the material that relate to these processes have been deleted from few days and report back to the Senate as to the document I table today. whether further action should be taken to obtain those documents. I wish to table the following documents as required by the Senate order: (a) a list of all Question agreed to. of the proposals submitted for funding under BUDGET the Government’s Cooperative Research Consideration by Legislation Committees Centres program, including the amount of Reports funds sought; (c) a list of all proposals which the CRC selection committee rejected and Senator LIGHTFOOT (Western Austra- the reasons for rejecting them; and (d) AGO lia) (3.37 p.m.)—Pursuant to order and at the Brief 2003/(EA Sub 2897), Options for Sup- request of the chairs of the respective com- port of the Australian Photovoltaic Industry, mittees, I present the reports of the Econom- dated 12 December 2003, sent to the Minis- ics and Employment, Workplace Relations ter for the Environment and Heritage and the and Education Legislation Committees on Minister for Industry, Tourism and Resources the 2004-05 budget estimates, together with by Gerry Morvell, and a list of applications the Hansard records of proceedings. in the 2004 CRC selection round and funding Ordered that the reports be printed. sought identifying those that were unsuccessful in stage 1 and reasons. I table the documents I have referred to.

CHAMBER Thursday, 17 June 2004 SENATE 24123

OCCUPATIONAL HEALTH AND Economics Legislation Committee–– SAFETY (COMMONWEALTH Appointed, as a substitute member: EMPLOYMENT) AMENDMENT Senator Cherry to replace Senator Murray (EMPLOYEE INVOLVEMENT AND for the committee’s inquiry into the COMPLIANCE) BILL 2002 Superannuation Budget Measures Bill 2004 and 2 related bills. Report of Finance and Public Administration Legislation Committee Question agreed to. Senator LIGHTFOOT (Western Austra- CORPORATE LAW ECONOMIC lia) (3.37 p.m.)—On behalf of the Chair of REFORM PROGRAM (AUDIT the Finance and Public Administration Legis- REFORM AND CORPORATE lation Committee, Senator Mason, I present DISCLOSURE) BILL 2003 the report of the committee on the Occupa- In Committee tional Health and Safety (Commonwealth Consideration resumed. Employment) Amendment (Employee In- (Quorum formed) volvement and Compliance) Bill 2002, together with the Hansard record of proceed- The CHAIRMAN—The question is that ings and documents presented to the commit- Democrat amendment (1) on sheet 4214, tee. revised, be agreed to. Ordered that the report be printed. Senator MURRAY (Western Australia) (3.42 p.m.)—The government and the oppo- COMMITTEES sition have made their views plain on my Membership amendment. Essentially, in summary, the The DEPUTY PRESIDENT—The government like the intent and the thinking President has received letters from party behind (1)(a) but find that they cannot sup- leaders seeking variations to the membership port it for various reasons. The ALP feel of certain committees. similarly—but probably a bit more warmly Senator VANSTONE (South Australia— towards (1)(b) as well—and, again, find that Minister for Immigration and Multicultural they cannot support it for various reasons as and Indigenous Affairs and Minister Assist- expressed by them. The only reason I want to ing the Prime Minister for Reconciliation) rise to my feet before taking the vote is that (3.39 p.m.)—by leave—I move: the minister at the table, Senator Ian Camp- bell, in his remarks earlier said that the word That senators be discharged from and appointed to committees as follows: ‘patronage’ is not understood in statute and is difficult to define. I indicate that there is a Select Committee on the Administration of precedent. The precedent is in the Australian Indigenous Affairs–– Federal Police Act 1979, part VI— Appointed: Senators Heffernan, Johnston, Miscellaneous. It has the absolutely delight- Nettle, Ridgeway and Scullion ful heading—Senator Conroy, please note Community Affairs Legislation Committee–– this for the future—‘Prohibition of patronage Appointed, as a substitute member: and favouritism’. It says: Senator Sherry to replace Senator Denman The Commissioner, or a delegate of the Commis- for the committee’s inquiry into the Family sioner, in exercising powers under this Act: and Community Services and Veterans’ Affairs Legislation Amendment (Income (a) in relation to the engagement of AFP employ- Streams) Bill 2004 ees; or

CHAMBER 24124 SENATE Thursday, 17 June 2004

(b) otherwise in relation to AFP employees; counting treatments where the difference must do so without patronage or favouritism. between them is material. What I mean by That puts to bed the idea that the Corpora- material is: if it can take you from a profit to tions Law could not include a similar prohi- a loss depending on the type of treatment. bition. However, having said that, I very That is the issue these amendments deal much doubt that it will influence the view of with. the government or Labor as to my amend- What I find frustrating in this debate is ment. So I put the amendment and await the that whenever I talk privately to auditors and response. accountants, they say: ‘That company really Question negatived. pushes the envelope. They’re really aggressive in their accounting interpretations.’ It is Senator CONROY (Victoria) (3.45 clear that everybody understands, in a private p.m.)—The next block of opposition sense, when someone is pushing the enve- amendments relate to audit and financial re- lope. But when it comes to getting people on porting. Labor welcome many of the pro- the public record—and we have had these posed reforms relating to audits and financial experts from the industry before us at par- reporting in the CLERP 9 bill. We are parliamentary committee hearings—to ask them ticularly concerned about the provisions in what an aggressive accounting treatment is, relation to non-audit services and cooling-off everybody has amnesia. Nobody wants to periods. We are also disappointed that the say on the public record what an aggressive bill fails to address the use of aggressive ac- accounting technique is. Talk to them pri- counting techniques, an issue specifically vately and they will give you a list. They raised by Justice Owen in the HIH Royal have got no problems telling you: ‘This goes Commission report. on all the time. That was pushing the enve- I want to start by discussing aggressive lope.’ But you will not get a word out of any accounting techniques. I believe that share- of them on the public record. It is very frus- holders are entitled to know when manage- trating. ment is applying aggressive accounting tech- How do we get around this? No-one wants niques. In his report, Justice Owen said that to point the bone. They are all afraid to break in relation to the acquisition of FAI a certain the cone of silence, to blow the whistle, be- accounting treatment was said to be in ac- cause there will be ramifications. How do we cordance with mandatory accounting stan- fix it? Let us make it mandatory to disclose. dards. Yet evidence before the royal commis- Let us say that if management want to treat a sion suggested that on an alternative view of particular transaction in a particular way, but the same accounting standards the item there are alternative treatments and the audi- should have been recognised as an expense. tor has an alternative view, then let us have This would have resulted in HIH reporting that on the table. That way shareholders are substantial operating losses. This goes to the able to do two things: they are able to judge heart of whether or not management can lean the integrity of the management and they are on an auditor to get the treatment they able to ask why management is leaning on want—basically to smooth the profit flows the auditor to get a process, standard or in- and make management look better than they terpretation adopted? They can make a should. That is what is at the heart of this judgment about whether or not the com- debate. This example illustrates the impor- pany’s reports are accurate and fair. Ulti- tance of an auditor disclosing alternative ac- mately, it is their money being invested in

CHAMBER Thursday, 17 June 2004 SENATE 24125 these companies and they are entitled to tive way of trying to get to some of these know whether or not there is funny business issues and Labor did not support it. I am going on in the way these things are ac- hoping Senator Murray will support this counted for. The most critically important amendment. reason why this amendment should be In relation to non-audit services— adopted is that it will restore the link be- Senator Murray—Can amendment (16) tween auditors and shareholders. At the mo- be put first, because that is a distinct area, ment it is clear from all of the evidence we and then the others be put together? have seen that auditors believe the people they owe allegiance to are those in manage- The CHAIRMAN—I was going to ask ment. Notwithstanding the way the Corpora- Senator Conroy for clarification as to what tions Law is meant to work, auditors are ap- he intended to move. pointed or elected—however you want to Senator CONROY—I intend to move describe it—by the shareholders. amendment (16) separately. We want to send a clear message to the The CHAIRMAN—And then you will auditing profession. We want to tell them: you move amendments (17) to (20) and (23) ‘The people you owe your allegiance to are together? the shareholders. If management tries to lean Senator CONROY—Yes. I move: on you, we want you to stand up, report it (16) Schedule 8, page 230 (after line 22), after and take questions on this from your share- item 15, insert: holders because ultimately the shareholders 15A After subsection 308(1A) decide who runs the company and who should audit the company.’ This will give Insert: power to the auditors to resist management, (1B) An auditor who audits the financial but most importantly it will give power to report for a financial year must the shareholders to deal with auditors who report to members on: will not stand up on behalf of shareholders, (a) The impact of the position taken who will not blow the whistle and say, ‘No, by the reporting entity where we’re not prepared to cop that particular ac- alternative accounting treatments are reasonably open from the counting treatment.’ That is what we need. reading of an accounting standard We need to give power to the shareholders, and the difference is material; but shareholders will not be able to deal with and this unless they are told about it. (b) Significant matters arising in the What is the secret? Let us lift the veil on audit process. these accounting secrets so that the share- Senator MURRAY (Western Australia) holders who understand these issues can say: (3.52 p.m.)—I appreciate the minister may ‘Just a minute. Why did you adopt that ac- need a little more time to be briefed, so I will counting treatment? If you hadn’t, it would speak to the amendment. The original Labor have given a very different figure.’ Share- amendment—and perhaps Senator Conroy holders are entitled to know that because if can confirm this—was constructed prior to they then make a decision to either increase the Parliamentary Joint Committee on Cor- or decrease their investment in that company porations and Financial Services CLERP then they are informed. That is what this report Part 2: Financial reporting and audit amendment is about and I hope it is adopted. I appreciate Senator Murray had an alterna-

CHAMBER 24126 SENATE Thursday, 17 June 2004 reform coming out. Recommendation 4 of Senator CONROY (Victoria) (3.56 that report states: p.m.)—I think we were perfectly comfort- The Committee recommends that the Bill should able with the recommendation of the joint insert a definition of ‘true and fair view’ into the parliamentary committee. I think this one is Corporations Act 2001 to clarify that its purpose broader and has a better coverage than the is to ensure that the financial reports of a disclos- one in the joint parliamentary committee ing entity or consolidated entity represent a view report. It was quite narrowly focused and that users of the reports ... would reasonably re- only dealt with companies that got them- quire to make an informed assessment of matters selves into a bit of trouble. I am looking to such as investment in the entity or the transaction of business with the entity. have a much broader approach. The one you are referring to, I agree, is a good amend- Recommendation 3 states: ment and gets right down to dealing with The Committee recommends that where alterna- some facts, but only in a limited number of tive accounting treatments are possible in an ac- cases. I have no difficulty with the amend- counting standard, and where the alternative/s not ment you are referring to. I am hoping to selected could have resulted in the company re- capture a much broader range of transactions cording a loss for the financial year, or substantial losses rather than gains, or have materially af- than potentially would be captured in the fected its solvency, then the reason for the choice joint parliamentary committee recommenda- of the more favourable alternative over the less tions. I would like to pursue this one, but if it favourable alternative must be disclosed by the were unsuccessful I would not necessarily be external auditor. opposed to having the other one. I think they Senator Conroy, that is a far better recom- are complementary. I do not think they nec- mendation than the one you have put before essarily cut across each other. One is in a us. The question I asked through the chair, narrow set of circumstances; the other is in a which you might have missed, was whether broader set of circumstances. I hope that your amendment was designed prior to the clarifies my views on that. Hopefully, the committee report coming out, because the government will also accept this amendment. substance of recommendation 3 is more fo- The CHAIRMAN—I call the minister. cused, more precise and I think better deter- Senator Murray interjecting— minable than the amendment you have suggested. The CHAIRMAN—Senator Murray, I have called the minister. Minister, do you I suggest to Senator Conroy that, if he want to hear Senator Murray’s response? were to withdraw amendment (16), which is before us now, and redraft it with recom- Senator Vanstone—I would love to hear mendation 3 in mind, the Democrats would Senator Murray’s response, but I would like to say something too. be far more disposed to support it. I point out that, to the best of my knowledge, the De- The CHAIRMAN—I think the minister mocrats and the Liberal Party members on is anxious to say something. You obviously the committee supported recommendation 3 have words that will interest the minister. and so did the Labor Party. It would seem a Senator Murray interjecting— waste, frankly, if you were to put, with re- The CHAIRMAN—I know how helpful spect, an inferior amendment to that which you can be, Senator Murray, but the minister the committee was suggesting. would like to say a few words.

CHAMBER Thursday, 17 June 2004 SENATE 24127

Senator VANSTONE (South Australia— with it for so long. The horror of that is it Minister for Immigration and Multicultural was a state bank that did it. It is not accept- and Indigenous Affairs and Minister Assist- able when anyone does it—it is not accepting the Prime Minister for Reconciliation) able when the private sector does it—but it is (3.58 p.m.)—I have not had the experience certainly not acceptable when, in effect, a of Senator Murray not being helpful. I know government agency does it. That bill obvi- how helpful he can be. He is always helpful. ously did not pass, but nonetheless the inten- Obviously, transparency in reporting finan- tion was there. cial matters for shareholders is critical. It Another matter I would like to highlight is affects the decisions that people make on the importance of transparency in account- their investments. Not everybody is rich ing—and I am coming back to you, Senator enough to drop a lazy $1,000, $2,000, Murray; I have not forgotten you down there, $10,000 or $50,000. Some people do not obliterated as you are, visually at least, by listen to advice and put all their eggs in one the Hansard operator. In my previous portfo- basket. When things hit the fan, they lose a lio I had Access Economics do some work lot. So these things are important. I think that on the transparency of state budgets because is generally understood. I am idealistic enough to believe that, if not I understood what Senator Conroy and the people in the front bar of the pub then at Senator Murray were saying. I think Senator least interested parties should be able to look Conroy was making the assumption that I did at a budget and see what it means. They not have an interest in accounting standards. should be able to see not just a few dollars Just briefly, for his benefit, I can advise the that add up but what that money is going to chamber that, when we were unlucky enough purchase in this portfolio or that portfolio. to be in opposition for a long period of time, They should be able to understand reports on a private member’s bill in relation to ac- what happened in the last year—what the counting standards was drafted at my re- government intended and what has actually quest. I was a bit upset that the drafter appar- happened with the money—so that, for ex- ently thought it was Senator Bronwyn ample, lobby groups in the disability area Bishop at the time who wanted it drafted. could see what money is actually going to In particular I had it done because banks the disabled and whether a promise of more were not required to follow certain account- places for respite care has in fact resulted in ing standards, which of course allowed the more places. terrible disaster that hit the South Australian Sadly the report indicated that, in many bank to happen—where I think $4 billion cases, the states are not good at being trans- was lost in the end. You could say, ‘Well, it parent in their accounting. In one sense, this was taxpayers’ money or government is more fundamental than transparency in the money,’ but South Australians had to pay corporate structures. What I am asking for higher fees and charges—and probably here is transparency in accounting so that taxes; I am not sure—for a very long period voters who want to participate in the democ- of time, in a small state, to recoup that. The ratic process are judging on open, honest and particular standard related to off-balance- transparent material and are able to see sheet items where there were very significant whether a government has done what it said loans put out by the bank. Through the way it would do. I believe there should be more they were structured, they were not on the of this right across government so that peo- balance sheet. That is how they got away ple can see not just dollars adding up but

CHAMBER 24128 SENATE Thursday, 17 June 2004 what the actual outputs are expected to be Senator CONROY (Victoria) (4.05 and then, later in the year, what they are. p.m.)—by leave—I move opposition The government does not support amendments (17) to (20) and (23) on sheet amendment (16). I am advised that the 4216 revised: AASB and witnesses at the hearings of the (17) Schedule 1, item 91, page 43 (after line 14), PJSC expressed the view that disclosures after subsection (11A), insert: like this might be too complex for inclusion Non-audit services not to be provided in the auditor’s report. Nonetheless, as a mat- by auditor ter of policy, the government is looking to (11AA) A person contravenes this subsection if ensure that shareholders and the market gen- the person, as an auditor that performs erally are given relevant and useful informa- for any company any audit required by tion. Pending accounting standard AASB this Act, provides to that company 101—which will require the preparers of contemporaneously with the audit any financial statements to disclose key decisions non-audit service, including but not restricted to: that are fundamental to the accounts—will require disclosures broadly along the lines of (a) bookkeeping or other services those proposed by these amendments. related to the accounting records or financial statements of the company; Senator MURRAY (Western Australia) or (4.03 p.m.)—The Democrats will not be (b) financial information systems design supporting your amendment (16), Senator and implementation; or Conroy. If, however, you were to come back (c) appraisal or valuation services, after the dinner break with a substitute fairness opinions, or contribution-in- amendment which put the thrust of the kind reports; or PJSC’s recommendation before us then we (d) actuarial services; or would support that. (e) internal audit outsourcing services; Senator CONROY (Victoria) (4.04 or p.m.)—Thank you for that suggestion, Sena- (f) management functions or human tor Murray. I stand admonished by Senator resources management functions; or Vanstone’s last contribution; clearly she is (g) broker or dealer, investment adviser, someone who has followed this debate ex- or investment banking services; or tensively. I was hoping she would stay to (h) legal services and expert services match her rhetoric with some substance here unrelated to the audit; or in the chamber, but I see that Senator Kemp (i) any other service prescribed by has ably taken over. I know she will be well regulations made for the purpose of represented in her absence. We are looking this subsection. forward to your breaking that duck you (11AB) A person does not commit an offence scored at question time, Senator Kemp. because of a contravention of Senator Kemp—The big guns are coming subsection (11AA) if: in! (a) the non-audit service is not Senator CONROY—Well, let us not get described above and the activity is carried away. I think we have probably said approved in advance by the audit all we need to on this amendment and can committee of the company; or now move on. Question negatived.

CHAMBER Thursday, 17 June 2004 SENATE 24129

(b) the company, auditor, or service is As I mentioned earlier, I met with Senator exempted by ASIC from the Sarbanes last week in Washington. He is provisions of subsection (11AA). very confident that the moves they have (18) Schedule 1, item 91, page 43 (line 16), omit made in the US have cleaned up a lot of the “The”, substitute “Where (11AB) applies, problems that emerged, and Australian com- the”. panies are being drawn into that US regula- (19) Schedule 1, item 95, page 82 (line 1), omit tion. So is it surprising that when we see, as “2”, substitute “4”. in that last amendment, a choice between (20) Schedule 1, item 95, page 82 (line 20), omit giving the industry and the auditors what “2”, substitute “4”. they want and giving the shareholders the (23) Schedule 2, item 2, page 137 (after line 31), power to have their will prevail—when the after paragraph 295A(2)(c), insert: auditors argue, ‘Just trust us; our integrity is (ca) the company’s risk management unquestionable’—this government takes the and internal compliance and side of the auditors against the shareholders? control system implements the It is no surprise. policies adopted by the board; and Just recently, US SEC Commissioner Roel Campos justified the more stringent audit (cb) the company’s risk management requirements in the US by saying that it was and internal compliance and control system is operating a privilege for companies to raise capital in efficiently and effectively in all the US and access the low cost of capital and material respects; and liquidity that exists there. I say it is also a Labor believes that certain non-audit services privilege for companies to raise capital in threaten the independence of the auditor. Australia, and we should have the highest Even ASIC took this position in November possible standards. Yet the Howard govern- 2002. In ASIC’s original submission on the ment has chosen to take the soft option in CLERP 9 policy paper, they said: relation to non-audit services. Self-regulation of non-audit services is the approach taken ... the provision of some non-audit services will by this government. This self-regulatory ap- always, or almost always, threaten the independence, or the appearance of independence, of audi- proach is not in shareholders’ best interests. tors, regardless of the safeguards adopted ... ASIC It is time to strike out for shareholders; it is considers that the best approach is to prohibit the time to give shareholders some confidence provision of such non-audit services through the that auditors are independent and that they Act, rather than through the ethical rules of the are not being influenced by other business. professional bodies. It was perfectly clear—every single wit- I endorse those sentiments. To protect audi- ness, even those who oppose this, came be- tor independence, certain non-audit services fore our committee and accepted it with must be prohibited. The Institute of Internal something like valuation. If you were the Auditors, the Australian Shareholders Asso- auditor of the company, could you audit a ciation Ltd and the Australian Council of valuation done by your own company? Super Investors all agree. The US has taken Every single witness basically said no. So we this approach. Many Australian companies ask: what is the problem with banning it so already have to comply with the Sarbanes- that you cannot provide valuation services if Oxley Act in the US. you audit? You say it should not be done, you say it would be unethical, so let us ban it. That is what this amendment does, but I

CHAMBER 24130 SENATE Thursday, 17 June 2004 suspect the government will oppose it. It is provide a sign-off in relation to the financial another victory for the auditors over the statements. The CEO-CFO sign-off is rec- shareholders, courtesy of this government. ommended in the ASX corporate governance Labor’s other amendments implement Jus- guidelines, and those guidelines are wider tice Owen’s recommendation that four years than those proposed by the CLERP 9 bill. is an appropriate cooling-off period before Under the guidelines the certification extends audit partners can join their former clients. to the internal compliance and control proce- The government has flip-flopped on this is- dures which implement the policies adopted sue and has changed it from a two-year pe- by the board. This requirement is an impor- riod in the original consultation paper to a tant component of the certification. Whether four-year period in the draft bill. But, follow- the internal systems are sufficient is a key ing industry pressure, who does the govern- factor in the integrity of information which is ment side with—Justice Owen, who con- funnelled up through an organisation to the ducted a royal commission, took expert evi- board. Labor takes the view that the certifi- dence and came up with his four-year rec- cation under the Corporations Act should ommendation? No. It sides with the audit also extend to internal procedures. profession yet again. In our view, Justice If Labor’s amendments are not accepted Owen is correct when he says that a two-year by the government, we will have a situation cooling-off period might not be sufficient to where listed companies have an obligation arrest a reasonable apprehension that former under the Corporations Act which is incon- partners retain an influence over members of sistent with, and at a lower standard than, the audit team. It is very simple, very clear. that in the ASX corporate governance guide- What is worse is that Treasurer Peter lines. You have got to say, based on track Costello went on national television the night records, if companies have got a choice be- Justice Owen’s report was released and said, tween the mandatory lower standard of the ‘We will implement every single one of Jus- Corporations Act or the Australian Stock tice Owen’s recommendations.’ What hap- Exchange’s higher standard guidelines, we pens when we get here a year later? The dust know which one they are going to take. They has settled a bit and the industry have had a will take the low road. Here is a chance to bit of a fight-back, have come in and done a back up the Stock Exchange and to back up bit of lobbying—not that it is too hard to what is needed to clean up these dodgy re- lobby this mob to protect auditors and the ports produced by companies. I urge the gov- big end of town—and the government has ernment: deliver on the promises of the caved in to the pressure. Peter Costello’s Treasurer. I call on the Democrats to support word means nothing. He made a commit- the amendments. ment to the Australian public. He said, ‘We Senator MURRAY (Western Australia) will implement every single one of Justice (4.13 p.m.)—I know we are dealing with Owen’s recommendations.’ Well, here we amendments (17), (18), (19) and (20). Are have it in clear black and white: the chance we dealing with amendment (23) at the same to keep the Treasurer’s word to the Austra- time? lian public. The pressure is on, Senator The TEMPORARY CHAIRMAN Kemp, to keep the Treasurer’s word. (Senator Hutchins)—We are. Our next amendment proposes that section Senator MURRAY—These amendments 295A of the bill require CEOs and CFOs to relate to three discrete areas and I would like

CHAMBER Thursday, 17 June 2004 SENATE 24131 to deal with them on that basis, but I do not whereby they were entirely independent, you mind them being voted on together. The first would not need to worry about prescriptive discrete area, which absorbed the bulk of the law. time Senator Conroy gave to these amend- The other alternative we have put forward ments, concerns the prohibition of non-audit as an idea—and we know it is an awkward services—black-letter law without doubt, one—is that appointment be made from a prescriptive law without doubt. I think Sena- roster constructed by ASIC. Once again, the tor Conroy’s logic, whilst not impeccable, is government, the Labor Party and the busi- clear and precise. But I fear that we get into ness community will not come at that. In my this situation simply because we have started view it is basically because the sorts of peo- from the wrong premise. I have exposed as ple who advise them and are trained in these fully as I can the arguments that lie behind matters tend to lack an ability to think more my premise in my minority reports and my laterally and more imaginatively. They seem supplementary remarks on the committee’s to think the way we do things is the way we bills. Essentially, Senator Conroy’s amend- should always do things. What we are left ments are based on the premise that the sys- with is a lot of prescriptive black-letter law tem will not change—that the method of proposals. I am a little uncomfortable with electing directors, the relationship between this route, because I would prefer my route. auditors and shareholders, and the way in However, in the absence of my route or which the company constitution and the in- something along those lines you are going to stitutional structure of the company carry on have to go down Senator Conroy’s route will remain the same—and that, therefore, if eventually, because there is no other way in they remain the same, you have to do some- which you can stop the cross-subsidisation of thing about the independence issue through audit services and non-audit services or the this route. patronage and favour that results from being Our view, in contrast, is that you would able to offer people extremely lucrative non- not need any of this if auditors were ap- audit services and doing a bit of nodding and pointed independently. So we have put for- winking in favour of the dominant share- ward the proposition that one mechanism to holder and the executive and non-executive do that would be through the corporate gov- directors by the way. I say what I say advis- ernance board elected by shareholder, not edly. I have no option but to support Senator shareholding. The shareholding method of Conroy’s amendment because of the logic of electing a main board at present allows the opposition’s position. It is second best— dominant shareholders to appoint the direc- and I do not mean that rudely; I just think tors, who are therefore subordinate to the there is a different way to do things. So that patronage of dominant shareholders; and is where we will be on that. those directors appoint the auditor. There is a We then move to amendments (19) and patronage line all the way through and, con- (20), which substitute the years that the gov- sequently, you have no independence in that ernment has chosen with the years that the relationship. So the only way to put some royal commission has chosen. I have never independence back in is to prescribe a whole quite understood why a shorter version was lot of areas that they may not deal in. That is chosen by the government—and the commit- why I say the logic is consistent, clear and tee process did not properly elucidate that— follows very much an understandable route; and until such time as I can understand why but if they were appointed on a basis it should be shorter I think I am obliged,

CHAMBER 24132 SENATE Thursday, 17 June 2004 again, to run with the consistency of Senator This will give a horse laugh out in the wider Conroy’s proposition. community, given what the Latham-led La- The third discrete area to discuss is bor Party is attempting to do to business. amendment (23). That is an absolutely fasci- People are not listening to this broadcast, but nating amendment. Senator Conroy, I do not there may be some who are tuned in to the think you quite realise just what an innova- Internet and they would know the many ad- tion this is and just what an astonishing step verse decisions that the Latham-led Labor forward amendment (23) is in terms of audit Party is making which will impact on busi- practice in this country. I say that based on ness. I do not blame Senator Conroy for this. my experience of the Auditor-General and Nothing I say should be seen to be attacking the Joint Committee of Public Accounts and Senator Conroy, because Senator Conroy is Audit. All the excitement in audit these days really like a lone Collingwood supporter in is in performance audits, not in financial au- the Robert Heatley Stand at the Carlton dits, because that is the area where you as- Football Ground in relation to Labor Party sess risk, where you assess the unknown and policy making at the moment. where you assess the future. The basis of a From time to time, Senator Conroy does financial audit is to tick off the past and to make sense—that is true. He has not made establish that what has happened in the past sense today. I think Senator Conroy has at- and the way it has been reported and re- tempted to understand the business commu- corded is accurate and that you can rely on it nity but he is having no influence, and I thereafter to sell assets, distribute profits or think that is a pity. From my point of view it whatever it is you want to do with the assets would be a great thing if Senator Conroy of a company. The public sector leads the could moderate the extremist pro-union poli- country in its emphasis on performance au- cies that the Labor Party is adopting. I think dits. The private sector, in contrast, almost that probably events have passed Senator invariably just has financial audits—which, Conroy by. If you look at a lot of the busi- incidentally, are cheaper to do than perform- ness initiatives that the Labor Party is now ance audits, which are more difficult. talking about—for instance, the free trade So I will put a compliment your way, agreement—Senator Conroy in the Labor Senator Conroy and your adviser. This little Party is like that Collingwood supporter in initiative is a really sweet one because it spe- the Robert Heatley Stand. cifically goes to risk and it specifically goes On this issue I think Senator Conroy tries to compliance and control systems interact- to speak of behalf of shareholders. The Labor ing with that risk. I am quite sure the gov- Party never speaks on behalf of sharehold- ernment will pop up and find some reason to ers—that is the truth. The Labor Party is a say no, but I would suggest to you that this is trade union party and is committed to taking an initiative which deserves further explora- its orders from the trade union movement. It tion at some future date. We certainly will be is a disappointment, I have to say. I think we supporting it this time round. would do well to listen to Senator Murray on Senator KEMP (Victoria—Minister for this. He is one that I listen to. Sometimes the Arts and Sport) (4.21 p.m.)—The gov- Senator Murray comes down on my side of ernment will not be supporting these the fence and sometimes he does not. This amendments. I was somewhat struck by time he has argued articulately but not con- Senator Conroy’s concern for shareholders. vincingly, and we will not be accepting Senator Murray’s views either on this.

CHAMBER Thursday, 17 June 2004 SENATE 24133

Senator Conroy referred to his recent trip the UK have adopted two years. The Austra- to America. It was good that he had a break. lian Labor Party in its wisdom—or lack of It has been a big year and it is going to be an wisdom—has adopted four years. In our even bigger year. He drew our attention to a view, the four-year ban is quite inappropriate US senator. My advice, Senator Conroy, is in Australia’s comparatively smaller market that the US Sarbanes-Oxley approach of se- and would negatively impact on the capacity lective prohibition may be really problematic of many Australian companies to obtain fi- in the Australian context. It is a smaller mar- nancial expertise from leading audit firms to ket in Australia, with only four to six major fill board and senior management positions. accounting firms. What may work in Amer- Finally, Senator Conroy discussed item ica may not work here. It is possible that the (23) of the ALP amendments. In brief, these US senator gave Senator Conroy the advice amendments will require the chief executive that he did, but he was referring to the US officer and chief financial officer of a com- market, not to the Australian market. It is a pany to sign off on the company’s risk man- bit of a worry to see Senator Conroy slav- agement and internal compliance and control ishly following the US on this particular is- systems. The advice that I have received— sue. and I think this would give a lot of comfort We believe that the disclosure based ap- to the Senate—is that this is covered by the proach is preferable to the US style prescrip- ASX Corporate Governance Council guide- tive approach of selective prohibition. My lines. advice is that there is no evidence in Austra- Senator CONROY (Victoria) (4.27 lia of any specific link between corporate p.m.)—I think I did make that point of my- failure and the provision of non-audit ser- self, and this is a chance to assist the corpo- vices to warrant prohibition. The parliamen- rate governance guidelines. I will just retary Joint Committee on Corporations and spond very briefly to Senator Murray be- Financial Services—the Chapman commit- cause Senator Murray’s intentions are always tee—was not satisfied on the evidence that a honourable in this area. We have discussed it blanket ban could be justified and the com- previously. I am an optimist—and I know mittee did not favour a selective legislative that you would never like to be described as approach because of the likelihood that it a pessimist, Senator Murray—and I am op- might be overinclusive or underinclusive and timistic that we can make this system work. fail to accommodate instances where the You have probably given up on it and you threats posed by self review might be non- think that it is fundamentally broken—in existent. what I would describe as a pessimistic Items (19) and (20) of the ALP amend- view—and therefore you probably believe ments propose to amend sections 324CI and that we need to go to a completely different 324CJ to require a four-year cooling-off pe- model. But I retain my degree of optimism riod. The two-year cooling-off period re- that we can make this system work. I appre- quired by the bill is based on the Ramsay ciate your indications of support for the report and is preferable, in our view, to a amendments. It is no surprise to find this four-year cooling-off period. A four-year government siding with the big end of town cooling-off period is excessive and my ad- against the shareholders. This is what these vice is that it is far out of line with interna- choices are throughout this debate. Whom tional best practice in this area. The US has are you going to back: the big end of town, one year, and the European Commission and the corporate boards, or shareholders? This

CHAMBER 24134 SENATE Thursday, 17 June 2004 government will stand condemned because, 116BD Subsections 100 penalty units as we are now seeing, amendment after 324BC(1) and or imprisonment amendment and vote after vote it will always (2) for 12 months, or both. side with the big end of town. 116BE Subsection 40 penalty units. Question agreed to. 324BC(3) 116CA Subsection 100 penalty units Senator SHERRY (Tasmania) (4.29 324CA(1) or imprisonment p.m.)—Apparently this morning there was a for 12 months, or conflict between government amendments both. and a Labor amendment. To overcome this 116CB Subsections 40 penalty units conflict we have amended Labor’s amend- 324CA(1A) and ment (22), and now the new government (2) 116CC Subsection 100 penalty units provisions are included in Labor’s table, so 324CB(1) or imprisonment there is now no conflict. That is my under- for 12 months, or standing. both. 116CD Subsections 40 penalty units. The TEMPORARY CHAIRMAN 324CB(1A) and (Senator Hutchins)—That is our under- (2) and (4) standing. 116CE Subsection 100 penalty units Senator SHERRY—by leave—I move 324CC(1) or imprisonment for 12 months, or Labor’s amendment (21), revised amend- both. ment (22), amendments (24), (25) and (32) to 116CF Subsections 40 penalty units. (34): 324CC(1A), (2) (21) Schedule 1, page 100 (after line 23), after and (4) item 109, insert: 116DA Subsection 100 penalty units 324CE(1) or imprisonment 110A Schedule 3 (after table item 104) for 12 months, or Insert: both. 116DB Subsections 40 penalty units. 103A Subsection 100 penalty units 324CE(1A) and 300(11AA) or imprisonment (2) for 12 months, or 116EA Subsection 100 penalty units both. 324CF(1) or imprisonment R(22) Schedule 1, item 111, page 100 (line 26), for 12 months, or to page 102, omit the item, substitute: both. 116EB Subsections 40 penalty units. 111 Schedule 3 (before table item 117) 324CF(1A) and Insert: (2) 116FA Subsection 100 penalty units 116BA Section 324BA 100 penalty units 324CG(1) or imprisonment or imprisonment for 12 months, or for 12 months, or both. both. 116FB Subsections 40 penalty units. 116BB Subsection 100 penalty units 324CG(1A) and 324BB(1) or imprisonment (2) for 12 months, or 116FC Subsection 100 penalty units both. 324CG(5) or imprisonment 116BC Subsection 40 penalty units. for 12 months, or 324BB(2) both.

CHAMBER Thursday, 17 June 2004 SENATE 24135

116FD Subsections 40 penalty units. 116MB Subsection 100 penalty units 324CG(5A) and 328B(2) or imprisonment (6) for 12months, or 116GA Section 324CI 100 penalty units both. or imprisonment 116NA Subsections 100 penalty units for 12 months, or 331AAA(1) and or imprisonment both. (3) for 12months, or 116GB Section 324CJ 100 penalty units both. or imprisonment 116NB Subsections 100 penalty units for 12 months, or 331AAB(1) and or imprisonment both. (2) for 12 months, or 116GC Section 324CK 100 penalty units both. or imprisonment 116O Subsection 20 penalty units. for 12 months, or 342B(1) both. 116H Subsections 100 penalty units (24) Schedule 4, item 1, page 179 (lines 5 and 324CM(1), (2) or imprisonment 6), omit the item, substitute: and (3) for 12 months, or 1 Schedule 3 (table items 1, 30, 50, 51, both. 83, 90, 117, 138, 229A to 229C, 235, 240, 116I Section 324DB 100 penalty units 309B, 309C, 310A to 310C, 311A to or imprisonment 311C, 312A, 334 to 337) for 12 months, or both. Repeal the items, substitute: 116JA Subsection 100 penalty units 1 Section 111AU 400 penalty units 324DC(1) or imprisonment or imprisonment for 12 months, or for 10 years, or both. both. 116JB Subsection 40 penalty units. 30 Section 184 4,000 penalty units 324DC(2) or imprisonment 116KA Subsections 100 penalty units for 10 years, or 324DD(1) and or imprisonment both. (2) for 12 months, or 50 Subsection 4,000 penalty units both. 209(3) or imprisonment 116KB Subsection 40 penalty units. for 10 years, or 324DD(3) both. 116LA Subsection 100 penalty units 51 Section 224 400 penalty units 327A(3) or imprisonment or imprisonment for 12 months, or for 10 years, or both. both. 116LB Subsections 100 penalty units 83 Section 254T 200 penalty units 327B(1) and (3) or imprisonment or imprisonment for 12 months, or for 5 years, or both. both. 116LC Subsection 100 penalty units 90 Subsection 4,000 penalty units 327C(3) or imprisonment 260D(3) or imprisonment for 12 months, or for 10 years, or both. both. 116MA Subsection 100 penalty units 117 Subsection 4,000 penalty units 328A(4) or imprisonment 344(2) or imprisonment for 12 months, or for 10 years, or both. both.

CHAMBER 24136 SENATE Thursday, 17 June 2004

138 Subsection 4,000 penalty units 311C Subsection 4,000 penalty units 588G(3) or imprisonment 1043A(1) or imprisonment for 10 years, or for 10 years, or both. both. 229A Subsection 400 penalty units 312A Subsection 4,000 penalty units 674(2) or imprisonment 1043A(2) or imprisonment for 10 years or for 10 years, or both. both. 229B Subsection 200 penalty units 334 Section 1307 200 penalty units 674(5) or imprisonment or imprisonment for 5 years, or for 5 years, or both. both. 229C Subsection 400 penalty units 675(2) or imprisonment 1A Schedule 3 (after table item 273A) for 10 years, or Insert: both. 273AA Subsection 1,000 penalty units 229CA Subsection 100 penalty units. 950D(3) or imprisonment 679(1) for 1 year, or both. 235 Section 726 400 penalty units 273AB Subsection 1,000 penalty units or imprisonment 950E(1) or imprisonment for 10 years, or for 1 year, or both. both. 273AC Subsection 1,000 penalty units 240 Subsection 400 penalty units 950F(1) or imprisonment 728(3) or imprisonment for 1 year, or both. for 10 years, or 273AD Subsection 500 penalty units both. 950F(2) or imprisonment 309B Section 1041A 400 penalty units for 6 months, or or imprisonment both. for 10 years, or both. (25) Schedule 4, page 186 (after line 15), after 309C Subsection 400 penalty units item 11, insert: 1041B(1) or imprisonment 11A Paragraph 1317E(1)(f) for 10 years, or both. After “601FC(5)”, insert “or (7) or (9)”. 310A Subsection 400 penalty units (32) Schedule 5, item 15, page 193, omit “5 1041C(1) or imprisonment penalty units”, substitute “50 penalty for 10 years, or units”. both. 310B Section 1041D 400 penalty units (33) Schedule 5, item 15, page 193, omit “5 or imprisonment penalty units”, substitute “100 penalty for 10 years, or units”. both. (34) Schedule 5, item 17, page 194, omit “5 310C Subsection 400 penalty units penalty units”, substitute 100 penalty 1041E(1) or imprisonment units”. for 10 years, or both. Amendment (22) replaces the table in the 311A Subsection 400 penalty units CLERP 9 bill which sets out the liability 1041F(1) or imprisonment framework for auditor independence. Cur- for 10 years, or rently the penalties which apply for breach of both. 311B Subsection 400 penalty units the auditor liability framework range from 1041G(1) or imprisonment $550 to $2,750 with a possibility of six for 10 years, or months imprisonment. In our view, these both.

CHAMBER Thursday, 17 June 2004 SENATE 24137 penalties are too low. Labor’s amendments amendment can correct me if I am wrong, increase the pecuniary penalties and double that these penalties in fact represent maxi- the jail term. Under Labor’s amendments, mums. They do not represent the amount breach of the auditor’s liability framework which would ordinarily or automatically be will result in penalties ranging from $2,200 applied. Therefore, if I am correct in my un- to $11,000. derstanding, I think that these increases in Amendment (24) relates to serious penalties as maximums are probably war- breaches of the Corporations Act. Labor’s ranted. amendments double the current penalties for Senator COONAN (New South Wales— serious breaches of the act. We have in- Minister for Revenue and Assistant Treas- creased many of the penalties from five years urer) (4.34 p.m.)—I understand that we are to 10 years and increased to five years many dealing with amendments to increase penal- offences that now only carry two-year penalties for breach of auditor independence re- ties. In addition, we have doubled the pecu- quirements. Strict liability offences will at- niary penalties. Labor’s amendments in- tract a penalty of $4,400 while other penal- crease the penalties applying to breach of the ties will be $11,000, imprisonment for 12 provisions relating to non-binding votes on months or both. The bill already increases the remuneration report. The CLERP 9 bill significantly the level and nature of the pen- imposes five penalty units for a breach of the alties relating to breach of the auditor inde- relevant provisions. This amounts to a pen- pendence requirements and fault based of- alty of $550. Labor’s amendments increase fences in relation to the general requirement. the penalties to start at $5,500 and rise to Specific requirements for auditor independ- $11,000. In Labor’s view, a clear message ence attract a penalty of 25 penalty units— needs to be sent that failure to put a non- that is, $2,750, imprisonment for six months binding vote to shareholders is a serious or both—which is a fivefold increase of the breach. existing pecuniary penalty. There is currently Senator MURRAY (Western Australia) no term of imprisonment. So there is a sig- (4.32 p.m.)—As a general proposition the nificant increase in any event. The amend- opposition certainly is aware—and perhaps ments, in the government’s view, are exces- the government is—of our view that white- sive and fail to recognise that the new audi- collar crimes and penalties have tended to be tor liability framework will provide for sepa- of a lesser order than those crimes and penal- rate contraventions and penalties to accumu- ties which attach under criminal law, nor- late very quickly so long as an auditor who is mally. We have consistently been concerned, in breach of the provisions continues to en- especially when we look at the ASIC reports. gage in audit activity. I state this position They do very good work on getting some- briefly as the basis for the government not body in before the courts, and the law itself agreeing to the amendments. provides a fairly modest penalty. We should Question agreed to. recognise that the principle of judicial discre- Senator COONAN (New South Wales— tion means that, unless a penalty is man- Minister for Revenue and Assistant Treas- dated, a judge or magistrate will invariably urer) (4.36 p.m.)—by leave—I move gov- look at a legislative penalty as a maximum. ernment amendments (77) to (84): So, if you have a low amount, you end up (77) Schedule 1, item 112, page 103 (lines 11 and with perhaps an even lower penalty being 12), omit subsection 1299A(2), substitute: applied. I would think, and the mover of the

CHAMBER 24138 SENATE Thursday, 17 June 2004

(2) An application under this section: (84) Schedule 1, item 113, page 109 (table item (a) must contain such information as is 332C, cell at column 3), omit the cell, prescribed in the regulations; and substitute: (b) must be in the prescribed form. 5 penalty units (78) Schedule 1, item 112, page 106 (line 9), These are technical amendments that relate omit paragraph 1299F(2)(c), substitute: to the authorised audit companies. In particu- (c) be lodged with ASIC in the lar, they relate to lodgment of documents and prescribed form. lodgment of prescribed forms. My under- (79) Schedule 1, item 112, page 106 (line 19), standing is that they are not opposed. omit paragraph 1299F(4)(c), substitute: Question agreed to. (c) be lodged with ASIC in the Senator COONAN (New South Wales— prescribed form. Minister for Revenue and Assistant Treas- (80) Schedule 1, item 112, page 106 (line 30), urer) (4.37 p.m.)—by leave—I move gov- omit paragraph 1299F(6)(c), substitute: ernment amendments (85) to (87) on sheet (c) be lodged with ASIC in the PK247: prescribed form. (85) Schedule 1, item 155, page 133 (line 16), (81) Schedule 1, item 112, page 106 (line 32) to omit “After”, substitute “Before”. page 107 (line 6), omit subsection 1299G(1), (86) Schedule 1, item 155, page 133 (line 18), substitute: omit “or (c)”, substitute “(ab)”. (1) A company that is an authorised audit (87) Schedule 1, item 155, page 133 (line 23), at company must, within one month after the end of paragraph (c), add “or”. the end of: These are also technical amendments to cor- (a) the period of 12 months beginning rect anomalies in the numbering of amend- on the day on which the company became registered as an authorised ments in the bill. audit company; and Question agreed to. (b) each subsequent period of 12 Senator MURRAY (Western Australia) months; (4.37 p.m.)—I am now about to move an lodge with ASIC a statement in respect amendment which will certainly go down of that period. because if it were passed it would result in (1A) A statement under subsection (1): lower political donations from companies (a) must contain such information as is than they presently give. Nevertheless, I prescribed in the regulations; and think it is important that I push this particular (b) must be in the prescribed form. boat especially since it is getting greater and (82) Schedule 1, item 113, page 109 (table item greater support from the shareholding com- 332A, cell at column 3), omit the cell, munity. I recall that when I began my busi- substitute: ness career quite a few decades ago it was 5 penalty units the practice for companies to support sporting and cultural events that either the manag- (83) Schedule 1, item 113, page 109 (table item 332B, cell at column 3), omit the cell, ing director or his wife—because it always substitute: was a he in those days—liked. So, if the managing director was a supporter of tennis 5 penalty units or if his wife liked Romanian folk dancing, you would find the company putting money into those with no regard to their sharehold-

CHAMBER Thursday, 17 June 2004 SENATE 24139 ers; they thought it was their right. Slowly choice, because a corporation or a union is a shareholders have taken the view that if you democratic institution. I have mentioned un- are going to spend their money there ought ions in this discourse simply so that everyone to be greater justification for it than simply realises that I intend to move the very same the managing director’s view of the world. form of amendment or type of approach un- Sporting sponsorships and cultural sponsor- der workplace relations law. ships have become more and more focused Turning to the companies themselves, I and more and more relevant, so that where a note that political parties determine multibil- company does back them they have a direct lion dollars of expenditure. The budget this relationship to the company’s corporate phi- year, if you add in tax expenditures, is over losophy and policy and to its goods and ser- $200 billion. Political parties are of immense vices range. Quite frankly, as a result more is importance—they can even send people to spent now on cultural and sporting events war—and I think it is very important that the than was ever spent when I began my busi- relationship of money in influencing those ness career, so it has not been a bad process. parties be absolutely above board. In my mi- Turning to political donations, this is a far nority report on CLERP 9, the part 1 report, I more sensitive area. Shareholders, I am told took into it something I am looking at with by the various surveys, now cover about 50 respect to another committee I sit on, which per cent of Australian adults—and perhaps it is the workplace relations committee exam- might be more—both directly through direct ining the Cole royal commission matters. share ownership and indirectly through in- That has political donations as part of its vestment in various funds. Those sharehold- terms of reference, so I was able to produce a ers represent all points of the political spec- schedule that arises from that inquiry and trum. As we know from our assessment of transpose it here. I recognise that some of votes, about three-quarters of the votes cast these companies are private companies, but in any election go to the two major parties, this schedule I have put in my minority re- Liberal and Labor, and one quarter goes to port is compiled from online AEC returns others, yet publicly listed corporations quite from 1998-99 to 2002-03, so it is four years often have a bias just to one or the other and worth. Just listen to the size of some of these of course unions have the same problem. The donations to political parties: under ‘Property difficulty with political donations is that the developers’, Croissy Pty Ltd, $1.9 million; purpose of them is often improper and can be Lend Lease Corporation, $1,173,000, if you corrupt, namely: to achieve influence and to round it off; Mirvac, $813,000 rounded; Aus- be able to determine the direction and desti- traland Property Group, $697,000; Furama nation of a particular political party. We De- Pty Ltd, $589,000; Gandel Group, $571,000; mocrats have long argued—and by long I and under ‘Builders & constructors’, Multi- mean for many years—that if registered or- plex, $1.7 million; Leighton Group of Com- ganisations, like unions, and corporations are panies, $1.3 million; Meriton Apartments, to make political donations then they should over $1 million; Baulderstone Hornibrook, do so with the full authority of their mem- $748,000 rounded—and so it goes on. bers or shareholders. If those members or You have to ask yourself: why are those shareholders choose to delegate that specific people giving so much money? What is it responsibility to a board or to the manage- about? They do not give it because of a love ment committee, in the case of a union, so be of politicians or even of politics. In the union it, but let it be their precise and determined case that may be more true, because in some

CHAMBER 24140 SENATE Thursday, 17 June 2004 respects their hearts are more attached to dinners with ministers, shadow ministers and their donations, but it is about buying influ- so on, and we understand that there are other ence. I think these matters need to be deter- means by which money is raised. I have put mined by shareholders. The amendment that this case strongly before the Joint Standing we will move—and I can guarantee that it Committee on Electoral Matters, in supple- will go down—puts two basic propositions: mentary remarks we have written through either donations must be approved by share- other minority reports and in various debates holders or a donations policy must be ap- in this chamber. I know that everyone here proved by shareholders. The policy could understands what I am on about, so with simply be that the board of directors could those remarks I move: determine it at their discretion. I do not ob- (2) Schedule 2, Part 1, page 139 (after line 12), ject to boards of directors determining these at the end of the Part, add: matters. What I object to is that they deter- 2A After Division 8 of Part 2M.3 mine these matters without regard to the Insert: shareholders’ views and wishes. Senators should note that the committee examined this Division 9—Disclosure by companies of political donations matter. Recommendation 26 from the committee’s report says: 323E Introductory provisions (1) This Division has effect for authorising The Committee recommends that provisions be gifts and political donations, as defined inserted in the Corporations Act that would re- in the Commonwealth Electoral Act quire the annual report of listed companies to 1918 and in this section, made by include a discussion of the board’s policy on mak- companies to political organisations. ing political donations. (2) It is unlawful for a gift or political That is the expert committee of the parlia- donation as defined in this section to be ment saying that it is about time this made by a company to a political stopped—that it is about time we recognised organisation except as authorised by that the media concern, the community con- this Division. cern and our own knowledge that this is (3) In this Division: wrong requires us to give back to sharehold- candidate means a candidate for ers the power to make decisions in these ar- election to the Commonwealth eas. Parliament, a State Parliament or for a I did say in my opening remarks that the position in an organisation as defined consequence of this would be for donations in the Workplace Relations Act 1996. to drop. Perhaps I am wrong. What I have company includes a private company noticed is that political donations have be- and a public company as defined in come such a serious issue in image terms for section 9 of this Act. a number of companies that they are not political donation means: making donations at all. If one were a be- (a) a gift as defined by the Common- liever in companies making donations, one wealth Electoral Act 1918; or would say that this sort of provision would (b) a disposition of property as defined enable shareholders to decide that there by the Commonwealth Electoral Act should be a policy of making donations and 1918; and to start one up. More and more companies includes but is not limited to, all are now saying, ‘We will not donate at all.’ manner of administrative support Of course, they do go to extremely expensive provided for a candidate or political

CHAMBER Thursday, 17 June 2004 SENATE 24141

party including provision of postal, in the case of a body telephonic and electronic and like corporate—500 penalty units. communication facilities, photo- (2) For the purposes of this section, an copying, folding, binding and the approval resolution is a qualifying like, printing and other associated resolution which specifically authorises facilities, all forms of advertising the company to make donations, not including canvassing and door- exceeding in total a sum specified in knocking and any form of assistance the resolution to nominated political provided by the company for a organisations, during the requisite candidate or political party. period beginning with the date of the political organisation means: resolution and concluding at the (a) a registered political party as expiration of 3 years after the date of defined by the Commonwealth the resolution, after which a further Electoral Act 1918; or resolution is required in accordance (b) a registered organisation as defined with subsection (1). in the Workplace Relations Act (3) In subsection (2): 1996. qualifying resolution means: the relevant time, in relation to any (a) an ordinary resolution; or political donation made by a company, if the directors so determine or the means: articles of association so require: (a) the time when the donation is made; (b) a special resolution; or or (c) a resolution passed by any (b) if earlier, the time when any contract percentage of the members greater is entered into by the company or than that required for an ordinary undertaking in pursuance of which resolution. the political donation is made. the requisite period means three years 323F Prohibition of political donations by or such shorter period as the directors companies may determine or the articles of (1) It is unlawful for a company or an association may require, commencing officer on behalf of a company to make on the date of the resolution. any political donation to a political (4) The directors may make determinations organisation unless: for the purposes of subsection (3) (a) the political donation is authorised except where any provision of the by a resolution passed at an articles operates to prevent them from approved general meeting by a doing so. majority of shareholders of the (5) An approval resolution must be company before the relevant time; expressed in specific terms in or accordance with subsection (2). (b) the political donation is made on the (6) Where a company or an officer on authority of the company, board or behalf of a company makes a political management body in accordance donation in contravention of subsection with a donation policy which has (1), an approval resolution of that been approved by a general meeting donation at the next available general of the company before the relevant meeting by a majority of shareholders time. of the company operates so as to Penalty: in the case of an individual— validate the donation for the purposes 50 penalty units; or of this section.

CHAMBER 24142 SENATE Thursday, 17 June 2004

(7) Nothing in this section requires political donations. We believe that, if there approval of donations where the value is to be further regulation in this area, the of the donation is $1,500 or less. Commonwealth Electoral Act is the appro- (8) For the purposes of this section, priate act for that. The Joint Standing Com- company includes a subsidiary of the mittee on Electoral Matters, with its solid company. credentials and work in this particular area, Senator COONAN (New South Wales— is the appropriate parliamentary committee Minister for Revenue and Assistant Treas- to deal with what may be a valid argument urer) (4.48 p.m.)—I will make a few brief by Senator Murray. We would like to see a remarks in response to Senator Murray. It reference to the joint electoral committee will not be any surprise, as Senator Murray with recommendations with respect to the has noted, that the government will not be relevant act, which we regard as the Elec- supporting the amendment. I want to very toral Act, and for that reason we will not be briefly record the reasons why. Firstly, the supporting the amendment. Corporations Act is not, in the government’s Question negatived. view, the appropriate regulatory framework in which to be considering this matter. In our Senator COONAN (New South Wales— view, issues regarding political donations Minister for Revenue and Assistant Treas- would be more appropriately regulated by urer) (4.51 p.m.)—by leave—I move gov- the current electoral legislative framework— ernment amendments (88) to (93) on sheet that is, the Commonwealth Electoral Act PK247: 1918—rather than the Corporations Act. (88) Schedule 2, item 11, page 146 (lines 20 to Secondly, as Senator Murray has graphically 32), omit subsection 239BA(4), substitute: illustrated, this information is already pub- (4) If the Chairperson gives a direction as licly available. Information regarding politi- to the sitting members, he or she may: cal donations by companies is already pub- (a) revoke the direction and give a new licly available from the Australian Electoral direction under subsection (2) as to Commission and, depending on your point of the sitting members; or view, no doubt you can draw whatever con- (b) vary the direction to replace one or clusions appeal to you. Thirdly, the decision more of the sitting members; by a company to donate money to political at any time after the giving of the parties, or to any recipient for that matter, direction and before the must primarily, I suppose, be one of a com- commencement of proceedings in mercial nature. Unless the amount to be do- relation to the matter. nated is on such a scale that it may be classi- (5) If: fied as an extraordinary transaction, it would (a) the Chairperson gives a direction as not generally be a matter for the shareholders to the sitting members; and of the company but rather a matter for the (b) one of those persons: company’s management. For those reasons, (i) ceases to be a member; or stated very briefly, the government will not (ii) ceases to be available for the be supporting Senator Murray’s amendment. purposes of proceedings in Senator SHERRY (Tasmania) (4.50 relation to a matter; p.m.)—I also indicate that the Labor Party during the proceedings or after the will not be supporting this amendment. Sena- completion of the proceedings but tor Murray may have valid concerns about before the report on the matter to

CHAMBER Thursday, 17 June 2004 SENATE 24143

which the proceedings relate is Senator COONAN (New South Wales— finalised; Minister for Revenue and Assistant Treas- the Chairperson may vary the urer) (4.52 p.m.)—I move government direction to replace that person at amendment (94) on sheet PK247: any time after the person so ceases to (94) Schedule 2, page 163, at the end of the be a member or to be available. Schedule, add: (89) Schedule 2, item 11, page 150 (after line Part 4—Content of financial reports 22), at the end of section 239CC, add: Corporations Act 2001 (9) The Financial Reporting Panel may revoke or vary a direction given under 17 Subsection 45A(4) subsection (4). Omit “(d)”, substitute “(b)”. (90) Schedule 2, item 11, page 151 (after line 18 Subsection 295(2) 15), at the end of section 239CD, add: Repeal the subsection, substitute: (5) The Financial Reporting Panel may (2) The financial statements for the year revoke or vary a direction given under are: subsection (1). (a) the financial statements in relation (91) Schedule 2, item 11, page 152 (after line to the entity reported on that are 34), at the end of section 239CG, add: required by the accounting (3) The Financial Reporting Panel may standards; and revoke or vary a determination made (b) if required by the accounting under subsection (1). standards—the financial statements (92) Schedule 2, item 11, page 154 (line 23), in relation to the consolidated entity omit “The”, substitute “A member of the”. that are required by the accounting Schedule 2, item 11, page 154 (line 25), standards. omit “If the”, substitute “If a member of 19 Subsection 303(2) the”. Repeal the subsection, substitute: (93) Schedule 2, item 11, page 154 (line 25), (2) The financial statements for the half- omit “If the”, substitute “If a member of year are: the”. (a) the financial statements in relation These amendments relate to the Financial to the entity reported on that are Reporting Panel, which is a new body being required by the accounting established under the bill. These amendments standards; and facilitate the operation of the Financial Re- (b) if required by the accounting porting Panel, provide for the revocation and standards—the financial statements variation of directions given by the Financial in relation to the consolidated entity Reporting Panel and allow one member of that are required by the accounting the Financial Reporting Panel to certify rele- standards. vant information to a court instead of requir- This amendment facilitates the introduction ing the whole panel. of international accounting standards. In par- Senator SHERRY (Tasmania) (4.52 ticular, it removes inconsistencies between p.m.)—I indicate the Labor opposition will the standards and the law. be supporting these amendments. Senator SHERRY (Tasmania) (4.52 Question agreed to. p.m.)—The Labor opposition will be supporting this amendment. Question agreed to.

CHAMBER 24144 SENATE Thursday, 17 June 2004

Senator COONAN (New South Wales— (ii) an officer or employee of the Minister for Revenue and Assistant Treas- company; and urer) (4.53 p.m.)—by leave—I move gov- (c) the qualifying disclosure is made to: ernment amendments (95) to (99) on sheet (i) the company’s auditor or a PK247: member of an audit team (95) Schedule 4, item 2, page 180 (line 14), omit conducting an audit of the “services with”, substitute “the supply of company; or services or goods to”. (ii) a director, secretary or senior (96) Schedule 4, item 2, page 180 (line 17), omit manager of the company; or “services with”, substitute “the supply of (iii) a person authorised by the services or goods to”. company to receive disclosures (97) Schedule 4, item 2, page 181 (after line 29), of that kind; and at the end of section 1317AB, add: (d) the offender is: (3) Without limiting paragraphs (1)(b) and (i) the company’s auditor or a (2)(b), if a court is satisfied that: member of an audit team (a) a person (the employee) is employed conducting an audit of the in a particular position under a company; or contract of employment with (ii) a director, secretary or senior another person (the employer); and manager of the company; or (b) the employee makes a disclosure (iii) a person authorised by the that qualifies for protection under company to receive disclosures this Part; and of that kind; or (c) the employer purports to terminate (iv) the company; or the contract of employment on the (v) any officer or employee of the basis of the disclosure; company; and the court may order that the (e) the offender discloses one of the employee be reinstated in that following (the confidential position or a position at a information): comparable level. (i) the information disclosed in the (98) Schedule 4, item 2, page 183 (after line 6), qualifying disclosure; at the end of Part 9.4AAA, add: (ii) the identity of the discloser; 1317AE Confidentiality requirements for (iii) information that is likely to lead company, company officers and to the identification of the employees and auditors discloser; and (1) A person (the offender) is guilty of an offence against this subsection if: (f) the confidential information is information that the offender (a) a person (the discloser) makes a obtained directly or indirectly disclosure of information (the because of the qualifying disclosure; qualifying disclosure) that qualifies and for protection under this Part; and (g) either: (b) the qualifying disclosure relates to a contravention or possible contra- (i) the offender is the person to vention of a provision of the whom the qualifying disclosure is Corporations legislation by: made; or (i) a company; or (ii) the offender is a person to whom the confidential information is

CHAMBER Thursday, 17 June 2004 SENATE 24145

disclosed in contravention of this the first report. I operate with many other section and the offender knows portfolios and responsibilities, and in the that the disclosure of the back there I have my adviser, Mr Mark Ley, confidential information to the who has many other portfolios and responsi- offender was unlawful or made in bilities, so we could not attend to putting all breach of confidence; and the committee recommendations into amend- (h) the disclosure referred to in ments even though many, perhaps most of paragraph (e) is not authorised under them, were unanimous. But I did pick on subsection (2). one, because it is an area dear to my heart. I (2) The disclosure referred to in paragraph move Democrat amendment R(2A) on re- (1)(e) is authorised under this subsection if it: vised sheet 4214: (a) is made to ASIC; or R(2A) Schedule 4, item 2, page 181 (line 4), omit “in good faith” substitute “with an (b) is made to APRA; or honest and reasonable belief”. (c) is made to a member of the This amendment comes from the whistle- Australian Federal Police (within blowing chapter of the part 1 report from the the meaning of the Australian Federal Police Act 1979); or committee. With the committee’s forbear- ance, I will touch on some of the elements (d) is made to someone else with the consent of the discloser. there. If you have the report before you, it is at pages 18 to 21. It discusses the require- (99) Schedule 4, item 3, page 183 (after table ment for a whistleblowing report to be made item 338), insert: in good faith. Towards the end of the discus- 338A Subsection 25 penalty units. sion, with various evidence put to the com- 1317AE(1) mittee and drawn out, at item 2.61 it says: These amendments pick up a recommenda- Dr Simon Longstaff, St James Ethics Centre, told tion of the parliamentary Joint Committee on the Committee the test should be on the question Corporations and Financial Services. They of truth. provide that a subcontractor of goods or an At 2.62 it says: employee of such a subcontractor will be He believed that an ‘honest and reasonable’ belief eligible for the protections available under would be acceptable. Ms Kathleen Farrell, Law the new whistleblowing provisions in the Council of Australia, also supported the honest bill. and reasonable belief as the appropriate threshold Senator SHERRY (Tasmania) (4.53 test. p.m.)—The Labor opposition will be sup- The threshold test is ‘in good faith’ and the porting these amendments. amendment seeks to substitute that with ‘an Question agreed to. honest and reasonable belief’. The committee said in summary: Senator MURRAY (Western Australia) (4.54 p.m.)—The Parliamentary Joint Com- This matter of the motivation behind the disclo- mittee on Corporations and Financial Ser- sure has generated lively debate about the very fundamentals of whistleblowing protection legis- vices, as I said this morning, has produced lation. There is tension between the views of two reports. The first report came out a little those who fear the low threshold requiring an over a week ago and the second report just agency to receive disclosures will encourage nui- late this week. The government has picked sance or malicious complaints and those who up a couple of the 27 recommendations in argue that the motives of the person disclosing

CHAMBER 24146 SENATE Thursday, 17 June 2004 information is irrelevant—the focus should be on Senator COONAN (New South Wales— the substance of the allegations. The Committee Minister for Revenue and Assistant Treas- believes that the legislation must be founded on urer) (4.59 p.m.)—I move government the premise that the veracity of the disclosures is amendment (100) on sheet PK247: the overriding consideration and the motives and the informant should not cloud the matter. The (100) Schedule 5, page 189 (after line 29), after public interest lies in the disclosure of the truth. item 4, insert: Accordingly, the Committee makes the following 4A After paragraph 200F(a) recommendation. Insert: Recommendation 4 reads: (aa) a benefit given under an order of a The committee recommends that the threshold court; or test of ‘in good faith’ be removed and replaced by This amendment simply provides that share- ‘an honest and reasonable belief’. holders will not have a role in approving a I concur with that committee recommenda- termination payment to directors where that tion. So did the Labor members of the com- payment arises out of court-awarded dam- mittee and, of course, the Liberal chair and ages. That is obviously a matter that needs to the Liberal members of the committee. That be addressed as a technicality. is the simple motivation behind this amend- Senator SHERRY (Tasmania) (5.00 ment. p.m.)—The Labor opposition will support Senator SHERRY (Tasmania) (4.58 this amendment. p.m.)—I indicate that I have noted Senator Senator MURRAY (Western Australia) Murray’s keen interest in this issue over a (5.00 p.m.)—I am inclined to support the long period of time. For the reasons that amendment, Minister, but I would like a little Senator Murray has advanced, we believe more motivation from you because I suspect that the case he puts forward is valid and that it is not technical. I suspect that it actu- should be supported. The Labor opposition ally relates to a fundamental issue and I am will be supporting this Democrat amend- inclined to support it because of what I sus- ment. pect rather than what you said. Senator COONAN (New South Wales— Senator COONAN (New South Wales— Minister for Revenue and Assistant Treas- Minister for Revenue and Assistant Treas- urer) (4.58 p.m.)—Very briefly, notwith- urer) (5.00 p.m.)—Obviously the rationale is standing Senator Murray’s rationale and ar- that, if there are court-awarded damages, it gument that he has outlined for substituting puts beyond doubt that there can be some the words, the government’s consideration of shareholder participation in providing that this matter has come down on the side of the shareholders can have role in approving such view that the ‘in good faith’ requirement a termination payment. It would be a court should be retained, as it ensures that disclo- order; the company would have no choice as sures under the whistleblowing provisions to whether it would abide by it. Subject to its are not used for frivolous or vexatious pur- solvency, of course, it would have no choice poses. I have listened to Senator Murray’s but to pay it. In those circumstances I would views about this and he makes a point about have thought it would be reasonably clear how you might really be able to substitute that shareholders would then have some dif- this, but the government’s consideration is ficulty in approving it. Obviously they can that on this occasion it will oppose it. be informed about it, but approving it is Question agreed to. something they would not have any material

CHAMBER Thursday, 17 June 2004 SENATE 24147 role in one way or the other if it is a court- remuneration of directors and imposed award for a certain sum. executives”. Senator MURRAY (Western Australia) (27) Schedule 5, page 191 (after line 13), after (5.01 p.m.)—Minister, floating in my mem- item 5, insert: ory is that there have been court cases and 5C After section 201D that this would clear up a real problem that Insert: has been exhibited at jurisprudence. I might 201DA Special rules for the appointment be wrong; I could not recall a case. of listed corporation directors Senator COONAN (New South Wales— (1) A notice of meeting of a listed Minister for Revenue and Assistant Treas- corporation at which a person is urer) (5.01 p.m.)—Certainly it was thought standing for election as a director must necessary that this should be cleared up be- contain the following information for each person standing for election, or re- yond doubt. I would think that it is pretty election, as a director: straightforward in terms of jurisprudence that shareholders would not have a role in cavil- (a) any relationship between that person and any director of the company ling with a sum that has been set through the which may affect the independent judicial process. Obviously it puts beyond conduct of the duties of a director; doubt that there is not an expectation that and shareholders would have a role. I understand (b) any relationship between that person that the motivation behind this amendment is and the company which may affect to put it beyond doubt. the independent conduct of that Question agreed to. person’s duties as a director; and Senator SHERRY (Tasmania) (5.02 (c) all other public company p.m.)—Before I seek leave to move the next directorships currently held by that block of opposition amendments together, I person; and want to indicate that amendment (63), which (d) any other information required by I understand is being redrafted at our request, the regulations. relates to an operative date issue. I would (2) A person standing for election or re- like to move the other amendments by leave election must give the company any together, but not including amendment (63). information the company needs to comply with subsection (1). Senator MURRAY (Western Australia) (28) Schedule 5, page 191 (after line 13), after (5.03 p.m.)—I will be proposing some altera- item 5, insert: tions to opposition amendments (27), (28) 5D After section 202C and (29) and, of course, the mover might not accept those. I think that amendments (26) to Insert: (29) sit together neatly as a block, so perhaps 202D Certain payments not to be made we can move those first and move the rest A listed corporation must not pay the later. following types of remuneration to a director who is not an executive of the Senator SHERRY (Tasmania) (5.03 listed corporation: p.m.)—by leave—I move opposition (a) options that are granted over shares amendments (26) to (29): of the listed corporation; (26) Schedule 5, heading, page 189 (lines 2 and (b) bonus payments; 3), omit “Remuneration of directors and executives”, substitute “Appointment and

CHAMBER 24148 SENATE Thursday, 17 June 2004

(c) retirement benefits other than (4) Subsection (1) does not apply to an superannuation which is required by issue of a security if member approval statute to be paid; and is not required under the provisions of (d) other forms of remuneration the listing rules of a listing market in specified by the regulations. relation to the listed corporation. 202E Limited-recourse loans (29) Schedule 5, item 5, page 190 (lines 1 to 18), omit subsection 200F(2), substitute: (1) A listed corporation must not provide limited-recourse loans to its directors, (2) Subsection 200B(1) does not apply to a or senior managers or employees. For benefit given in connection with a the purposes of this section, a limited- person’s retirement from an office in recourse loan is any loan where: relation to a company if: (a) the loan is made by the listed (a) the benefit is: corporation (or an associate of the (i) a genuine payment by way of listed corporation) to a director or damages for breach of contract; senior manager of the listed or corporation; (ii) given to the person under an (b) the loan is used to purchase shares agreement made between the or securities of the listed company and the person before corporation; and the person became the holder of (c) the borrower’s liability to repay the the office as the consideration, or principal is limited to the sale price part of the consideration, for the of the shares or securities purchased person agreeing to hold the by the borrower. office; and (2) Subsection (1) does not apply to a loan (b) the value of the benefit, when added provided by a company if the to the value of all other payments (if company’s ordinary business includes any) already made or payable in providing finance and the loan is connection with the person’s provided in the ordinary course of that retirement from board or managerial business and on ordinary commercial offices in the company and related terms available to clients of the bodies corporate, does not exceed company. the lesser of: 202F Shareholder approval of securities to (i) the amount worked out under be issued to directors subsection (3); and (1) A listed corporation must not issue a (ii) the amount worked out under security of the listed corporation to a subsection (4). director of a listed corporation without These amendments relate to general issues of member approval as set out in this appointment and remuneration of directors. section. In respect of the appointment of directors (2) Where member approval is required by and listed companies, Labor’s amendment subsection (1), it must be approved by (27) relates to a candidate who is standing a special resolution passed at a general for election as a director. In our view, before meeting of the listed corporation. a candidate is elected as a director of a listed (3) Details of the securities to be issued company, certain information must be dis- must be set out in or accompany the closed, which includes: any relationship be- notice of meeting at which the tween the candidate and any existing director resolution is considered. which may affect the independent conduct of

CHAMBER Thursday, 17 June 2004 SENATE 24149 their duties as a director; any relationship Senator MURRAY (Western Australia) between the candidate and the company (5.07 p.m.)—In amendment (28) there is the which may affect the independent conduct of heading ‘202D Certain payments not to be their duties as a director; and any other direc- made’ in bold. The first line after that says, torships of public companies that the candi- ‘A listed corporation must not pay the fol- date holds. This amendment is not onerous. lowing types of remuneration ...’. Between It simply requires disclosure and is about ‘pay’ and ‘the’ I wish to insert the words ‘or breaking up what we would argue is com- otherwise provide’, because that is the quali- monly known as the ‘old school tie network’. fying sentence for (a), (b), (c) and (d). I In Labor’s view, shareholders are entitled to move: know about a candidate’s relationships with Section 202D, after “A listed corporation must other board members before they are elected. not pay”, insert “or otherwise provide”. My colleague Senator Conroy discussed is- Senator SHERRY (Tasmania) (5.07 sues about executive remuneration during the p.m.)—The Labor opposition will be agree- second reading debate and I do not intend to ing to that amendment to our amendment repeat his comments. (28). Senator MURRAY (Western Australia) Question agreed to. (5.05 p.m.)—It may help the debate if I now Senator MURRAY (Western Australia) indicate where I would like some changes (5.08 p.m.)—I now want to add words after because, if they are accepted by the opposi- ‘listed corporation’. It now reads: tion, the government will have those to respond to. I refer to proposed amendment (28) A listed corporation must not pay or otherwise on sheet 4216 (revised), which says ‘A listed provide the following types of remuneration to a corporation must not pay’. I propose to re- director who is not an executive of the listed corporation: quest that the opposition accept the words ‘or otherwise provide’ after ‘pay’. The reason I It is after the second occurrence of ‘listed do this, Senator Sherry, is that item (d) of corporation’ that I wish to insert the words your amendment (28) says ‘other forms of ‘in consideration of the performance of du- remuneration specified by the regulations’. ties by the director as a director of the listed The difficulty is that that could be in means corporation’. other than what we would normally under- Before we get to the specific words, I stand as payment—in other words, it could want to motivate the argument because if the be in kind or elsewhere. That is my first re- mover does not accept them then it falls quest, and I will have a second request. away. Frequently with directors there are Senator SHERRY (Tasmania) (5.06 conflicts of interest and there are circum- p.m.)—I would appreciate your advice on stances in which directors are involved in the procedure here but the Labor opposition businesses that provide services and goods to is happy to accept the suggestion of Senator the corporation concerned. You will recall Murray. that, when the Coles-Myer boardroom stoush was on, that was very much an issue. There The TEMPORARY CHAIRMAN are many companies where that is so. It is (Senator McLucas)—Just to assist me, perhaps the nature of our business world. could you identify exactly where you are The difficulty I have is that the way in which referring to, please? this is phrased might be seen to catch somebody who is a director or owner of another

CHAMBER 24150 SENATE Thursday, 17 June 2004 company but is also a director of this com- thought. So I am a little uncertain as to the pany and is providing services and goods. consequences of the amendment. Sometimes it happens just in a related corpo- My instinct is to pass it now and then let ration—there is a head office and a number the government examine the point I am mak- of subsidiary corporations—but sometimes it ing, because they will look at the Hansard. If will be one corporation with a completely the government were to accept it in the separate one. That is the purpose of my House of Representatives, one of the options amendment. If the mover accepts the general would be to insert the words ‘retirement proposition then I will give you the specific benefits other than amounts accruing from words that I suggest. payments made by the listed corporation or Senator SHERRY (Tasmania) (5.10 the director to a superannuation, retirement p.m.)—I certainly recall the Myer case. We or pension fund’. I do not intend to move an would accept your principle as you have out- amendment to this effect now; I am just sig- lined. nalling to both the government and the oppo- Senator MURRAY (Western Australia) sition that I have a concern in that area. (5.10 p.m.)—In that case, I will give you the Senator SHERRY (Tasmania) (5.13 specific words. I move: p.m.)—Our intention with this amendment is Section 202D, after “executive of the listed to deal with superannuation by statute—in corporation”, insert “in consideration of the per- other words, the nine per cent superannua- formance of duties by the director as a director of tion guarantee. That is where we are drawing the listed corporation”. the line. Your flagged change may extend it Question agreed to. beyond that and we do not want to permit Senator MURRAY—There is one other any extension beyond the statutory nine per amendment I want to discuss, rather than cent superannuation guarantee, which is the moving it straight away, to see if there are community standard. We have had some very flaws in the suggestions made to me in this extensive debate on community standards of particular area. I am not convinced of the superannuation in recent times, so we are not case. At the moment, paragraph (c) in of a mind to expand the amendment beyond amendment (28) refers to retirement benefits that at the present time. other than superannuation which is required Senator MURRAY (Western Australia) by statute to be paid. You must bear in mind (5.14 p.m.)—I accept that. But the govern- the commencing sentence, which says, ‘A ment has an understanding of some concerns. listed corporation must not pay ...’ which One other question that I have to the mover then goes to paragraph (c). The suggestion of opposition amendment (28) concerns was made to me that it should be ‘retirement ‘202E Limited-recourse loans’. The text of benefits other than amounts accruing from 202E(1) on sheet 4216 reads: payments made by the listed corporation or A listed corporation must not provide limited- the director to a superannuation, retirement recourse loans to its directors, or senior managers or pension fund’. My inclination is to sup- or employees. port the Labor amendment as is, but if the Was it your intention to cover employees in government were to look at this matter in the the fullest sense of that term? other House, it seems to me that amounts Senator CONROY (Victoria) (5.15 could be caught up which perhaps refer to p.m.)—I understand, Senator Murray, you the past. That would be unwise, I would have were asking whether or not we wanted to

CHAMBER Thursday, 17 June 2004 SENATE 24151 include employees in this prohibition. I amendments (29A) and (29B) on sheet 4216 would say yes. There are many employees at revised: a senior level who would not fall into the (29A) Schedule 5, page 191 (after line 13), after level of managers or directors who are of- item 5, insert: fered these loans. To try and draw a distinc- 5A Subsection 200G(2) tion between directors and employees would, Omit the subsection, substitute: unfortunately, lead to an artificial break. There are many high-paid employees who (2) The payment limit is whichever is the lesser of: would also be offered these sorts of non- recourse loans. I am sure Senator Sherry has (a) the amount worked out under subsection (3); and made the point: this practice is something that I find difficult to justify. If a director, a (b) the amount worked out under manager or an employee wants to buy shares subsection (3A), in a company, we support that. But what we if the person was an eligible want to know is: why don’t they put their employee in relation to the company when the person retired from office. hands on their pocket like everybody else In applying this subsection, disregard and go to the bank and get a loan? They superannuation which is required by should not be receiving these interest-free statute to be paid. loans—all the upside is for them and the (29B) Schedule 5, page 191 (after line 13), after downside is worn by the shareholders. While item 5, insert: we appreciate the sentiment of what you are 5B After subsection 200G3 saying, we would like to stick with everybody being covered. I seek leave to amend Insert: opposition amendment (28). (3A) The amount worked out under this subsection is: Leave granted. (a) if the relevant period for the person Senator CONROY—I move: is less than 12 months—a Section 202E, paragraph (1)(a), after “senior reasonable estimate of the total manager”, insert “or employee”. remuneration that the person would I thank Senator Murray for drawing this to have received from the company and the related bodies corporate our attention. We would like to insert the during the relevant period if the word ‘or employee’ after ‘to a director or relevant period had been 12 months; senior manager’ in 202E(1)(a). It was more a or drafting error, Senator Murray. Hopefully, (b) if the relevant period for the person that will clarify where we stand on that. We is 12 months—the total were not trying to be inconsistent. remuneration that the person Question agreed to. received from the company and related bodies corporate in the The TEMPORARY CHAIRMAN relevant period; or (Senator McLucas)—The question now is that opposition amendments (26), (27), (28), (c) if the relevant period for the person is more than 12 months—the total as amended, and (29) be agreed to. remuneration that the person Question agreed to. received from the company and Senator CONROY (Victoria) (5.19 related bodies corporate in the last p.m.)—by leave—I move opposition 12 months of the relevant period.

CHAMBER 24152 SENATE Thursday, 17 June 2004

(3B) For the purposes of section 3A, if a were lazy. All we ever did was copy some- person has held an office in relation to one else’s policies. That rant and rave went a company: on and on and they voted us down so that (a) throughout a period; or they could steal our policy. We are prepared (b) throughout a number of periods; to accept that the government has changed its the relevant period for that person is mind and accept that this is good policy. This that period or the period consisting is good public policy that goes a long way to of the total of those periods. empowering shareholders to put these issues Although I will briefly discuss items (29A) into their hands. We welcome that. and (29B) which relate to termination pay- The third step to put a brake on rewards ments, I will not discuss payments to non- for executive failure is to ensure that termi- executive directors because I discussed those nation payments are subject to binding yesterday. The effect of Labor’s amendments shareholder approval. Labor’s amendments is to require shareholder approval of massive give shareholders a binding vote on termina- termination payments to executive directors tion payments which exceed one year’s re- which exceed one year’s salary—of course, muneration. In determining the termination excluding statutory superannuation. Share- payment, statutory superannuation is ex- holders, employees and retirees view the cluded—I want to make that point again. payment of massive termination payments to Currently it is possible—and this is quite executives and directors who have failed to unknown; many experts in corporations law perform as unacceptable. One academic lik- have been quite surprised, because this next ened it to mad cow disease in some board- section is very obscure—for termination rooms. He said: payments to directors to reach up to seven It moves from company to company, rendering times a director’s annual salary before share- directors incapable of applying common sense. holder approval is required. The CLERP 9 Recent history shows that we need to put a bill does not fix this. brake on rewards for executive failure. The When this bill is passed, directors will still first step is to ensure that performance condi- be able to obtain termination payments tions are met. Labor’s amendments require amounting to seven times their annual salary detailed disclosure of performance condi- package if that is what is agreed. But we tions. think that if these termination payments ex- The second step to put a brake on rewards ceed one year’s salary then shareholder ap- for failure is to give shareholders a non- proval should be required, because nothing binding vote on the remuneration report. The gets up shareholders’ noses more than paying CLERP 9 bill adopts Labor’s policy and re- for failure. They do not mind generously quires a non-binding vote. I again want to remunerating executives who are doing a reiterate our congratulations to the govern- good job, but what they cannot abide is re- ment for adopting Labor’s policy on this. I warding failure. Shareholders have been well remember when we moved this over 14 frustrated in the last five years, as this has months ago as an amendment to the Corpora- gone on and on. tions Act—and Senator Murray supported My favourite quote in this area comes us—that the government accused us of being from the chair of CalPERS, the Californian plagiarists. I am sure you will remember, public sector superannuation fund. It was in Senator Murray. We were plagiarists. We relation to the New York stock exchange and

CHAMBER Thursday, 17 June 2004 SENATE 24153 the obscene payments made to Dick Grasso tween length of service, remuneration and as the CEO of the stock exchange. The quote termination payments. goes something like this: ‘We’ve dragged the The bill currently requires shareholder ap- snouts out of the trough. Now we want to proval of certain termination payments to know who filled the trough.’ What CalPERS directors where those payments exceed one was doing was pointing the finger at boards, year’s remuneration or a higher amount de- saying, ‘Why are boards giving these outra- termined in accordance with a formula set geous payments? We want to make the out in the Corporations Act. The ALP pro- boards accountable.’ posal would require shareholder approval Labor believes it is tightening up the law. where any termination payment exceeds 12 There is already a binding vote in the law. months remuneration except for payments This is not groundbreaking. The law gives a required to be paid by law or those that rep- binding vote on termination payments. It is resent accrued leave entitlements—we have just so woolly; you could drive a truck had some discussion about that—or is made through it. Why haven’t there been any of pursuant to an agreement entered into prior those votes? It is because corporations have to 1 January 1991. The intent of the provi- been able to structure their payments to sions is to ensure that shareholder approval is avoid this binding vote. Labor is saying no. required in respect of termination payments The time has come to put the power back in that really are not proportionate to either the shareholders’ hands and make boards ac- director’s income whilst in office or the countable. If boards want to put up proposals length of tenure. The formula relates length that are outrageous and obscene, they are of service and the level of remuneration dur- going to have to put them up knowing that ing service with the amount paid out on re- they have to get shareholder approval. That tirement. The formula does seek to ensure will start giving shareholders the power to payments made to directors upon their re- make these directors accountable. As the tirement from office are subject to share- chairman of CalPERS said, ‘We want to holder scrutiny where they may be large know who has been filling the trough.’ enough in relation to the length of time in Senator COONAN (New South Wales— office or overall remuneration practices of Minister for Revenue and Assistant Treas- the company. We think it is important that urer) (5.24 p.m.)—We are considering (29A) those individual factors are taken into ac- and (29B), a proposal to amend the bill to count. require shareholder approval for termination While the opposition has claimed that the payments to executives that exceed the value provisions of the bill will allow directors up of one year’s remuneration. I want to make a to seven times their annual remuneration, the couple of very brief points. The brevity of actual proposal to limit payment to one my contribution does not necessarily reflect year’s remuneration very much throws the anything other than, as I understand it, ex- baby out with the bathwater and does not haustive discussion about how these amend- achieve any proportionality of termination ments are to proceed. Executive remunera- payments to income whilst in office. The tion is, in the government’s view, a matter proposal is to require shareholder approval for the board. CLERP 9 facilitates communi- of termination payments to executives. The cation between boards and shareholders on bill requires approval for particular payments this issue and provides proportionality be- made to directors, including executive directors. The bill does not intend to blur the line

CHAMBER 24154 SENATE Thursday, 17 June 2004 of responsibility for shareholders to deter- Senator CONROY (Victoria) (5.30 mine non-executive directors’ remuneration p.m.)—by leave—I move opposition and for directors to determine executives’ amendments (30) and (31) on sheet 4216 remuneration. Requiring shareholders to di- revised: rectly approve payments to executives rather (30) Schedule 5, Item 11, Page 192 (after line than to enhance accountability would obvi- 16), at the end of the item, add: ously detract from the accountability of di- (aa) the discussion of board policy in rectors for such payments. It is for those rea- paragraph (a) must include: sons that the government will not be support- (i) a discussion of the relationship ing the amendments. between such policy and the Senator MURRAY (Western Australia) company’s performance; (5.28 p.m.)—I was taking some advice from (ii) a detailed summary of the the chair of the committee of which I am a performance conditions where member and which has been dealing with any element of remuneration is this bill. I got the impression Senator Conroy subject to a performance got a bit excited, because I distinctly heard condition; him talking about non-binding as well as (iii) an explanation as to why such binding propositions which confused me. performance conditions were This is surely a binding proposition that chosen; Senator Conroy is putting here. I scurried (iv) a summary of the methods used across to my adviser and he said that this is a in assessing whether any such change in language. I presume, Senator Con- performance conditions are met and an explanation as to why roy, you got excited when talking about other those methods were chosen; things. (v) if any such performance Senator CONROY (Victoria) (5.29 condition involves any p.m.)—Thank you, Senator Murray, for clari- comparison with factors external fying that. I suspect that the emotion of the to the company: moment possibly led to that confusion. This (A) a summary of the factors to be is definitely a binding proposition. It is an used in making each existing proposition, which we are amending comparison; to make tougher, and it is binding. It exists (B) if any of the factors relates to currently in the act. We are just tightening it the performance of another up. company, or two or more Senator MURRAY (Western Australia) other companies, or of an index on which the securities (5.29 p.m.)—After you said ‘non-binding’ I of a company or companies re-read it and thought that perhaps I was are listed, the identity of that tired and could not pick it up. I am glad to company, of each of those discover that it is binding. Frankly, I do not companies or of the index; and have much time for non-binding votes. I (vi) in relation to persons described in think they are symbolic. As you would know, paragraph (c), where any later on I shall move some binding votes of entitlement to securities is my own. We will support these amendments. received which is not subject to Question agreed to. performance conditions, an explanation as to why that is the case;

CHAMBER Thursday, 17 June 2004 SENATE 24155

(vii) in relation to persons described in remains fixed regardless of changing paragraph (c), an explanation of market values of the equity. the relative importance of those For the purposes of this paragraph, elements which are related to unvested equity means equity in the performance and those elements company which has been issued to the which are not related to particular director or executive by the performance in respect of the company pursuant to a director or terms and conditions of the employee equity scheme and where: person’s remuneration; and (i) the equity was issued subject to (viii) such other matters as may be vesting arrangements over time prescribed by the regulations. and the equity has yet to vest; or (31) Schedule 5, item 12, page 192 (after line (ii) the equity forms part of a 30), at the end of the item, add: minimum holding requirement ; and (d) the following details in relation to imposed on the director or the remuneration of: executive by the company. (i) each director of the company; (e) a line graph which plots for each of and the most recent 5 financial years the (ii) each of the 5 named company total shareholder return on: executives who receive the (i) the holding of shares of that class highest remuneration for that of the company’s equity share year: capital whose listing, or (A) the value of options granted, admission to dealing, has resulted exercised and lapsed in the company falling within the unexercised during the year definition of a listed company; and their aggregation; and (B) the percentage of the person’s (ii) a hypothetical holding of shares remuneration for the financial made up of shares of the same year that is made up of options kind and number as those by granted to the person in that reference to which a broad equity year; market index is calculated, (C) an explanation of the and state the name of the index company’s policy on the selected for the purposes of the duration of the contract, the graph and set out the reasons for notice periods and termination selecting that index. payments under such Question agreed to. contracts; Senator CONROY (Victoria) (5.30 (D) details of any equity value p.m.)—I would like to indicate that we seek protection scheme entered into to defer opposition amendment (63) on sheet by them or on their behalf. 4216 revised. We understand there are some For the purposes of this paragraph issues around that amendment and we seek equity value protection scheme means to defer it for the moment in order to clarify any financial arrangement which those. results in the director or executive retaining legal ownership of unvested Senator MURRAY (Western Australia) equity in the company the value of (5.30 p.m.)—I move Democrat amendment which to the director or executive (3) on sheet 4214 revised:

CHAMBER 24156 SENATE Thursday, 17 June 2004

(3) Schedule 5, item 7, page 191 (lines 25 and be an executive, and when the board needs to 26) omit subsection (3), substitute: talk to them they can come along and front (3) The vote on the resolution binds the up to the board. We should remember that directors of the company except that: one in five directors is an executive and that (a) an absolute majority of shareholders most other directors are former executives of the company may vote that themselves. I do not know the numbers, but I approval of the remuneration of suspect that the vast majority of so-called executive directors is not necessary; non-executive directors used to be execu- and tives, so they have that culture and mentality. (b) where a vote of the kind mentioned This is a very simple proposition: it says in paragraph (a) is taken, a board remuneration policy must be that if there is a shareholder vote it binds the approved by the AGM. directors of the company. I have given an out. I continually argue on company law that This amendment requires me to re-express it is the shareholders who make the decisions the view I just put, which is that I rather like about these things. If an absolute majority of binding votes. This amendment specifically the shareholders of the company—not just requires the remuneration of directors to be those who are in the pocket of the chair so determined by a binding vote. We heard that he can fiddle the proxies as he sees fit, throughout the committee’s hearings—and as under the present system—vote that ap- Senator Conroy was present at some of proval of the remuneration of executive di- those—this constant obfuscation, this con- rectors by those shareholders is not neces- stant mixing of the mud. The myth is put out sary, that is fine by me. They are entitled to that directors are responsible to shareholders do that. Where a vote of the kind mentioned and it is quite right that shareholders should in paragraph (a) is taken, a board remunera- determine directors’ remuneration, but when tion policy must be approved by the AGM you talk about the management they say, with respect to those executive directors. ‘No, that is for the board to determine.’ Then That is a very reasonable proposition. The you say, ‘But most of the people who create binding vote continues a well-understood immense angst amongst shareholders are and widely accepted view that the sharehold- actually both management and directors.’ ers are entitled to bind the directors of a The fact is that you have to decide. Either company with respect to these matters. directors are going to have their remunera- Senator COONAN (New South Wales— tion determined by shareholders or they are Minister for Revenue and Assistant Treas- not. I think the principle is exactly right: the urer) (5.34 p.m.)—I would like to very shareholders determine the board, and de- briefly respond to Senator Murray’s com- termine everything to do with that board, and ments. His amendment (3) is a proposal that the board run the company and determine shareholder approval be mandated for all everything else. If that principle is right— remuneration and retirement packages for and I have spelt it out in much more detail in directors, whether executive or non- my minority report—then whether you are executive. The government’s position on this an executive director or a non-executive di- is that the bill does not seek to shift account- rector the vote should be binding. That is the ability for determining executive remunera- end of it as far as I am concerned. If an ex- tion to shareholders, even in relation to executive director does not want to be in that ecutive directors. It is appropriate, in the situation then let them get off the board and government’s view, that the responsibility

CHAMBER Thursday, 17 June 2004 SENATE 24157 and accountability through the non-binding pounder of his ideas, and he sorely tempts shareholder vote remains with the board. me on this one. He represents a view that I As I said in respect of some earlier have much in common with. He articulates amendments—the ones we have just dealt very well the disillusionment of many share- with—the bill does not intend to blur the line holders about the behaviour of many corpo- of responsibility for shareholders to deter- rate boards and the disconnect that has oc- mine directors’ remuneration and for direc- curred between boards and their sharehold- tors to determine executives’ remuneration. ers, and I have great sympathy for that. The Requiring shareholders to directly approve lack of accountability, the gross excesses payments to executives would detract from which have occurred in the last few years, the accountability of directors for such pay- both here and overseas, are down to weak ments. The Corporations Act provides that boards that have not been prepared to exer- directors are to be paid remuneration as de- cise their authority. They have used many termined by the company at a general meet- justifications. They talk about the interna- ing. However, this is a replaceable rule that tional market and say that they have to be in practice is almost universally overridden competitive; they blame disclosure—one of by a provision in the company’s constitution. the very things I am most proud of and I am sure Senator Murray is as well. In 1998 we As everyone knows, the listing rules of the combined to force the disclosure of execu- ASX require shareholder approval of any tive remuneration into the law because com- increase in the total pool of directors’ fees panies were not complying. We heard the payable to all directors. This does not apply screams that it was the end of the world, it to the salary of an executive director. The was terrible and it would lead to exorbitant government consider, then, that there are salary increases. Six years later, this is the already mechanisms available which require argument the government, CEOs and com- shareholder approval of increases in non- pany directors are still trying to run. They try executive directors’ remuneration. Again, the to say, ‘It’s because you’ve made it manda- non-binding shareholder vote in directors’ tory, Senator Conroy. It’s because you and and senior executives’ remuneration is, in the Senator Murray got together and mugged us government’s view, a powerful tool to hold in the Senate that we have seen these explo- directors to account and should be at least sions in salaries.’ given a chance to operate in practice before much more restrictive amendments are con- Senator Murray—And in the UK. sidered. A related issue that we have just Senator CONROY—That is right. Ap- dealt with is the opposition’s proposal— parently we have caused this international which has now been passed—to amend the leapfrogging to take place. You are dead act to require shareholder approval for ter- right, Senator Murray. They use this leap- mination payments to executives that exceed frogging argument, saying that the first thing the value of a year’s remuneration. Given the people do every year is sit down and open up way in which Senator Murray has cast this the company reports for the company across matter, I have at least placed on record the the road and say, ‘They’re getting paid this government’s view that we will not be sup- much money; we want this much money’— porting it. the comparative wage-setting process which Senator CONROY (Victoria) (5.37 the government rail against year after year in p.m.)—Senator Murray is a very clever ex- relation to the trade union movement. It used to happen that the workers in a factory would

CHAMBER 24158 SENATE Thursday, 17 June 2004 get to together and say, ‘They get paid a dol- do not respond to shareholder concerns and lar more than us. We deserve the same as community concerns about this, they will they get paid across the road.’ The govern- bring on themselves the sorts of proposals ment, business and management have railed that Senator Murray has championed and against this comparative wage system. They will continue to champion. say it should be about productivity, that the Senator MURRAY (Western Australia) workers should be made to base their wage (5.42 p.m.)—This is a really important issue. claims on the productivity of the company. The issue of binding versus non-binding Yet here we have, in the international market, votes has attracted the attention of govern- the comparative wage justification: ‘That ments, interested organisations and legisla- boss over there gets paid that much. That tors all over the world. I guess the non- person who does the same job as I do gets binding vote is a step forward in the debate. paid more than me. I should get paid more The reason I rise again is that I think my than I do.’ Well, it has been rejected right proposition is a logical consequence of the across the board in the wage system and it way in which the Corporations Act is should be rejected for the sham that it is in phrased. Minister, your advisers will tell you the directors’ club—because that is what it this and perhaps you, as a barrister, might really is: a club. know. My understanding of corporations law I am sorely tempted by this. I hope, Sena- is this: it does not distinguish between execu- tor Murray, that the proposals that have been tive and non-executive directors. I do not put in place work. I believe we need to give recall within the Corporations Law any in- this new system we are putting in place, stances where executive directors are pulled these new powers—albeit limited—a chance out, if you like, and non-executive directors to work. They may not work, because at the dealt with separately from executive direc- moment this government is rejecting our tors. There may be some instances but none amendments. We may not be giving enough that I can recall. power. We may not be shaking the club up The difficulty for you, Minister, is that in enough, but I would like to give this system enunciating this position the government is of non-binding votes a trial. If the abuses introducing a very profound change to policy continue and the exorbitant and obscene in corporations law because what you have salaries and payments for failure continue, I just said is that the government takes the think you will have a strong argument to put view that executive directors should not be in the next few years that the non-binding subordinate to shareholders but subordinate vote has not worked. But I would like to give to the non-executive directors, who are sub- this system a trial first. I believe that, if the ordinate to shareholders. You have effec- governments accept our amendments, we tively created two classes of directors. Per- will put in place a tough enough regime. I haps that already exists. I always thought may be wrong, I may be an optimist; I hope I there were four classes: chairs, mostly am not. But at this stage Labor would like to chairmen; executive directors; non-executive give this system a trial before we take the directors; and women—because they were extra step you are proposing. So at this stage, just added on as the optional extra in the last while I agree with the sentiment and I think few years! I have always thought they you articulate it very well, Labor will not needed much more parity than they have got, support this amendment. But the business which is one reason I am trying to open up community should be on notice that, if they

CHAMBER Thursday, 17 June 2004 SENATE 24159 the director election processes. I digress, but tidy up the matter that was raised previ- I feel strongly about that. ously—on sheet 4261: I quite seriously put to you that, if you are R(63) Schedule 12, item 2, page 251 (after line going to pursue the proposition you have put, 30) at the end of section 1468, add: I think the Corporations Law needs to be (4) The amendments made by section reviewed. In all those circumstances where it 201DA of item 5C and section 202F is the government’s determination that ex- of item 5D of Schedule 5 to the ecutive directors as directors are not respon- amending Act apply after 1 October sible to shareholders, you need to say so; 2004. because my reading of the law, as it is, is that Question agreed to. it does not distinguish between the two. I Senator MURRAY (Western Australia) think—and you would know, Minister, as a (5.48 p.m.)—I think I am having fun but not lawyer—that for some creative lawyers out much success. That is probably the summary there it opens up the opportunity for juris- of what is happening. I turn to Democrat prudence, because somebody could claim amendment (4) on sheet 4214 revised. Again, that the law is not expressed in the way you I suggest to you, this is a really fundamental have stated and that someone is entitled to issue. It is at the forefront of modern debate demand that executive directors, because on corporations law, on shareholder rights they are directors, are responsible to their and on the need for much more voting to shareholders and the vote should bind them. occur. I must say in passing that I was abso- Senator COONAN (New South Wales— lutely intrigued by the negative commentary Minister for Revenue and Assistant Treas- on the European Union elections, because urer) (5.45 p.m.)—Without replying in detail they only got a 46 per cent vote and they said to that, I think you are right. Certainly it is that that showed that the whole European my experience and understanding that the Union was looking shaky and there was not law does not distinguish between executive enough support for it and so on. I thought to and non-executive directors. I agree with myself, ‘Hang on; the American President you. I think these changes and some of the gets elected with only 50 per cent of the prescriptions that are being written into some populace voting.’ The idea behind those re- of these amendments—and I am not attack- marks is that not having a full vote does not ing any in particular—will have lawyers ab- always indicate a lack of support or partici- solutely salivating. I think that that is almost pation. Nevertheless, I have a bias towards an irresistible proposition. What I think maximising the shareholder vote, because I would be appropriate at this stage of the de- believe that corporations are democracies bate is that I bring your comments to the at- and that the vote should be maximised. I tention of those giving detailed consideration hold this view, quite frankly, with the abso- to the underpinnings of this legislation. For lute belief that you need to dilute and dimin- the purposes of tonight, though, I must say ish the power and the patronage of dominant that we still are not persuaded by the amend- shareholders, because I think they often act ment. in their interests and not necessarily in the Question negatived. interests of all the shareholders in the entire company. Senator CONROY (Victoria) (5.47 p.m.)—I move opposition amendment This debate is right at the heart of a Labor R(63)—a transitory provision designed to proposition which has alarmed many institutions and which we will deal with later. Es-

CHAMBER 24160 SENATE Thursday, 17 June 2004 sentially what Labor are proposing is based are very considerable—is quite extraordinar- on the same philosophy—that is, to maxi- ily limited by the way in which company mise the vote. They have taken the view that constitutions are rigged. They are rigged so that should be done by institution; in other that the dominant shareholders and those words, they say that super funds should vote with patronage can ensure that they get their and must vote—it is a compulsory vote—on people on the map. The problem with that is every single resolution that comes before that people have not paid enough attention to them. That could result in thousands of thou- reforming constitutions. So I would say that sands of matters, both major and minor, to be the next most important thing that you dealt with. I have sympathy with that view should have compulsory voting on is the because of the strength of feeling I have constitutions of companies. about maximising the vote in corporate de- The third most important area is the area mocracies, but I recognise that, at this stage of remuneration, not out of some desire for of the ability of those organisations to do that people not to earn big bucks if they deserve thoroughly and with proper consideration them but because it relates to the perform- and thought, there are some dangers in the ance of the companies. I recall—and it sticks Labor proposition. right in my head—the figure that was quoted We, on the other hand, take the view that in America, that if you expensed the options there are subject matters which you should and the hidden remuneration packages of the have a maximum vote on. I do not think executives and the boards of America prop- there is a participant in this debate who erly on their balance sheets you would re- would disagree with my statement in my duce the worth of American companies by 13 report or my belief that the board is the sin- per cent. This is not a minor issue. I have no gle most important institution in a corpora- means of validating that figure, of course, tion. It is the body to which shareholders but I do recall the quote. delegate their powers as the representative Where do I get to with this? What I am body. It is an executive as well as a delibera- suggesting is that not only is it desirable to tive body. It deals with the strategy and the have shareholders vote but in fact there is a effectiveness of the company, and it in turn duty on institutional investors to vote. The determines how the management shall oper- difficulty with duties that are not spelt out in ate. So I think the single most important de- law is that, to make them apply, people have cision anybody makes when voting is a deci- to take other people to court, and for years sion on who the directors of the company and years wend their way through the vari- shall be. If I look at subject matter as op- ous court structures all the way up to the posed to an institutional approach, I would High Court. It is very difficult and very say that if you are looking for a compulsory costly and very awkward. vote that is the first area you should go to. I just say to the government: an institu- The second area that we should go to is tional investor who invests on behalf of the much neglected by Treasury, by CAMAC, by beneficial owners of shares has a fiduciary our own committee and by the government, duty. It is a fiduciary duty established the opposition and everyone else, and that is through centuries—not just years—of com- the issue of election processes. The contesta- mon law. It is a fiduciary duty established bility of election processes for new direc- through endless jurisprudence. It is a fiduci- tors—and for those women in the audience, I ary duty which they are not exercising, and would remind you that the barriers to entry

CHAMBER Thursday, 17 June 2004 SENATE 24161 unless you get really heavy court cases com- move Democrat amendment (4) on sheet ing down they are not going to exercise that 4214: duty. I say that an institutional investor has a (4) Schedule 5, item 7, page 191 (after line 26), fiduciary duty in respect of the beneficial at the end of section 250R, add: owners of shares they manage or act for and, (4) Where a listed company has an if they have that fiduciary duty, they must institutional investor, and that vote at an AGM of the company. And I say institutional investor has a fiduciary that they must vote on at least those three duty in respect of the beneficial owners areas which I have already outlined. of shares they manage or act for, they must vote at an AGM of the company Why do I not say that they should vote on on the following: every resolution? Simply because I do not think that they are equipped to do so yet. I do (a) any resolution concerning the constitution of the company; and not think that they are going to have the systems, the software, the analysts, the manage- (b) any remuneration of directors, whether executive or non-executive; rial capacity to do that. But I think that they and should at least do it in the most important areas. So, if you like, I have taken a Labor (c) any matter concerning the election of directors. principle which I think rests on the founda- tions of fiduciary duty. I have taken a Labor Penalty: in the case of an individual—50 principle which they have expressed, which penalty units; or is that you need to maximise shareholder in the case of a body corporate— participation in corporate democracy. I have 500 penalty units. taken a Labor principle which they have Senator CONROY (Victoria) (5.57 enunciated, which is that you must ensure p.m.)—As always, eloquently expressed, that there is thoughtful participation in areas Senator Murray. I want to clarify one matter. that matter to companies. I have translated it Certainly when Labor first began consulting in a different sense because we Democrats and circulating our issues we were looking at are strong supporters of democracy, of proc- mandating voting for all issues. But, follow- ess and of good principle. ing a lot of the concerns that you have raised, I have put the argument to you with some we have actually refined that down in the force, I think. I am as certain as day that it amendments. We have moved to just material will be knocked over as usual. But I do say matters to take into account the sorts of con- that this sort of thinking is gathering ground cerns that you and many others have ex- world over and you have got a choice: you pressed to us. As you would be aware, one of can be a leader in this area or you can be a the reasons we did circulate our amendments follower. As sure as God made little apples, for consideration—after long thought and as or whatever the expression is, I think it was much as I believe it should be mandatory one of those chaps who made little apples, voting for all—is that for the moment we wasn’t it? believe we should take small steps. So we have moved back from 100 per cent to mat- Senator McGauran—God made little ters that are material. green apples. IFSA are once again proving themselves Senator MURRAY—Okay, as sure as to be one of the most powerful lobby groups that—one of these days compulsory voting is in the country—certainly their lobbyists are going to apply to institutional investors. I worth the money they are paid. IFSA were

CHAMBER 24162 SENATE Thursday, 17 June 2004 demanding, and were supportive of, what but ultimately you will lose and IFSA will you did yesterday, Senator Murray—and lose on this matter. they certainly demonstrated who is running Senator COONAN (New South Wales— the show with their opposition to disclosing Minister for Revenue and Assistant Treas- what they charge their customers. The pas- urer) (6.01 p.m.)—I do not propose to en- sion with which they pursued the outcome gage senators on the activities or otherwise that you delivered them yesterday is equal to of lobby groups. What I do think is important their opposition of your proposal today. It to stress here—and Senator Murray ex- would have been nice if you could have con- pressed it very much as a philosophical ar- vinced them that if they wanted one they gument—and what I think is the real issue could have had the other. I know that you do here is: what is an effective form of partici- not necessarily like to horse trade like that, pation? Views can legitimately vary. I do not but in this instance you might have done eve- know that I would agree with the proposi- ryone a favour by getting at least one of the tion—if indeed it is a proposition being two things. They are passionately opposed to put—that superannuation fund trustees, fund the disclosure of how they vote—never mind managers or institutional investors would be being forced to vote. I certainly share your in breach of their fiduciary duty if for some sentiments. I do believe, and I have argued reason they did not vote. I do not know that passionately, as you would be aware, that it necessarily would be the case—unless they there is a fiduciary duty. I do believe they were required to, of course. I can envisage should be voting. I do not believe that they situations where there may be reasons and should go missing. I do not believe that they where it certainly would not require voting should be conflicted, as they are. The only as a discharge of a fiduciary duty. That is a way, ultimately, we are going to get proper very theoretical argument because obviously outcomes in this situation is by having them circumstances do vary. vote and by making them disclose how they I think the question here is: what is an ef- vote. fective form of participation and how is it Rather than achieving 100 per cent in rela- delivered? Industry guidelines are already tion to this amendment to deal with material working well. A legislative requirement of resolutions, I am prepared to accept I will not the kind proposed here would certainly in- at this stage achieve all that I seek to volve significant costs of compliance. I do achieve. I believe that for the moment trans- not think we should be fooling ourselves parency and disclosure is as much as we can about this. What is the cost? The proposal is possibly achieve. I wholeheartedly endorse based on a number of assumptions. As I have your statement, Senator Murray, that this is a said, I do not know that they are necessarily growing force, that this government stands in made out. The importance of different sub- the way of an international movement, and ject matters that might be facing a board will that it will be ultimately defeated by this vary across companies and, of course, ac- movement, because the owners of the cording to different circumstances over time. money, the owners of these shares, are the There is a number of arguments, however, ones driving this agenda. Your narrow self- that I want to place on record against manda- interest is in protecting IFSA and its mem- tory voting. My view is that the matter is bers and in serving its interests, as you did probably best left to industry guidelines, yesterday and as you are going to do again which are flexible and seem to be working today. You may have a small victory today,

CHAMBER Thursday, 17 June 2004 SENATE 24163 well. My understanding is that high levels of that they are not able to, or at least not will- voting are recorded. In the order of 92 per ing to, meet them—and so they put their cent of all company resolutions appear to be money elsewhere. That is often said in re- voted on. Cost would be imposed on institu- sponse to any tightening of requirements, but tional investors and of course that will be in this case it does seem to be a bit of an borne by both their members and, most im- overreach that might well and truly produce portantly, beneficiaries. Voting may be, and that result. usually is, resource intensive and may force Mandatory voting also overlooks, as I said international investors to engage analysts earlier, other effective forms of participation, with the expertise to determine all of those including direct contact with boards and issues. That may be something that is en- management. It does not allow for genuine gaged in any event, and maybe it should be reasons to abstain. It may encourage, as I engaged in any event. I just think we need to have referred to a little earlier, the require- have a much better handle than we appear to ment to engage such analysis that you, as a have on the practical implications of what we board, are covered within an inch of your life would actually be imposing here if we were for whatever view you take. On other occa- disposed to agree to this amendment. sions that may not be possible and you are Mandatory voting would also generate forced into doing something arbitrary and significant administrative and enforcement uninformed. costs. I think Senator Murray mentioned the Proponents rely on a number of assump- fact that once you get into this line of coun- tions that I do not necessarily think are made try the only way you enforce it is when you out in the Australian setting. Australia has a push people into the court system or have high proportion of retail investors, and it will fines and administrative arrangements to deal not necessarily lift the rate of participation with it. There is, in my submission, a range but it certainly will impose costs. Share- of unintended consequences. Penalties would holder voting really cannot be compared to be imposed where a simple oversight led to a electing a legislature. The decision to invest failure to vote on one of many resolutions. A in a company is a private matter. This gov- $50,000 fine is a very draconian response or ernment has strived across a range of differ- impost, it seems to me. Institutional investors ent policy developments and responses to may be discouraged from investing in listed make sure that people are much better in- Australian companies and may move funds formed. One of the matters of which I am offshore. proud—we in this place are all proud of I might just mention to senators Conroy things that we think really make a differ- and Murray that one of the issues in this de- ence—is the fact that I have encouraged and bate is that you can drill down and require a have actually got a task force looking at how lot of things of companies—and indeed it is we can have a regulatory structure on the one appropriate that we look at a framework and hand and, on the other, provide much more try to get the balance right in this CLERP 9 effective information and education for peo- debate—but there is a broader picture out ple so as to make them much more finan- there. From experience, when you are man- cially literate. I do not only mean the basics; aging a wide range of policy development I want even those who are quite sophisticated across different areas, you find that invest- to have access to information they otherwise ment is affected because you impose on in- might not have. Institutional investors cer- stitutions requirements that are so onerous tainly have a fiduciary duty to act in the best

CHAMBER 24164 SENATE Thursday, 17 June 2004 interests of members and beneficiaries—that hundreds of resolutions at all of the AGMs is an unassailable proposition. It is really a around Australia last year? None—not one. matter of how we put some flesh on the You want a tick a box mentality—we have proposition. In some cases it may be in the got it. How on earth do you explain that members’ best interests not to vote. That is a every single resolution moved got passed possibility. Mandatory voting is a sort of one and that everyone voted for it? If that is not size fits all thing that overlooks the differ- tick a box, what is? ences and will simply once again codify Senator Coonan—It sounds fine to me. what we have earnestly tried to avoid: a one Senator Murray interjecting— size fits all, tick a box approach to voting. Senator CONROY—Exactly. What has Finally, I want to mention that in my view happened is that every single resolution that mandatory voting on material resolutions is has been put up has been passed. Only two problematic and implicitly undermines the resolutions were withdrawn, and they were importance of other matters. I appreciate the two very big and important steps. People that way Senator Murray put his argument and I I have credited publicly deserve credit for the have listened to the way in which Senator stands they took with them, but they were Conroy put his argument, but the importance withdrawn. But every single other resolution of different subject matters does vary, as we that was put up was passed including—to the know, across issues and companies. It is dif- shame and embarrassment of fund managers ficult to identify a voting right which is in- in this country—the Boral amendments, ones herently most valuable and to relegate other that Senator Murray and others would know decisions that may have a real bearing on the of. I went and attended the Boral AGM to conduct of the company that are not going protest. I held a proxy and I spoke against to be in the net. So I do not think you can the resolution but unfortunately it was cherrypick. I think it is very difficult to be passed. cherrypicking as to what you say is important and what is not. I can understand the Can I just make the following point. kernel of the three instances that Senator Compulsory voting for pension funds—or Sherry mentions, but I would urge those par- super funds, as we call them—is not a radical ticipating in the debate, in thinking carefully proposal. It is a proposal that was introduced about this, to consider what is an effective in the United States of America by the form of participation, and it is the govern- Ronald Reagan Republican party in the Con- ment’s view that forcing everyone down the gress. It was introduced by a gentleman same chute is not it. named Bob Monks. Bob Monks, as he will tell anybody who asks him, says: ‘I am a Senator CONROY (Victoria) (6.10 Reagan Republican and I believe in empow- p.m.)—I rise to respond to a number of those ering shareholders. I do not believe this is statements and to point out my view, as anything other than a perfectly straightfor- Senator Murray has heard me put on a num- ward and reasonable proposition.’ If the ber of occasions. If you want to talk about a Ronald Reagan Republican party can en- tick a box mentality, let us have a quick quiz dorse mandatory voting for pension funds in for those in the chamber. Senator Murray, the United States of America, what is the you already know the answer because you problem here? Why is this government yet have heard me ask this quiz question before. again doing the bidding of IFSA? Why is it How many resolutions were defeated on the not prepared to stand up on behalf of share- floor of an AGM out of the hundreds and

CHAMBER Thursday, 17 June 2004 SENATE 24165 holders? I know, Senator Coonan, that you ten. I make a generalisation, of course, be- disagree with this, but I have got to say cause that cannot be so for everybody who Senator Murray is dead right: there is a fidu- runs a business. ciary duty to voting. The fact that so many The problem with that is that you end up people have ignored their fiduciary duty is being angry about the double standards: the shameful. If we have got to end this farce shareholders end up being angry and the whereby companies can try to argue that they community ends up being angry. That is why do not have to have a vote and that there is executive pay is such an issue. It is a touch- no fiduciary duty to have one, I say so be it. stone of what is wrong with our country. It is Let us mandate voting. Let us put an end to a touchstone of this individualism—this ‘me this ridiculous situation. As I said earlier, first; I’m all right, Jack’ kind of approach Senator Murray is dead right. We will win from a portion of our community. The reason this battle; it will occur. This government we are spending so much time talking about may want to do the bidding of fund manag- executive remuneration is that it matters so ers and IFSA yet again but it will ultimately much to Australians; it also matters to the be unsuccessful. A worldwide corporate gov- businesses and the communities that the ernance movement is growing, the power of businesses affect. shareholders is growing and we will win this Last year I saw a report on executive sala- debate ultimately. Senator Murray, you are ries that was conducted by Dr John Shields dead right. from the University of Sydney for the La- Question negatived. bour Council of New South Wales. They Senator MURRAY (Western Australia) have not always been my best friends, I (6.14 p.m.)—We are now on amendment (5), might say; but I was interested by this. It which is a fascinating proposition, and I stated that they had found evidence that the must thank some union research for the idea more a company pays its top executives, the coming to me on this one. Coming from a worse it performs, which struck me as an business background, as I do, I always think amazing outcome. The report examined it is a great idea if people can earn a lot and share prices, returns on equity movements improve their financial standing and so on. and earnings per share in Australia’s largest But I am always deeply offended by the dou- 100 companies. In all criteria, taking into ble standards that I see applied to working account the size of the company, there was a people. I do not know of any listed company significant reduction in shareholders’ returns that is not represented in a major lobbying where executives were overpaid. It found organisation—the Group of 100, the BCA, that companies perform best when the execu- the ACCI, AIG or any of those. Whenever an tives are paid between 17 and 24 times aver- issue comes out where working people are age earnings. You can see where I am going saying, ‘Actually, we need more money for with this. If they were paid more—in other the annual wage case through the AIRC,’ or, words, if the payment began to get beyond ‘We’re concerned about job security,’ they that which was reasonable—performance say, ‘This is going to cost a lot,’ or, ‘This began to deteriorate. The study found that, could affect jobs,’ and so on. They are rea- even if the executive was paid in share bo- sonable arguments—decisions about money nuses and share options, the company results do affect productivity, efficiency, business suffered. survival and so on. But when it comes to their own remuneration: oops! It is all forgot-

CHAMBER 24166 SENATE Thursday, 17 June 2004

Over the past decade executive remunera- of $937.70, this would require reporting of tion has on average mushroomed from 22 all remuneration packages over $975,208. Is times average earnings to 74 times average this an unreasonable proposition that we are earnings. Highlighting the importance of putting? We are basically saying that the remuneration disclosure, the HIH royal com- shareholders are entitled to know that they mission recommendation No. 1 on corporate can approve anyone being paid over $1 mil- governance says: lion. In summary, Senator Conroy, we are I recommend that the disclosure and other re- saying that in addition to the cut-off at the quirements of the Corporations Act 2001, the five highest paid, we are recommending that relevant accounting standards and the Australian the board has to tell the shareholders why Stock Exchange Listing Rules that relate to direc- anybody above $1 million is worth it. That is tors’ remuneration be reviewed as a matter of essentially the proposition: either a $1 mil- priority, to ensure that together they achieve clear lion cut-off or the top five. I move Democrat and comprehensive disclosure of all remuneration amendment (5) on sheet 4214 revised: or other benefits paid to directors in whatever form. (5) Schedule 5, item 12, page 192 (after line 30), at the end of the item, add: That refers to directors. There is also the sense of people needing to justify to the (1A) The details in relation to remuneration prescribed in paragraph 1(c) must shareholders where they are paid very large include the total remuneration of each amounts. We have always supported the pro- director and company officer where the posal of a remuneration report outlining the value of the total remuneration is equal remuneration of directors, the five most to or exceeds 20 times the full-time highly paid executives of the company and adult ordinary time earnings as the consolidated entity. But we recognise, as periodically reported by the Australian I am sure everyone in the room does, that the Bureau of Statistics. cut-off at five is arbitrary. In fact, for some Senator COONAN (New South Wales— low-cap companies, five is probably too Minister for Revenue and Assistant Treas- many; and for other large-cap companies, it urer) (6.21 p.m.)—I think at issue here is an is too few. It may sometimes be the case that assumption that, because you are highly re- it does not pick up some of those whose pay munerated, you have the ability to have a is so high that shareholders may need to be significant influence on the overall manage- alerted to the fact. For example, it is under- ment of the company. I do not know that that stood that, despite its dreadful recent per- assumption is always correct, as I will just formance, there are 14 executives at AMP outline very briefly. But, firstly, it is not clear who are paid over $1 million. That informa- how this rule would actually interact with the tion may be a bit dated, but that is my under- disclosure requirements. I think what you standing. said, Senator Murray—and I may not have In the interests of transparency and ac- quite got it—was that this would replace the countability, the Democrat amendment that I top five disclosure requirements. am about to move proposes to introduce an The current provisions of the bill are de- amendment requiring the annual disclosure signed to require disclosure of persons who of the remuneration of all executives and are central to the governance of the com- employees who are paid more than 20 times pany—I think that is the issue—and have the the full-time adult ordinary time earnings. ability to impact on the strategic direction of Based on the December 2003 weekly figure the company. It is important that these indi-

CHAMBER Thursday, 17 June 2004 SENATE 24167 viduals’ remuneration be disclosed, as they cept this one at the end of the day, Senator do make key decisions—I do not think there Murray, I think your proposal has merits and is any argument about it—that affect the Labor will support it. company and the incentives which drive Question agreed to. them and that may have a bearing on the Senator COONAN (New South Wales— overall performance of the company. I think Minister for Revenue and Assistant Treas- we are all in furious agreement that, if highly urer) (6.25 p.m.)—by leave—I move gov- remunerated people also have some issue to ernment amendments (101) to (104) on sheet do with the central governance of the com- PK247: pany and an ability to influence the company, that should be disclosed. (101) Schedule 6, page 195 (after line 12), after item 1, insert: I did want to put on the record, after lis- 1A Before subsection 674(3) tening to Senator Murray, that disclosure of all individuals who earn more than a particu- Insert: lar amount may lead to a significant amount (2B) A person does not contravene of disclosure that is actually not relevant to subsection (2A) if the person proves shareholders for governance purposes. You that they: could have a whole lot of people running (a) took all steps (if any) that were around doing things that may not actually reasonable in the circumstances to help the objective that you are striving for. If ensure that the listed disclosing entity complied with its obligations I understand Senator Murray’s proposal cor- under subsection (2); and rectly, it would catch, to use the colloquial (b) after doing so, believed on term, ‘screen jockeys’ and require their re- reasonable grounds that the listed muneration to be disclosed. They are clearly disclosing entity was complying people who are highly remunerated, but I do with its obligations under that not think anyone is going to be asserting that subsection. they have any significant influence on the (102) Schedule 6, page 195 (after line 20), after overall management of the company. The item 2, insert: way the actual proposal is framed has a cer- 2A Before subsection 675(3) tain awkward angle to it in specifying which Insert: figures are to be relied on, given that they are updated quarterly. It is for those reasons, (2B) A person does not contravene rather than taking issue with the fact that if subsection (2A) if the person proves that they: somebody is highly remunerated this has an influence on the governance of the com- (a) took all steps (if any) that were reasonable in the circumstances to pany—and this has been reflected in the ensure that the disclosing entity bill—that we will not be supporting the complied with its obligations under amendment. It is for those reasons, rather subsection (2); and than that we disagree with the central propo- (b) after doing so, believed on sition, that we will not be supporting the reasonable grounds that the amendment. disclosing entity was complying Senator CONROY (Victoria) (6.24 with its obligations under that p.m.)—I indicate that Senator Murray’s ar- subsection. guments have been quite compelling. While I doubt the government will be willing to ac-

CHAMBER 24168 SENATE Thursday, 17 June 2004

(103) Schedule 6, item 9, page 204 (line 18), with subsection (1), the details must after “not”, insert “, by reason only of include a statement that: subsection (3) being satisfied,”. (a) the disclosing entity is not regarded (104) Schedule 6, item 9, page 207 (line 29), as having contravened the provision after “the”, insert “determination,”. specified in the statement; and These amendments deal with continuous (b) that following the outcome of the disclosure. Amendments (101) and (102) will hearing, ASIC may issue an insert a due diligence defence for persons infringement notice or may choose involved in a contravention of the continuous not to issue an infringement notice disclosure obligations. The defence requires in relation to the alleged contravention. that the person will have taken all steps that were reasonable in the circumstances to en- One of the most controversial aspects of the sure that the disclosing entity complied with CLERP 9 bill is the power granted to ASIC its continuous disclosure obligations and to issue infringement notices in relation to believed on reasonable grounds that the en- breaches of the continuous disclosure re- tity complied with these obligations. gime. Labor supports this power. We see it as Amendments (103) and (104) are for the a mechanism to enhance ASIC’s regulatory purposes of clarification. tool kit. We believe that presently ASIC does not have sufficient regulatory tools at its dis- Senator MURRAY (Western Australia) posal to effectively enforce the continuous (6.26 p.m.)—I like these amendments, Min- disclosure regime. In March of last year ister. It is a good adjustment to the act. ASIC reached a $100,000 settlement with Question agreed to. AMP following an investigation by ASIC in Senator CONROY (Victoria) (6.26 relation to AMP’s disclosures to the market p.m.)—I move opposition amendment (35) during 2002. ASIC said that if a fining re- on revised sheet 4216: gime had been in place then a $100,000 fine (35) Schedule 6, item 9, page 210 (after line 32), would have been appropriate but, as there after section 1317DAJ, insert: was no power to levy a fine, AMP agreed to 1317DAK Publication in relation to make a community education contribution of statement of reasons $100,000 as a substitute. (1) If ASIC issues a statement of reasons to In Australia, companies are quick to dis- a disclosing entity, ASIC may publish close the good news and slow to disclose the the following details in relation to the bad, so it is time ASIC had the teeth it needs statement of reasons, that: to enforce the continuous disclosure regime. (a) ASIC believes that the disclosing However, ASIC is prevented from disclosing entity has contravened subsection to the market that it has issued an infringe- 674(2) or 675(2); and ment notice and is prevented from disclosing (b) ASIC has issued a statement of to the market that it is investigating a breach reasons to the disclosing entity; and of the continuous disclosure regime. The (c) the disclosing entity has an quite ludicrous proposition being put forward opportunity to appear before ASIC here is that ASIC is going to be guilty of at a private hearing in relation to the breaching continuous disclosure laws be- alleged contravention. cause it is not going to tell the market of a (2) Where ASIC publishes details of the material fact. statement of reasons in accordance

CHAMBER Thursday, 17 June 2004 SENATE 24169

In Labor’s view this is market relevant in- Ordered that the report be printed. formation. Accordingly, we believe that the BUSINESS market should know if ASIC is investigating Rearrangement an alleged breach. That is why we are moving an amendment which gives ASIC the Senator ELLISON (Western Australia— power to disclose to the market that it has Minister for Justice and Customs) (7.31 issued a statement of reasons and that the p.m.)—I move: company has an opportunity to appear before That intervening business be postponed till af- ASIC at a private hearing in relation to the ter consideration of government business order of alleged contravention. This is not a require- the day no. 3 (Anti-terrorism Bill 2004). ment; it is an option for ASIC to use in cir- Question agreed to. cumstances where it believes the market ANTI-TERRORISM BILL 2004 should be informed about the alleged contra- Second Reading vention. Debate resumed from 15 June, on motion We have also built safeguards into the by Senator Troeth: amendment. If ASIC chooses to publicise the fact that it has issued a statement of reasons That this bill be now read a second time. then ASIC is also required to include in the Senator LUDWIG (Queensland) (7.32 publication a statement that the company has p.m.)—I rise to speak on the Anti-terrorism not contravened the provision and that, fol- Bill 2004. This bill makes changes to four lowing the outcome of the hearing, ASIC pieces of legislation: the provision in the may choose not to issue an infringement no- Crimes Act 1914 allowing the police to de- tice. We want to get the balance right. We tain and question persons being investigated want to ensure that companies are not put on for terrorism offences; the provision in the show trial, but it is clear that if ASIC is con- Crimes (Foreign Incursions and Recruit- ducting an investigation of a corporation it is ment) Act 1978 prohibiting persons from a market-sensitive issue and should be dis- engaging in hostile activity in a foreign state; closed to the market so that shareholders can the offence in the Criminal Code Act 1995 respond accordingly. relating to membership of, and training with, Sitting suspended from 6.30 p.m. to terrorist organisations; and the provisions in 7.30 p.m. the Proceeds of Crime Act 2002 enabling courts to make orders for the confiscation of Progress reported. ‘literary proceeds’ of criminal activity. BUDGET The bill was the subject of an inquiry by Consideration by Legislation Committees the Senate Legal and Constitutional Legisla- Report tion Committee, which delivered a bipartisan Senator EGGLESTON (Western Austra- report on 11 May. In the bipartisan report, lia) (7.31 p.m.)—On behalf of the Chair of Liberal and Labor members of the committee the Finance and Public Administration Legis- recommended several amendments to the lation Committee, Senator Mason, I present bill. On 12 May, the shadow minister for the committee’s report in respect of the homeland security wrote to the Attorney- 2004-05 budget estimates, together with the General indicating the opposition’s accep- Hansard record of the committee’s proceed- tance of these recommendations and support ings. for the amendments to implement them. In the letter the opposition urged the Attorney-

CHAMBER 24170 SENATE Thursday, 17 June 2004

General to continue the bipartisan approach terrorist attack. That said, we do not see this to the legislation displayed by the Senate bill as establishing a precedent for the future committee. Regrettably, whilst the govern- extension of these amendments to other areas ment has accepted the need to make changes of law enforcement. We are reassured by the to its proposed amendments to the Crimes fact that the bill preserves the existing safe- Act and to the Crimes (Foreign Incursions guards for suspects detained as part of a po- and Recruitment) Act, it has rejected the rec- lice investigation, including the right to si- ommendations, endorsed by its own senators, lence, the right to seek legal representation for changes to the proposed amendments to and the supervision of extensions of time by the Proceeds of Crime Act. a judicial officer. I will first address the amendments to the We believe that, consistent with other anti- Crimes Act 1914 dealing with the police de- terrorism legislation passed by this parlia- tention of terrorist suspects, which, in La- ment since September 11, it is appropriate to bor’s view, are the most significant provi- ensure that the operation of these amend- sions of the bill as it currently stands. I will ments is subject to an independent review make a number of points about these after three years. Labor are certainly commit- amendments. Prolonged detention of citizens ted to that review; however, we have not yet without charge is an extraordinary measure heard the same commitment from the gov- which should only be sanctioned in excep- ernment. One of the bipartisan recommenda- tional circumstances where it is necessary to tions of both Liberal and Labor members of counter a demonstrated and urgent threat to the Senate committee was that the use of the the safety of the community. Labor has care- new ‘dead time’ provision relating to over- fully considered the case put forward by po- seas inquiries only be available upon suc- lice commissioners and in particular by Aus- cessful application to a judicial officer. We tralian Federal Police Commissioner Keelty are pleased that, following Labor’s represen- in light of the AFP’s experience in investigat- tations, the government has agreed to an ing the Bali terrorist bombings. Their com- amendment to this effect. I will address this ments followed earlier calls by experts such issue further at the committee stage of the as Professor George Williams, in October bill. 2002, to review the adequacy of part 1C of I turn to the Crimes (Foreign Incursions the Crimes Act in the new threat environ- and Recruitment) Act 1978, the next act sub- ment, as well as moves by the United King- ject to amendment by the government. The dom and Canada to strengthen their own opposition sees sense in updating the 1978 laws in this area. act following more recent examples of state- We believe a case has been made by our sponsored terrorism, such as al-Qaeda in Af- law enforcement agencies for these amend- ghanistan and earlier in the Sudan, and ac- ments to deal with the unique challenges of cordingly supports these amendments. I international terrorism investigations. We are should note in passing that it has been im- persuaded that these amendments are needed plied, if not stated, by the government that to enable the gathering of evidence that the need for these amendments was in part would be admissible in an Australian court. demonstrated by the case of David Hicks. This is not something that can be done using This suggestion, like all of this government’s the powers given to ASIO last year, which statements about Mr Hicks and Mr Habib, were conferred for the different purpose of cannot go unquestioned. Overnight—from gathering intelligence that may help avert a last Thursday to Friday—the United States

CHAMBER Thursday, 17 June 2004 SENATE 24171 finally particularised its allegations against with terrorist organisations. For example, the Mr Hicks, some 2½ years after he was de- ASIO director, Mr Dennis Richardson, stated tained. They cover alleged training and other in his November 2003 report to parliament: activities with the KLA in Kosovo, LET in ASIO is aware of a number of Australians who Pakistan and al-Qaeda in Afghanistan. have received terrorist training since the late Read in light of these alleged particulars, 1990s. The level of instruction received by these it is not at all self-evident that the Crimes individuals ranges from basic military training to advanced terrorist tactics. Identifying other Aus- (Foreign Incursions and Recruitment) Act tralians who have undertaken terrorist training has no application to Hicks’s case, bearing in remains a priority. mind that section 6(3)(aa) of the act, inserted in 1987, does not require armed hostilities to This was not the only statement made in re- be directed at the government of the foreign spect of this point. The Australian Federal state and that not all of Mr Hicks’s alleged Police Commissioner, Mick Keelty, told the Senate committee examining this bill: activities appear to have been with government forces. The government has never From my perspective ... the investigation into the made public the legal advice it has received Bali bombings opened up our eyes to how many about Hicks, but there is more than a little people have been training, for example, as part of Jemaah Islamiah. suspicion that the problem is not so much with the act as with obtaining admissible He did not leave it at that. He went on to say: evidence. With or without these amend- We have a large number of people who poten- ments, the application of the act to Hicks is, tially could act as terrorists, who have been given in our view, not a closed question. the training to make the bombs. We saw the technology of detonating bombs by mobile phone in One flaw, identified by Liberal and Labor the Bali bombings and we have now seen it in the senators, in the drafting of these amendments Madrid bombings. The speed at which this new was the absence of criteria to guide the exer- technology is passing through the hands of train- cise of the proposed new power to make ing camps is extraordinary. The speed at which regulations prescribing organisations. Again, the Jemaah Islamiah bombers learnt new tech- Labor made representations to the govern- nologies to avoid detection—and I am talking ment to rectify this. We are pleased that the about the two outstanding suspects—has been government has agreed to move an amend- incredible. So we have to have some major deter- rent for people who are involved in the process of ment, which I will also speak to at the com- training these people but also for people who mittee stage when dealing with that matter. subject themselves to the training to potentially I now turn to the amendments to the act as terrorists. membership and training offences in the You can see that these statements highlight Criminal Code Act. Again, the opposition the real concerns of our frontline agencies supports these amendments. Self-evidently, about Australian involvement in terrorist the more controversial and complex of these training. Therefore, on balance, we are satis- amendments are those to the training of- fied of the need for parliament to strengthen fence, as they introduce a modified form of the training offences in the Criminal Code. strict liability to an offence which carries a Finally, I turn to the amendments to the heavy penalty, placing a significant burden Proceeds of Crime Act. It should be ac- on an accused. Again, we have carefully con- knowledged that the Proceeds of Crime Act sidered this proposal in light of evidence already covers a substantial portion of liter- about the extent of the problem of training ary proceeds that could be derived from ter-

CHAMBER 24172 SENATE Thursday, 17 June 2004 rorist activity. The grave and unique nature by an Australian court on public policy of terrorism is already recognised in the act, grounds. Secondly, the court retains the ulti- which excludes terrorism from the statute of mate discretion whether or not to make a limitations applying to all other offences, literary proceeds order at all, and if it does which, as you know, Acting Deputy Presi- make such an order, whether to confiscate all dent Hutchins, is six years. The residual or only some of the profits. Under the act the category of terrorist literary proceeds that court must take into account a range of fac- would not be covered are, firstly, those de- tors when determining whether to make an rived overseas and transferred to Australia or, order. Those factors include the nature and secondly, those derived from overseas terror- purpose of the product or activity from ist activity which predates the enactment of which the proceeds were derived; whether antiterrorism legislation in Australia in mid- supplying the product or carrying out the 2002. We are not opposed to amendments activity was in the public interest; and, lastly, that close these loopholes, although, as Lib- the social, cultural or educational value of eral and Labor members of the Senate com- the product or activity. mittee unanimously concluded, these amend- In this area, Liberal and Labor members ments do have a retrospective operation. In of the Senate committee made bipartisan this respect, the explanatory memorandum, recommendations for two amendments to the which asserts otherwise, is simply wrong and bill: that item 24 of the bill be amended to should be corrected. This government should remove the words ‘or indirectly’, and item take the initiative and amend it today. 26 of the bill be amended to omit the pro- Labor certainly agrees with the unanimous posed reference to United States military recommendation of the committee that the commissions. Regrettably, the government independent review mandated by section 327 has chosen not to continue the bipartisan of the Proceeds of Crime Act should examine approach of the committee and has refused to the impact of the retrospective operation of amend the bill in this way. Accordingly, La- these amendments and, in particular, whether bor will be moving these amendments at the they have had implications beyond the area committee stage. If the government fails to of terrorist literary proceeds. support them, we are fully committed to im- In considering these amendments, we plementing them if elected. I will discuss have had regard to the fact that two key safe- these issues further during the committee guards in the current act are maintained. stage of the bill. I am only foreshadowing at Firstly, the civil burden remains on the this point some of the issues that may be prosecution to prove on the basis of evidence aired during that debate. that the person committed a terrorist offence. Before concluding my remarks in the sec- For example, in the cases that the Howard ond reading debate, I should also foreshadow government plainly has in its cross-hairs— that Labor has announced its support for the Mr Hicks and Mr Habib—the court is cer- amendments to be moved by the government tainly not obliged to recognise any convic- relating to bail and minimum non-parole pe- tion by a Guantanamo Bay military commis- riods following the Roche and Khazal cases. sion as conclusive of this issue. Indeed, a We recognise these are extraordinary meas- cursory look at the principles of private in- ures but, having considered them closely and ternational law suggests a person could the serious offences to which they relate, we mount a pretty good argument that such a believe they are in the national interest and conviction should be treated with scepticism necessary to ensure that the law is more

CHAMBER Thursday, 17 June 2004 SENATE 24173 closely aligned with community expecta- the government has considered alternative tions. Consistent with our existing commit- measures that might be more effective or ment to ensure the operation of the amend- appropriate under the circumstances. Unfor- ments to the Crimes Act after three years, it tunately, the vast bulk of the government’s almost goes without saying that we will in- antiterrorism proposals we believe have clude the proposed amendments relating to failed these tests, even after extensive bail and non-parole periods in any such re- amendment by the Senate. Accordingly, we view. have voted against them, although there have Senator GREIG (Western Australia) been a number of worthy proposals which (7.48 p.m.)—Senator Ludwig was judicious the Democrats have been willing to support. in his repeated use of the term ‘bipartisan’ to The threat of terrorism is real and has se- describe support for the Anti-terrorism Bill rious implications for Australia’s security. 2004. While it is true that there are two par- However, ‘national security’ is also a vague ties in this place which support the legisla- concept which can be relied upon as a blan- tion, we are of course a multiparty parlia- ket justification for increasing powers and ment and it would be wrong to conclude that winding back the rights and freedoms of in- bipartisan support meant unanimous support. dividuals. As parliamentarians, we are It does not. We on the crossbench, certainly charged with the responsibility of making we Democrats, oppose this legislation. laws for the ‘peace, order and good govern- Here we are once again debating yet an- ment of the Commonwealth’. Clearly, this other set of what we argue are flawed antiter- includes a responsibility to ensure that the rorist initiatives on the part of the govern- government has the legislative capacity to ment—initiatives which have been the sub- protect Australia’s national security, but it ject of understandable and widespread com- also includes the very important responsibil- munity opposition and which were strongly ity to ensure that the fundamental rights and criticised in evidence before the Senate’s freedoms of Australians are not violated in Legal and Constitutional Legislation Com- that process. mittee. We Democrats are committed to I indicate again from the outset that we keeping Australians safe from terrorism and Democrats strongly oppose the vast majority for this reason have given careful considera- of the measures within this bill. The bill tion to each of the proposals the government makes a range of amendments to the Crimes has presented to combat terrorism. Some of Act, the Crimes (Foreign Incursions and Re- these proposals we have supported and some cruitment) Act, the Criminal Code Act and we have not. In each case we have consid- the Proceeds of Crime Act. It will extend the ered whether there is any justification for the period for questioning of suspects arrested new powers being proposed by the govern- on terrorism charges by 20 hours—that is, to ment. This has involved looking at, firstly, a maximum of 24 hours—upon application whether there is a demonstrated deficiency in to a judicial officer. It will allow for dead existing law; secondly, whether there is any time during questioning for the purpose of evidence to suggest that the new powers will obtaining information from other countries in be effective in addressing threats to security; different time zones. It will limit the exemp- thirdly, whether any infringement of rights tion that currently applies under the Crimes and liberties associated with the proposal is (Foreign Incursions and Recruitment) Act for vital and necessary in order to protect the persons who serve in or with the armed safety of Australians; and, finally, whether forces of a government of a foreign state by

CHAMBER 24174 SENATE Thursday, 17 June 2004 providing that the exemption does not apply paigns and in direct communications with to persons who serve in or with a prescribed members and senators. In its evidence before organisation. the committee, Amnesty International testi- It will remove the requirement that, in or- fied that it was very concerned with the bill der for a person to be charged with an of- and that it ‘could be used to give legislative fence under the foreign incursions act, the legitimacy that would otherwise be a contra- person must have been in Australia or an vention of international human rights stan- Australian citizen or resident during the year dards’. preceding the commission of the offence. It Associate Professor Joo-Cheong Tham will increase the maximum penalty for an made the point that not only are the provi- offence under the foreign incursions act from sions of this bill concerning but the context 14 to 20 years. It will empower the minister in which it is being introduced is particularly to issue an evidentiary certificate attesting disturbing. We now have extensive legisla- that a group or organisation was not part of tive infrastructure to combat terrorism, based the armed forces of a foreign state at any on broad criminal liability, sweeping execu- given time. It will create an offence of mem- tive powers and significant departures from bership of an organisation that is found by a established community standards and there is court to be a terrorist organisation—as op- ‘a grave risk of these exceptions being nor- posed to a terrorist organisation prescribed malised’. by regulations. It will amend the offence of There are now more than 15 pieces of an- training with a terrorist organisation to re- titerrorism legislation within Commonwealth verse the onus of proof in relation to reck- law. And the pattern that we see emerging is lessness. that, once a piece of legislation has been It will amend the Proceeds of Crime Act passed, the government then attempts to in- so that a person is prohibited from obtaining crease its powers under that existing legisla- literary proceeds within Australia or transfer- tion. This is obviously a relevant considera- ring literary benefits to Australia in relation tion when we are examining legislation such to the commission of a foreign indictable as this, where improvements and safeguards offence. It will expand the definition of ‘lit- are introduced by the Senate, because ex- erary proceeds’ to include the commercial perience shows that the government may exploitation of a person’s notoriety resulting attempt to remove these safeguards at a later directly or indirectly from the commission of date. an indictable offence—for example, this We Democrats are pleased that the gov- would include notoriety resulting from the ernment and opposition have chosen to take detention of a person. It will also expand the up some of the recommendations made by definition of ‘foreign indictable offence’ to the Senate Legal and Constitutional Legisla- include an offence triable by a military tion Committee. It is disappointing, however, commission of the United States. that among the government’s amendments Like most of the government’s antiterror- there are new, regressive measures to reverse ism initiatives, this bill has been the subject the presumption in favour of bail. This is a of considerable and understandable commu- long-held principle and is closely related to nity criticism not only to the Senate Legal the presumption of innocence. It is founded and Constitutional Legislation Committee on the notion that deprivation of liberty but also through broader community cam- should, as far as possible, be tied to convic-

CHAMBER Thursday, 17 June 2004 SENATE 24175 tion for a criminal offence. Individuals more than 20 hours. We note the very real charged with a crime are innocent until concerns expressed by Amnesty International proven guilty and the presumption in favour that this may breach article 37 of the Con- of bail reflects this. If a suspected terrorist vention on the Rights of the Child and very presented a risk to the community then that probably breaches the recommendations would be taken into account by the bail au- from the royal commission into black deaths thority, who would be likely to refuse bail. in custody. Given this, it is difficult to see why there is Additionally, we Democrats believe that any need to reverse the presumption in fa- the power to grant an extension of time for vour of bail. the investigation period should be restricted We Democrats have a range of other con- to magistrates and should not be vested in cerns in relation to this bill. Firstly, in rela- justices of the peace, or persons authorised to tion to the amendments to the Crimes Act grant bail. We are also concerned by the po- 1914, we argue that there is a lack of any tential for unlimited dead time during the compelling justification for an extension of investigation period and believe that the bill the investigation period in relation to terror- should set out a maximum period of deten- ism offences, particularly since no such ex- tion, including dead time. tension has been considered necessary in In relation to the proposed amendments to relation to other complex, multijurisdictional the Crimes (Foreign Incursions and Recruit- offences. ment) Act, we Democrats are yet to be con- The Democrats question the necessity of vinced that they are necessary, given that the increasing the investigation period for terror- government already has powers to proscribe ism offences when ASIO already has exten- armed forces engaged in hostilities under the sive detention and questioning powers in Criminal Code. We take this opportunity relation to terrorism. During debate on the once again to reiterate our strong opposition ASIO powers, we noted that there was some to the proscription regime. Whilst the gov- ambiguity as to whether the underlying pur- ernment must be legislatively equipped to pose of the powers was intelligence gather- combat the threat of terrorism, we also being or criminal investigation. Despite at- lieve that it should target criminal behaviour, tempts by the Democrats to resolve this am- not thought or association. biguity by way of amendment, it is now en- We are very concerned by the lack of cri- shrined in the legislation. For this reason, we teria for proscribing organisations under the are unconvinced by the AFP’s argument that proposed amendments. It is really quite in- the respective regimes have different under- credible that the Attorney-General’s Depart- lying purposes and safeguards. Once again, I ment has conceded that the amendments take the opportunity to express the Democ- would enable it to proscribe the Scouts if it rats’ concern regarding the broad definition wanted to. It is for this reason that there is a of a terrorist act under Commonwealth anti- desperate need to include criteria for pro- terrorism legislation and the potential that scribing organisations. Like many of the this creates for individuals who are not ter- submissions to the committee, the Democrats rorists to be charged with terrorism offences. have concerns regarding the use of ministe- We are deeply concerned that the bill rial certificates. Given the heavy penalties permits the extended detention of children which apply to offences under the foreign and Aboriginal and Torres Strait Islanders for incursions legislation—which, of course,

CHAMBER 24176 SENATE Thursday, 17 June 2004 will be increased by this bill—the Democrats The Democrats share the concerns of the believe that the prosecution should be re- Senate Legal and Constitutional Legislation quired to present compelling evidence to Committee regarding the concept of indirect establish each of the elements of the offence. notoriety. We are also concerned that the test In relation to the amendments to the relating to literary proceeds does not require Criminal Code Act, the Democrats’ primary a person to have been convicted of an indict- concerns relate to the broad and imprecise able offence—the court simply needs to be definitions. In particular, we are concerned satisfied that they have committed such an by the scope of the definition of a terrorist offence. We do not see how a court could organisation and the potential for this defini- properly establish that a person has commit- tion to incorporate legitimate resistance ted an indictable offence other than after a movements. It is also unclear what it means trial in which all the relevant evidence has to be a member of an organisation or to have been presented to the court. Like the legal received training from an organisation. For and constitutional committee, we strongly example, would a person be classified as a oppose any recognition of United States mili- member of an organisation by virtue of hav- tary commissions. We have consistently ex- ing attended a meeting of that organisation? pressed the strongest opposition to the re- Unless these terms are more tightly defined, gime at Guantanamo Bay and the use of there is a very real risk that the legislation military commissions to try detainees. will capture individuals who are not in any The procedures which will be used in way associated with terrorism. The Democ- these military commissions are the antithesis rats also oppose the strict liability provision of those which apply in criminal proceedings in section 102.5 of the bill. This provision under Australian law. Apart from being com- will essentially reverse the onus of proof for pletely secretive, the entire proceedings are recklessness, thereby compromising the pre- subject to presidential direction. They have sumption of innocence until proven guilty. been set in motion as a result of a direction In relation to the amendments to the Pro- from the President, and if the President dis- ceeds of Crime Act, we Democrats have a agrees with the ultimate finding of the tribu- long record of opposing retrospective legisla- nal then he can simply reverse it. Given the tion. We take the view that one of the func- inherent flaws in this process, it will be im- tions of the law is to provide certainty to in- possible to trust the verdicts that emerge dividuals in the ordering of their affairs and from these commissions. The Democrats the decisions they make. Retrospective believe it is a huge mistake for the govern- changes to the law compromise the ability of ment to in any way recognise or give legiti- individuals to make informed choices about macy to these commissions. how they live their lives, as they can never It will be clear from my remarks that be certain that a particular act which is legal many of the concerns which the Democrats at the time will not subsequently be made have in relation to this bill will remain even illegal. Although the retrospective changes to if all the government and opposition the Proceeds of Crime Act do not give rise to amendments are passed. We believe that this criminal liability, they do have the potential bill, like the vast majority of the govern- to detrimentally affect the rights of individu- ment’s other anti-terrorism initiatives, is so als. significantly flawed that we cannot bring ourselves to support it. Thus, we will be voting against it.

CHAMBER Thursday, 17 June 2004 SENATE 24177

Senator NETTLE (New South Wales) In the worst-case scenario, historians will have to (8.04 p.m.)—I rise to speak in the debate on explain why the golden age of Western democ- the Anti-terrorism Bill 2004. The Greens racy lasted only about 200 years. have consistently opposed legislation regard- I will now go to the detail of what is pro- ing terrorism that abrogates fundamental posed in this latest round of antiterrorism civil and political rights. We have consis- legislation—draconian legislation that im- tently argued that the existing normal crimi- pacts on our civil and political rights—and nal law—murder, damage to property and go through the specific clauses of the bill. conspiracy—with its important checks and The clauses of the bill that seek to amend the balances, is more than adequate to address Crimes Act to create new police powers will criminal acts commonly described as terror- give both state and federal police the power ism. History shows that emergency legisla- to hold terrorism suspects for up to 24 hours tion passed in periods of martial law and for questioning before being charged, rather conflict can very easily become the norm and than the current 12 hours. In practice this lead to a culture and practice of human rights could mean detention for much longer: up to abuse by security and police agencies. two to three days and potentially indefinitely, The Greens have supported sensible as the clock can be stopped—we do not changes to security arrangements—such as know if it can be stopped multiple times— the Aviation Transport Security Bill 2004, for various reasons, including for a period which seeks to improve security in the avia- equivalent to the time difference between tion industry—but we remain concerned that Australia and another country whose law the war on terrorism is leading to a perma- enforcement agencies need to be consulted nent violation of fundamental human rights by Australia for information needed in the in this country and around the world. These investigation. fundamental rights include the right to a These new powers are unnecessary. ASIO lawyer, the right to a fair and open trial, the already has extensive detention and question- right to be presumed innocent until proven ing powers for up to seven days, which it has guilty and the right not to be detained with- used. We do not know a lot about these pow- out charge. Generally Labor has succumbed ers because those subject to them are banned to the threat of being labelled soft on terror- from speaking about their experience. We ism and supported the government’s bills opposed these new powers for ASIO; now with minor changes. That appears to be the that they are in place, we do not understand case with this piece of legislation also. Like why the AFP and state police believe they law and order at a state level, terrorism also need these powers. The government has threatens to become an annual auction in not made a case for the necessity for these which the major parties compete to remove new powers. Is there some sort of turf war our fundamental human rights. between the AFP and ASIO? Is it a case of An eminent American liberal philosopher, police agencies seeing this as a chance to Professor Richard Rorty, has said: increase police powers? Or is it a case of the government trying to wedge Labor and La- Further attacks are likely to persuade those el- ites— bor saying, ‘No way,’ and therefore bucking the bill? It has been suggested that the inves- those in the West— tigation of terrorism is different, that it is they must destroy democracy in order to save it. more complex; but there are equally complex cross-jurisdictional offences, such as corpo-

CHAMBER 24178 SENATE Thursday, 17 June 2004 rate fraud and organised crime, for which the tary at that time,’ that is taken as prima facie police have not asked for these powers—at evidence in the court. That is utterly unac- least, not that we know of. These powers ceptable. could lead to a greater number of people be- Another part of the legislation seeks to ing charged with terrorism offences as a amend the Criminal Code Act to create a mechanism for holding people for a longer reckless forms of terrorism training offence. period of time and bargaining, so to speak, This makes it an offence to train with a with suspects over what they will be charged banned organisation, whether or not you with. know the organisation has been banned. This bill also seeks to amend the Crimes Given the broad scope of the terrorism defi- (Foreign Incursions and Recruitment) Act. nition, that could include resistance move- This part of the bill allows the government to ments in many places, from Tibet to West make criminals of Australians and others Papua. Given that membership of terrorist fighting with overseas armies, whether or not organisations can include informal members, the individual or the army has engaged in recklessness in relation to somebody training criminal acts. It extends the effect and the you or you training someone is also more scope of the minister’s power to ban organi- possible. These are strict liability offences. sations, a power which the Greens opposed There is no requirement to show intent or and continue to oppose. It is unnecessary, knowledge. For example, the US pilots who given existing powers and offences under the trained the people who flew the planes into existing banning and proscription regime, the World Trade Centre would have commit- and it is worse because the criteria proposed ted an offence under this measure. Strict li- by the government amendment are even ability should not apply to such serious of- looser than the broad-brush definition of ter- fences, especially with such serious penalties rorism which is in the current proscription involved as are in this legislation. regime. The Attorney-General can list This legislation also seeks to amend the whomever they want. Criteria such as armed Proceeds of Crime Act 2002. It expands the hostilities against a foreign state allied or scope of the Proceeds of Crime Act in pre- associated with Australia would mean that venting people from receiving payments for the West Papuan freedom movement could publishing information about offences for be proscribed, as could have been the East which they have received a conviction, Timorese independence movement and the which would cover issues indirectly related ANC. to the offence, such as imprisonment at The use of certificates as evidence means Guantanamo Bay. The retrospective effect of that the prosecution is not required to prove this component of the legislation should be its case. The certificates proposed are merely opposed on principle. It is also a form of statements from the minister. The minister double jeopardy, where somebody is being writing something down is what a certificate punished twice: once for their imprisonment is in this legislation. This is then taken as and then through their inability to profit from prima facie evidence and no further proof or talking about their imprisonment, whether evidence is required. If a defendant says that they have been convicted or not. It prevents they were working with the British military the receipt of proceeds that come from indi- at the time the offence relates to and the min- rect notoriety and it could prevent discussion ister writes down on a piece of paper, ‘No, not only about conditions at Guantanamo they weren’t working with the British mili- Bay, Abu Ghraib and the Bagram Air Base

CHAMBER Thursday, 17 June 2004 SENATE 24179 but also about conditions in Australian pris- In no circumstances whatever shall a prisoner ons. of war be tried by a court of any kind which does not offer the essential guarantees of independence This could undermine the important and impartiality as generally recognized ... prison reforms that have come about through people writing about crime and about their The failure of the United States to establish prison experience. The legislation in this article 5 tribunals to determine the status of component of the bill does not even require detainees at Guantanamo is a breach of the somebody to have been convicted in order convention and in marked contradistinction for them to not be able to write and gain to the current conduct in Iraq, where an arti- profit from the story of the experience of cle 5 tribunal made up of three military offi- imprisonment they have suffered. Many of- cers began examining individual cases on fences against foreign law which are in- 19 April 2003. A lack of sufficient due proc- cluded in this component of the legislation ess guarantees and procedural safeguards and exist as a result of unjust and repressive legal a lack of an independent and impartial tribu- systems in other countries. For example, un- nal—ultimately President Bush is judge, jury der this legislation the students of the and executioner—is a breach of article 14.1 Tiananmen Square massacre could not pub- of the International Covenant on Civil and lish or receive profit from writing about their Political Rights, which requires an independ- experiences. ent and impartial tribunal. President Bush can hardly be called that, having already la- The next section of the legislation in- belled those people in Guantanamo Bay as cludes, as I mentioned before, the US mili- ‘bad men’. There are restrictions on the tary commission at Guantanamo Bay. It rights of lawyers and the ability to conduct seeks to include the military commissions in an effective defence, and an extension of the definition of foreign indictable offences. military jurisdiction over non-military con- This is to recognise the legitimacy of the duct. Evidence that can be included in these United States military commission trials of military commissions is such as would not be Guantanamo Bay suspects by including the accepted in a court of law, either in this conviction by military commission within country or in the United States. the definition of criminal offences covered by the Proceeds of Crime Act. Whilst com- The government also proposes a series of missions have already been recognised in amendments to this legislation, which we this parliament for the purpose of prison will discuss further in the committee stage of transfer, this is the first time that Australian this debate. A significant proportion of these law has recognised the negative conse- amendments go to another key area of this quences that could flow from these kangaroo legislation—that is, to ensure that bail is not courts. Senator Brown and I have spoken in given to terrorist suspects and that non- this chamber, as has the member for Cun- parole periods are extended. The amend- ningham in the other place, about the prob- ments remove the right to bail except in ex- lems with these military commissions. I will ceptional circumstances. They create manda- point out some of the problems that the In- tory minimum parole periods for terrorism ternational Commission of Jurists has high- offences, treason, treachery and espionage. lighted. They include the failure to determine This is unprecedented in Australian law, ex- prisoner of war status under the third Geneva cept for mandatory sentencing in the North- convention. Article 84 of the third Geneva ern Territory and Western Australia. convention provides:

CHAMBER 24180 SENATE Thursday, 17 June 2004

These proposals attack judicial independ- young man went straight into Supermax— ence, the importance of discretion of the ju- the most draconian part of the New South diciary to decide important matters such as Wales criminal justice system. This young pre-trial custody or detention and an appro- man went straight there, and the prosecution priate length of sentence based on the indi- said at his bail hearing, ‘He poses no threat vidual and particular circumstances of the to the community.’ crime and the defendant. They are arbitrary Under the proposal by the government to and quite possibly in breach of the Interna- remove the capacity for bail in terrorism of- tional Covenant on Civil and Political Rights fences, there is no way this young man and the Convention on the Rights of the would be back at the University of New Child, there being no exemption, we under- South Wales doing his medical exams, as he stand, for children. It is a disgrace that the is at the moment. As his lawyer said, this government is trying to rush through these young man may well make a very fine doctor draconian amendments to remove bail and in the future. If Izar ul-Haque were put in bring in mandatory minimum parole periods prison after rather than prior to this legisla- with no inquiry into what is being proposed tion going through—if it does go through— and with virtually no public discussion. It he would not be going back to the University appears that Labor also believes it is accept- of New South Wales to do medical exams to able not to have public debate on this move perhaps become a fine doctor one day. He in Australian law which is unprecedented would be locked up in the Supermax prison except, as I mentioned, for mandatory sen- in Goulburn jail, with the corrective services tencing in the Northern Territory and West- officers in that area not understanding why ern Australia. he was there and the prosecution having said These proposals for bail and parole laws that he posed no threat to the community. will see young Islamic men and women— That will be the effect of this legislation. perhaps those from Western Sydney whom I That will be the effect of these proposals the met in my office this afternoon—locked up government is putting forward. But the op- for a very long period of time on the basis of position believes it is appropriate to simply unfair investigations and trials. A 19-year-old let the legislation go forward and support it medical student from the University of New with no public inquiry, no public debate. South Wales, Izar ul-Haque, had a bail hear- This has been an enormous issue. In Sydney ing in Sydney not so long ago. At that bail the treatment of Izar ul-Haque has been an hearing and in the lead-up to the bail hearing, enormous issue for the Muslim community, the prosecution identified this young man as yet the opposition seems to think it is fine to posing no threat to the community. He was just let the legislation go through. subsequently granted $200,000 bail, having Eight members of the Muslim community had the prosecution say that he posed no from New South Wales, the ACT and Victo- threat whatsoever to the community and hav- ria were talking to me in my office today ing had prison officers from the Department about the impact on their community of this of Corrective Services in New South Wales kind of terrorism legislation going forward. saying, ‘I don’t know why this young man These Muslim community representatives was put into the Supermax prison at Goul- who were in my office today were telling me burn.’ Normally there is a risk assessment that—as I know from colleagues—there are process for prisoners to be put in such a members of the Muslim community in Syd- prison. That process takes a week, but this ney, particularly women, who are afraid to

CHAMBER Thursday, 17 June 2004 SENATE 24181 leave their homes. They are saying to their They faced 200 hours of community service. children, ‘Don’t go to that protest,’ and, That was a non-Muslim Anglo member of ‘Don’t be involved in that Islamic organisa- community. Every Muslim community indi- tion.’ They do not want to give money to vidual who has been picked up in similar Islamic community and service organisations circumstances has been tried under terrorism in Sydney because they fear they will be legislation. No wonder the Muslim commu- caught in the scope of the terrorism legisla- nity feels that there are two systems of jus- tion. Many of us here know that that is not tice in this country. They are taking tremen- true. They would not be caught under the dous steps to try to combat this within the scope of this terrorism legislation by picking community. They are getting information up the phone and talking to their friends, about what is actually in this legislation be- going to a protest or giving money to Islamic cause the sense of fear within the community community organisations. But that is the fear is enormous. People feel that they cannot that has been created within the Muslim pick up the phone, they cannot go to a pro- community as a result of the steamrolling of test, they cannot go out of their houses and terrorism legislation that we are seeing in they cannot support their community organi- this parliament. sations. That is the result of terrorism legisla- In the first committee that I sat through on tion that we are seeing this government this legislation, the ASIO legislation, we bringing in. And now we see another lot— heard from Islamic community organisations legislation that seeks to lock up a young that they believed this legislation would be medical student from the University of New used first on the Islamic community. It has South Wales so that he cannot become a doc- been. Everyone in this country who has been tor. He gets locked in Supermax. (Time ex- caught up under this terrorism legislation, the pired) whole raft of it that has been brought in, has Senator ELLISON (Western Australia— been Muslim. How does one think this Minister for Justice and Customs) (8.24 makes individuals within the Muslim com- p.m.)—At the outset I thank senators for munity feel when they know that every indi- their considered contributions to the debate. vidual who has been picked up under this This is a very important issue for Australia legislation has been a Muslim? Every organi- and of course it is another measure in the raft sation which has been banned and proscribed of provisions that the government has put in under the legislation that has come in has place in relation to counter-terrorism in this been a Muslim one. That is not even the case country. The Anti-terrorism Bill (No. 2) 2004 in the United States. But in this country builds on Australia’s existing counter- every single terrorist organisation that has terrorism laws in critical areas and continues been banned is a Muslim one and every sin- this government’s practice of proactively gle person who has been picked up is from a updating our legal framework in light of the Muslim organisation. current terrorist environment. It contains im- There was a young man in my office this portant measures to give police the opera- afternoon who was talking to me about the tional flexibility they need to fairly obtain two tiers that the Islamic community in Syd- reliable and credible evidence in terrorism ney sees. A bomb went off near the Rooty investigations while maintaining the long- Hill mosque about three weeks ago. That standing protections entrenched in the person was not tried for terrorism offences; Crimes Act. It tightens the provisions of the that person was tried under the criminal law. Crimes (Foreign Incursions and Recruit-

CHAMBER 24182 SENATE Thursday, 17 June 2004 ment) Act so that Australians and residents would update the bill to provide for a na- can be prosecuted if they serve in any capac- tional solution to bail for terrorism offences ity with a terrorist organisation in or with the rather than relying on a patchwork of bail armed forces of a foreign state. It improves laws to be updated by the states and territo- the offences targeting those who take up ries. Persons charged with or convicted of membership in terrorist organisations and federal terrorism and other related offences ensures these offences are consistent with the would face a presumption against bail unless other terrorist offences in the Criminal Code. a bail authority were satisfied that excep- It also enhances the offences of providing tional circumstances justified the granting of training to or receiving training from a ter- bail. If a person failed to persuade the bail rorist organisation. It also severely restricts authority that exceptional circumstances ex- the possibility for people to cash in on their isted, they should be refused bail. The of- notorious connections with terrorism by fences to be covered by this presumption reaping the benefits of selling their stories. against bail are described in proposed sub- This bill was introduced into the House on section 15AA(2). They include all the terror- 31 March 2004 and was immediately re- ism offences in the Criminal Code and other ferred to the Senate Legal and Constitutional relevant offences such as treason, espionage, Legislation Committee. The committee re- and treachery in certain circumstances, as ported on the bill on 11 May this year. The well as federal offences that equate with government has now considered that report murder. Proposed clause 1A of government and has prepared some amendments to give amendment (1) ensures that this bail provi- effect to some of the Senate committee’s sion only operates for persons charged with recommendations. Of course, not all of the or convicted of relevant offences prospec- committee’s recommendations called for tively. amendments to the bill. I might just touch Another aspect of government amend- now on some of those amendments, but be- ments (1) to (3) concerns a minimum nonpa- fore I do I want to place on record the gov- role period. The government is concerned ernment’s appreciation of the work done by that sentences for convicted terrorists should the Senate Legal and Constitutional Legisla- reflect community concern about terrorism. tion Committee, which really does a lot of The significant period that those sentenced good work in the Senate in relation to the are serving on parole—which in most cases review of legislation. is necessary to reintegrate prisoners back Firstly, government amendments (1) to (3) into the community—is not warranted in the deal with a question of bail, and that has case of terrorists and does not reflect com- been the subject of comment, I know, by munity concern about the crimes. The very senators who have been addressing this bill significant proportion of the overall head tonight. The government is convinced that sentence devoted to release on parole— Australia’s bail laws should treat suspected usually close to half—has a potential to un- murderers and terrorists in the same way. At dermine confidence in the criminal justice the moment they are treated differently ac- system, given that dealing with such cases is cording to the separate bail regimes in the often costly and difficult. Proposed items 1C, states and territories. The Australian commu- 1D and 1E of government amendment (2) nity rightly expects that its laws provide ade- would include in the bill a minimum nonpa- quate protection from terrorism. Proposed role period regime applying to all persons item 1A of government amendment (2) convicted of and sentenced to imprisonment

CHAMBER Thursday, 17 June 2004 SENATE 24183 for terrorism and other terrorism related of- Proposed item 1A of government amend- fences. Currently the time required to be ac- ment (2) and government amendment (3) tually served in prison is at the discretion of refer to the definition of ‘terrorism offence’ the courts. Terrorism offences in the Crimi- used in the bill. The same definition applies nal Code have a diverse range of maximum to the investigatory framework, the bail pro- penalties. It would be difficult to specify a vision and the minimum nonparole period fixed nonparole period for each separate of- regime. ‘Terrorism offence’ is defined to in- fence that could adequately take into account clude all terrorism offences in part 5.3 of the the court’s sentencing discretion and the Criminal Code as well as the terrorist bomb- range of maximum penalties that could be ing offences in division 72 of the code. Gov- imposed. Consequently, the government ernment amendment (3) would omit this amendments specify the application of the definition from part IC of the Crimes Act, minimum nonparole period as three-quarters while item 1A of government amendment (2) of the head sentence imposed for terrorism would insert it in section 3 of the Crimes Act and other terrorism related offences. These where it has general application. amendments will mean that terrorists would Government amendments (4) to (6) deal be required to serve at least three-quarters of with dead time, which has also been the sub- their sentence in prison before being eligible ject of debate. I am addressing the amend- for parole. While this may appear to be an ments now in order to save time and also to extraordinary measure, it has been used be- indicate to the Senate the rationale behind fore in the context of people-smuggling, and these amendments which the government terrorism raises extraordinary issues. will be putting during the committee stage. In increasing the prison time to be served These amendments flow from recommenda- by terrorists, the government recognises the tions of the Senate Legal and Constitutional need to ensure that courts still maintain sen- Legislation Committee. Government amend- tencing discretion about whether someone ments (4) to (6) relate to the committee’s should be imprisoned and, of course, about recommendation that the proposed dead time the total period of the sentence concerned. provision at section 23CA(8)(m) of the bill Furthermore, the minimum nonparole period only be available if judicially authorised. for terrorism offences will not affect the Dead time is time when the investigation nonparole period that a court may impose for time clock stops to allow investigators or other offences. The community has, as a re- arrested persons to do prescribed events, sult of the activities of terrorists, paid a huge such as talk with a legal representative, carry cost in terms of emotional wellbeing from a out a forensic period or give the person who loss of peace of mind as well as financially. is being questioned time to have rest or recu- These amendments are about making those peration. convicted of terrorism offences spend more The government has developed a mecha- time in prison in recognition of that cost, and nism for judicial authorisation of extra dead further ensuring the protection of the Austra- time for terrorism offences, in recognition lian community. Proposed clause 1B of gov- that this is the best way to balance the rights ernment amendment (1) ensures that this of an arrested person with providing the op- minimum nonparole regime only operates for erational flexibility required given that ter- persons convicted of relevant offences pro- rorism investigations will often have an in- spectively. ternational dimension. This is a very important part of the reason for this amendment.

CHAMBER 24184 SENATE Thursday, 17 June 2004

Of course it is something which does not mittee. Of course, not all of those required an relate to your normal investigation where a amendment to the bill, as I mentioned earlier. good deal of work has been undertaken by In relation to remaining government investigating officers and a good deal of in- amendments, (7) and (8), item 15 of the bill formation is to hand. In terrorism related would ensure that a person involved with a offences you are often obtaining information terrorist organisation that is part of the armed from overseas, and it may be necessary to forces of a government will be liable for an further obtain that information from overseas offence under the foreign incursions act by whilst you are questioning a suspect. updating that act. The bill gives the govern- At present the bill provides for a special ment the power to prescribe organisations for category of dead time in relation to making the purposes of the Crimes (Foreign Incur- these overseas inquiries to obtain informa- sions and Recruitment) Act. The Senate tion relevant to that terrorism investigation. committee recommended that the bill also The mechanism which the government now include criteria regulating the prescription of proposes in response to the Senate commit- an organisation. The government agrees with tee’s recommendation is not limited just to that recommendation. Amendment (8) would making those overseas inquiries. It is general update item 15 of the bill by stipulating that in nature but includes an indicative list of the Attorney-General can prescribe organisa- events that may arise in complex terrorism tions under the act if satisfied on reasonable investigations giving rise to a legitimate need grounds that the organisation is directly or for extra dead time. A general mechanism is indirectly engaged in preparing, planning, needed because it is impossible to accurately assisting in or fostering particular activities, predict every event that may necessitate a including terrorist acts or serious violations reasonable halt in questioning so that critical of human rights. Amendment (7) contains a information can be obtained for a proper pre- minor tidy-up of the bill to ensure that the charge interview. The mechanism would al- terrorist organisations already prescribed for low investigating officials to make a case for the purposes of the terrorist offences in the extra dead time before a judicial officer. The Criminal Code are automatically caught by arrested person, or his or her legal represen- the offence provisions of the foreign incur- tative, would be given an opportunity to re- sions act. fute that case before the judicial officer con- The bill also includes measures to cerned. strengthen Australia’s laws for the confisca- Should the Senate pass this updated dead tion of proceeds of crime, and that too has time mechanism, I make the undertaking that been the subject of comment by senators the government will conduct an independent tonight. The purpose of such laws is to dis- review of the new investigatory framework courage and deter crime by diminishing the for terrorism investigations approximately capacity of offenders to finance future crimi- three years after they become law. Such a nal activities and to remedy the unjust en- review would provide an opportunity to ex- richment of criminals who profit at society’s haustively analyse the operation of the new expense. The Senate committee recom- provisions and remedy any evident opera- mended that the amendments to the literary tional or legal shortcomings. This undertak- proceeds provisions of the Proceeds of ing, I would point out, is also giving effect to Crime Act 2002 contained in the bill be sub- another recommendation made by the Senate ject to independent review. The Proceeds of Legal and Constitutional Legislation Com- Crime Act will be subject to a comprehen-

CHAMBER Thursday, 17 June 2004 SENATE 24185 sive and independent review under section when the police carry out an investigation 327 of that act during 2006. As with the they are gathering evidence for a potential amendments to the investigatory framework trial. That is why the regime dealing with the of the Crimes Act, I again make an undertak- Australian Federal Police and its interviews ing to the Senate that the amendments to the has to be different to that of ASIO. The intel- Proceeds of Crimes Act contained in this bill ligence generally gathered by ASIO during will be considered as part of that review. an interview is generally not admissible, The recent barbaric terrorist attack in Ma- whereas when an Australian Federal Police drid was a stark reminder to us all that we officer interviews someone they are about must be prepared to meet and defeat global obtaining evidence which can be admitted in terrorism head on. Ensuring our intelligence a court of law for the purposes of securing a capabilities are appropriately directed to- conviction. That is why the two regimes are wards terrorist organisations and their plans quite different. It is not a question of the AFP is arguably the most critical part of Austra- having some sort of conflict with ASIO. It is lia’s counter-terrorism efforts. Our legal just that they are very different organisations framework, however, must be constantly existing for different purposes, albeit in the evolving in the new terrorist environment. service of the ultimate goal of the protection The bill, when updated by government of Australia’s interests. I commend the bill to amendments, will respond proactively to the Senate and I commend the amendments these legal challenges. Importantly, it will which the government will be moving in the give police the ability to do their job prop- committee stage. erly. As we have seen recently, the Australian Question agreed to. Federal Police has been at the forefront of Bill read a second time. counter-terrorism efforts and the investiga- In Committee tion of suspected terrorist offences. I know that there have been comparisons drawn be- Bill—by leave—taken as a whole. tween the provisions relating to ASIO and to Senator ELLISON (Western Australia— the Australian Federal Police. I would point Minister for Justice and Customs) (8.41 out that this is not a turf war, as Senator Net- p.m.)—by leave—I table a supplementary tle indicated; quite the contrary: the AFP memorandum relating to the government complements the work done by ASIO. amendments to be moved to the bill. I move ASIO is about gathering intelligence and, government amendments (1) and (2) on sheet as the Commissioner of the Australian Fed- PD201: eral Police, Mick Keelty, pointed out whilst (1) Clause 4, page 2 (after line 6), before giving evidence before the Senate Legal and subclause (1), insert: Constitutional Legislation Committee, the (1A) The amendment made by item 1B of regimes between ASIO and the AFP are quite Schedule 1 applies: different and they have to be so. ASIO col- (a) to a person convicted of an offence lects information for intelligence and in do- on or after the commencement of ing so does not have the same requirements this Act (whether or not the person that we make of police. For instance, if po- was charged with the offence before lice are questioning people, people have a the commencement of this Act); and right to remain silent. There are all sorts of (b) to a person charged with an offence restrictions on the way that investigation and on or after the commencement of interviewing can be carried out because this Act.

CHAMBER 24186 SENATE Thursday, 17 June 2004

(1B) The amendments made by items 1C, (c) an offence against a provision of 1D and 1E of Schedule 1 apply in Division 80 or Division 91 of the relation to minimum non-parole Criminal Code, or against section offences of which persons are 24AA of this Act, if: convicted on or after the (i) the death of a person is alleged to commencement of this Act, whether the have been caused by conduct that offences were or are committed before, is a physical element of the on or after that commencement. offence; or (2) Schedule 1, page 3 (after line 4), before item (ii) conduct that is a physical element 1, insert: of the offence carried a 1A Subsection 3(1) substantial risk of causing the Insert: death of a person; and terrorism offence means: (d) an ancillary offence against a provision of Division 80 or Division (a) an offence against Division 72 of 91 of the Criminal Code, or against the Criminal Code; or section 24AA of this Act, if, had the (b) an offence against Part 5.3 of the defendant engaged in conduct that is Criminal Code. a physical element of the primary 1B After section 15 offence to which the ancillary Insert: offence relates, there would have been a substantial risk that the 15AA Bail not to be granted in certain conduct would have caused the cases death of a person. (1) Despite any other law of the (3) To avoid doubt, the express reference Commonwealth, a bail authority must in paragraph (2)(d) to an ancillary not grant bail to a person (the offence does not imply that references defendant) charged with, or convicted in paragraphs (2)(a), (b) or (c) to an of, an offence covered by subsection offence do not include references to (2) unless the bail authority is satisfied ancillary offences. that exceptional circumstances exist to justify bail. (4) To avoid doubt, except as provided by subsection (1), this section does not (2) This subsection covers: affect the operation of a law of a State (a) a terrorism offence; and or a Territory. (b) an offence against a law of the Note: Subsection (1) indirectly affects Commonwealth, if: laws of the States and (i) a physical element of the offence Territories because it affects is that the defendant engaged in section 68 of the Judiciary Act conduct that caused the death of a 1903. person; and (5) In this section: (ii) the fault element for that physical ancillary offence has the meaning element is that the defendant given in the Criminal Code. intentionally engaged in that bail authority means a court or person conduct (whether or not the authorised to grant bail under a law of defendant intended to cause the the Commonwealth, a State or a death, or knew or was reckless as Territory. to whether the conduct would result in the death); and primary offence has the meaning given in the Criminal Code.

CHAMBER Thursday, 17 June 2004 SENATE 24187

1C After section 19AF subsection are for minimum non- Insert: parole offences. 19AG Non-parole periods for sentences for (4) If the person was subject to a certain offences recognizance release order, the nonparole period supersedes the order. (1) This section applies if a person is convicted of one of the following (5) Sections 19AB, 19AC, 19AD, 19AE offences (each of which is a minimum and 19AR have effect subject to this non-parole offence) and a court section. imposes a sentence for the offence: Note: The effects of this include (a) an offence against section 24AA; preventing a court from: (b) a terrorism offence; (a) making a recognizance release order under para- (c) an offence against Division 80 or 91 graph 19AB(1)(e) or (2)(e), of the Criminal Code. 19AE(2)(e) or 19AR(2)(e); Note: A sentence for a minimum non- or parole offence is a federal (b) confirming (under para- sentence, because such an offence graph 19AD(2)(d)) a pre- is a federal offence. existing non-parole period; (2) The court must fix a single non-parole or 3 period of at least /4 of: (c) confirming (under para- (a) the sentence for the minimum non- graph 19AE(2)(d)) a recog- parole offence; or nizance release order; or (b) if 2 or more sentences have been (d) declining (under subsection imposed on the person for minimum 19AB(3) or 19AC(1) or (2) non-parole offences—the aggregate or paragraph 19AD(2)(f)) of those sentences. to fix a non-parole period. The non-parole period is in respect 1D At the end of section 20 of all federal sentences the person is Add: to serve or complete. (6) Paragraph (1)(b) does not apply in (3) For the purposes of subsection (2): relation to a minimum non-parole (a) a sentence of imprisonment for life offence mentioned in section 19AG, or for a minimum non-parole offence is offences that include one or more such taken to be a sentence of minimum non-parole offences. This imprisonment for 30 years for the subsection has effect despite subsection offence; and (1) and sections 19AB, 19AC, 19AE (b) it does not matter: and 19AR (which permit or require a court to make a recognizance release (i) whether or not the sentences order in certain circumstances). mentioned in that subsection were imposed at the same sitting; Note: If the court sentences the person or to imprisonment for a minimum non-parole offence, it must fix a (ii) whether or not the convictions non-parole period under section giving rise to those sentences 19AG. were at the same sitting; or 1E At the end of section 20AB (iii) whether or not all the federal sentences mentioned in that Add:

CHAMBER 24188 SENATE Thursday, 17 June 2004

(6) Subsection (1) does not permit a court circumstances exist to justify bail. The of- (including a federal court) to pass a fences are, in summary, a terrorism offence, sentence, or make an order, that a Commonwealth offence involving interna- involves detention or imprisonment, in tional conduct causing a death or an offence respect of the conviction of a person of treason, espionage or treachery involving before the court of a minimum nonparole offence mentioned in section conduct that carried a substantial risk of 19AG. causing death and actually caused death or an ancillary offence thereto. The Attorney- Note: If the court sentences the person to imprisonment for the General first referred to these amendments minimum non-parole offence, it on 3 June following a decision by a New must fix a non-parole period South Wales magistrate on the previous day under section 19AG. to grant bail to Bilal Khazal, who had been I touched on these amendments in the speech charged with collecting or making docu- in reply that I gave during the second reading ments likely to facilitate terrorist attacks. At debate. These amendments relate to bail and the time there was widespread concern that a nonparole period. I have outlined the pol- this decision did not reflect community ex- icy behind the question of bail—that is, the pectations when dealing with charges as se- presumption against bail and that it should rious as facilitating terrorist acts. As this is only be granted in exceptional circum- still a matter before the courts, it would be stances—and the question of the nonparole inappropriate for me to make any further period. These two amendments fit in with particular comment. government amendment (3), which I propose On 3 June the New South Wales parlia- to move shortly, but because the motion re- ment passed the Bail Amendment (Terror- quired for the respective amendments is dif- ism) Act 2004, which provides that a person ferent we are actually dealing with them accused of a terrorist offence is not to be separately. So we are dealing with amend- granted bail unless they satisfy the court that ments (1) and (2) now and I will move bail should not be refused. In effect, that amendment (3) shortly. added terrorism to the list of offences for Senator LUDWIG (Queensland) (8.43 which a presumption against bail already p.m.)—I recognise that amendments (1), (2) operates in the New South Wales Bail Act, and (3) do in fact relate to the same issue. which previously consisted of serious drug Unfortunately, as I understand the way the offences, murder and repeat offences of seri- amendments have to work in this place, you ous personal violence. A similar presumption actually have to reverse it, but there has been operates under the Victorian Bail Act in the leave given to deal with (1) and (2), and case of treason, murder or serious drug of- amendment (3) is a technical amendment so I fences. The amendments would also create a will reserve my comments on that and only minimum nonparole period for Common- foreshadow that I will say more during the wealth offences of terrorism, treason, espio- debate when (3) is moved. The amendments nage and treachery of three-quarters of the that the government has now moved together head sentence imposed by the court or, if concern principally two issues: bail and the multiple sentences have been imposed, the nonparole period. The amendments relating aggregate of those sentences as defined in to bail will provide that a person charged section 16 of the Crimes Act. The amend- with a specified Commonwealth offence ments do not limit the court’s discretion must not be granted bail unless exceptional

CHAMBER Thursday, 17 June 2004 SENATE 24189 when fixing the head sentence applying tion to bail on the basis of these two cases, it normal sentencing principles. is not good enough to say that because they On 1 June the Western Australian District are before the court we cannot talk about Court sentenced Jack Roche to a period of them. I do not want to hear what the opposi- nine years imprisonment with a nonparole tion have to say on those particular cases but, period of 4½ years for conspiring with al- if they are the rationale on which the opposi- Qaeda to bomb the Israeli embassy. The sen- tion are deciding that we should not be grant- tence was backdated to 18 November 2002, ing bail to people who are charged with ter- meaning that Mr Roche will be eligible for rorism offences, I think we need to hear a parole in May 2007, less than three years little bit more than, ‘We’re basing it on those from now. Again, there has been consider- cases, but we can’t talk about them because able concern that this period does not meet they’re in the courts.’ I would be interested community expectations, given the abhorrent to hear some more argument from the oppo- deeds this individual was planning, although sition as to why they think it is acceptable it must not be forgotten that the court said it that people who are charged with terrorism would have imposed a longer sentence but offences should automatically not be granted for a letter from the prosecution referring to bail. the accused’s cooperation with authorities. I have already given, in my second read- Again, as this matter is still before the courts, ing contribution to this debate, the example it would be inappropriate for me to go fur- of ul-Haque, where the prosecution said he ther than I have. poses no threat to the community. Senator As I said earlier, we recognise that these Ludwig has given an example in relation to are extraordinary measures. But having the second case he cited, Jack Roche, in looked at them closely, and the grave of- which he said the judge made a decision on fences that they concern, we believe they are the basis of the way in which he had cooper- in Australia’s national interest and are neces- ated with the investigations. I would be in- sary to align the laws more closely with terested to hear from Senator Ludwig on be- community expectations. However, as with half of the opposition, the Labor Party, why all such extraordinary measures, it will be they believe it is acceptable that people important to keep their operation under close charged with terrorism offences should scrutiny. We are committed to ensuring that automatically not be granted bail. Why they too are subject to an independent review should the presumption be turned around in after three years. relation to these individuals? I do not want to hear the specifics of the cases, but I am cer- Senator NETTLE (New South Wales) tainly interested in hearing a rationale, a rea- (8.48 p.m.)—I have a number of questions to son. This is the public debate we are having ask both the opposition and the government on this. The government proposed this last on this. I will start with the opposition, given week. Sure, the Carr government may have they have just made their contribution. I rec- jumped up first in relation to Khazal in re- ognise and accept that, in referring to the sponse to something they saw in the Daily Khazal case and the Roche case, the opposi- Telegraph and changed the Bail Act in New tion do not want to go into the details of South Wales, but I do not think that is a ra- those cases. But, if the opposition are making tionale for why we should follow on and do a decision to support government amend- such a thing here. I would be very interested ments to turn around the presumption in rela-

CHAMBER 24190 SENATE Thursday, 17 June 2004 to hear from the opposition what the ration- that are already in place for these types of ale is. offences show that. But where an innocent Senator LUDWIG (Queensland) (8.51 individual is charged with a terrorism of- p.m.)—There are a number of reasons why it fence, for whatever reason, I do not under- would be inappropriate in this place to go stand why the opposition is supporting turn- into the two cases I mentioned. They are not ing around the presumption that they can the details that I wanted to go to; they are have access to bail. That is the concern with merely the events that formed Labor’s view bringing in these proposals. This is the only on whether or not we will support these par- opportunity for public debate as to why this ticular amendments. It is not only in the is appropriate, and I think we need more ex- sense of those events. Upon examining the planation from the opposition and from the legislation and having looked more generally government about why this is the path that at the New South Wales and Victorian provi- we should be going down. sions, we have come to agree that they are Senator ELLISON (Western Australia— serious issues. We can find a way to look at Minister for Justice and Customs) (8.54 the amendments, on the basis of both the p.m.)—I covered the rationale for the gov- events and more generally the provisions of ernment amendment in relation to bail in the the New South Wales and Victorian legisla- second reading speech in reply. I would just tion, and come to our own conclusion that say again that terrorism offences are very they are serious offences and that this is one much at the serious end of the scale of crimi- appropriate way to deal with them. nal activity. There already exists in a number Senator NETTLE (New South Wales) of jurisdictions the requirement that bail be (8.52 p.m.)—I do not contest what Senator granted only in exceptional circumstances Ludwig is saying in relation to these being for serious offences such as murder. What we serious offences. What we need to be careful are indicating to the courts is that a similar of—and one of the reasons why the Greens regard should be had to terrorism offences as are opposing this—is putting these measures being in that category of seriousness such in place and buying into what I would de- that bail should be granted only in excep- scribe as the ‘law and order auction’ that tional circumstances. happens at state government level in relation I just want to make it clear to the Senate to what New South Wales and Victoria have that it is dangerous—in fact, unwise as done. It is not about saying these are not se- well—to comment on cases which are before rious offences. Where an individual is the courts. As I understand it, there is a case charged with a terrorism offence and the ca- proceeding in relation to an issue of bail and pacity to access bail is automatically turned one which is an appeal in relation to a matter around and the onus is reversed, it is not which was heard in Perth. I will certainly not about whether that offence is serious; it is be commenting on any feature or otherwise about whether there are innocent individu- of those cases, as they are before the courts. als—and we are not talking cases here; we But in a general sense I can say that the gov- are talking generics—who may be caught up ernment have moved this amendment so that and charged with terrorism offences who are we can have a national regime in relation to not automatically granted the presumption to bail for terrorist offences and not the patch- access bail. That is our concern. It is not that work, as I mentioned earlier, that exists in these are not serious offences. They are ob- relation to the various state and territory ju- viously serious offences, and the penalties risdictions. We do say very clearly that ter-

CHAMBER Thursday, 17 June 2004 SENATE 24191 rorism offences are at the serious end of the flect the seriousness of those offences. It is scale of criminal activity. They are in a cate- not a decision we make lightly—the fact that gory which equates to offences such as mur- exceptional circumstances should be made der, and there are already in place provisions out in the case of bail or, indeed, in relation for bail which require there to be exceptional to the nonparole period—but it is really up to circumstances before someone can be given us, the legislature, to determine this. The bail where they have been charged with judiciary is governed by the laws that we those sorts of offences, and we think that it is enact, and we have to give that judiciary di- consistent. rection. Senator NETTLE (New South Wales) We are giving the judiciary appropriate di- (8.57 p.m.)—I just want to comment in rela- rection with these amendments. We are say- tion to the comment the minister made about ing very clearly to the judiciary, ‘This is how cases before the court. The only case that I we want you to apply the law.’ There was a have mentioned in here is the bail hearing of famous American judge who was on his way ul-Haque, which is not before the courts. I to court and someone said, ‘Judge, you are have not mentioned any other cases. But ul- on your way to do justice, are you?’ and he Haque’s case is before the courts. His bail said: ‘Anything but. I am merely going to hearing is not before the courts; it has con- apply the law’—sometimes a very different cluded. situation. Nonetheless, the job of the judici- I have two questions for the minister. I ary is to apply the law and we as the legisla- suppose the first is an overarching question. ture have to enact that law. We believe this is Why do the government believe that they appropriate and it is our responsibility to do know better than the courts and the judiciary so if we think it is appropriate. We think it is in making determinations about what danger nothing less than what the Australian com- individuals pose to the community and what munity would expect of any responsible sorts of sentencing and nonparole periods government. they should face? Why do the government Senator NETTLE (New South Wales) believe that they know better than the judici- (9.00 p.m.)—I thank the minister for answer- ary? ing my question. The minister says that it is Senator ELLISON (Western Australia— what the community expects. I live in Syd- Minister for Justice and Customs) (8.58 ney and I know what the Daily Telegraph p.m.)—In relation to the matter that Senator expects in these sorts of cases. I know the Nettle has raised, I do not believe it is in the response of the New South Wales govern- courts—I think that is correct—but that does ment in changing the Bail Act as a result of not take away the fact that there is the poten- what the Daily Telegraph expects. I am now tial for it to be so. With regard to the ques- seeing the federal government responding to tion about whether the government know what the Daily Telegraph expects in New better than the judiciary, we are the elected South Wales. representatives of the Australian community I have another question, Minister, which and we are elected to enact laws which re- relates to the International Covenant on Civil flect what the community expects. I believe and Political Rights and to the Convention the community does expect that in cases of on the Rights of the Child. Has the govern- serious crime, including terrorism, there ment sought advice about whether this legis- should be put in place provisions which re-

CHAMBER 24192 SENATE Thursday, 17 June 2004 lation contravenes either of those two inter- the notion that the deprivation of liberty national conventions? should as far as possible be tied to conviction Senator ELLISON (Western Australia— for a criminal offence. Individuals charged Minister for Justice and Customs) (9.01 with a crime ought to be considered innocent p.m.)—I will take it on notice and ascertain until proven guilty, and the presumption in the question of advice in relation to those favour of bail reflects that. If a suspected particular conventions. Perhaps Senator Net- terrorist presented a risk to the community, tle has some other queries that she can put in that would clearly be taken into account by the meantime. the bail authority, as I have argued, which would be highly unlikely to support bail un- Senator GREIG (Western Australia) der those circumstances. We Democrats see (9.01 p.m.)—I put on record the Democrats’ no particular need to reverse that presump- consideration of these amendments. Gov- tion in favour of bail. ernment amendment (1) provides that the presumption against bail applies to a person Indeed, by introducing minimum nonpa- convicted of an offence after the com- role periods the government is attempting to mencement of the act whether or not the per- fetter the discretion of the courts during the son was charged after the commencement of sentencing process. There is a wealth of legal the act, and also applies to a person charged authority to assist judges in fixing suitable with an offence after the commencement of sentences. The sentencing of individuals the act. It also provides that the new mini- should take into account all relevant factors mum nonparole periods apply to persons on a case-by-case basis. By setting, as it convicted of offences on or after the com- seeks to do, a minimum nonparole period the mencement of the act whether those offences government is precluding the court from tak- were committed before, on or after the coming into account all relevant considerations. mencement of the act. We will oppose that For those reasons we cannot and will not amendment. support amendments (1) and (2) proposed by the government. Equally, government amendment (2) introduces, firstly, a presumption against bail Senator ELLISON (Western Australia— other than in exceptional circumstances for Minister for Justice and Customs) (9.04 terrorism offences and Commonwealth of- p.m.)—In relation to Senator Nettle’s ques- fences involving death or a substantial risk of tion I can advise the chamber that the gov- death. Secondly, it provides for minimum ernment sought advice from the Office of nonparole periods for terrorism offences and General Counsel in relation to the question other Commonwealth offences involving of compliance with international conventions death or a substantial risk of death. For those and the ones that Senator Nettle has men- particular offences it dictates that the mini- tioned. I am advised that the advice received mum nonparole period must be three- by the government is that these provisions do quarters of the total sentence for the offence comply with our obligations in relation to or, if there are two or more offences, the ag- those conventions. As is the norm, we do not gregate of the sentences for those offences. table or provide advice that we have received. Suffice to say that we have obtained The presumption against bail is a long- that advice. held principle and closely related to the presumption of innocence, as I argued in my Senator NETTLE (New South Wales) second reading contribution. It is founded on (9.05 p.m.)—I thank the minister for his an-

CHAMBER Thursday, 17 June 2004 SENATE 24193 swer. I suppose the answer is, ‘We say it’s all to the government amendments we are de- right; therefore you must believe us.’ I think bating, it is worth remembering that the pur- the government should table the advice so pose of bail is to ensure that an accused per- that we can determine the basis on which the son appears in court for trial after an assess- government believes it is not contravening ment of risk of carrying out any more of the these conventions. The minister has said that alleged acts is made. This can only be as- the protocol is that advice is not tabled. I sessed on an individual basis, yet these have been here only two years but I have amendments before the chamber seek to been here long enough to see the number of change the whole purpose of bail—for the times in which the advice has not been ta- capacity for these risks to be assessed on an bled. The argument still needs to be made as individual basis. It is just a blanket ruling for to why and how the government believes any terrorism offence. It does not make any these international conventions have not judgment about whether or not it is appropri- been contravened by this legislation. Perhaps ate to the offence at the time; it is a blanket I could the ask the minister that question, ruling for any terrorism offence. Nobody having recognised and seen the number of who is charged with a terrorism offence can times that advice has not been tabled: on be assessed as an individual. Their individual what basis is the government’s advice that risk, their danger to the community, their the International Covenant on Civil and Po- likelihood of reoffending or their likelihood litical Rights and the Convention on the of appearing or not appearing for their case Rights of the Child have not been contra- cannot be assessed. vened? The government think they know better Senator ELLISON (Western Australia— than the judiciary by saying, ‘In all these Minister for Justice and Customs) (9.06 areas, we, the government, arrogantly have p.m.)—That seems to me to be a backdoor decided we know better than the judiciary.’ attempt—that is, to ask instead of tabling the No-one charged with a terrorism offence can advice to detail it. The advice is that these show any of these individual traits. No-one provisions do comply with our international can have their case looked at individually. obligations. I am not going to go further than No-one can have their risk, their capacity to that. The government stands by the fact that turn up or their likelihood to re-offend as- these provisions do comply with our interna- sessed. None of those things can be assessed, tional obligations. We believe that they do as they have been in cases that have now because of the advice we have received from been concluded, in the bail hearing before a the Office of General Counsel. That is as far court. That is the decision the government as I can take it. are making and that is the decision the oppo- I should have done this earlier: I table a sition are making when standing up and say- supplementary explanatory memorandum ing, ‘Me too.’ It is not acceptable to the relating to the government amendments to be Greens and we oppose it. moved to this bill. The memorandum was Question agreed to. circulated in the chamber on 16 June this Senator ELLISON (Western Australia— year. Minister for Justice and Customs) (9.10 Senator NETTLE (New South Wales) p.m.)—The government opposes schedule 1 (9.07 p.m.)—In response to his last answer, I in the following terms: thank the minister for nothing. With regard

CHAMBER 24194 SENATE Thursday, 17 June 2004

(3) Schedule 1, item 2, page 3 (lines 9 to 13), to At their core, the Democrat amendments be opposed. seek to ensure that, if the legislation is to This really covers the same ground that was pass and become an act, nothing in this legis- dealt with in the earlier debate. I can take it lation can breach the International Conven- no further. tion on the Rights of the Child and that that Senator NETTLE (New South Wales) particular international benchmark is main- (9.10 p.m.)—The minister is right—it covers tained. We know, for example, that with the the same area. This is a further vote about passage of this legislation, young people—as whether or not people should be treated as young as 14—could be detained for up to individuals and about whether or not the several days. During the comprehensive in- government knows better than the judiciary. quiry into this legislation we had consider- The Greens disagree and we will be oppos- able evidence both in writing and in person ing the proposal. from a number of organisations, including the Public Interest Advocacy Centre and Senator GREIG (Western Australia) Amnesty International, that expressed their (9.11 p.m.)—The proposal we have before us particular concerns about how the legislation seeks to remove two definitions, which, in- may impact on Indigenous and young peo- deed, have now been replaced with the suc- ple. I refer to page 19 of the Senate Legal cessful passage of amendment (2), which the and Constitutional Legislation Committee Democrats opposed. Consequently, we report into the provisions of this bill. Under would oppose this particular proposal as the heading ‘Detention of minors and Abo- well. riginal and Torres Strait Islander people’, The TEMPORARY CHAIRMAN section 3.33 stated: (Senator Lightfoot)—The question is that The Public Interest Advocacy Centre recom- item 2 in schedule 1 stand as printed. mended that, in line with the recommendations in Question negatived. the Royal Inquiry into Aboriginal Deaths in Cus- Senator GREIG (Western Australia) tody, the current maximum extended investigation period of 8 hours should be maintained for people (9.11 p.m.)—by leave—I move Democrat under 18 years of age and Aboriginal and Torres amendments (1) and (2) on sheet 4265: Strait Islander people. (1) Clause 4, page 2 (after line 18), at the end of The report goes on to reflect the views of the clause, add: Amnesty International at section 3.34, which (3) The amendments made by this Act states: apply only insofar as they do not contravene the International Amnesty International Australia also expressed Convention on the Rights of the Child. concern that the Bill would extend the possible period of detention for children, and argued that (2) Schedule 1, page 3 (after line 13), after item this ran the risk of breaching Article 37 of the 2, insert: Convention on the Rights of the Child, which 2A After section 23B provides that no child should be deprived of his Add: or her liberty arbitrarily. 23CA Compliance with International We have heard some comment from the gov- Convention on the Rights of the Child ernment arguing that there will be no This Division applies only insofar as it breach—that safeguards are in place and does not contravene the International there will be no contravention of the Con- Convention on the Rights of the Child. vention of the Rights of the Child by the pas-

CHAMBER Thursday, 17 June 2004 SENATE 24195 sage of this legislation. But we Democrats assurances of the minister and the govern- would argue that that assurance is not good ment but is actually a significant and con- enough. More importantly, if that is to be the crete part of the legislation to put beyond any case, why not put it beyond doubt, enshrine doubt that it may or may not apply. it in the legislation and affix the notion to the Senator NETTLE (New South Wales) bill before us? That is what we are seeking to (9.16 p.m.)—The Australian Greens will be do. It is critical, as the Democrats have ar- supporting these Democrat amendments. We gued during the passage of a whole suite of have a real and very genuine concern about antiterrorism bills, that we maintain as best the contravention of the International Con- we can those minimum benchmarks of civil vention on the Rights of the Child, as we liberties and human rights. This is yet an- also have a real and genuine concern about other opportunity to do that. the contravention of the International Cove- I note with interest that just a few days nant on Civil and Political Rights. I will take ago the member for Perth, Mr Stephen this opportunity to ask the government a Smith, was giving a speech in relation to the number of questions on this, given that we appropriation bills and he spoke to his inter- got no answers before in relation to the ad- est in immigration and more particularly in vice that they had received. I might do that response to the Human Rights and Equal by reading out two particular paragraphs Opportunity Commission’s report tabled re- from the International Covenant on Civil and cently entitled A last resort? The report of Political Rights and ask the minister how this the national inquiry into children in immi- legislation and the two amendments that just gration detention. I realise we are not this got up with the support of the major parties evening talking about children in immigra- apply in relation to bail. Article 9 paragraph tion detention, but I would argue that the 3 of the covenant reads: principle is the same. Mr Smith, speaking on It shall not be the general rule that persons await- Tuesday, 1 June this year, said: ing trial shall be detained in custody, but release In budget week we saw the long-awaited release may be subject to guarantees to appear for trial ... of the Human Rights and Equal Opportunity and, should occasion arise, for execution of the Commission’s report entitled A last resort? The judgement. report of the national inquiry into children in I will read that beginning section of article 9 immigration detention. The HREOC report into paragraph 3 of the International Covenant on children in detention is an indictment of the How- Civil and Political Rights again: ard-Ruddock children in immigration detention policy and an indictment of the government’s It shall not be the general rule that persons await- administration of that policy. ing trial shall be detained in custody ... He went on to argue, in part, as to why Labor Can the minister explain how the amendment was so strongly opposed to children being in just supported by the government and the immigration detention centres. As I say, I opposition to remove the presumption that an would argue that the principle applies here individual will be granted bail does not con- to. Let us ensure that the interests of children travene that paragraph of the international do come first in the passage of this legisla- covenant? tion, that it is given some considerable ex- Senator ELLISON (Western Australia— press concern and priority and that the con- Minister for Justice and Customs) (9.18 vention to which Australia is a signatory is p.m.)—There is no general rule in this bill not just reflected through the promises and that says a person shall be detained in cus-

CHAMBER 24196 SENATE Thursday, 17 June 2004 tody whilst awaiting trial. That being the tained in custody. But the general rule is for case, there is no infringement of article 9 them to be detained in custody. paragraph 3 as mentioned by Senator Nettle. Senator LUDWIG (Queensland) (9.21 What we say is not that a person shall be p.m.)—The Senate Legal and Constitutional denied bail; we say in fact that there is an Legislation Committee in respect of this mat- ability to grant bail, albeit that the case for ter was mindful of the impact on children. bail has to show exceptional circumstances. The transcript of the proceedings shows that If the proposal was to say ‘there shall be no it was a matter that was considered. It was bail’ then you would have a general rule that reflected in our recommendation for judicial the person concerned would be kept in cus- oversight of the suspension of questioning. It tody awaiting trial. Certainly I think there is think it is also worth mentioning that the a misunderstanding there by Senator Nettle convention was a matter that was taken into in relation to how this provision of article 9 account by Labor when we first developed relates to the bill we have before us tonight. part IC of the Crimes Act, which was re- There is no general rule in this bill at all that flected in the way the system works, where denies a person bail. It simply imposes crite- there is a four-hour provision for questioning ria which the person has to meet. I would to take place. This is in respect of a suspect argue, in any event, that in the terminology who has been arrested and, of course, there of ‘general rule’ where it says, ‘It shall not be are certain safeguards. But, if you recall, part the general rule that persons awaiting trial IC then also goes on to provide a different shall be detained in custody,’ you could well period for others that might be covered by expect that it could entertain an exception to the convention. that general rule. But that does not arise in Also, in this instance, it is not that initial this case. There is no general rule that a per- period that is gavelled with. What we are son will be denied liberty pending trial in now talking about is the extension. The ex- this bill. tension will allow judicial oversight, so the Senator NETTLE (New South Wales) court will then be in a much better position, (9.20 p.m.)—I note the minister’s acknowl- in respect of the person in this instance who edgement and I agree that the way the cove- is suspected of committing a serious offence nant is written—‘It shall not be the general such as terrorism, to be able to determine, rule that persons awaiting trial shall be de- having heard from the parties and looked at tained in custody’—does allow for there to the evidence or the people concerned, as to be exceptional circumstances. That is the what circumstances should surround the ex- case in this bill. This bill has the general rule tension for questioning. Labor says that the that a person charged with terrorism offences way this works provides, perhaps, a more shall remain in custody. If there are excep- upfront way of allowing the magistrate with tional circumstances, the situation may be judicial oversight to carry out his task in a different, but the general rule is that they will way that takes all of those considerations be detained in custody. I do not think there into account. Labor acknowledges the intent has been a misunderstanding on my part at of the amendments but is not able, for the all. The general rule is that you are detained reasons outlined, to be in a position to sup- in custody. There may be exceptional cir- port them. cumstances and that is what the government Senator ELLISON (Western Australia— is providing for—for people not being de- Minister for Justice and Customs) (9.24

CHAMBER Thursday, 17 June 2004 SENATE 24197 p.m.)—For the record, the government op- Can the minister point out how that applies poses Democrat amendments (1) and (2) and in relation to this bill? in relation to the protection afforded to chil- Senator ELLISON (Western Australia— dren would point to the fact that the investi- Minister for Justice and Customs) (9.26 gatory framework already provides for pro- p.m.)—As I understand it, the usual remedies tection of children. Part IC of the Crimes Act would apply in relation to unlawful detention has been alluded to by Senator Ludwig and or arrest in this circumstance. I think that is that provides a raft of provisions which go to what Senator Nettle is driving at. Of course, protecting the interests of a juvenile. Cer- police have to carry out appropriate stan- tainly, the provisions of section 23L of the dards in the investigation of a matter, the Crimes Act provide for the questioning of a apprehension of a person, the questioning of child to be conducted in the presence of an that person and, certainly, in relation to the interview friend. An interview friend could arrest and charging of that person. All those be a parent, guardian or legal practitioner. normal requirements apply and, of course, if The extra dead time mechanism, which we an arrest is executed unlawfully, the usual will move in amendments (4) to (6), also remedies would be open to the person con- requires a judicial officer to be informed as cerned. That would follow for unlawful de- to whether the suspect is a child and that has tention. to be advised to the judicial officer before Senator NETTLE (New South Wales) that judicial officer makes a decision as to (9.27 p.m.)—The minister started that re- whether to grant the extra dead time. sponse by saying that he thinks this is the Of course, as Senator Ludwig mentioned case. It sounded as though he got more con- in relation to children, we have a lower pe- fident as he went on in terms of this being riod of interview: it being two hours rather the case. I wanted to allow the minister to than the four that applies to an adult. A judi- check: is this the case? cial officer has to provide the approval for Senator ELLISON (Western Australia— the extension of time and, as I have said, part Minister for Justice and Customs) (9.27 of that application must entail the advice that p.m.)—Yes, it is the case. the person they are dealing with is a juvenile. But, when you take all the provisions of part Question negatived. IC of the Crimes Act which apply and these Senator ELLISON (Western Australia— amendments, we believe that there is appro- Minister for Justice and Customs) (9.28 priate protection of a juvenile in the circum- p.m.)—by leave—I move government stances. amendments (4) to (6) on sheet PD201: Senator NETTLE (New South Wales) (4) Schedule 1, item 5, page 6 (line 8), after (9.26 p.m.)—I have one more question for “section”, insert “23CB,”. the minister in relation to the International (5) Schedule 1, item 5, page 6 (lines 21 to 26), Covenant on Civil and Political Rights. omit paragraph (m), substitute: Paragraph 5 of article 9 of that covenant (m) any reasonable time that: states: (i) is a time during which the Anyone who has been the victim of unlawful questioning of the person is arrest or detention shall have an enforceable right reasonably suspended or delayed; to compensation. and (ii) is within a period specified under section 23CB.

CHAMBER 24198 SENATE Thursday, 17 June 2004

(6) Schedule 1, item 5, page 6 (after line 38), justice of the peace or bail justice after section 23CA, insert: about the application. 23CB Specifying time during which (5) The application must include suspension or delay of questioning may be statements of all of the following: disregarded (a) whether it appears to the (1) This section applies if the person investigating official that the person mentioned in paragraph 23CA(8)(m) is is under 18; detained under subsection 23CA(2) for (b) whether it appears to the the purpose of investigating whether investigating official that the person the person committed a terrorism is an Aboriginal person or a Torres offence. Strait Islander; Note: The person may be detained (c) the reasons why the investigating under subsection 23CA(2) for official believes the period should the purpose of investigating be specified, which may, for whether the person committed a example, be or include one or more terrorism offence, whether the of the following: person was arrested for that (i) the need to collate and analyse terrorism offence or a different information relevant to the terrorism offence. investigation from sources other Application for specification of period than the questioning of the (2) At or before the end of the person (including, for example, investigation period, an investigating information obtained from a official may apply for a period to be place outside Australia); specified for the purpose of (ii) the need to allow authorities in or subparagraph 23CA(8)(m)(ii). outside Australia (other than (3) The application must be made to: authorities in an organisation of (a) a magistrate; or which the investigating official is part) time to collect information (b) if it cannot be made at a time when a relevant to the investigation on magistrate is available—a justice of the request of the investigating the peace employed in a court of a official; State or Territory or a bail justice; or (iii) the fact that the investigating (c) if it cannot be made when any of the official has requested the foregoing is available—any justice collection of information relevant of the peace. to the investigation from a place (4) The application may be made: outside Australia that is in a time (a) in person before the magistrate, zone different from the justice of the peace or bail justice; or investigating official’s time zone; (b) in writing; or (iv) the fact that translation is (c) by telephone, telex, fax or other necessary to allow the electronic means. investigating official to seek information from a place outside However, before making the Australia and/or be provided with application by means described in such information in a language paragraph (c), the investigating official that the official can readily must inform the person that the person, understand; or his or her legal representative, may make representations to the magistrate,

CHAMBER Thursday, 17 June 2004 SENATE 24199

(d) the period that the investigating (a) give the investigating official a copy official believes should be specified. of the instrument as soon as (6) The person, or his or her legal practicable after signing it; and representative, may make represent- (b) if the instrument was made as a ations about the application. result of an application made by Decision about specifying period means described in paragraph (4)(c)—inform the investigating (7) The magistrate, justice of the peace or official of the matters included in bail justice may, by signed instrument, the instrument. specify a period starting at the time the instrument is signed, if satisfied that: Evidentiary provisions if application was made by telephone, fax etc. (a) it is appropriate to do so, having regard to: (10) As soon as practicable after being informed of those matters, the (i) the application; and investigating official must: (ii) the representations (if any) made (a) complete a form of the instrument by the person, or his or her legal and write on it the name of the representative, about the appli- magistrate, justice of the peace or cation; and bail justice and the particulars given (iii) any other relevant matters; and by him or her; and (b) the offence is a terrorism offence; (b) forward it to the magistrate, justice and of the peace or bail justice. (c) detention of the person is necessary (11) If the form of the instrument completed to preserve or obtain evidence or to by the investigating official does not, in complete the investigation into the all material respects, accord with the offence or into another terrorism terms of the instrument signed by the offence; and magistrate, justice of the peace or bail (d) the investigation into the offence is justice, the specification of the period being conducted properly and is taken to have had no effect. without delay; and (12) In any proceedings, if the instrument (e) the person, or his or her legal signed by the magistrate, justice of the representative, has been given the peace or bail justice is not produced in opportunity to make representations evidence, the burden lies on the about the application. prosecution to prove that the period Instrument specifying period was specified. (8) The instrument must: Government amendments (4) to (6) relate to (a) specify the period as a number the question of dead time. I again outlined (which may be less than one) of the provisions in relation to that in my hours; and speech in reply in the second reading debate. (b) set out the day and time when it was These amendments are the result of recom- signed; and mendations made by the Senate Legal and Constitutional Legislation Committee and (c) set out the reasons for specifying the period. that committee recommended that the proposed dead time provision at section (9) The magistrate, justice of the peace or bail justice must: 23CA(8)(m) of the bill only be available if judicially authorised.

CHAMBER 24200 SENATE Thursday, 17 June 2004

It is interesting to note that in the amend- vided with such information in a language ment there is a provision for the application that the official can readily understand. to be made to the judiciary official. In that Again, these inquiries can involve different application it must be stated why the investi- languages. Translation can take some time gating official believes the period should be and has to be provided in a form that the in- specified. In doing that, the investigating vestigating official would understand. This is official must outline one or more of the fol- part and parcel of the reason for the extra lowing four factors. First is the need to col- dead time. The approval for that extra dead late and analyse information relevant to the time has to be granted by a judicial official. investigation from sources other than the The amendments are the result of a recom- questioning of the person—including, for mendation from the Senate Legal and Con- example, information obtained from a place stitutional Legislation Committee. It is a outside Australia. That refers to the circum- sound recommendation from that committee. stance where they have to make investiga- I commend these amendments to the Senate. tions overseas or obtain information from Senator LUDWIG (Queensland) (9.32 overseas. Second is the need to allow au- p.m.)—Labor support government amend- thorities in or outside Australia, other than ments (4), (5) and (6). These amendments authorities in an organisation of which the implement recommendation 1 of the Senate investigating official is part, time to collect committee, which was that the use of the information relevant to the investigation on proposed new dead time provision relating to the request of the investigating official. This overseas inquiry be subject to approval by a refers to the situation, for example, where judicial officer. As I mentioned earlier in my you have an Australian Federal Police officer contribution to the second reading debate, who is the investigating official needing to Labor wrote to the government on 12 May get information from a state policeman and seeking this amendment. We were pleased to asking that state policeman to make certain learn this week that the government had inquiries for him or her. agreed to it. It has now provided and moved Third is the fact that the investigating offi- the relevant amendments. Opposition amend- cial has requested the collection of informa- ments (1), (2), (3) and (4) on the revised run- tion relevant to the investigation from a place ning sheet deal with the same matter— outside Australia that is in a time zone differ- perhaps in a slightly different way, but they ent from the investigating official’s time come to the same conclusion. As we are sup- zone. This again relates to that overseas in- porting the government’s amendments, I will quiry but makes a further provision for the not be moving the opposition amendments I time zone factor. It may be the middle of the have just described. night when you want to make inquiries of Senator GREIG (Western Australia) officials in the United States or the United (9.34 p.m.)—Government amendments (4) Kingdom. In that case, you would have to and (5) are both consequential upon amend- wait until their morning before you could ment (6), which itself inserts a new provision raise anyone to get that information. So that requiring that extensions of the extension of is another aspect which has to be outlined in the investigation period by the use of dead the application. The fourth criterion is the time must be approved by a magistrate or a fact that translation is necessary to allow the justice of the peace. This amendment imple- investigating official to seek information ments a recommendation of the legal and from a place outside Australia and/or be pro- constitutional committee, which I was

CHAMBER Thursday, 17 June 2004 SENATE 24201 pleased to be a part of, that suspensions of Senator ELLISON—Exactly! In this the investigation period should be approved situation there is a provision for a magistrate by a judicial officer. or, if one is not available, a bail justice. I am While the Democrats welcome these provided with clause 23DA, which talks amendments and will be supporting them, we about specifying time during which suspen- would like to record our outstanding con- sion or delay of questioning may be disre- cerns in relation to these provisions. In par- garded. It states there: ticular, we are concerned that it will be pos- The application must be made to: sible for a suspension of the investigation (a) a magistrate; or period to be authorised by a justice of the (b) if it cannot be made at a time when a mag- peace. Minister, might that include, for ex- istrate is available—a justice of the peace em- ample, an employee of the Attorney- ployed in a court of a State or Territory or a bail General’s Department who is a justice of the justice; or peace? Could they authorise such a suspen- (c) if it cannot be made when any of the fore- sion? going is available—any justice of the peace. We find it disturbing that there is no So you have a descending order. Bail justice maximum amount of dead time—in other is a term that applies to Victoria. Each of the words, although a person can only be ques- states has its own bail act and, as mentioned tioned for a maximum period of 24 hours earlier, there is a patchwork of provisions in under the bill, they could potentially be kept relation to bail. The term bail justice applies in police custody indefinitely without being to Victoria; justice of the peace is a more charged provided that a magistrate or a JP common term which is used in other states approves the suspension of the investigation and territories. So you have a magistrate first period. We clearly do not believe that is a and if you cannot find a magistrate it has to satisfactory situation. It is one of the reasons be either a justice of the peace employed in a why we will ultimately be opposing this bill. court of a state or territory or a bail justice. However, we do acknowledge that in this Bail justice applies to Victoria; justice of the instance the government’s amendment (6) peace applies to the other jurisdictions. improves the bill. Thus we support it and Senator NETTLE (New South Wales) amendments (4) and (5) which are conse- (9.39 p.m.)—I thank the minister for provid- quent on it. Minister, I repeat my question: ing an answer to that question and Senator could an employee of the Attorney-General’s Greig for pointing out that part of the legisla- Department who is a JP be the person to tion, because it is quite an incredible piece of authorise a suspension? legislation. The Greens support these amend- Senator ELLISON (Western Australia— ments in relation to when individuals get Minister for Justice and Customs) (9.36 dead time—and that dead time occurs for a p.m.)—The advice I have is that if a magis- raft of different reasons—and stipulations as trate is not available then an employee of the to how that dead time is to apply. But it is Attorney-General’s Department could be the quite incredible that a justice of the peace— person to authorise that, provided they are a and, as Senator Greig rightly pointed out, the bail justice. Now you are going to ask me— justice of the peace might be somebody em- Senator Mark Bishop—What is a bail ployed by the Attorney-General’s Depart- justice? ment—can grant a suspension of 23 hours or 10 hours whilst investigations are made and

CHAMBER 24202 SENATE Thursday, 17 June 2004 that, after questioning continues, the same which had been authorised then they would justice of the peace in the Attorney-General’s be subject to sanction because they would be Department can grant another suspension of clearly in breach of these provisions. another 10 hours. Minister, is there any way You should have caps on the time allotted. in which this is not providing for indefinite We have the current four hours for an adult detention? and two hours for a child with the extensions Senator ELLISON (Western Australia— provided by judicial approval. With these Minister for Justice and Customs) (9.40 proposals, extra dead time has to be obtained p.m.)—Firstly, additional dead time can only by judicial approval and any suspension or be accessed if judicial approval is given. delay of questioning for overseas inquiry That reflects the recommendation of the must be reasonable. You cannot just do it on Senate Legal and Constitutional Legislation a whim or a fancy. You cannot just say, ‘I’ve Committee. It is not automatically available got to phone up the United Kingdom for in- to the police, and that should be remem- formation and I want an extra 10 hours to do bered. The judicial officer can impose a that.’ You have to give solid reasons as to maximum cap on the period of dead time why. I mentioned the time zones which are authorised. As part of the authorisation proc- specified in the amendments. We believe that ess, the arrested person or the representative spells it out quite clearly that certainly you of that arrested person can make representa- would not have indefinite detention. If there tions to the judicial officer. were any attempt to do that, it would be in Secondly, any suspension or delay of breach of these provisions. questioning to obtain further information or Senator BROWN (Tasmania) (9.44 to make overseas inquiries must be reason- p.m.)—I ask the minister: is any justice of able. A suspension or delay would be unrea- the peace a judicial officer? sonable if relevant information could be ob- Senator ELLISON (Western Australia— tained from an overseas location without Minister for Justice and Customs) (9.44 delay or if the same information as that p.m.)—The answer to that is yes. sought overseas could be obtained from a Senator NETTLE (New South Wales) location within Australia. A suspension or (9.44 p.m.)—I thank the minister for his pre- delay may also be unreasonable if the infor- vious answer in relation to indefinite deten- mation to be obtained has little relevance to tion in saying that he believed it would be the questioning of the suspect. outlawed under the provisions. Can the min- Thirdly, the period for which the question- ister point to where? The question was: how ing is suspended or delayed must also be does this not involve indefinite detention? reasonable. This period would be capped by The answer the minister gave was that he the judicial officer, who must specify a spe- thought indefinite detention would not be cific period of dead time. So you have a covered under these provisions. Can the min- number of safeguards in relation to the dead ister point to where? time and the suspension of questioning. The Senator ELLISON (Western Australia— involvement of the judicial officer gives you Minister for Justice and Customs) (9.45 that certainty. I have outlined provisions stat- p.m.)—I point to government amendments ing where it would be considered unreason- (4) to (6), particularly (5), which states: able to have an extension of time. If a police officer detained a person beyond the time (m) any reasonable time that:

CHAMBER Thursday, 17 June 2004 SENATE 24203

(i) is a time during which the you cannot be too prescriptive about every questioning of the person is situation. What you do rely on is a body of reasonably suspended or delayed; case law which says that ‘reasonable’ equates and to the circumstances of the case, but it cer- (ii) is within a period specified under tainly does not equate to an indefinite period section 23CB. of time. That is government amendment (5) relating Progress reported. to dead time. The application for judicial approval is provided for in government ADJOURNMENT amendment (6). We have gone over the fact The DEPUTY PRESIDENT—Order! It that the application must be made to a magis- being 9.50 p.m., I propose the question: trate, a justice of the peace or a bail justice— That the Senate do now adjourn. I am looking at subsection (3). It provides for Queensland: Road Funding the reasons, as I mentioned earlier, for the Senator SANTORO (Queensland) (9.50 extra dead time, which are contained in sub- p.m.)—Tonight I want to say a few words section (5)(c)(i), (ii), (iii) and (iv), which I about road funding as it applies to our state recited to the Senate previously. It is all set of Queensland, Mr Deputy President. This out in the government amendments, and I has been in the news quite a lot lately, be- think that that adequately covers the query cause in Queensland the Beattie Labor gov- that Senator Nettle has raised. ernment has been behaving very badly. For Senator NETTLE (New South Wales) example, it has just brought down a budget (9.47 p.m.)—I thank the minister for at- that cuts state spending on road infrastruc- tempting to answer that question. If there is a ture to just 12 per cent of the capital works belief that indefinite detention is reasonable, program. There was a miserly six per cent under the section the minister pointed out, increase in new state funding for road pro- amendment (5)—‘any reasonable time’—can jects. The Howard government, through the there be indefinite detention? AusLink national transport plan, has in- Senator ELLISON (Western Australia— creased federal road funding in Queensland Minister for Justice and Customs) (9.47 by 61 per cent. The question must be asked: p.m.)—If it ended up in court I would be who is failing the test here? amazed if any court in Australia would be of There was one nasty statistic about a view that reasonable time was indefinite. I Queensland under Labor that I highlighted in can say quite clearly that that is not the inten- this place yesterday. It is that the Beattie tion of this at all. Those remarks are impor- government likes to play the blame game. It tant because they are being placed on the is forever seeking scapegoats for its own record during this debate for a very good failings. As always when he is in a tight cor- reason—that is, it is not the government’s ner—and it is usually one he has put himself intention at all that a reasonable time would into—Premier Beattie blames the feds. be equated to an indefinite period. I think The chief focus of interest at present is the that that answers the question very clearly. appalling condition of traffic on the Ipswich What you have to remember is that the Motorway. This carries very heavy com- question of reasonable time has been ad- muter traffic in the morning and afternoon dressed by the courts. It has been used in the peak hours and a lot of heavy transport traf- law in all sorts of circumstances, because fic at all times. It is a national highway, but

CHAMBER 24204 SENATE Thursday, 17 June 2004 its problems, which the Commonwealth has faultless and unfailing. So has that of the already paid out tens of millions of dollars to Minister for Roads and Local Government, fix, flow to a very large extent from prob- my friend and colleague in this place Senator lems fed into the motorway from inadequate the Hon. Ian Campbell. state transport infrastructure—roads and In particular, I want to pay tribute to Sena- public transport. That is why my energetic tor Campbell, whom the Beattie Labor gov- Liberal colleagues in the other place—the ernment has rudely and crudely tried to de- member for Blair and the member for More- monise over the Ipswich Motorway. Perhaps ton—have been so assiduous and so utterly Premier Beattie does not know—indeed I do determined in helping to find a solution. The not think that he would care at all—that member for Ryan, too, has flow-on traffic Senator Campbell, while from the great state problems—if ‘flow-on’ is an appropriate of Western Australia, was born and raised in term in the circumstances—as a consequence Queensland and knows at first-hand what the of the Ipswich Motorway’s current inability actual development and infrastructure prob- to cope with traffic volumes. He has also lems are. Mr Beattie may not be aware that played a valuable part in finding a solution. Senator Campbell attended Brisbane Gram- It is also a project in which I have been mar and grew up on the Sunshine Coast, an- happy to lend a hand. other area to which the Beattie government Incidentally, I wish to acknowledge the fails to give enough attention. The federal presence in the public gallery of Ms Kathy Minister for Roads and Local Government Lynch, a recent policy vice president of the has made a forensic investigation of the Ips- Liberal Party and someone who has done wich Motorway situation. His inquiries have much work in developing good, sound trans- been very detailed. They have been very spe- port policy, an activity clearly of assistance cific. They have involved not only the local to the Liberal Party and the community. To- federal coalition members but, more impor- day, in the vital area of road and transport tantly, the community. His analysis cannot be infrastructure policy, Mr Peter Turner con- faulted, except by the curiously inverted tinues to perform in the grand and effective logic that the Beattie Labor government likes tradition of Ms Lynch, and I am also in- to employ. debted to him for the good work that he does The Commonwealth’s funding proposal in that vital area of policy development. for the Ipswich Motorway, the solution that it When it comes to road infrastructure a ho- has put forward, results from a deep under- listic solution is necessary not only because standing of the key issues involved and the there is a clear federal role in creating effec- requirements of the motorway’s users. It tive road infrastructure but also because flows, too, from a good grasp of the prereq- someone has to fill in the gaps left after the uisites of the local population and those of Beattie government has spent its money on surrounding and therefore affected areas. In its primary capital works program—building short, the solution is one that requires the a compliant bureaucracy. On the other hand, cooperation of all three levels of government the response of the Howard government to and key stakeholders and adequate funding Brisbane’s, and indeed south-east Queen- from the levels of government that are re- sland’s, transport difficulties has been exem- sponsible for the road. It was sickening to plary. The commitment and foresight of the see how the Beattie government played up to Minister for Transport and Regional Ser- the Commonwealth while everyone—or so it vices, the Deputy Prime Minister, has been was thought—was reading from the same

CHAMBER Thursday, 17 June 2004 SENATE 24205 page in the search for a solution, but then the Ipswich Motorway with mums and dads behaved like an attack dog the moment the taking their kids to school. I want to com- money was put on the table. Not only does it pliment my friend and colleague from the bite the hand that feeds it, it takes the arm off lower house the honourable member for at the elbow. The Beattie government clearly Moreton because the residents who live near has no conscience. roads such as Kessels Road, Oxley Road, On the Ipswich Motorway, as in the case Graceville Avenue, Venner Road and King of the Tugun bypass at the southern end of Arthur Terrace, and residents who also live the Gold Coast, it has been keen to point out near other roads outside his electorate such the problems, which are in any case very as the Mount Gravatt-Capalaba Road, will plain, but very reluctant to do anything about benefit enormously from the long-term ini- them. The solution to the Ipswich Motor- tiative that the member for Moreton has way’s problems is not to fund a six-lane de- shown when it comes to improving road and velopment, as Opposition Leader Mark transport infrastructure not only in his elec- Latham said after the AusLink white paper torate but also in the surrounding area. was released. It is to spend substantial My friend the member for Blair in the sums—to be precise, $52.7 million over five other place is also a critic of the Labor recipe years—to begin upgrading and planning for for further and worsening chaos on the Ips- future improvements to the motorway in the wich Motorway and surrounding road sys- context of an overall integrated urban solu- tems. As he pointed out in the House of Rep- tion. It is a solution that has also been em- resentatives only this week, the Beattie La- braced not just by the local residents affected bor government’s proposal—backed by the by the current condition of the Ipswich Mo- former profligate mayor of Liverpool, now torway but also by the local businesspeople the federal leader of the Labor Party—is for and developers who see the technical and an eight-year time frame for construction of financial sense of the initiative that has been an even bigger parking lot. Queensland’s worked out by the diligent coalition MPs, the transport minister, Mr Paul Lucas, who minister and of course the local residents. should know the score, apparently does not. That solution embraces the Pacific Highway, In the state legislature on 18 March this year the Gateway Motorway and the bridge, and he said the Ipswich Motorway ‘is reaching the Logan Motorway. That is a further $574 its capacity of some 99,000 cars per week- million that the Howard government will day’. Yet according to the Labor Party, on its outlay as part of a total investment in Bris- own web site, the 2003 figure was already bane urban corridors that will total $626.7 99,073. million over five years. As the member for Blair pointed out—not As my friend and colleague the member happily perhaps, but maybe with some bitter for Moreton said in other place on 24 May, humour at the contortions the ALP goes the Queensland government’s solution is to through in trying to justify the unjustifi- entrench forever the business case for more able—the ‘Queensland solution’ is appar- trucks—more traffic—in the area. Labor ently based on discounting traffic flow by says—to quote the Minister for Citizenship some 20 per cent. While I was doing a little and Multicultural Affairs speaking as the research for this speech I looked at some- local member, I should stress, and a very thing the Labor member for Oxley said in the good local member at that—it is okay for 18- grievance debate in the House of Representa- wheel trucks to be competing for space on tives on 8 March this year about the Ipswich

CHAMBER 24206 SENATE Thursday, 17 June 2004

Motorway, in which you might think he has a gent economic power in the world today is vital interest as one of the local members— China, a nation which has a rich culture and thankfully not the only local member be- the potential to establish as broad a reach and cause if that had been the case those people arguably already has? I do not think it is a that he represents and those he seeks to rep- coincidence. Nor do I think it is a coinci- resent would have been sold out very badly. dence that both of these countries have, dur- He said it should be fixed as a stand-alone ing their economic development, been called project, commenting: the greatest thieves of intellectual property in Let us upgrade it to six lanes and do a proper job. the world. The US and, more recently, China Then let us talk about other roads. Or we can do it have demonstrated an ability to take what at the same time—it does not worry me: we can they need from the rest of the world, assimi- chew gum and walk and breathe at the same time. lating strengths without selling out their core That is what the member for Oxley said. I character. Once in the ascendancy, it is only say to that: fine, but you also have to be able to be expected that they would seek to pull to think first. The member for Oxley did not up the drawbridge behind them. think—on this as on so much else. Neither So for a whole range of reasons Stephen- does the Labor Party or the Queensland gov- son’s words came to mind. It is the control of ernment think not only on this issue but on music, movies, software and their distribu- so many other issues. tion that is precisely the subject of chapters Trade: Free Trade Agreement 17, 14 and others in the proposed so-called Senator LUNDY (Australian Capital Ter- free trade agreement between Australia and ritory) (9.59 p.m.)—In the opening pages of the United States of America. It is what we Neal Stephenson’s ode to the future, Snow stand to lose in relation to these issues that Crash, he describes the US economy as only exposes the hidden truth that the Prime Min- doing four things well: music, movies, soft- ister, with his forelock-tugging approach to ware and pizza delivery, this last one being a trade and foreign relations, is intellectually metaphor for distribution. Stephenson’s sim- ill equipped to understand—because his plistic message is that, done well, only these mind remains rooted in a time and a class four things are needed to stay on top of the when we, for all intents and purposes, were global economic food chain. In other words, colonial. Mr Howard does not understand control over production and distribution of that there might be things that are uniquely both cultural content and knowledge and the Australian that we stand to lose: our ability tools to manage it are the means to social, to create, innovate and use our intellectual cultural and economic domination. It sounds property to advance social and economic melodramatic—of course, that is Stephen- goals. son’s style. His choice of metaphor is fasci- The Howard government’s sycophantic nating because it is so deeply rooted in the participation in bilateral trade talks with US marketcentric culture. America was inevitably going to lead to an History suggests that cultural and eco- imbalanced outcome. This is because Amer- nomic performance are deeply intertwined. ica is really big and Australia is really small. The dominant economic power in the world It is also because America has an aggressive today is the US, whose culture has been car- and comprehensive bilateral agenda that has ried by its economic reach to all parts of the at its core the growth of US-centric cultural globe. Is it a coincidence that the great emer- content and US corporate friendly intellectual property management. Even the legis-

CHAMBER Thursday, 17 June 2004 SENATE 24207 lated copyright extension is called the For software and applications, the free mickey mouse amendment, so complete is trade agreement effectively means that intel- the corporate domination of the debate. In lectual property law in Australia faces an ad contrast, Australia had a domestic political hoc morphing to conform with US law. I say issue relating to our continuing political and ad hoc because the changes are only where it economic emphasis on primary produce. is favourable to the common corporate inter- Culture, intellectual property and copyright ests in both countries—that is, those here in were brought to the table by the US. One can Australia with head offices of their organisa- only assume that the important issue of intel- tions in the US. Some counterbalancing fea- lectual property did not rate at all in the tures under US law—such as the fair use of Howard government’s political motivation to copyright—do not exist here, so claims that do the deal. In fact it seems that the Austra- the free trade agreement will bring consis- lian negotiators were led to believe that the tency or uniformity to Australian and US US intellectual property agenda was whole- intellectual property law have little credibil- heartedly supported by at least some so- ity. called Australian interests, including the Getting to the bottom of all this complex- Business Software Association of Australia, ity is therefore necessary if we are to assess which of course were really representing the the overall merits of this proposal. Intui- interests of very large US based companies tively, these provisions represent bad news operating here. for Australia. This is why the Labor initiated It seems that any further analysis of the Senate Select Committee on the Free Trade fact that these interests were not necessarily Agreement between Australia and the United Australia’s at all either did not occur or was States of America is so important. It is not conveniently ignored. Given the weight put controlled by the Howard government, so it on these issues by the US and the vigorous does create a forum for transparent assess- domestic debate in that country, alarms bells ment. The people of Australia were never should have been ringing. Instead, the nego- going to get that from the Howard govern- tiated result shows lazy, irresponsible politi- ment. Not only has Labor created a forum for cal expediency that has the potential to cost the airing of the real and likely impact of the Australia dearly. The result is an agreement proposed free trade agreement, it has lifted that seeks to determine a new direction in awareness of intellectual property manage- Australian IP law. It is an agreement that is ment and cultural independence generally. dictating legislative change, despite the fact With the political focus of the free trade that a programmed review of the Australian agreement on agriculture, it has been a sub- digital agenda legislation has reached its own stantial challenge for the cultural sector, arts conclusion. To date the Howard Government community and IT sector to respond with have not bothered to defend this interference vigour and substance to the threats and chal- in the digital agenda review and its recom- lenges posed by the free trade agreement to mendations—a legislated review put in place cultural independence and innovation. But at the time of the passage of this legislation respond they have. Through the body of evi- through the parliament. This was scheduled dence already gathered by the Senate com- three years after the law came into effect and mittee, through written submissions and pub- is in direct conflict with its recommendations lic hearings, a picture is taking shape. This with the direction the free trade agreement picture tells a story of how this agreement will take Australian intellectual property law. and the related changes to our laws will po-

CHAMBER 24208 SENATE Thursday, 17 June 2004 tentially stifle what is unique and interesting Environment: Endangered Species about Australian culture through music, Senator CHERRY (Queensland) (10.08 movies and software innovation. p.m.)—I rise tonight to speak about the issue Whether it is the importance of having the of development in the Sunshine Coast region largest, on a per capita basis, dynamic open of Queensland, in particular about the reluc- source software sector or the need to be able tance of the federal government to own up to to express ourselves in our cultural content, its responsibilities and live up to its obliga- the bulk of non-large corporate evidence ar- tions under the federal Environment Protec- gues that this free trade agreement will have tion and Biodiversity Conservation Act to an inhibiting effect. For the first time, par- protect matters of national environmental liament is gaining a clearer understanding of significance. This particular matter has arisen the impact that open source software is hav- because of a proposal by a development firm ing in Australia and around the world. But as to build a supermarket in a shopping centre open source software gains market share and in the middle of the main street of Maleny. challenges the anticompetitive habits of ex- Ordinarily you would not think that building isting large software houses, the free trade a supermarket in a shopping centre in the agreement will potentially put the brakes on middle of a small country town would ulti- this momentum. The Australian open source mately trigger a federal environment protec- community argue that Australia will be par- tion act, but what was fascinating about this ticularly disadvantaged because we have a particular development was that it actually higher proportion of, and therefore a greater affected an area of land known to be used by future potential for, open source as a part of a at least two significant endangered species growing software sector. registered under the federal act. In particular, In conclusion, there is no doubt about the it was known that the Coxen’s Fig Parrot degree of secrecy and trickiness the Howard actually roosted on this particular block of government has employed to get this deal to land. It was also known that the creek on this stage. What remains to be seen is just which this particular shopping centre was to how much detail has been deliberately with- be built was an important part of the recov- held from the Australian people. I will con- ery program for the endangered Mary River clude with a reminder of the history and mo- Cod. It was also known that platypuses were tivation of intellectual property law, which actually breeding in this creek in the middle was to create an incentive for writers by giv- of this very small country town. All of these ing them some control over their work. Pat- things were known to the government be- ent laws were designed to prevent monopo- cause they were clear in the referral that was lies by making public important technologi- given to the government by the developers, cal innovations, by providing inventors with yet in record time the government dismissed temporary exclusive rights over their crea- the question of whether this development tion as a trade-off. The underlying assump- was going to have a significant impact on tion was that innovation best occurred with endangered and threatened species. free-flowing ideas in the public domain. It is In doing so, in my view, the government with some irony that such laws have de- has again failed to live up to its obligations parted so dramatically from their original under the EPBC Act to protect matters of intent. national environmental importance. What is particularly worrying for me is that the government has also undermined programs

CHAMBER Thursday, 17 June 2004 SENATE 24209 which it has itself been funding. In the last ened species which are protected by that fed- five years the federal government, through eral act were impacted on by that particular the Natural Heritage Trust, has put $383,000 development and the minister, in my view, into breeding programs to help the Mary has comprehensively failed to take proper River Cod recover in the Mary River catch- account of that. Indeed, looking at the an- ment, which includes Obi Obi Creek, which swer which he gave to Senator Allison, it flows through Maleny. It was known that appears to me that the department went little fingerlings that had been bred as part of that further than desktop research, a quick pe- recovery program had been released into this rusal, of the papers submitted by the devel- creek in the vicinity of this shopping centre oper before giving it the big tick and flick development and it was known that this de- and deciding it would not be a controlled velopment would obviously have a signifi- action under the act. I believe that in doing cant impact on the effectiveness of that re- so the minister completely failed to apply the covery program, yet at no point did the min- precautionary principle which he is required ister bother to check with the scientists in- to do under the EPBC Act. He certainly volved in that recovery program to discuss failed to ensure that the impact of this devel- the impact on that threatened endangered opment on these two threatened species species. In particular, at no point did the min- would in fact be properly assessed. ister even consult with the scientists involved Indeed, in his response to Senator Alli- in the Coxen’s Fig Parrot recovery plan, also son’s question about why those involved in being funded out of federal money in the the Commonwealth funded recovery plan for same area. It was known that the Coxen’s Fig the Mary River Cod which had been released Parrot was actually roosting in one of the into Obi Obi Creek had not been consulted large fig trees on the block of land but at no by Environment Australia ‘in relation to the stage did the minister or his department possible damage to creek banks associated bother to contact the scientists involved in with the development’, all he had to say was: the recovery plan to check on the impact of Relevant information concerning the likely pres- this development on that particular plan. In ence of the Mary River Cod and the impacts of answers which the minister has provided to the proposal on water quality ... within Obi Obi questions on notice from my colleague Sena- Creek was taken into account. tor Allison, he did acknowledge that they at He did not say how, he did not say where, he least read the recovery plan. I think the good did not say what information and he did not burghers of Maleny should be thankful that talk to the experts. He did not ensure that the minister at least read the recovery plan, people actually went in and had a look at the but it is extremely disappointing that he did site and tried to determine where the impact not bother to go further and actually talk would be. Presumably he was not even with the scientists involved in the recovery aware that fingerlings under a federally plan to work out what the impact would be funded recovery program were put into this on the Coxen’s Fig Parrot if this particular creek. From the Democrats’ point of view, it piece of land were developed. is extremely disappointing to see the gov- Ordinarily it would probably not be a mat- ernment yet again failing to live up to its ter which you would worry about in terms of obligations under that federal act. a block of land in the middle of a small country town triggering the EPBC Act. But in this particular circumstance two threat-

CHAMBER 24210 SENATE Thursday, 17 June 2004

The EPBC Act has been found by the now been destroyed. It highlights the diffi- Federal Court, in the Nathan Dam decision culty that local communities have in trying to very recently, to be much more powerful and get this government to live up to its national much more significant than the minister has responsibilities to the environment in terms been prepared to give it credit for. The Fed- of these sorts of developments. It is unfortu- eral Court found that the minister is required nate that it has reached the situation now to consider downstream and flow-on conse- where it will require the Caloundra City quences of actions in determining environ- Council to find upwards of $1.8 million to mental impact. I note that the minister has buy the site if we are going to ensure that no appealed that decision to the full Federal further damage is done to what little vegeta- Court, but I have a sneaking suspicion he is tion is remaining. I will certainly be calling not going to get much assistance from the on the government to at least come good and full bench because it was a very strong deci- help the Caloundra City Council to find the sion and what the decision actually reflected funds to buy the site so we can in fact get was the precautionary principle which the some revegetation going and ensure that the minister has not been prepared to put in impacts on Obi Obi Creek and the animals place in dealing with the act up to this par- that use that corridor as part of their ecosys- ticular stage. tem are not made worse by this development being taken further. It seems crazy to me that the government can be putting $383,000 of federal money Marriage into a recovery program for the endangered Senator BARNETT (Tasmania) (10.16 Mary River Cod, another $300,000 into re- p.m.)—I stand in this place in support of the habilitation of the Mary River catchment, Howard government’s Marriage Legislation another $30,000 into the recovery program Amendment Bill 2004. Marriage is a bedrock for the Coxen’s Fig Parrot and another institution worthy of protection. Marriage $30,000 into Project Platypus in the Blackall has endured for thousands of years and Range to try to improve habitats for these across countries, cultures and religions. It is animals, yet at the same time approving in a social institution which benefits family another part of the environment department a members and society. It provides for stability significant development that will adversely in society. It provides a solidly built roof affect the effectiveness of all those funding under which children are nurtured, protected programs. It would seem that one part of the and raised. It specifically benefits the chil- environment department does not know what dren and is designed to ensure their welfare the other part is doing, or does not want to is maximised. There should be no doubt find out. about its definition. However, the commonly It is a very disappointing outcome from accepted definition of marriage—the union the minister’s point of view. It is very disap- of a man and a woman—is under threat. If pointing that the minister has been so cava- our current workable definition is watered lier with his responsibilities under this act down, the great value of the institution of and it is very disappointing that, as a result marriage to our culture, to our society and of not declaring this to be a controlled action, particularly to our children will be irreversi- the important habitat that was on that site, bly diminished. This is why the Howard including the fig tree that was known to be a government has introduced into the Austra- feeding site for the Coxen’s Fig Parrot, has lian parliament legislation to codify the current common law definition of marriage.

CHAMBER Thursday, 17 June 2004 SENATE 24211

This legislation was passed in the House of there are many couples who still seek marriage Representatives today, and I commend Prime and in my view it behoves the law to develop in a Minister John Howard and Attorney-General way that gives marriage a modern contemporary Philip Ruddock on this action. meaning. Senator Cherry—Mr President, I rise on These comments and the recent trends are a point of order. Is this bill still on the Notice worrying. I acknowledge the current debate Paper at this stage? regarding a homosexual couple’s desire to access superannuation or property, and in The PRESIDENT—I understand that the many respects this is legitimate. This is why senator can talk generally to the subject. our government, in separate legislation, is Senator BARNETT—That is indeed acting to ensure those people in an interde- what I am doing. I appreciate and accept the pendent relationship are protected when it points made. Amazingly, there is no defini- comes to superannuation. However, claims tion of marriage in the Marriage Act 1961, to superannuation or the like are different the Family Law Act 1975 or our Constitu- from any claims to the right to be married. tion. However, both pieces of legislation Another issue that we are currently debat- contain references to the traditional defini- ing and considering is whether we are going tion. For example, under section 46 of the to allow same-sex couples to adopt children Marriage Act civil celebrants are required to from overseas. A study of Australian primary explain the nature of the marriage relation- school children carried out by Dr Sotirios ship before solemnising a marriage with Sarantakos, Associate Professor of Sociology words that include, ‘Marriage, according to at Charles Sturt University, published in law in Australia, is the union of a man and a 1996, looked at children with married het- woman to the exclusion of all others, volun- erosexual parents, unmarried cohabiting het- tarily entered into for life.’ The issue of the erosexual parents and homosexual parents. meaning of marriage has been raised in Aus- The study rated a variety of school subjects tralia recently in a number of ways, includ- and assessed various social issues with each ing in the Family Court case of Kevin and child. The study concludes with these words: Jennifer. The full Family Court said that the words ‘marriage’ and ‘man’ in the Marriage Married couples seem to offer the best environment for a child’s social and educational devel- Act have a contemporary, everyday meaning. opment. Are we going to allow the longstanding definition of marriage to be interpreted out of the People have been voicing their opposition to context in which it was written? same-sex marriage and adoption for a number of years. In the UK, the Rt Hon. Jack With regard to Kevin and Jennifer, the Straw MP was quoted on the Today program former Chief Justice of the Family Court, the on 4 November 1998 as saying: Hon. Justice Alistair Nicholson, had this to I’m not in favour of gay couples seeking to adopt say in Australian Family Lawyer, Spring children because I question whether that is the 2003: right start in life. We should not see children as The increasing legal recognition given to non- trophies. Children, in my judgement, and I think marital heterosexual unions from the 1980s on it’s the judgement of almost everyone including has more recently been extended to same sex single parents, are best brought up where you unions, although in both cases there have been have two natural parents in a stable relationship. pockets of opposition to the extension of the vari- There’s no question about that. What we know ous rights and obligations of marriage partners to from the evidence is that, generally speaking, that less traditional couples. However, this may be,

CHAMBER 24212 SENATE Thursday, 17 June 2004 stability is more likely to occur where the parents who has to be the husband, from what the Prime are married than when they are not. Minister said—a couple of kids and a white More recently, Bill Muehlenberg of the Aus- picket fence. Most people do not actually fit into tralian Family Association said in March this this mould. year in a lengthy article: She also said: Marriage makes for better families and better The definition of a family today is actually much families make for better societies. And from the more broad. They are not always biologically evidence we just examined, marriage makes for based. There are foster families, single parent better people as well. families, families comprising of same sex couples, blended families and many more types. You The Labor Party has stated that it supports cannot actually have a nice simplistic idea of a the right of homosexual couples to adopt family. children from overseas. This is illogical, irra- She went on to say: tional and sends all the wrong messages. Remember, the purpose of adoption is to Surely, a family is a group of people who create a give parents to children, not children to par- set of relationships to ensure their own and their loved one’s daily needs are met. It is a symbiotic ents. Same-sex adoption is against the best relationship between a community and a family ... interests of the child. And she goes on. Exactly what is she talking On matters close to home, I notice the La- about? How confusing is that? I would ask bor member for the seat of Bass, Michelle Michelle O’Byrne to come clean and tell her O’Byrne, and the Liberal candidate, Michael community exactly what she thinks. Does Ferguson, have two diametrically opposed she support homosexual marriages or is she views on this legislation and, indeed, on hiding behind Labor’s new policy, just like what constitutes both marriage and the fam- Peter Garrett, and recanting on her own be- ily. Michelle O’Byrne’s position was re- liefs? ported widely in the national media when the legislation was just announced. The reports At least three Australian same-sex couples made it clear she was uncomfortable with are trying to change the current law in Aus- Labor’s position in supporting the definition tralia by travelling to an overseas jurisdiction of marriage as between a man and a woman. such as Canada, Netherlands, Belgium or The Australian reported on the 2 June 2004: Denmark to be married and then returning home to seek judicial recognition of their Labor MP Michelle O’Byrne compared the push marriage in Australia. A notice of intent to do to restrict same-sex couples’ ability to adopt with apartheid, telling caucus that during the 1980s she just this was made in February this year. would have committed a crime in South Africa if Australia is a party to the Hague Convention she had stayed in the same room as her husband. on Celebration and Recognition of the Valid- To add to this view, which I do not believe is ity of Marriages. One of the obligations supported in the community in Tasmania, placed on Australia is to recognise marriages Michelle O’Byrne is reported as saying in validly entered into in foreign countries. It is the parliament on 1 April 2004: immaterial whether the foreign country is a party to the convention. The Hague conven- The Howard government has long tried to claim tion does not define ‘marriage’. However, it some kind of moralistic ground when it comes to family but, as we heard today from the Prime has been recommended that marriage ‘shall Minister himself, this government’s commitment be taken to refer to the institution of mar- to families only serves you if you fit into its nar- riage in its broadest, international sense’. row view of what a family might be: mum, dad— Some unions are explicitly excluded from

CHAMBER Thursday, 17 June 2004 SENATE 24213 the convention. However, same-sex mar- being loving parents. Of course they are. I mean I riages are not excluded and neither are po- believe in the maximum conditions of stability for lygamous marriages. people who have children. It is arguable that either now or at some The PRESIDENT—Order! The time for time in the future, if it is not for the Howard your contribution has expired. government legislation, the Hague conven- Senator BARNETT—Mr President, I tion will enable foreign same-sex marriages seek leave to incorporate the remainder of to be recognised in Australia. The great my speech in Hansard. weakness for Australia is that current ar- Leave not granted. rangements mean that the local, currently Senator BARNETT—Mr President, I accepted definition of marriage is vulnerable seek leave to continue for one more minute to redefinition on the basis of what unions in light of the earlier interjection. other countries choose to recognise as ‘marriage’. Wherever possible Australian law Leave granted. should be made in Australia by Australians Senator BARNETT—Thank you, Mr for Australians and that law should prevail. President, and I appreciate the indulgence. Although no state in the USA officially To remove the growing doubt about the fu- recognises gay marriages, civil unions be- ture of marriage as a fundamental institution tween same-sex couples are currently legal in society and avoid any threat to its defini- in Vermont. In Massachusetts, the state’s tion, I researched and drafted a letter to the Supreme Judicial Court essentially legalised Prime Minister recommending an amend- gay marriage in November 2003, by ruling ment to the Marriage Act. It was signed by that the state constitution requires recogni- 30 of my coalition backbench colleagues. tion of gay marriages. Recently, some city That amendment has now been introduced— mayors and local authorities in San Fran- and I support it, obviously. Marriage is a cisco, New York and New Mexico have de- rock-solid institution. It is not a fashion to be fied their state laws and issued marriage lic- updated, and I hope the legislation is passed. ences to same-sex couples. Governors in Finally, I wish to sincerely thank the many these states have declared such marriages hundreds of Australians from all around this invalid under existing state law and sought country, and especially from Tasmania, for injunctions to prevent further licences being the support, encouragement and prayer of the issued. Some Canadian provinces, US states past few months. I have been inundated with and European countries enable unions be- letters, emails and calls and have been heart- tween same-sex partners to be registered, ened greatly. I have also been maligned and without according them the same status as abused by some of those with a different marriage. President George Bush has review. But that is the nature of the democratic cently announced his intention to ban same- world we live in, and I thank God for the sex marriages. The Prime Minister has re- privilege we have in this country to stand up cently said: and say what we believe without fear or fa- I think there are certain benchmark institutions vour. and arrangements in our society that you don’t Senate adjourned at 10.29 p.m. muck around with, and children should be brought up ideally by a mother and a father who are married. That’s the ideal. I mean I’m not saying people who are unmarried are incapable of

CHAMBER 24214 SENATE Thursday, 17 June 2004

DOCUMENTS Tabling The following documents were tabled by the Clerk: Lands Acquisition Act—Statements describing property acquired by agreement under sections 40 and 125 of the Act for specified public purposes [2]. National Health Act—Declaration No. PB 9 of 2004.

CHAMBER Thursday, 17 June 2004 SENATE 24215

QUESTIONS ON NOTICE The following answers to questions were circulated:

Commonwealth Scientific and Industrial Research Organisation: Appointment (Question Nos 2871 and 2872) Senator Brown asked the Minister representing the Minister for Science the following questions, upon notice, on 11 May 2004: With reference to the appointment of Ms Donna Staunton as Communication Director for the Com- monwealth Scientific and Industrial Research Organisation (CSIRO): (1) When was the Minister advised of the appointment. (2) Did the Minister have any role in making or approving the appointment. (3) Given Ms Staunton’s lack of scientific experience and her previous roles with the tobacco industry, what is the Minister’s view concerning the appropriateness of Ms Staunton’s appointment. (4) Has Ms Staunton retracted her well-known public position for example, as reported in The Age on 25 April 2004, that smoking is not addictive. (5) Does the Minister consider it appropriate that CSIRO has not declared Ms Staunton’s long, well- known, documented and public defence of smoking as not being addictive. (6) What conflicts of interest could arise between Ms Staunton’s support of the tobacco industry and CSIRO work on preventive health, particularly the Preventative Health Flagship program. Senator Vanstone—The Minister for Science has provided the following answer to the honourable senator’s question: (1) As a matter of courtesy I was advised of the impending appointment of Ms Staunton before it was announced to CSIRO’s senior executive staff on 2 March 2004. (2) As is routinely the case with senior CSIRO appointments, a range of internal and external stakeholder views are sought prior to deciding on an appointment. My views (along with those of a number of other stakeholders) were sought in relation to this position. The final decision was an internal matter for CSIRO management. (3) CSIRO is a large and complex organisation which operates in a competitive and challenging environment. It is essential that it recruits highly talented and experienced people in its research support areas. Ms Staunton is a highly regarded communication professional with strategic communication experience in complex organisations and with strong networks across all levels of government and industry. (4) Yes. In 2000, Ms Staunton stated that she accepted that nicotine is in fact addictive and that smoking is a major cause of preventable illness in Australian society. (5) Prior to the appointment of Ms Staunton to this position, CSIRO considered all relevant matters relating to the appointment and concluded that she was an outstanding candidate with extensive experience in the communication area at a high level and with strong networks across all levels of government and industry. Statements Ms Staunton made approximately 10 years ago concerning the addictiveness of nicotine were retracted in 2000. (6) See (5) above. Ms Staunton’s employment in the tobacco industry ceased in 1999. Since 1999 Ms Staunton has been a Member of the Board of Directors of the National Breast Cancer Centre. There are no real or perceived conflicts of interest.

QUESTIONS ON NOTICE 24216 SENATE Thursday, 17 June 2004

Copyright: Piracy (Question No. 2875) Senator Ludwig asked the Minister for Justice and Customs, upon notice, on 6 May 2004: (1) (a) How many operations against copyright infringement or piracy were initiated in the 2002-03 financial year; and (b)(i) can this figure be provided broken down by state and territory, (ii) how many operations resulted in charges being laid against individuals or corporations, and (iii) how many operations were a result of: (a) liaison with international policing groups, and (b) complaints by members of public against an operator or retailer. (2) For the 2002-03 financial year, how many offences against the Copyright Act 1968 in relation to piracy have resulted in: (a) a conviction; (b) a maximum penalty fine of $65 000 being imposed; and/or (c) imprisonment. (3) Can information be provided on cases where prosecutions in relation to these crimes have led to conviction, financial penalties and or imprisonment. (4) In cases where piracy was found to have occurred, what happened to the copying devices used to reproduce movies or sound recordings. (5) In each conviction relating to the piracy of movies or sound recordings, did the Director of Public Prosecutions make a submission on behalf of the Government during the trial or sentencing phase requesting the court to take into consideration the quantity and value of the items seized; if so, what was the court’s comment or finding in each case in relation to this submission. Senator Ellison—The answer to the honourable senator’s question is as follows: (1) (a) In the 2003-03 financial year, 7 such cases were reported to the AFP. (b) (i) Northern Territory, 1 Victoria, 1 New South Wales, 2 South Australia, 1 Tasmania, 1 Christmas Island, 1 (ii) One case (from NSW) resulted in the prosecution of 3 individuals for the offence of ‘Distribute for the Purpose of Trade, contrary to the Copyright Act 1968. The remaining referrals were rejected by the AFP. (iii) (a) Nil. (b) 7. (2) (a) According to the Director of Public Prosecution (DPP) records, there have been five prosecutions conducted by the DPP pursuant to section 132 of the Copyright Act 1968 resulting in conviction in the 2002-03 financial year. Offences against the Copyright Act 1968 may also be prosecuted by State and Territory police. (b) In none of these prosecutions was a maximum penalty against the individual of $65,000 imposed. (c) In none of these prosecutions was a sentence of imprisonment imposed. (3) The DPP holds records in relation to the sentences imposed in those cases that have led to conviction, financial penalties or imprisonment. (4) Section 133(4) of the Copyright Act 1968 provides that the court may order that a device or recording equipment used or intended to be used for making infringing copies be destroyed or delivered up to the owner of the copyright concerned or otherwise dealt with in such manner as the court thinks fit. Of the cases in (2) above, in two cases orders were made pursuant to section 133(4) for the recording equipment to be forfeited to the Commonwealth. In one case the computer

QUESTIONS ON NOTICE Thursday, 17 June 2004 SENATE 24217

equipment used in the commission of the offence was dealt with under Proceeds of Crime legislation. The remaining two cases did not involve copying devices. (5) These matters are relevant to the sentence imposed and would generally be taken into consideration on sentence. The DPP does not hold records to answer this question. Australian Volunteers International: Funding (Question No. 2883 amended) Senator Brown asked the Minister representing the Minister for Foreign Affairs, upon notice, on 6 May 2004: (1) In relation to the Government’s new policy on international volunteering, which takes a whole-of- government value for money approach, is it correct that under the new policy, $1.6 million will be withheld from Australian Volunteers International. (2) Will these funds be spent on any other aspect of overseas aid and/or international volunteers. Senator Hill—The Minister for Foreign Affairs has provided the following answer to the honourable senator’s question: (1) Australian Volunteers International (AVI) is allocated funds from the Government on an annual basis. No funds have been “withheld”. In 2003-2004 AVI was allocated $10 million. This represents a reduction of $1.6 million from funding provided in 2002-2003 and reflects a critical audit and financial systems assessment of AVI and the outcomes of an accreditation review of volunteer sending organisations. AVI has received a total of $32.74 million between 2001-2002 and 2003-2004 under the Government’s volunteer program. (2) See above. No funds have been withheld from AVI.

QUESTIONS ON NOTICE