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Tuesday, 27 February 2018
Page: 2130

Dr LEIGH (Fenner) (19:00): Today we are debating two bills that, at least in terms of intent, are uncontroversial. Labor will support schedule 1 of the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017 and the ASIC Supervisory Cost Recovery Levy Amendment Bill 2017 without hesitation. Labor remains concerned about the manner in which indigeneity is defined in schedule 2 of the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017, and I will address that matter in due course.

Turning first to the ASIC measures, schedule 1 of the Treasury Laws Amendment (2017 Measures No. 5) Bill makes amendments to the Corporations Act 2001 to strengthen protections against manipulation of financial benchmarks. It will make manipulation of all financial benchmarks used in Australia a specific criminal offence and subject to civil penalties. Individuals will be liable to fines up to the greater of three times the benefit they gained or 4,500 penalty units, currently $945,000. Body corporates will be liable to fines up to the greater of 45,000 penalty units—$9.45 million in current terms—three times any benefits from the manipulation or 10 per cent of the entity's turnover in the previous year. Civil penalties will also apply. Currently manipulation of financial benchmarks is enforced using existing laws relating to market manipulation, false trading and market rigging.

Second, these measures will also establish a new licensing regime requiring administrators of certain designated significant financial benchmarks to obtain a new 'benchmark administrator licence' from the Australian Securities and Investments Commission. Administration of financial benchmarks, at present, does not require a licence and is not a regulated activity under current law. ASIC will have the power to designate significant financial benchmarks with the consent of the minister. Financial benchmarks can be so designated if the benchmark is systematically important, could cause instability or would materially impact Australian investors if the availability or integrity of the benchmark were disrupted.

Third, the bill will give ASIC powers to make rules imposing a regulatory framework for licensed benchmark administrators and related matters. This framework will reflect a set of principles released by the International Organization of Securities Commissions. This bill will give ASIC the power to compel market participants to make submissions to ensure the continued generation of financial benchmarks during times of financial market stress. This is naturally a power of last resort. The ASIC Supervisory Cost Recovery Levy Amendment Bill 2017 supports this regime by adding benchmark administrator licensees to the list of entities from which ASIC may recover its regulatory costs under the ASIC supervisory costs recovery levy. Labor supports these measures, as they strengthen our laws against the manipulation of financial benchmarks.

We've seen cases of manipulation of financial benchmarks around the world. In Australia, legal action against Westpac, NAB and ANZ regarding alleged manipulation of the bank bill swap rate is ongoing. As ASIC has noted, the manipulation of the bank bill swap rate is not a victimless act. There are winners and losers. Just as insider trading harms certain market participants, so too does manipulation of the bank bill swap rate. It impacts financial products used by many Australian businesses to manage their financial affairs, and it undermines the confidence that investors have in the market itself. Manipulation of rates causes other market participants to pull out, just as insider trading decreases the trading volume. We support these measures.

I turn now to the Productivity Commission reforms. Schedule 2 of the Treasury Laws Amendment (2017 Measures No. 5) Bill provides for the appointment of a commissioner with extensive skills and experience in dealing with policies and programs that have an impact on Indigenous persons and experience in dealing with one or more communities of Indigenous persons. The new law increases the number of commissioners, not including the chair, from 11 to 12.

In his Closing the Gap statement to parliament on Valentine's Day of this year, the Prime Minister announced a new role for the commission in Indigenous policy evaluation and the expansion of the commission to include a new commissioner to oversee this work. According to the explanatory memorandum:

A number of high profile reports have highlighted the need for more evaluation of policies and programs that have an impact on Indigenous persons, including the Commission’s Overcoming Indigenous Disadvantage Report 2016. This report included case studies of programs that are making a difference as 'things that work', but the report found that only a relatively small number have been rigorously evaluated. There is a pressing need for further evaluation to better understand which policies and programs are effective in improving outcomes for Indigenous persons.

Labor share this concern. We are worried that the quality of evaluation has not been as high as it should have been. Improving the evidence base in Australia is absolutely critical, and there is no area in which that is more vital than Indigenous policy. The Productivity Commission has been at the forefront of making this argument. To the extent that we can increase the quality of evaluation, perhaps even implement a greater number of randomised policy trials in this field, that would be a very good thing. Labor support the inclusion of a Productivity Commissioner with expertise and remit to policy matters relating to Aboriginal and Torres Strait Islander people. So that goal enjoys bipartisan support.

But there is a significant issue that concerns us. That goes to the definition of 'Indigenous person' in this bill. In the bill the definition of 'Indigenous person' is an old-fashioned one. It is based on race and descent rather than the standard updated definition which uses a three-part notion—descent, identification and acceptance in the community. According to the Australian Bureau of Statistics and the Australian Law Reform Commission, among others, the most widely adopted definition of Aboriginal and Torres Strait Islander, what they call the 'Commonwealth working definition', is:

… Aboriginal or Torres Strait Islander is a person of Aboriginal or Torres Strait Islander descent, who identifies as being of Aboriginal or Torres Strait Islander origin and who is accepted as such by the community with which the person associates …

In practice, the 'descent, identification and acceptance' definition is the one used by Commonwealth departments. I referred to it as the modern definition. But what I call this modern definition echoes Justice Gerard Brennan's words from the 1992 Mabo judgement which noted Indigeneity as being a combination of:

… biological descent from the indigenous people and … mutual recognition of a particular person’s membership by that person and by the elders or other persons enjoying traditional authority among those people.

So this modern definition has at least a quarter-century of jurisprudence behind it. This three-part definition was also used by the former Aboriginal and Torres Strait Islander Commission to determine eligibility to vote and stand in ATSIC regional and national councils. When various elections were challenged, this three-part definition—this updated, modern definition, known these days as the Commonwealth working definition—was tested a number of times in the courts. So it is not as though the three-part definition has not been before the courts in the past.

Labor argued in a Senate Select Committee on Strengthening Multiculturalism report that it was necessary to move away from race based terminology in legislation and policy. I want to read to the House the Labor senators' comments in the Senate multiculturalism report:

1.1 The question of 'race' as a 'concept' and 'term' is used widely in parliamentary language, legislation and in the construction of entities with 'race' as part of their nomenclature. The issue of 'race' is a concern to Labor.

1.2 The use of the term 'race' has the capacity to reinforce negative perceptions of others from different cultures. This matter ought to be seriously considered by us and we ought to consider ways by which the leadership of the parliament could begin to change attitudes around the use of the term race in our multicultural society.

1.3 The Australian Labor Party notes that, in the 2012 Final Report of the Expert Panel on Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution, the Expert Panel proposed the removal of s. 51(26) and s. 25 of the Australian Constitution because of their reliance upon 'race' as an 18th Century concept, and the embedded racist thinking that governs their construction.

1.4 Race is used in other applications and has been the basis or cause of much discrimination in Australia as a consequence. The constitutional changes recommended by the previous Expert Panel … have not been proceeded with so the Australian Constitution remains racist.

It is indeed true that the existing definition, the one that the government brings forward in the bill today, has been used in legislation in the past. It is indeed true, as the government has put to us, that it is part of Commonwealth legislative drafting guidelines. But just because it was done in the past doesn't mean it should be done in the future. As our Labor senators have noted, it is not the 18th century. It's time to demonstrate leadership on how Australia can change attitudes around the use of the term 'race'. It is time to use an updated, modern definition to include the Commonwealth working definition of Aboriginal and Torres Strait Islander in this bill. That is not a matter of semantics; it is a matter that is important for reconciliation. It's important for multiculturalism. It's important for egalitarianism.

I should note that, as we have sought to pursue this matter, we've done so in good faith through discussions between offices. We were hopeful that this matter could have been resolved by the government without us needing to raise it in the House. The Treasurer's office did indeed engage in good faith. We approached them shortly after this bill was introduced. We explained our concerns and we proposed an amendment which was based on the Commonwealth working definition of Aboriginal and Torres Strait Islander. So I don't want to criticise the Treasurer's office for the way in which they have dealt with this. What we have been concerned about, though, is the way in which this matter has been handled by the Prime Minister's office.

Following weeks in which Labor had not had our calls returned, we opened the Weekend Australian on 24 February to read an article clearly planted by the government quoting Senator Scullion saying that the delay in passing the bill was Labor's fault. The government wasn't returning our calls, wasn't engaging with us in good faith, but instead was simply seeking to background The Australian newspaper. But I have to say that that article in The Australian makes some interesting historical points. It quotes the words of Justice Brennan that I noted earlier. And, when detailing Senator Scullion's suggestion that a Labor amendment would require further consultation, the reporter, Stephen Fitzpatrick, wrote:

Asking an actual indigenous Australian for legislative advice? Well, there’s a ruling on that, too. In a 1998 Federal Court case on indigenous identity, Justice Ron Merkel said it was a shame the matter had been 'left by a parliament that is not representative of Aboriginal people to be determined by a court which is also not representative of Aboriginal people.' Perhaps one day, he mused, such a ruling 'might be made by independently constituted bodies or tribunals which are representative of Aboriginal people'.

It is notable that we are dealing with this issue, with these problems, and with the way in which the Prime Minister's office has handled this issue at the very same time that the government is failing to listen to and embrace the Statement from the Heart at Uluru. As the Opposition Leader said in response to the Closing the gap report:

This has to include a meaningful say for the First Australians in the decisions that affect their lives—a Voice to parliament.

Labor will legislate one should we win government. The Prime Minister has ruled the voice out.

And it appears that the Prime Minister is also reluctant to accept Labor's amendments to move away from an old-fashioned definition of Indigenous people in our bill. Labor has consulted on this issue. We have the benefit of three Indigenous members of the Labor caucus. Labor's Aboriginal and Torres Strait Islander caucus was attuned to the issue. We have sought expert advice. We are not going out on a limb here.

The use of our proposed definition is not even unprecedented in legislation in Australia. Commonwealth legislation has indeed used the standard, old-fashioned, outmoded definition, but in the New South Wales Aboriginal Land Rights Act 1983 the definition is:

Aboriginal person means a person who:

(a) is a member of the Aboriginal race of Australia, and

(b) identifies as an Aboriginal person, and

(c) is accepted by the Aboriginal community as an Aboriginal person.

The Commonwealth working definition, the three-part definition, finds existence in New South Wales law but not, ironically, in Commonwealth law. The government claims that moving to the new, modern, three-part definition—putting the Commonwealth working definition in statute—might cause constitutional problems. Those experts we have consulted say this is a claim which is shaky at best. The three-part definition was upheld by the High Court as giving meaning to the expression 'aboriginal race', formerly within section 51(xxvi) of the Constitution, by Justice Deane in Commonwealth v Tasmania 1983. If there were a constitutional concern, it surely would have been tested by now.

Constitutional lawyer Professor Megan Davis has been commenting on the matter publicly over the last week. Indeed, she did so in response to the story in The Australian. Professor Davis's concerns are about the use of the two-part race based definition in the legislation and how such race based definitions deny Indigenous communities sovereignty over their identity. Her comments do not go to the issue of a constitutional challenge.

Labor will facilitate passage of the bills in the House. As I have noted before, they are, in their broad substance, issues which we support on this side. But in the Senate we will proceed with our detailed amendment to the definition of 'Aboriginal and Torres Strait Islander person'. We trust that the government will return our calls and engage with us in good faith, not choose to play games on this sensitive and important issue, instead, recognise the desire of many in the Indigenous community to use an updated, modern definition of indigeneity, move away from race based language and use the Commonwealth working definition—the descent, identification and acceptance definition—in this bill. It ought not be a bridge too far. It is time to update the way in which we define indigeneity in Commonwealth legislation. This bill is the right place to start. I urge the government to get on board, to do the right thing and to engage with decency and good faith, as Labor has done.