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Wednesday, 6 July 2011
Page: 7833


Mr ANDREWS (Menzies) (18:03): Australia has a generous social welfare system. When people find themselves in necessitous circumstances whether by way of unemployment or disability, or some other affliction in their lives, then the commitment of the Australian people shared across the aisle of politics is that we provide them with welfare. That has been done for many decades in Australia and, by any internat­ional standards, the provision of that welfare in this country is most generous.

That welfare, of course, does not come out of nowhere. It comes from the taxes which are contributed by other Australians to ensuring the common good of all people in this country. I say that because there is a concomitant responsibility or duty on the part of people who are in receipt of welfare, and part of that duty is to be truthful and frank about their financial circumstances. If, for example, a person's financial circum­stances change and they are in receipt of more income than they were at the time that they received their welfare or they become the owner of some asset, they have the responsibility to inform the social security authorities through Centrelink of those changed circumstances so that a reassess­ment of their situation can be made consistent with providing welfare to them and consistent with the broader objective of meeting the common good of all Australians.

That is why the social security legislation contains provisions that require a person whose circumstances have changed finan­cially to notify the department or notify Centrelink about those changes. This is something which is commonly understood and known throughout the Australian population. Indeed, if a person was unaware of that and they are in receipt of welfare, they are regularly reminded of that comm­itment, that obligation, in letters that they receive in regard to their particular payment from the government.

This bill arises because of a difficulty, which has come to light, in relation to people who have defrauded the Commonwealth. Defrauding the Commonwealth might sound like the defrauding of some remote institution, but the reality is that defrauding the Commonwealth is defrauding all Austra­lians, because all Australians who are taxpayers make contributions to the funds which enable these payments of welfare to be made.

It was assumed, as the minister has pointed out, for quite a number of years after the implementation of the Criminal Code in this area that a prosecution brought pursuant to the Criminal Code met all the legal requirements. However, in a case in the South Australian jurisdiction that ultimately ended up in the full court of the Supreme Court of South Australia—the case of Poniatowska—it was decided in a majority decision that one of the elements was missing, namely, that the legislation did not define a duty by way of an omission, and therefore, on technical grounds, what were thought to be proper and appropriate and lawful prosecutions that had been brought over a number of years are in danger of being overturned. Indeed, if that was the last say on that case in those particular circumstances, the prosecution would have been overturned. The minister said that this is a matter currently before the High Court and we are waiting for the High Court to pass judgment.

It could be argued that the parliament should wait for the High Court to hand down its judgment. That is a principle which I think in most cases we would subscribe to, because until the High Court does hand down that judgment there is still some uncertainty or some final determination to be made by the judicial officers of this land. However, the danger in this case is that, if we do wait, there are potentially thousands of cases that could be overturned, and not only overturned by people seeking to quash those convictions but potentially compen­sation claims made against the Common­wealth.

The principle of retrospectivity, which has been mentioned in this debate, is an important one. Nobody in a legislative mode approaches retrospectivity lightly. As a general proposition, we do not wish to say that something which was regarded as lawful in the past is now unlawful and to go back to those past events. It is one thing to do it prospectively but it is another thing entirely to do it retrospectively. So it is appropriate that concerns about retrospectivity be raised in relation to this case. However, there is a difference here. We are not creating an offence anew. People have been charged with offences and they have been convicted of welfare fraud. Nobody will be affected or captured by this legislation who had not already been caught and penalised before. In fact, if the legislation does not pass and the High Court upholds the majority finding in the South Australian Supreme Court, the prospect is that many people who had been convicted of offences before may be able to seek to have those convictions quashed and be paid compensation.

I say this is different because it is quite clear on the face of the social security legislation that there is that obligation to inform Centrelink, the social security authorities, of a change of circumstances. Whilst one may argue about the technic­alities of the law, this is a case where we ought to go back to what the law is based on. The law is based on a moral or ethical principle which I was seeking to describe at the outset. Yes, we are generous in terms of welfare, but a person in receipt of welfare has to be honest and frank about their particular financial circumstances.

It would not be justice for society generally and the community, and it certainly would not be justice for the taxpayers whose taxes contribute to welfare payments, if a situation were to arise where, because of the technical interaction between the Criminal Code and the social security legislation, for what had been regarded properly as welfare fraud offences were overturned. Whatever one argues about the legal technicalities of this case—being a lawyer myself, one can always find a legal argument to advance, and I am not convinced that this is retrospectivity as we normally understand it—even if one does not agree with me, I think there is in this case a broader moral or ethical principle that this parliament should seek to uphold. It is for that reason we on this side of the chamber will not be opposing this legislation that the government has brought forward.

I will refer to some cases, because we are talking in many instances not about some mere trifle where somebody had overlooked the fact that they had mown the lawns a couple of times for neighbours and been paid $20, $30 or $50 for that but about very substantial fraud against the taxpayer, against the Commonwealth, in many cases. Let me just give the chamber some examples. These are drawn from the annual reports of the Commonwealth Director of Public Prosecutions. One is that over a period of more than 10 years a person failed to notify Centrelink that they had worked and earned income while in receipt of Centrelink benefits. As a result, the person obtained social security payments to which they were not entitled of over $100,000. The person was charged pursuant to the Criminal Code, convicted and sentenced to imprisonment.

Another case was that of a person with power of attorney over a parent's financial affairs who failed to inform Centrelink of the parent's death and continued to receive the parent's fortnightly payments for around 10 years. The person defrauded the Common­wealth of over $80,000. Again, there was a prosecution, a conviction and a sentence of imprisonment.

The third case is one where, over two separate periods totalling eight years, a person claimed parenting payment (single) while living with a partner. The person neglected to inform Centrelink when the couple had reconciled and, in relation to a separate period, falsely claimed that the couple had separated. The person received over $80,000 in social security payments to which they were not entitled. In this case they were charged under the Criminal Code, convicted and released on condition that they be of good behaviour for a specified period.

I will give the House one more example. Over almost seven years, a person received over $70,000 in social security payments to which they were not entitled through failing to inform Centrelink of their earnings from full-time employment. The fraud was discovered as a result of a data-matching exercise between Centrelink and the Aust­ralian Taxation Office. Again, this person was prosecuted, convicted and sentenced to a period of imprisonment. I do not believe that any reasonable Australian would regard a circumstance where, because of what is largely a legal technicality, people who had been convicted in those circumstances would have the possibility opened up to them to quash those convictions and, more than that, possibly even claim compensation from the Commonwealth. To use a colloquial expres­sion, it fails the front pub test. It fails the common-sense test of ordinary Australians. That common-sense test is based on this notion that, yes, we are generous, but there is a concomitant duty or responsibility to those who are generous in relation to these payments. It is on the basis of that principle that we will not be opposing this legislation.