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Wednesday, 10 December 1986
Page: 3714

Senator NEWMAN(4.19) —I have found a common thread going through this debate. A number of honourable senators have said that when they first heard about the idea of an Australia Card they were superficially attracted to it. I remember Senator Haines said that, I know that a number of honourable senators on this side of the chamber said that, and I know that there is some division on the opposite benches even now as to whether there is real support for it. The interesting thing is that anybody who has had the benefit, as we have in this place, of studying both the legislation and the material which has been available over the last few months has been forced to the conclusion that this cannot and must not be the way to go. It is a superficially attractive idea. It is one that, until one studies the fine print, does seem as if it may be a way to cope with social security fraud; it may be a way to cope with illegal immigrants; it may be a way to cope with the cash economy; it may be a way to cope with organised crime. But, as I say, it just looks like a good idea. It is not a good idea at all.

I was very interested, a little earlier this afternoon, to hear Senator Tate, from my own State of Tasmania, talk about students at the University of Tasmania having no difficulty with a library card which identified them. I am really concerned that Senator Tate, with his background in the law and his concern, I understand, for human liberties and freedoms, could so superficially compare the Australia Card, the proposal that is before us today, with a library card which is used by university students.

Senator Peter Baume —A very bad analogy.

Senator NEWMAN —It is an extremely bad analogy. I would compare it myself more to the card index which one uses in a library to look up a subject matter or to look up material for research. When one finds one's subject matter, one is referred to where one will locate that material, and it can be a wide-ranging coverage of material. That is what the Australia Card does. It tells the Public Service and the Government where the documents on every Australian citizen are located throughout the Public Service. That is what makes it different from a bank card; that is what makes it different from a university student's library card. It is the long arm of government stretching right across all these areas of information which is the danger to us all.

People say `I have nothing to hide'. Of course they have nothing to hide; but do they want all their private arrangements and every inch of their lives available to hundreds of thousands of public servants? Do they want them, as the doctors found in New South Wales, distributed to the media? It is one thing having something to hide; it is quite another thing again to have the world knowing one's business. Honest and honourable though one may be-and I hold no brief for tax cheats, rorters and all the other things that the Government would like to suggest that we are supporting in our opposition to this card-it is a much more serious matter than that, and I believe there are other ways of dealing with the very serious problems which this country faces. I believe that this card represents the greatest attack on our privacy ever contemplated by any Australian government.

The card has been called a licence to live, but apart from the Big Brother implications, another reason for the overwhelming opposition is simply that the Australia Card will not work. It will not stop social security fraud; it will not catch up with illegal immigrants; it will not stop the operation of the cash economy; it will not combat organised crime. One has to ask: Is it really worth the 2,150 extra public servants, the cost to taxpayers of $1 billion over the next 10 years, and the estimated cost-and it can only be estimated, because the Government will not come clean on this-of $2 billion to businesses large and smaller? Is it worth the fines for failing to report the loss of the card, or for failing to demand its production when carrying out everyday transactions, or, as Senator Bolkus tells us, the fact that 100,000 public servants would have access to the computer and would have temptation before them?

I draw the Senate's attention to the paper just received from the Law Society of New South Wales, in which it refers to the Government's submission to the Joint Select Committee on an Australia Card. The Government suggested that the following departments should have access to the register: The Australian Taxation Office, the Department of Health, the Department of Social Security, the Department of Veterans' Affairs, the Department of Housing and Construction, the Australian Bureau of Statistics, the Australian Federal Police, the Australian Institute of Health, the Department of Immigration and Ethnic Affairs, the Department of Foreign Affairs, and the Department of Employment and Industrial Relations. That was not enough. The Government's submission went on to say that the Government cannot rule out categorically the possibility that at some future date additional uses may suggest themselves as being desirable or essential to meet emerging problems in the taxation and welfare or other areas. It is a Big Brother measure.

If the Australia Card recouped the millions of dollars that are lost each year through social security fraud, through the activities of illegal immigrants and through the inefficiency of the Taxation Office, perhaps it could be justified. But the benefits to be gained from the massive costs and the frightening implications of the card do not justify it at all. The Government's submission contained a cost-benefit summary which showed that over a 10-year period the revenue savings are not much greater than the cost of implementing the system in the particular departments. As I said before, they are not the only costs involved. Small business is quite clear where it stands, and I would like to quote from a telegram received by Senator Warwick Parer from the Australian Free Enterprise Foundation in Brisbane. It reads:

Dear Senator,

On behalf of the Australian Free Enterprise Foundation and its 30,000 plus members representing small business and private citizens, we wish to register the strongest possible objection to the proposed ID card named the Australian Card.

We would be pleased if this objection could be noted in the Senate by you in the strongest possible terms.

Senator Parer has already made a speech in this debate and this was received afterwards, so I am very pleased for the Australian Free Enterprise Foundation to read that into the record. There is opposition right around this country to this card.

We found that in a February 1986 poll 22 per cent of Australians said that they saw the main advantage of ID cards as reducing social security cheating. But as a number of senators have already said, the case presented by the Department of Social Security in favour of the card is extremely unconvincing. The Department told the Committee:

The overall savings likely to accrue from the new system are impossible to estimate. Savings would occur in two main ways. Firstly, there will be some deterrence from claiming pensions and benefits in false names. Only a very small percentage of social security payments is due to this cause and estimated savings would be unlikely to exceed $10m a year. Secondly, claimants for social security assistance and existing beneficiaries would be less likely to misrepresent details of their income in the knowledge that there were linkages between income and identity. The savings from this source are however impossible to estimate.

The Government's submission to the Committee reveals that there would be no net gain to the Department of Social Security from the introduction of the national identification system. What is even more interesting, I think, is that in spite of this marvellous identification system that the Government trumpets, the Department of Social Security has said that it would not accept the card alone as sufficient proof of identity anyway. So much for an extremely expensive, very intrusive piece of plastic.

Only 0.6 per cent of fraud on the Department of Social Security is estimated to involve false identity. Something that people do not always realise is that the vast majority of overpayments occur because of the failure of benefit recipients to report accurately changes in their economic circumstances, sometimes through clerical error and sometimes through unintentional misunderstanding of the conditions and provisions of payments. Sixty-one per cent of frauds on the Department are due to unreported income variations. Even if the Department were prepared to accept the card as proof of identity, it would have no impact at all on the overwhelming majority of the overpayments. Those who are working while they are claiming unemployment benefits-and that is an area which happens all too frequently-or the supporting mothers who live with their boyfriends without declaring their support will not be caught by the card. Those are some of the things that people would like to see dealt with, but they will not be caught by the Australia Card.

Ian Temby, the Director of Public Prosecutions, stated in his annual report that many serious social security fraud cases were not being investigated. They did not need a card; they needed investigation. There is clearly a need for action to be taken at departmental level, and a number of speakers have emphasised this. There has to be a more accurate check on people's actual circumstances-not their names but their circumstances. There must be a stricter enforcement of the work test. The Department of Social Security must ensure that applicants for benefits fully understand the conditions which apply to the benefits and it must take action to ensure that clerical errors are kept to an absolute minimum. Compulsory work for the dole would make is very difficult to obtain more than one dole cheque.

Turning to the area of immigration, we find that the Government's submission to the Committee claimed that one of the largest gains to revenue through the introduction of the card would be in the area of identification of illegal immigrants through the requirement to produce the card when obtaining employment. But the Department of Immigration and Ethnic Affairs, in producing its evidence to the Committee, had to admit that its estimates for the number of illegal immigrants entering Australia and the number working illegally, based on a departmental study, were nothing more than guesswork. In case anybody thinks I am exaggerating I quote from Mr McKinnon's evidence to the Committee. In pointing out that the Department's information came from a departmental study, he said:

It was done about four or five years ago. If we did the same study now we probably could not find the same crystal ball that was used then, but it is very close to that standard of accuracy, let me say quite frankly to you.

In other words, the Department was prepared to admit that it had been doing a bit of crystal ball gazing and it was not prepared to stand by the reliability of its evidence. The Department has indicated that the card is likely to do little to combat illegal immigration. From the evidence given to the Committee it is clear that the area sorely in need of attention is the administration of the Department of Immigration and Ethnic Affairs. It is interesting that the Department of Social Security, in trying to match benefit recipients with the Department of Immigration and Ethnic Affairs' list of visitors who had outstayed their visas, found that the overstayers' file was of such poor quality that it could not be matched. Overall the Committee found that the statistics kept by the Department of Immigration and Ethnic Affairs were inadequate and that its files were in an appalling state.

The ID card will not do anything to control the entry of illegal immigrants which could not be achieved more cheaply and effectively through the tightening up of entry and administrative procedures. The identification of illegal immigrants should be carried out by the entry and exit control system of the Department of Immigration and Ethnic Affairs. The present system is inadequate and therefore ineffective and there are long delays in processing. The urgently needed upgrading of the Department's computer system is apparently taking second place to the installation of the Australia Card computer, which it has been stated in the Senate Estimates Committee B report will have little effect in detecting illegal immigrants. The Department of Immigration and Ethnic Affairs has no power under this legislation to demand the production of the Card from suspected illegal immigrants. That is laughable. In fact, if an officer of that Department wanted to ask a suspected illegal immigrant to produce his or her card, the officer would be liable for a fine of $5,000 for doing so. That explains why Senator Aulich in his contribution yesterday skated very carefully over this area of immigration. He said:

The point that I make is that in illegal immigration terms the Australia Card has a deterrent effect.

I highlight the next sentence, when he said:

It will not necessarily catch people at the moment.

What emphasis should we give to that last phrase `at the moment'? It is clear to honourable senators opposite, as it is clear to me, that that simply means that stage 2 is waiting in the wings.

Senator Puplick —More on the way.

Senator NEWMAN —More on the way. The Government wants to put its foot in the door first, then get into people's lives completely. Of course, special ID cards will be issued to visitors staying more than six weeks, but there is no provision for those cards to be returned when the visitor departs. Maybe I just have a criminal mind, but I would have thought that this would be a marvellous opportunity to have a growth industry in handing on special visitors' cards. There will be a lot of those floating around overseas and maybe in Australia; easy prey for forgers and a growth industry for illegal immigrants.

The Government is clearly far from confident about the effectiveness of the card in controlling illegal immigration. The best the Government could do in its submission to the Committee was to say that this would help to ensure that illegal immigrants are excluded from the Australia Card Register and hence from possible access to Commonwealth benefits and services. Because of the existing fears of detection, many illegal immigrants-the Department estimates about half of them-escape the tax system through the black economy. It is my conviction that the Australia Card will only make this situation worse because it will drive a higher proportion of illegal immigrants into the black economy.

Let us talk about this black or cash economy, because a major loss of taxation revenue occurs through the operation of the cash economy. The value of that has been put at between 5 per cent and 15 per cent of recorded gross domestic product-that is, between $10 billion and $30 billion-by the Australian Tax Research Foundation. This issue is of tremendous relevance to this debate. Despite the Government's trumpeting about the revenue that the Australia Card will recoup, the card will have little positive effect on the cash economy; it is more likely to make the situation worse. The Australia Card will be required to be produced only for written transactions such as wages records. If an employer chooses to keep no records and to pay below award rates, which I would deplore, the employee would pay no tax at all and could still claim unemployment benefit using his or her ID card-so what value an ID card? Mr Doug Meagher, who is a Queen's Counsel and a former counsel to the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union-he has been quoted on other matters-gave an opinion to the Committee that an identification system would have no impact in this area and, further, that since cash payment of wages occurs frequently in cases of casual employment for gardening or house cleaning, it is likely never to be banked and, therefore, this tax could never be collected. In fact, the only way to recoup this tax is to place greater emphasis on indirect taxation.

I turn to taxation because great concerns have been expressed, and rightly so, about the loss to revenue by people avoiding taxation. Loss of taxation revenue through the cash economy is not the only problem confronting the Australian Taxation Office, but the problems facing the Tax Office have very little to do with identity. While it is fair to say that the Tax Office would be able to recoup some of the revenue currently lost if an ID system were implemented, there are much cheaper solutions to many of the problems the Tax Office has in collecting all the taxation it is owed. Like the Department of Immigration and Ethnic Affairs, the Tax Office should tidy its own back yard before looking for expensive and dangerous solutions such as the Australia Card. The Tax Office is losing $2 billion a year through its own inefficiency.

It is sheer nonsense for the Tax Office to claim that an Australia Card is the only way to collect the shortfall in revenue. This is not my claim. This is the Claim of the Australian Audit Office and of the House of Representatives Committee on Expenditure. The matters revealed in those reports are appalling for any Australian taxpayer. The non-disclosure of dividends and interest income by taxpayers alone accounts for about $500m of lost taxation revenue every year. The Tax Office revealed to the Committee that only 18 to 20 per cent of the total interest paid in Australia is reported to it; only a little of that is checked, and only 50 per cent of what is checked is successfully matched. That is due to the Tax Office's failure to acquire adequate data processing equipment and to revise its work practices. Even the Reserve Bank of Australia is not required to provide interest details.

The Acting Assistant Auditor-General, Mr Antony Minchin, told the House of Representatives Committee on Expenditure that `from what we have seen of the dividends and interest check in the Taxation Office it seemed to us that they would never get it right' and `it did seem to us that the ADP area was not well organised. Had it had more resources it might have made a bigger mess'. What a comment from the Auditor-General's Office! This lack of up to date technology also means that the Taxation Office has failed to chase up unpresented group certificates and does not properly administer the prescribed payments scheme. The Tax Office estimates that revenue lost through unpresented group certificates amounts to $100m a year. The Auditor-General considers this to be an underestimate. The Auditor-General also disputes the Tax Office's assessment that the prescribed payments system recoups half of the tax evaded in the building industry and suggests that that is overly optimistic.

Over 10 years the Tax Office has underspent by $49m funds allocated to it for the purpose of upgrading its computer equipment. Apparently it prefers to stick to its labour intensive system whereby 2,500 staff are used to review and assess the nine million tax returns submitted annually. I find that statistic absolutely fascinating. It means that every assessor in the Tax Office is required to process 270 salary and wage returns a day, or approximately 35 an hour. Is it any wonder that they are missing the tax evaders? Mr Andrew Prtyz of the Administrative and Clerical Officers Association said of the Tax Office:

They do a lot of manual checking now where theoretically they should be able to run two computer tapes, interface them and get a computer printout.

The form in which information is provided to the Tax Office is also to blame since, while it is stipulated that interest payments over $100 be reported, there is no stipulation as to what medium the information should be carried on. The existing legislation should be amended to make supply of information in a compatible and easily processed form compulsory. However, in the view of the Expenditure Committee the Tax Office's failure to implement effective computerisation has severely limited its processing capacity and it is vital that this problem be rectified to utilise fully information when it is available. At present, Tax Office computers are not programmed to search for tax numbers. Matching of interest payments and tax instalments to individuals is done manually and it is consequently very difficult. Mr Frank Costigan, QC, has been quoted a number of times in this debate, and rightly so. He knows more about organised crime and the tax system taken together than anybody else in the country. He says:

It is a far less expensive exercise to write a program for that problem than to do the kind of thing you are talking about.

He was referring there to the Australia Card. No ID card system will solve the problems of the Tax Office. It boils down to antiquated, labour intensive work practices. It is a fact that as long as these issues are not addressed the Tax Office will continue to lose enormous amounts through tax evasion, and I refer to the quote that has been used before about using a jackhammer to crack a nut. The Labor member for Aston, Mr Saunderson, has said:

. . . issuing of trinkets to the public in Australia will not win votes at election time when they realise we have failed to address the real issue, when we have failed to improve the efficiency of the Taxation Office.

I move, lastly, to organised crime-a matter which, I am sure, concerns all honourable senators. Frank Costigan has strong objections to the Australia Card proposal on the basis that it is a significant intrusion into individual privacy. In his view it is possible to justify such an intrusion only if, on balance, the evil that the community is attempting to correct and the cost of doing it are justified. He told the Committee:

The benefits that might flow from it are to some extent illusory, certainly speculative, and can be achieved by other means.

The Minister for Health, Dr Blewett, said in his second reading speech on the Australia Card Bill:

No one doubts that by facilitating the pursuit of the money trail it will provide an invaluable instrument against corporate and organised crime.

But it would seem that a number of people do have doubts. The Government itself in its submission to the Australia Card Committee noted that the effectiveness of the card in combating organised crime was difficult to predict. I believe that it is abundantly clear that the card will not be at all effective in combating organised crime and is far more likely to provide a tool for organised crime to use to carry out its activities. We all know that the laundering of money is one of the secrets of the success of organised crime. What will the Australia Card do to deal with money being laundered at the race track or at the blackjack tables of the Launceston, Hobart, Perth or Adelaide casinos? Will the casinos be required to sight the card before cashing a cheque or agreeing to a gambler using credit? Not under this Bill. The Australian Federal Police has said:

There are no realistic grounds for anticipating any impact on the level of organised crime generally.

What is more sinister is that the Committee concluded from Mr Costigan's evidence that the card would be used by organised crime to legitimise its activities. Mr Costigan said:

I do not believe it would have inhibited the more important matters that I was looking at in the last couple of years.

In a public statement, he said:

If all you are going to achieve is the catching of small time crooks, the intrusion into privacy cannot be justified.

American studies have rejected this form of identification since it would benefit rather than combat organised crime. A forged card would give bona fide proof of identity to those who benefit by having a false identity. The Law Society of New South Wales has said:

Considering the gains to be had from forging or counterfeiting Australia Cards, the Society feels that the expense of reproduction by forgery or counterfeiting would be minimal and could lead to a `Black Market' in Australia Cards similar to that in the United States in Social Security Cards.

Senator Crowley referred earlier to those social security cards in America. I believe that this gives the lie to the apparent efficiency of the United States system. The Law Society continued:

This appears to add another string to the bow of organised crime, the Government having already acknowledged that people who are absolutely determined to abuse the system will attempt to do so.

We on this side of the chamber reject the ID card because the Government has failed to convince us that the card will achieve its stated aims which I repeat: To reduce tax avoidance and evasion, to reduce social security fraud, to stop illegal immigration and to help combat organised crime. Not only has it failed to convince the Opposition but also it has failed to convince the Australian Democrats. We know from the silence of many members of the Government that the Government has also failed to convince them. Mr Costigan said:

I am bemused by the attempt to correct what are articulated as problems in the community by a solution such as the Australia Card.

The Government has failed to convince its own members, many of whom would dearly love to break the ban of Caucus and vote with us on this legislation. I conclude by referring again to a statement by Senator Nick Bolkus, to whom I referred at the beginning of my speech. In May of this year he said:

I welcome the majority finding of the Joint Parliamentary Committee on the Australia Card and feel relieved that common sense has prevailed.

Let us hope that common sense prevails once again and that the Australia Card is rejected once and for all.