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Tuesday, 24 February 1987
Page: 576

Mr SPENDER —Can the Attorney-General verify that the National Companies and Securities Commission is not prosecuting a $13m corporate fraud case because it cannot afford the cost of investigation, and that this case is a relatively small one compared with others involving amounts probably in the tens of millions of dollars which will not be prosecuted because of lack of resources? Will the Attorney-General tell us how many tens of millions of dollars are involved in those cases and what action has been taken to ensure that these cases are promptly and rigorously investigated?

Mr Kent —Madam Speaker, I take a point of order. Would you agree with me that the question is somewhat lengthy?

Madam SPEAKER —The honourable member will resume his seat.

Mr SPENDER —Good try. I repeat: Will the Attorney-General tell us how many tens of millions of dollars are involved in these cases, what action he has taken to ensure that these cases are promptly and rigorously investigated, and what body is to conduct the investigations? Can the Attorney-General explain how this scandalous state of affairs stacks up against the Government's protestations about its plans to combat organised and white collar crime?

Mr LIONEL BOWEN —The honourable gentleman's question is based on a newspaper report that there was a $13m fraud which the NCSC was unable to prosecute overseas because of lack of resources. I had inquiries made as to whether that is the true position. I am advised that that is not the position. I understand that there was a suggestion of fraud and a prosecution was commenced in Queensland and was successfully prosecuted in that State. Accordingly, the NCSC advised that no Australian shareholder was disadvantaged. It went on to say that there may have been matters that it would have liked to investigate overseas.

Mr Spender —Involving tens of millions of dollars.

Mr LIONEL BOWEN —No. On that basis-it was made very clear-the NCSC was asked whether it wanted to avail itself of any other resources, particularly in the States, for example, in which there are many resources available for investigation. It was indicated that it did not wish so to do. The thrust of the honourable gentleman's question ought to be answered in this context--

Mr Spender —What about the United States matter?

Mr LIONEL BOWEN —The evidence given to us related only to that matter. If there are other matters which the honourable gentleman thinks might be the subject of investigation, we have not heard about them. The point I want to make is this: It is wrong for the NCSC, through some unknown spokesman, to create a climate in the media to the effect that it is unable to prosecute fraudulent practices or insider trading. Let us make it very clear that the resources that are available to the State corporate affairs commissions would also be available to the NCSC. Those resources amount to about $137m gross and $75m net. There are 1,400 people employed in the State corporate affairs commissions and they have over 300 investigators. One cannot understand why the NCSC was not able, if it wanted, to ask some of the States whether they could not make some of those resources available. No such request has been made.

Mr Spender —Is anybody doing anything?

Madam SPEAKER —I suggest to the honourable member for North Sydney that the Chair does not intend to put up with his ceaseless interjections. I warn him that if he continues, I will deal with him.

Mr LIONEL BOWEN —What must be said to the honourable member is that the NCSC has not asked for any definite further increases in its resources. There was a request by us to explain what resources it might need and why it could not use existing resources. At this stage, no answer has been given. There will be a meeting of the Ministerial Council for Companies and Securities on 6 March. I tell the honourable member that it will be very forcefully put to the members of the NCSC that the members of the Ministerial Council, which picks up all of the States, would be very anxious to learn whether there has been a failure to prosecute any suggestion of malpractice, fraud or insider trading, because we would want those prosecuted to the full. We cannot understand why the extensive resources available to the NCSC are not being utilised, if that is the position; but we have no evidence of it.

The thrust of the original question was: What happened to the $13m fraud? I have given an answer to that question. If there is a suggestion of other fraud, or other insider trading, we would like to know about it. If this has occurred because of failure to provide resources, we have not yet heard about it to that extent. The National Companies and Securities Commission Act 1978, which set up the Commission, makes it very clear that this is a co-operative effort between the Commonwealth and States. The NCSC has full entitlement to use State resources. If that is the case, we want to know why it has not done so in the past. Those resources are available now and, from the point of view of the business community, there is a $75m profit going to the States at present from filing and other fees.