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Wednesday, 10 December 1986
Page: 3735


Senator Sir JOHN CARRICK(6.10) —The Senate is debating a Bill entitled the Australia Card Bill 1986 and, in association with it, two privacy Bills. The Bill comes to us as a suggested mechanism-not as an end in itself-which purports to be able to overcome or to mitigate a number of offences and crimes, and one should examine it in that regard. It purports to be able to deal with offences such as tax evasion, social security cheating, illegal migrants and organised crime. It points out, as will be accepted by all sides of this chamber, that there are serious breaches of the law in all these matters. The real questions to be asked are: Will it work? Is it the best way? What are its defects? How does it affect personal privacy and civil liberty? Most importantly, are there better ways?

This is not a debate only about whether we have an Australia Card or nothing. That is not the debate. Let me say from the outset that it is not a debate between the Government saying `We are out to get villains and tax cheats' and an Opposition, of whom the Government, for a sense of melodrama, says: `You are the protectors of tax cheats and social security frauds'. Let us have none of this. It does no sense to the debate at all. Let us accept that on both sides of this chamber we are out for the same goal-to eliminate or at least reduce to the minimum the offences and crimes that we have identified. Let us look at the debate from the point of view of whether the Australia Card is the best method, whether it has advantages, whether it has defects and, above all, whether there are better methods.

Let me say this: Over the course of my lifetime I have frequently deliberated in my mind whether we ought to have an Australia Card. Would it have advantages in this regard? I remember that during the Fraser Government, in which I was privileged to be a Minister, we set up an inquiry into an Australia Card to see whether there would be benefits to it. We sent officers overseas to look at the experience overseas. The officers reported that nowhere in countries similar to ours, countries that espoused democracy and the common law, was there any support at all for an identity card for a range of purposes and nowhere was there any advocacy that such an identity card would work. There was evidence that in one or two countries, such as the United States of America, there were social security cards and also evidence that those cards had very grave defects and very limited use, and were subject to very grave abuses. So, we set it aside.

I also want to say that, in the pursuit of these goals to reduce the offences, no government has acted more strongly or more vigorously than did the Fraser Government. Since there has been some suggestion that that Government allowed tax cheats, I have to say, with objectivity, that the Whitlam Government which it succeeded did little or nothing to deal with any of those matters and that at a time when the bottom of the harbour situation was emerging it did little or nothing to tackle that. By 1982, a year before the Fraser Government went out of office, the Commissioner of Taxation was able to say that the actions by the Fraser Government and by John Howard, the Treasurer, had put at rest, had eliminated, that particular fraud. I am very proud to say that John Howard brought in some 17 major measures.

Lest anyone should have this kind of debate that has gone on as a slanging match, with the Government trying to prove that the Opposition is by opposing trying to protect tax cheats, dole frauds and so on, let me say that over the last decade governments of the Liberal faith, both State and Federal, have brought in the five main royal commissions that have revealed the extent and nature of organised crime in Australia. It was in fact a State government of New South Wales that set up the Moffitt Royal Commission on Alleged Organised Crime in Registered Clubs in New South Wales which showed the magnitude of drug-related organised crime. It was in fact the Fraser Government which set up the Costigan Royal Commission on the activities of the Federated Ship Painters and Dockers Union which revealed not only the magnitude of the offences of the ship painters and dockers but a whole series of organised crimes, including tax offences. From those action emerged. Then there was the Woodward Royal Commission into Drug Trafficking, the Williams Royal Commission of Inquiry into Drugs and the Stewart Royal Commission of Inquiry into Drug Trafficking-one after the other. So let nobody say of my side of government that we have not set out to expose crime, wherever it is, to expose offences, wherever they are, and to seek to overcome them.

It was in fact the Fraser Government that set up the National Crimes Commission and indeed it was the incoming Hawke Government that weakened that Commission and took away some of its powers. Let us therefore deal with this situation, not by poking tongues out at each other and not with the Government saying that it has solutions and that we are the people who are supporting those who are tax dodgers and dole cheats. I remind the Senate on my journey that the evidence from the Auditor-General and from the Standing Committee on Expenditure shows that those who are in fact shielding such people at this moment are those in the Hawke Government. So, do not let us trade in that kind of stuff. If there are basically tax cheats today, four years of Hawke Labor government are to blame. It has had four years now-not four months, not four days, not four weeks, but four years. Those in the Hawke Government can turn back and look at others. If there are breaches in social security, let them--


Senator Cook —How many Bills have you knocked off which we tried to get through to get at tax avoiders?


Senator Sir JOHN CARRICK —I want the people of Australia to listen to these interjections because, of course, when we touch someone on a sore spot he is bound to cry out. I do not call some biased person as witness. I call the Auditor-General as witness, as I will in a moment, and I call the Director of Public Prosecutions as witness.


Senator Button —What do you think you are?


Senator Sir JOHN CARRICK —I will call them to say that those who are doing nothing about social security cheats at this moment are those in the Hawke Labor Government, in which Senator Button, who has just interjected, is a senior Minister. I refer to the recent report of the Director of Public Prosecutions. What have we got? The situation is that at this moment, after four years of this Government, in those two areas of crime an attenuated authority has been set up. We ask ourselves: Is this the best way? Will it work to deal with tax evaders? Will it work to deal with social security cheats? Will it overcome the problem of illegal migrants? Will it deal with organised crime? Will it work? Is it the best way? What are its defects? How will it affect privacy and civil liberties? Are there better ways? Because the Opposition believes that there are better ways it has moved an amendment which states:

Leave out all words after ``That'', insert: ``this Bill be withdrawn because:

(a) it does not address serious administrative failings and operational deficiencies in the Australian Taxation Office which remain a main cause of failure to collect revenue due to Government;

(b) the Card would not solve the problems of tax and welfare fraud, both of which generally involve people whose identity is not in question;

(c) the costs have been grossly understated and the benefits grossly exaggerated; and

(d) it will constitute an unprecedented and unjustifiable intrusion into the individual privacy of all Australians and will greatly damage our civil liberties''.

That amendment expresses, in general terms, our criticism of the Australia Card and points to an alternative-an alternative that would work, an alternative that would collect money from those who should legally be paying their tax. It would overcome or mitigate against social security fraud. It would move to deal with illegal migrants and it would strengthen our attack against crime. What a dreadful thing that the report of the Board of the New South Wales Police Force, whose Chairman is Sir Maurice Byers, a former Solicitor-General, should have said: `Everybody knows who the Mr Bigs of crime are in Australia. The police could get them if they were given sufficient powers. Everybody knows the Mr Bigs. They could be got if only the police had the powers'. That is a simple situation not needing an identity card at all.

Let us look at this issue both positively and negatively because it is not good enough simply to ask whether we ought to have a card. We can call on the Auditor-General, a completely objective witness, and we can call on the House of Representatives Standing Committee on Expenditure, an all party committee of the Parliament. What does the Auditor-General say?


Senator Button —What are you trying to turn this place into? You call him, you call someone and you call somebody else.


Senator Sir JOHN CARRICK —I do not want to know, and I am sure that other honourable senators do not want to know, what Senator Button is saying at the moment. He is simply mouthing words because he does not like my argument. He does not like the fact that the Auditor-General has said that the Hawke Labor Government is covering up tax frauds and it is not collecting tax. The Treasurer (Mr Keating) is particularly responsible. Every day he gets lists of people who have forgotten to put in their tax returns or who have overlooked them. This does not remind him of his own default. He says: `I forgot'. He does not forget that 170,000 Australians have done this, because he is reminded of those cases. The Treasurer is in charge of the Australian Taxation Office.

The Auditor-General has said: `Let us just take the ordinary group certificates that every pay as you earn wage earner gets'. Clearly, thousands of those group certificates are not lodged. The Tax Office knows that because it has a copy of them. The Tax Office has not followed up those cases. The Tax Office thinks that about $100m is not being collected as a result. It would not need an identity card to collect that amount; it could be collected if ordinary, administrative arrangements were made. The Auditor-General says that, in his opinion, much more money could be collected. It has not been collected simply because of default by the Treasurer, the Commissioner of Taxation and the Tax Office in the last four years. It has nothing to do with the need for an ID card. The report of the Expenditure Committee on the Auditor-General's five efficiency audit reports into the Australian Taxation Office stated:

The ATO had failed to take full advantage of technological advances that should permit computerised processing . . .

Their ability to extract the required data and to be able to interface that data between different systems, is inadequate.

Quite clearly, if there is a default in collecting tax it is because the Hawke Government is running dead, the Treasurer is running dead and the Tax Office is inefficient. It is not the Liberal and National parties saying this but the Auditor-General and the Expenditure Committee, a committee comprising members of all parties. In the first place, there is a better way. A better way to deal with the problem is to get some efficiency and some computerisation in the Tax Office. Why has the Tax Office underspent the money that it has been given to put into computers? By the Auditor-General's own statements the Tax Office is grossly inefficient in this area. It is no good saying that the Fraser Government ought to have done more during its period in office. In the four solid years of the Hawke Government all we have had is lectures on tax collection. Physician, heal thyself! The real reason for the first two defects is the Hawke Government itself.

What about social security fraud? What about chasing dole cheats and social security cheats? What does the Director of Public Prosecutions, Mr Temby, say-a man who was appointed by the Australian Labor Party, a man who has been fearless in what he has said on these matters? He says that the Government is not following up information on tax cheats. The fact that we are doing nothing about it has nothing to do with the need for an identity card. The Government is not acting at all in that regard. As a start, the Government has come up with a drastic solution to the problem. It will force every Australian into obtaining an identity card that he or she has to produce in a number of circumstances. There will be great penalties for those who do not demand to see the card in business dealings.

The Government says that we need the Australia Card. But does the Tax Office need it? The Auditor-General says that the Tax Office can collect an enormous amount of additional revenue. For example, he has revealed that about $2 billion in outstanding tax on dividends and, in particular, interest payments is not being raked in. The Tax Office does not need an identity card to do this. All the information is in the hands of the financial institutions. The Tax Office has the absolute power to demand that information from the institutions. This information is not being collected by the Tax Office. We do not need an identity card to do this. We do not need anything else. It is absolutely wrong to take the blame away from the Government and to force people to surrender some of their liberties in this regard.

In summary, the Government has said that there are tax evaders and social security cheats. The Auditor-General has said: `Physician, heal thyself'. The Government, the Treasurer and the Tax Office are failing to collect this revenue. They have the system to enable them to do it now. The Director of Public Prosecutions, Mr Temby, has said: `The Government and the Minister for Social Security, Mr Howe, are failing to collect revenue because they will not follow up social security cheats even though they know who they are at the moment'. The defect lies with the Government. The Government is protecting the tax evaders and the social security cheats and nobody else.

Sitting suspended from 6.30 to 8 p.m.


Senator Sir JOHN CARRICK —Before the suspension of the sitting I was talking on the Australia Card Bill. I had made the point that it was a mechanism which the Government had put forward purporting to deal with tax evaders, social security cheats, illegal immigrants and organised crime. I asked the questions that should be tested: Will it work? Is it the best way? What are its defects? How does it affect privacy and civil liberty? Are there better ways? I have been taking the matters one by one and examining them. What has come out is quite clear, and that is that the Auditor-General and the Expenditure Committee of the Parliament have said that the Australian Taxation Office is grossly inefficient in dealing with the collection of tax and that there are many hundreds of millions, maybe billions, of dollars of tax uncollected. As a result of that, of course, pensioners had their pension rise deferred, taxpayers had their tax cuts deferred, and public servant pensioners had a 2 per cent discounting of their pensions. Everybody paid because of the inefficiency of the Government.

I pointed out that the Director of Public Prosecutions had said that the Government was failing to follow up the social security cheats, and so instead of the others being responsible for allowing tax avoidance or tax evasion or social security cheats, it turns out that the Auditor-General has said that it is the Government that is to blame and the Director of Public Prosecutions has said that the Government is to blame. In looking at the situation I will take the matters one by one. Let us take the value that the Australia Card purports to be for social security. The Department of Social Security says that only 0.6 per cent of people committing fraud in social security are using false identities, and therefore that the Australia Card would be next to useless for social security; that in the broad base of the defects in social security, 61 per cent of overpayments are due to misstatements by people and not to people giving false identities. So in 61 per cent of the cases, the Australia Card will be no use at all. The Department of Social Security has said that it would raise no more money. So, why an Australia Card for social security?

Why an Australia Card for tax? First of all, it is important to understand that the great bulk of the ordinary tax collections can be done simply by better administration, by better government. The important thing again to understand is that Mr Frank Costigan, who so brilliantly conducted the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, has said that an Australia Card would not be useful in the pursuit of crime, whether it be tax avoidance or otherwise. In point of fact, one of the ugly things about this is that if people are given an Australia Card, or an identity card, which purports to be valid, the forger has his or her case strengthened, because one gives to the forger, one gives to the master criminal, a means of credibility; one gives him or her respectability. The ugly thing is that rather than preventing major crime, the Australia Card itself helps the master criminal, because he or she can then go around and establish his or her identity by it. If in fact the card is not accepted for him or her, it should not be accepted for anybody at all. There is a strange kind of paradox in this. The very Minister who is responsible for this Australia Card and says it will have integrity is, of course, the the Minister for Health (Dr Blewett) who put out the Medicare card. Everybody has a Medicare card. One would presume that it is a card of great integrity that cannot be forged; after all, it has a number on it.


Senator Walters —How many did you get?


Senator Sir JOHN CARRICK —There we are. If the Minister cannot run the Medicare card, how can he run an identity card? Why does the Government want to link the Tax Office, the Department of Social Security, the Department of Health and the Department of Immigration and Ethnic Affairs? The Department of Health has its own discrete identity card; let it stay that way. Then many people would have fewer worries about their health records becoming public. Let it remain in containment. The Minister for Health, who said that this would be kept in containment, is the Minister whose Department was capable of leaking information during the doctors dispute.

First of all, there is absolutely no need for an identity card for the Department of Social Security; it is less than useless. There is no need for a new identity card for the Department of Health, and the Department of Immigration and Ethnic Affairs says that it will be of no help to it. What it needs is a standardisation of the births, deaths and marriages records of the Registry offices throughout Australia. That would be helpful to it. Therefore, the Department of Immigration and Ethnic Affairs does not want the card. As to a card for the Tax Office, in all the years I served in the Fraser Government and heard submissions from commissioners of taxation, I never once heard a tax commissioner say that he wanted an identity card. Until recently there was no such suggestion at all. The fact is that there are two types of tax offenders; small ones and big ones. The big ones have access to fraud; they can get forgeries and can use the card. The paradox is that the card will help them towards fraud by making the job of the master criminal so much easier. In America, Canada and wherever else identity cards were looked at, it was seen that they were a perversion of what was necessary.

One wonders what this is all about. My colleagues have pointed out the great dangers to privacy. I will deal with the tests for this card. The first test is whether it will work. It will not work for tax evaders because the Auditor- General inferred that the only thing that will work is to put in a new government so that we can have efficiency in the Tax Office and a better Treasurer. Will it work for social security cheats? The Department of Social Security says it will not; very little fraud relates to dual identity and the card will not raise any money. Will it work for illegal immigrants? The Department of Immigration and Ethnic Affairs says no. Will it work for organised crime? Mr Frank Costigan, the person who is the expert on this, says it will not work at all. Is it the best way? Clearly it is not the way at all.

Does it have defects? It has every defect that one can conceive. It can be forged, it can open up links between departments and it will involve a data base which is not necessary at all. Why is it necessary, when we already have a Medicare card to link health? How will the card affect privacy and civil liberties? My colleagues have referred to those matters. Are there better ways? Of course there are. Why is it that such eminent bodies as the Australian Catholic Social Welfare Commission and other church bodies, the Law Society of Australia, civil liberties bodies, various branches of the Australian Labor Party, a number of trade unions and a whole host of very distinguished people have said that this is the wrong way to go about things?

What do we want to do? We want to catch tax cheats and social security cheats. We have shown the way. The way to do that is with a better administration, better organisation through the Director of Public Prosecutions and a better approach through government. The only body which is harbouring tax avoiders and social security cheats is the Government, as determined by the Auditor-General, the House of Representatives Committee on Expenditure and the Director of Public Prosecutions. So the Government has hoist itself on its own petard. There is no case for an Australia Card. There is a case for better administration and better government, and that can be answered in the ballot box.