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Wednesday, 18 March 1987
Page: 1054


Dr BLEWETT (Minister for Health)(4.26) —I move:

That the Bill be now read a second time.

On 10 December last year, the Federal Opposition and the Australian Democrats forged a brief unholy alliance based on quite contradictory principles and rejected the Australia Card Bill 1986. One part of this unholy alliance wanted simply a different identification system from the Australia Card, the other part no identification system whatever. The Bill was defeated in the face of overwhelming evidence that the Australia Card program is the single most effective weapon available to government to combat tax evasion and welfare fraud.

But more than being a deliberate move by both the Opposition and the Democrats to thwart the Government's democratically-earned right to govern fairly and effectively, the rejection of the Australia Card Bill was a defeat for all honest Australians. Over the past two years, in which a very lively and open public debate has ensued, and with much of the contribution from the Australia Card's critics being irrational and misleading, support for the program within the Australian community has remained strong. This is because honest Australians have become increasingly aware that the Australia Card program will protect their rights against those who are currently involved in tax cheating and welfare fraud. Honest Australians realise that the Australia Card will ensure that they no longer have to subsidise the cheats within our society. By again rejecting what in the Australia Card would be a highly secure but very basic identification system, the Opposition will be demonstrating once again that it has no commitment to ensuring fairness in our taxation system, and that it has no answers to the problems of fraud in our welfare system.

This Government believes that the people of this country have a fundamental right to expect that their elected representatives protect them from those who are operating dishonestly within the tax and welfare systems. They have a right to expect that the Government ensures as best it can that all contribute their fair share of tax. They have a right to expect that welfare benefits are paid only to those who are truly entitled to those benefits. They have a right to expect that immigrants to this country who are operating within our system are here legally. Finally, and very importantly, they have a right to expect that, in going about achieving these fundamental goals, governments do everything within their power to safeguard the rights to privacy and civil liberties of the individual. It is because the Government is convinced, as is the majority of the population, that the Australia Card program will significantly achieve and enhance all of these rights that I am today reintroducing the Australia Card Bill 1986.

I do not intend to dwell on the details of the Bill today, as this was done on its first introduction in my second reading speech of 22 October 1986. The Opposition's response throughout the debate which followed could most kindly be described as trivial and shallow, perhaps best typified by the honourable member for Flinders (Mr Reith), who offered a $100 reward to the first person to forge an Australia Card. This Opposition's overriding aim throughout that debate was to generate a fear and loathing campaign against the Australia Card through a mixture of misrepresentation, exaggeration, distortion, and scaremongering in an attempt to undermine public support for the program. That this contemptible campaign failed, and that the Opposition underestimated the intelligence and common sense of the Australian people, has been demonstrated by the minimal impact that its campaign has had. For even a cursory examination of Opposition arguments against the Australia Card exposes their shallowness, and it is now the Opposition which must explain to the public why its political opportunism has come before the rights and needs of the honest people of Australia, and why in its quest for power it is prepared to allow tax evasion and welfare fraud to go unabated.

The truth is that this Opposition has no policies on how to combat effectively these two major problems confronting Australian society today. Yet by blocking the Australia Card, which-until political opportunism became the catchcry-even front bench Opposition members had agreed would be effective against tax and welfare cheating, the Opposition is writing off a conservative $880m a year in lost revenue. Indeed, for every day which the Australia Card is delayed, an additional $2.5m will be lost to tax evaders and welfare defrauders-money which could have been spent on honest taxpayers and needy welfare recipients.

That the Australia Card would produce savings of this magnitude cannot be seriously challenged. The most conservative estimate put forward by the Australian Taxation Office of revenue gains in the tax area alone under the Australia Card program is $724m a year once the program is fully operational. Even the Joint Select Committee on an Australia Card, the membership of which included those masters of the backward somersault-the performing seals of the coalition circus-the honourable member for Barker (Mr Porter) and the honourable member for Richmond (Mr Blunt), considered that the estimates of savings were extremely low and could be more than double that amount.

In the area of social security fraud, the Government has not stated that there will be no savings, but rather that it is difficult to quantify the extent of welfare fraud and, therefore, the level of savings. However a number of specific large false identity cases provide a pointer to the extent of the problem. The Joint Select Committee stated:

While the Committee accepts the (Social Security) Department's difficulty in establishing the amount of social security fraud due to false identities, it believes that there is still significant fraud within this area.

I realise that honourable members opposite are likely to jump up and down and emit shrill cries about how the Department of Social Security stated that less than one per cent of identified welfare overpayments were due to false identity while 61 per cent were caused by understatement of income. Members of the Opposition will then attempt to draw the conclusion that the Australia Card would have no impact in this area. But they are wrong, as I shall demonstrate. They have either not read the Australia Card Bill, have not understood it, or choose to ignore the facts about how the program will work. For the benefit of honourable members opposite, I will attempt to explain it as simply as possible.

The Australia Card program will provide the Australian Taxation Office with a highly secure means of linking all sources of income-whether from employment, investment, or welfare payments-to the one identity. Such linkage has been the aim of past governments but is extremely difficult because of the lack of a unique identifier. The Australia Card number provides this unique identifier. Such a system of linkage through the use of a unique identification numbering system was recommended by all members of the Joint Select Committee on an Australia Card, although the Committee split on whether the existing tax file number identification system should be extended and upgraded, or whether a new identification system using Australia Card numbers should be introduced. Thus all agreed on the need for an identification system for tax and welfare purposes, although there was dis- agreement on how best this could be achieved. The Government's reasons for opting for the Australia Card program were outlined in my speech in reply to the Joint Select Committee in this place on 6 June 1986 and in my second reading speech of 22 October 1986. Likewise, the Opposition has been fond of quoting the all-party report, `A Taxing Problem', by the Standing Committee on Expenditure, as some sort of criticism of this Government. In fact that Committee, chaired by the honourable member for Sturt (Mr Wilson), recommended:

With or without the adoption of the Australia Card the Australian Taxation Office take the necessary steps to establish a high integrity identification system which would ensure maximum taxpayer compliance.

The reason for these conclusions, and for the Government's decision to move in this direction through implementation of the Australia Card program, is simple. Because the use of a single, highly secure number for each person for identification purposes will facilitate Tax Office attempts to draw together all sources of an individual's income, it will, therefore, help ensure that the fair and correct amount of taxation is paid. As this linkage will uncover those situations where understatement of income has resulted in inappropriate payment or overpayment of social security benefits, then the Australia Card will be extremely effective in enabling the Department of Social Security to rectify this problem. Additionally, because the Australia Card will be highly secure and virtually forgery-proof, false identities currently within the system and used for tax evasion and welfare fraud purposes will be weeded out, while it will be far more difficult in future to create new false identities.

Perhaps the most common fallacy perpetuated by the Opposition is that the Australia Card is a major infringement of individual privacy and civil rights because it is in some way something more extensive and sinister than a basic identification system. The Opposition has even gone so far as to claim that introduction of the Australia Card program is tantamount to the introduction of a dossier surveillance system. Leaving aside this Opposition's sudden and questionable conversion to civil libertarianism, this totally ignores the limited and specific compass of the Australia Card program. In fact, the Australia Card will do nothing more than provide a highly reliable and secure means of identification in situations where people are already required to provide proof of identity. The Australia Card will be used in relation to employment; investment, for example interest payments from financial institutions, and income from share and property transactions; and payment of welfare benefits. For convenience, it will also replace the Medicare card.

In all of these cases a person is already required to provide personal identification information-more information than will appear on the Australia Card, and in general roughly equivalent to what will appear on the Australia Card Register. In most of those cases, proof of that identity is already required; this requirement for proof of identity is increasing; and it will increase further even without the Australia Card. In fact, the Australia Card would streamline the present process.

The only additional information which this legislation in itself makes it necessary to record and report to the Australian Taxation Office is the Australia Card number. Thus when an employer or a financial institution provides details to the Tax Office on an employee or client, as well as the personal information currently required, such as name, address, and levels of income, it will be the Australia Card number. This could hardly be termed much of an imposition.

As well, in nearly all instances a person's Australia Card will need to be produced and the number recorded only once: When first opening an account with a financial institution, stock broker, or produce agent, or initially on obtaining employment. The major exception to this is Medicare, where just as now the Medicare card is used whenever a claim is made, the Australia Card will take its place. Indeed, as most people do not change jobs frequently, and do not regularly open new financial accounts, the overwhelming majority of Australians will find that the most common use of the Australia Card will be for the claiming of Medicare benefits.

As can be seen from this brief outline of how the Australia Card will work, it is clear that the Government proposal is for a very basic, albeit highly secure, identification system, and Opposition propaganda to the contrary is shallow and unconvincing. The Australia Card and the associated Register will contain only basic identification material-information which is already held on records throughout both the public and private sectors. The Australia Card itself will have on it only the given names and surname of the person; an Australia Card number; the expiry date of the card; a photograph of the person; and a signature. No other identifying information will be contained on the Card.

Where the Opposition has been unable to paint the Australia Card itself as being in any way iniquitous, a great deal of nonsense has been uttered about the associated Australia Card Register. Despite Opposition claims to the contrary, all that will be on the Australia Card Register is simple identification information.

The Australia Card Register will contain nothing other than basic identifying data such as surname and given names, date of birth, sex, residential and postal adresses, changes of address, any other name by which the person is entitled to be known and wishes to use, and other limited basic identifying information as listed in Schedule 1 of the Bill. The Register will also contain administrative details necessary to assist the authority in its management of the program, such as where and when cards were issued, details of any replacement cards, details of amendments made to information held on the Register, where and when the changes were made, and by whom.

There will most certainly be no central register of personal, non-identifying information such as medical history, credit history, marital status, religious beliefs, education, employment history, income, or voting intentions. For example, although Medicare would use the Australia Card number, the Tax Office and Social Security Department would not have access to Medicare records, just as they are denied access now. There will be no, I repeat, no dossier gathering.

Let me remind the House that no private agency has access to the Register. For example, while an employer or financial institution may ask to see and record the number of a person's Australia Card, they will have no access to the Register. As is set out in Part V of the Bill, access to the Register will be limited to the user agencies-the Australian Taxation Office, the Department of Social Security, and the Health Insurance Commission-with even that access limited to the verification of identity for the purposes of carrying out their specified functions.

To give further personal re-assurance, every access and every attempted access by each department, agency and individual will be logged and recorded on the Register. All individuals will have access to the information about them which is held on the Register, including information as to who looked at their file and why. Persons have that right of access to their own file at all times. A person can ask for information on the Register to be amended, and if the request is refused can ask for a review by the Data Protection Agency-a special body created under the legislation to ensure that individual privacy is not abused.

As I explained to the House last October, the Data Protection Agency will be an independent watchdog body which will review, establish, and maintain guidelines for the operation of the Australia Card program and provide individuals with a fast and efficient appeals mechanism in the event of complaints of a breach of those guidelines. The DPA will also be the complaint-handling authority for the privacy legislation. Those safeguards will be the most broad-ranging and effective ever seen in this country. With this range of protections, I believe the Australia Card achieves the necessary balance between the protection of individual privacy and the protection of the community from exploitation by the dishonest.

Another claim made by the Opposition during the debate last year was that the Australia Card will be used as an `internal passport'. Since that time, the honourable member for O'Connor (Mr Tuckey) has gone so far as to suggest that police will be able to confiscate motor vehicles if a driver cannot produce an Australia Card. Such flights of imagination have become the hallmark of the Opposition's contribution to this debate. The fact is that any person, be it a police officer or a Commonwealth public servant, who asks for a card for a reason not specified in the Bill would be committing an offence and could be subject to a maximum penalty of $5,000 and/or a prison term of two years. It would be quite an amazing internal passport which could put those asking for it in gaol for two years.

A variation of the `internal passport' argument is the claim that people will be required to carry Australia Cards at all times. This totally ignores the fact that the Bill specifically provides that an Australia Card does not have to be carried at all times. Some members opposite will of course continue to parrot the claim that the purposes for which the card is required are such that a person could be called upon at any time to produce it. Perhaps some supporters of the Liberal Party of Australia buy property every morning and open a new bank account or engage a new stockbroker every afternoon! The Opposition may be surprised to know that the vast majority of Australians undertake these types of financial transactions little more than a few times in a lifetime.

Additionally, Opposition speakers have claimed that people will no longer be able to conduct business by telephone, that every time they want to sell a pig or buy some shares they will have to front up to a stockbroker, marketing authority, or produce agent with their Australia Card. If honourable members read the Bill they will realise that the Government has made special provisions for people living in isolated areas, or those who suffer from impaired mobility.

Just as occurs now when people apply for a passport, the Government will allow certain groups of people who are prominent within the community to sign `certificates of identity', which can then be supplied for identification purposes through the post. After the certificate has been produced once to an agent, marketing authority, financial institution or the like and the number recorded, there will be no further need to produce the card for normal business with those bodies and customers may continue to transact all business in their preferred way, including by mail or telephone.

Some speakers also tried to exaggerate the effect of the penalties in the Australia Card Bill. The penalties were set by the Attorney-General's Department, and are directly comparable to penalties in other Commonwealth legislation, particularly the Trade Practices Act and Crimes Act. I wish to emphasise again that unintentional clerical errors attract no penalty.

Another misinterpretation of the Australia Card program by honourable members opposite is that it will have the greatest impact upon average pay as you earn income earners, leaving those persons operating in the `cash' or `black' economy untouched. This is not the case. In practice, the card will be of great assistance in detecting large amounts of income earned in the cash economy which cannot be absorbed into daily living expenses. Such funds find their way into the mainstream financial system through investments, real estate, shares, and so on. Once money is directed back into the financial system from the cash economy, account-holders can be identified by their Australia Card number, while undeclared income will be far more easily detected through tax audit trails established by the Australia Card program.

In fact, PAYE taxpayers will be among the main beneficiaries of the Australia Card program, as generally they are the least likely and least able to avoid tax. The Australia Card would help restore their confidence in the tax and welfare systems by helping to ensure that others are shouldering their fair share of tax and that hard-earned tax dollars are not being wasted on welfare cheats.

The only remaining Opposition debating point which is worth mentioning and which needs to be laid to rest is the suggestion that it has a realistic alternative to the Australia Card program. This is blatant nonsense. In the previous debate, I spent some time explaining why the Government had opted for the Australia Card ahead of the tax file identification system which was supported by all Opposition members on the Joint Select Committee on an Australia Card. While the Government's reasons were numerous and rational, they were perhaps best summed up late last year by Commissioner of Taxation Trevor Boucher when he stated:

I expect that by the time you take all the steps that need to be taken to get high integrity into, say, a tax file number, then there's the same effects, the same costs, the same privacy questions that you'd get with the Australia Card.

But amid its many somersaults, the Opposition has now abandoned the tax file option going so far as to vote against an Australian Democrats amendment in the Senate to introduce such a system. Instead, on 6 December last year the honourable member for Barker issued a Press release which claimed that an alternative proposal by the coalition would be `$2,735m more cost effective' over the first 10 years.

I am not surprised to note that, as far as I have been able to ascertain, neither the Leader of the Opposition (Mr Howard) nor the honourable member for Mackellar (Mr Carlton) has come out publicly in support of this economic stupidity, because these figures are so obviously a fantasy plucked from the air. But let us look more closely at just some of the claims made by the honourable member.

Firstly, he claimed that private sector compliance costs in that 10-year period will be $2 billion. This he based on two false assumptions: First, that costs to the public sector will be $1,000m; and, secondly, that costs to the private sector will be twice that cost. To begin with, as I advised the House last year, the estimated cost to the public sector over those first 10 years is $759m, not $1 billion. And in a letter quoted during the debate last year, the Business Regulation Review Unit stated quite clearly there was no evidence to suggest that the 2:1 ratio generally applied to government programs to determine private sector costs was applicable in the case of the Australia Card program.

One of the largest compliance costs in the private sector will be to the banks, and the Australian Bankers Association has already stated that the establishment cost of complying with the card will be around $60m, with ongoing costs of $4.6m a year. This on its own makes a mockery of the Opposition claims. The honourable member then claimed that the Opposition intended to spend $200m on `radical improvement of the administrative efficiency and upgrading the computer capacity of the Australian Taxation Office', which would result in savings of $4,471m over 10 years. Even allowing for a dramatic upgrading of computer capacity in the Australian Taxation Office, it is extremely unlikely that such benefits could be obtained.

To begin with, using the figures obtained during the Government's analysis of the tax file option-figures not disputed by the Joint Select Committee-it was estimated that expenditure of $377m, almost twice the amount proposed by the Opposition, would yield benefits of less than $2,000m over 10 years. This is nowhere near the figure of $4,471m estimated by the Opposition. As well, this ignores what is already being done by the Government in the areas of undeclared interest, and improved audit and imputation of dividends. In short, the Australia Card program is additional to the improvements already undertaken or planned in the tax and welfare systems.

The Opposition proposals do nothing about preventing the opening of financial accounts in false names nor about providing a means of linking all sources of an individual's income to that individual. In other words, they fail on the very test so often applied by this Opposition-the recommendations of the Standing Committee on Expenditure for the establishment of `a high integrity identification system which would ensure maximum taxpayer compliance'. So let us have no more of this nonsense that the Opposition has some sort of economically rational alternative. It has none. It has plucked a gaggle of figures from the air in some Peter Pan-like flight of fancy.

Let me turn finally to the question of possible improvements to the program during the long establishment lead times which it will require. The Government is committed to consultation on the program to ensure that it is implemented with minimal administrative burden and maximum civil liberty protection. On 5 February 1987 the Government indicated its willingness to consider machinery suggestions for streamlining the operation of the Australia Card program in keeping with the fundamental principles of the Bill. These suggestions related mainly to the operational side of the Bill and were designed to respond constructively to some of the criticisms voiced in earlier debates.

The response of the Opposition and of the Australian Democrats was totally and completely negative. The Democrats confirmed their intention to oppose the Bill, notwithstanding whatever improvements were made, while the honourable member for Barker stated only last week: `Regardless of its form, it will be rejected by the Senate'. So much for constructive debate. There will be many crocodile tears shed in this debate for such `lost' amendments. In the light of these comments they can be dismissed for the political cant they will be.

I would point out that the Australia Card program has long lead times-some six months from passage of the legislation to the beginning of implementation and at least 18 months before the scheme would be fully operational. Throughout that period the Government will continue to work co-operatively and constructively with all those organisations involved in the Australia Card program and will take into account their views in any final decisions on improvements to operational aspects of the program.

However, this is not a time for further delay. It is a time for decision. Early consideration of the Bill by the Parliament in its existing form is essential so that the fundamental principles in the Australia Card program can be addressed as soon as possible to resolve uncertainties about budgetary impact. I repeat that the Australia Card Bill in its present form fully embodies the principles and fundamental parameters of the Australia Card program.

The Government has to ascertain without delay whether further funds need to be allocated for the program within the immediate financial estimates of the Government. And more importantly, if the program fails to proceed, the impact needs to be addressed in the context of the Government's long term economic strategy, as rejection of the legislation will have a marked effect on Government revenues. As an example of the enormity of that effect, so far the Senate's rejection of the Bill has delayed implementation of the program by at least six months, which means that already more than $400m in revenue is destined to be lost due to that delay.

I hope that the more reflective members of the Opposition and the Democrats will take a more responsible attitude this time around to this important reform. We are offering the Opposition and the Democrats the opportunity to debate the principles of this measure. Having demonstrated that the Australia Card will work, that protections to individual privacy are comprehensive and pioneering, and that the alternatives proposed by the members of the Opposition are as lacking in substance as are their arguments against the Australia Card, I now urge them to accept that the Government has overwhelmingly established the case for this program. Once again I ask the House to give the Australia Card Bill 1986 favourable consideration. I present the explanatory memorandum.

Debate (on motion by Mr Porter) adjourned.