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Friday, 15 November 2002
Page: 6532


Senator ABETZ (Special Minister of State) (2:24 PM) —I am interested in the Labor Party's new policy of trying to make personal liabilities and responsibilities match those of corporations. It will be interesting to see which way the Labor Party jumps in relation to the tax rates: whether the personal tax rate ought be reduced to the company rate, or the company rate ought be increased. Undoubtedly, that will be an interesting discussion on another occasion.

Subsection 265(8) makes it an offence for a debtor to contract a debt greater than $500 in the two years prior to bankruptcy, where the debtor has no reasonable prospect of being able to repay it. The bill proposes to remove the $500 threshold. That is to correct an anomaly in the current law that allows an insolvent debtor to contract a large number of debts, each of which is less than $500 and, as a result, to escape prosecution. This unfortunately occurs. It has been brought to the attention of the government. When people deliberately run up bills of, let us say, $490 plus, over and over again, if you are a caring person, have you ever spared a thought for those who have been ripped off by $490 by an insolvent debtor who has undertaken this behaviour? The amendment is not aimed at debtors who fail to pay one or two small bills. In fact, the prosecutorial discretion would not allow that to occur in any event. It would be aimed at a manner of conducting oneself by going around the community and running up such debts, knowing that one can escape prosecution. Why the Australian Labor Party by their actions would seek to support and encourage people engaging in such behaviour is beyond the government's comprehension.

The opposition's amendment would exclude necessary personal or household expenses from the scope of the offence. What then becomes a necessary personal or household expense? I suppose the Labor Party's definition should be known to all of us, because they thought it was necessary to hock this nation for $96 billion worth of debt. They said that was necessary. The Labor Party's necessities are quite often, in our terms, luxuries. So how are you going to define what is actually necessary in the circumstances? Union fees would undoubtedly be a necessity for Senator Ludwig and his party. The opposition's amendment would introduce an undesirable level of uncertainty into a criminal offence. Debtors would be left in a state of uncertainty as to whether the incurring of a particular debt would amount to a criminal offence.

The drafting of offences that contain this level of uncertainty is contrary to basic principles of transparency and of sound legislative and public policy. For example, is the purchase of an expensive plasma screen television a necessary personal or household expense? Or is it, in fact, a luxury? Is the purchase of a top-of-the-range home computer system, costing thousands of dollars, a necessary personal household expense or a luxury? The provision may also be unworkable insofar as a creditor who fails to raise questions of other creditors in the course of a meeting will have difficulty establishing his or her credibility before the court. Rather than being an uncaring government and allowing them to escape the criminal sanction, we do care and want to protect the community against those who would go around the community deliberately running up a whole range of bills—of up to $490 a time— knowing that they have no intention of paying them.