Mr SERCOMBE(9.29 p.m.) —I propose to keep my remarks pretty short on the Financial Transaction Reports Amendment Bill 1996. In 1995, AUSTRAC received a report from a consultant, John Walker, in which he made estimates of the extent of money laundering in and through Australia. Frankly, the extent of the problem is mind-boggling to most people. The estimates that Walker gave ranged from $1 billion to $4.5 billion, with $3.5 billion in criminal profit generated in and laundered through Australia every year being his best estimate. Internationally, the proceeds of money laundering are estimated at somewhere between $500 billion to $1,100 billion per annum, with some estimates upwards of $US4 trillion. The great bulk of laundered funds is derived from the proceeds of the drug trade, arms smuggling, terrorism, tax evasion and the like. So we are dealing with a problem of very considerable significance.

I think the issues that are before the parliament at the moment are likely to be revisited with increasing regularity, not only given the size of the issues that we are dealing with but also the extent to which we are experiencing a change in the world in which commerce occurs. The Attorney-General (Mr Williams) has before him at the present time a report prepared by a group called the electronic commerce task force for the Commonwealth Law Enforcement Board. This report makes it very clear that the world in which commercial transactions, including criminal commercial transactions, are occurring is changing rapidly and increasing in sophistication. The application of telecommunications, information technology and encryption technology to money laundering and other aspects of criminal behaviour is going to mean that the issues around financial transactions and the way in which Australia of necessity, in collaboration with other jurisdictions, addresses these problems is going to increasingly exercise this parliament.

I will just read a portion of the second reading speech of the Financial Transaction Reports Bill which was given in 1987 by the then Attorney-General, Mr Bowen, because, despite the changes I have referred to, it still underlines the continuing importance of these matters. Mr Bowen said:

This bill represents one of the most significant initiatives to counter the underground cash economy, tax evasion and money laundering. It is notorious that the underground cash economy provides great scope for tax evasion, both domestically and internationally. It is clear that traditional investigative techniques have been ineffective in identifying financiers of major crime, because of the ease with which such persons are able to distance themselves from the actual criminal conduct. However, experience both in Australia and overseas has shown that the financiers are more closely associated with the profits of crime. That experience also shows that cash is an important part of financing criminal activity.

Ten years later those observations are just as true now as they were then but in a more complex, more sophisticated environment, which leads me to the observations I made before about the fact that I think this particular area is one that we are going to have to revisit with increasing frequency.

I do not intend to go through many aspects of the bill in any detail because of time and my desire to wrap up quickly. My colleague the honourable member for Banks (Mr Melham) dealt with the most controversial aspect of the legislation, and that is that the bill picks up—against the recommendation of the Senate Standing Committee on Legal and Constitutional Affairs—some proposals in relation to the accountability of solicitors under AUSTRAC and financial transactions legislation generally. I think that is a very serious step, given the importance of legal privilege and a whole range of other matters in the client-legal adviser relationship, for this parliament to be taking. On balance, the parliament is coming down in support of taking those steps. But it seems to me that that is a matter that ought to be kept under rigorous and continual review, probably by an appropriate committee of the parliament, to ensure that the intentions are being met adequately.

Another aspect of the bill that does cause me a little concern is the possibility of a creep, as it were, of AUSTRAC coverage that may arise from the provisions of the bill to improve the access to AUSTRAC data from state organisations. The submission from the Victorian State Revenue Office to the Senate committee, which forms the basis of the proposals in this legislation to extend its coverage to state revenue offices, makes it clear that the states did derive considerable benefit from their participation in 1991 in investigations of evasion of tobacco licences. It is on the basis of the success of that operation that the states have put forward a proposition, which has been accepted, that their revenue authorities gain access to AUSTRAC data. That is also a matter that will require very careful and continuing monitoring, given that the decision has now been taken.

It seems to me that the pressures may well increase for further creeping of access to AUSTRAC data. I refer, for example, to the section of the Senate report which deals with the question of whether the Department of Social Security ought to be given access to the data. I will just read one sentence from the report:

The Committee stresses that AUSTRAC was established to respond to major crime, not lesser breaches of the law such as more minor breaches of the Social Security Act.

It goes on and talks about the difficulties of illegal disclosure of social security information and the like. It is a very serious matter to provide the sort of data that AUSTRAC has, and any expansion of its coverage ought to be subject to very careful consideration. Frankly, it ought to be, as I said before, under continual review. It would be helpful to have some assurances from the Attorney-General that in fact he is cognisant of that and intends to institute some sorts of processes whereby that review occurs.

The final thing I want to say very briefly is that there are a number of other recommendations in the Senate committee report that have not been picked up in this legislation, and it would be helpful to get an understanding from the Attorney-General as to why.

Recommendation 5, for example, is along the following lines:

The Committee recommends that the present account opening requirements of the FTR Act should no longer be a mandatory minimal procedure.

In other words, the committee recommended somewhat simpler processes there, and it does not appear the government is picking that up.

Recommendation 7 says:

The Committee recommends that the FTR Act be amended so that the ATO no longer has a right of access but has access on the same basis as law enforcement agencies.

Once again, it is not picked up in the legislation, and it would be helpful to know why.

Recommendation 8 recommends that a civil liberties representative be appointed to the ministerial advisory committee on the act—a recommendation not picked up.

Recommendation 9 is:

The Committee recommends that the advice of a Privacy Commissioner be sought by the Director of AUSTRAC whether to appoint a civil liberties representative . . . or establish a separate advisory committee . . .

This was not picked up. It would be useful to know why.

Recommendation 17 is:

The Committee considers there should not be strict liability under section 31. It should be required that the prosecution establish—

I am sorry, I think this one may have been picked up, so I will move on. The point remains that there are a number of aspects of the Senate committee report that have not been picked up in this legislation with no explanation, and it would be helpful to have that explanation.