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Tuesday, 13 May 2003
Page: 10587


Senator IAN CAMPBELL (Parliamentary Secretary to the Treasurer) (3:53 PM) —I table a revised explanatory memorandum relating to the Terrorism Insurance Bill 2003 and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

CRIMINAL CODE AMENDMENT (TERRORISM) BILL 2002

The Criminal Code Amendment (Terrorism) Bill 2002 is the central element of the Commonwealth and State legislative package to implement the April 2002 Leaders' Summit agreement.

The Bill will draw on references of State power in re-enacting terrorism offences enacted earlier this year.

The federal legislation enacted earlier this year creates a number of offences in relation to terrorist acts, terrorist organisations and terrorist financing.

Those offences were based on existing Commonwealth constitutional power.

As the Commonwealth Constitution does not give the Commonwealth Parliament power to make laws with respect to `terrorism' as such, the offences rely on a `patchwork' of existing constitutional powers.

The patchwork of existing Commonwealth constitutional powers is extensive but it is also complex.

It is impossible to rule out unforeseen gaps in the coverage offered by offences based on existing powers.

Arguments about possible gaps could be exploited by people trying to avoid prosecution.

The reference of powers by the States, and the enactment of this Bill, will rule out these kinds of arguments.

It will ensure comprehensive national application of the federal counter-terrorism offences.

The Bill will re-enact Part 5.3 of the Criminal Code, which contains the terrorism offences enacted in June and amended in October this year, so that it attracts the support of the State references of power.

The Bill will, in effect, re-enact the terrorist act offences in Division 101, terrorist organisations offences in Division 102, and the financing terrorism offences in Division 103.

Once re-enacted, terrorism offences will be capable of operating throughout Australia, without any potential limitations arising from existing limits on Commonwealth constitutional powers.

The Government is committed to ensuring that our laws are as watertight as possible.

This Bill and the referral of powers by the States will do just that.

They will rule out arguments about potential gaps in the Commonwealth's powers in certain specific circumstances.

The States will have referred powers to the Commonwealth, so that there can be no question over the legitimacy of the counter-terrorism laws.

The Bill does not affect the substance of the current offences.

The re-enacted offences will be in the same terms as the current offences, but for the constitutional `reading down' provisions.

The Government has already taken action under the current provisions.

Regulations have been made specifying organisations as `terrorist organisations' for the purpose of the terrorist organisation offences.

The Bill includes transitional provisions so that these regulations will continue to have effect after commencement of the new provisions.

In addition to referring the `text' of the federal legislation, the States are also referring the power to amend the legislation.

The Bill reflects the Commonwealth's agreement with the States and Territories that future amendments will not be made without the approval of a majority of the States and Territories (and of at least 4 States).

An inter-governmental agreement is also being developed to support this understanding.

The Bill includes provisions to prevent any inadvertent displacement of State laws.

It allows for the concurrent operation of State offences that might deal with similar activity.

It also includes a regulation-making mechanism to `roll-back' aspects of the provisions to accommodate certain specified State and Territory legislation if that should prove necessary or appropriate.

The new Commonwealth provisions will commence on a date to be proclaimed.

This is to ensure that all States have enough time to complete their references.

I welcome the action already taken by the States to implement the agreement reached at the April 2002 Leaders' Summit.

References of power have been passed, or are awaiting assent, in New South Wales, Tasmania, Queensland and South Australia.

Reference legislation has been introduced in the Western Australian parliament.

Victoria is yet to introduce, but has indicated it will do so.

Since the September 11 attacks, the Howard Government has acted swiftly to introduce new policy measures and legislation, and to provide more resources for our security and intelligence agencies to bolster Australia's ability to combat terrorism.

The recent attacks in Bali have strengthened our resolve to put these measures in place as a matter of urgency.

The Commonwealth appreciates the States' efforts in responding quickly to the national need, and I look forward to the commencement of the legislation as soon as possible.

This Bill is part of a counter-terrorism legislative package that delivers on the Howard Government's commitment to ensure we are in the best possible position to protect Australians against the evils of terrorism.

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WHEAT MARKETING AMENDMENT BILL 2002

The Wheat Marketing Amendment Bill 2002 forms part of the arrangements to provide a funding mechanism for the wheat industry to meet the operational costs of the Wheat Export Authority (WEA). In order to raise the main stream revenue for the continued operation of the WEA it is proposed that a charge will be applied to all exports of wheat, commencing during the first half of next year. This would be implemented through regulations under the Primary Industries (Customs) Charges Act 1999.

The Bill's main purpose is to provide for the appropriation to the WEA of monies paid to the Commonwealth as the wheat export charge amounts.

With the privatisation of wheat marketing and financing arrangements in 1999 through the grower controlled company, AWB Ltd, the regulatory and monitoring activities associated with the single desk for export wheat were passed to the WEA which operates under the Wheat Marketing Act 1989. AWB (International) Ltd (AWBI), the wholly owned subsidiary of AWB Ltd responsible for maximising net returns to growers through export sales and pooling, was granted the single desk export right for wheat which had been held by the former Australian Wheat Board.

The Government has repeatedly confirmed its support for the wheat single desk while ever there is a benefit to Australian wheat growers and the nation's export performance. At the same time it is recognised that there needs to be flexibility to allow other exporters to take advantage of market opportunities. This is an important function of the WEA through its consent system which allows for both long term (12 month) and short term (3 month) consents. These principles as they apply to the this function of the WEA will be spelt out in the Wheat Marketing Act 1989 through an amendment included in the current Bill.

The other key functions of the WEA are monitoring AWBI's export performance and reporting on the benefits to growers; and conducting a review before 2004 of AWBI's use of its export rights. The opportunity has been taken with this Bill to make a number of minor amendments to the Wheat Marketing Act 1989 to improve the operational efficiency of the WEA and to strengthen its powers to monitor compliance by exporters.

It is appropriate that the wheat industry rather than the Government should fund the WEA since wheat growers are the main beneficiaries of the WEA and the single desk. Although the Government receives a monitoring report each year from the WEA on AWBI's performance, it is growers and the industry which receive the potential benefits from that performance. A separate report is made available annually by the WEA to all growers so that they can make an assessment of the value of the management of the single desk to their interests.

Industry funding is consistent with the situation prior to 1999 when growers paid for the regulatory aspects of the single desk through pool administration costs. Similarly, the $6 million interim `seed funding' for the WEA came essentially from grower money held in reserves of the former Australian Wheat Board. This initial resource is expected to be fully utilised by WEA around the end of its 2002/03 financial year which is why a new, on-going funding arrangement is required if the WEA is to continue to undertake its statutory functions.

An export charge on wheat, combined with the introduction of application fees for consents through separate regulations not related to this Bill, provides an equitable and simple means to ensure that those who benefit from the services of the WEA will meet its costs. To the extent that the charge is deducted from pool returns by AWBI, or from grower sales to exporters, only those growers who produce wheat for export, rather than those servicing the domestic market, will be funding the WEA. Consideration will be given to allowing growers some say in recommending an appropriate level of charge to meet the reasonable budget requirements of the WEA.

The Wheat Marketing Act 1989 already provides for the introduction by regulation of an application fee for consents. It is intended to activate these provisions from next year, even if the fee is only for a token amount. This will ensure that the WEA's costs related to processing consent applications will be recovered, at least partly, from those who directly benefit from the availability of export consents. A fee will also discourage non-genuine applications which could disrupt the WEA's administration and raise its costs unnecessarily.

The WEA's monitoring role and annual report to growers are important means to ensure the management of the single desk delivers the potential benefits available. These findings will feed into the 2004 review which the WEA is required to conduct under the wheat legislation. That review will examine AWBI's use of its single desk rights and not the existence of the single desk itself. It will provide a basis for growers to decide whether or not the current arrangements should remain or be modified. If needs be, they can bring forward a case for the Government's consideration.

This Bill, when combined with proposed export charge and consent application fee regulations, reflects the Government's commitment to the future of the wheat industry and the single desk. It provides the means to secure the on-going funding of the WEA. The wheat industry has a significant influence on the well-being of regional Australia as well as being a major contributor to Australia's export earnings. The 2004 review by the WEA of AWBI's use of its export rights will provide the opportunity for a rigorous assessment so that grower and community interests will continue to benefit from the arrangements.

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COMMUNICATIONS LEGISLATION AMENDMENT BILL (No. 1) 2002

The Communications Legislation Amendment Bill (No. 1) 2002 makes a series of minor amendments to the Australian Communications Authority Act 1997, the Freedom of Information Act 1982, the Radiocommunications Act 1992, the Telecommunications Act 1997 and the Telecommunications (Consumer Protection and Service Standards) Act 1999.

Schedule 1 to the Bill makes an amendment to the Australian Communications Authority Act 1997 to enhance the operation of section 54 of that Act. Section 54 empowers the Australian Communications Authority to make a written determination defining expressions used in its legal instruments. Due to the effect of sections 46A and 49A of the Acts Interpretation Act 1901, the ACA cannot apply, adopt or incorporate certain documents including legal instruments within a determination made under section 54 of the ACA Act 1997.

The proposed amendment contained in Schedule 1 to the Bill will allow the ACA to incorporate other documents by reference when making a written determination under section 54 and, in doing so, will make section 54 consistent with the existing determination powers under the Telecommunications Act 1997 and the Radiocommunications Act 1992.

Schedule 2 to the Bill also makes a number of amendments to the Freedom of Information Act 1982 to exempt from the application of that Act certain documents related to the administration of Schedule 5 to the Broadcasting Services Act 1992. Schedule 5 to the Broadcasting Services Act, which has operated since 1 January 2000, provides the regulatory framework for the control of illegal or offensive online material. This framework enables the Australian Broadcasting Authority (ABA) to investigate complaints from the public about online content, including material that is, or would be, refused classification or classified X by the Classification Board.

Since the release of material acquired during the course of an ABA investigation would undermine the policy and objects of the framework, it has become necessary to ensure that such material in the possession of the ABA is adequately protected. Once material is released under the FOI Act, the subsequent use or dissemination of that material cannot be controlled. The amendment contained in Schedule 2 to the Bill will ensure that material containing prohibited, or potentially prohibited, online content or the means of accessing such content is specifically exempt from disclosure under the FOI Act.

Schedule 3 to the Bill makes a number of amendments to the Radiocommunications Act 1992 in relation to law enforcement bodies. Commonwealth, State and Territory law enforcement and anti-corruption bodies use licensed radiocommunications devices for covert surveillance to gather evidence in serious criminal and anti-corruption investigations. Covert surveillance devices are usually operated under warrants issued by Commonwealth, State or Territory courts and for evidentiary value must also be properly licensed under the Radiocommunications Act.

The proposed amendments contained in Schedule 3 to the Bill will enable the ACA, by disallowable instrument, to exempt the personnel of certain law enforcement and anti-corruption bodies from the operation of some sections of the Radiocommunications Act dealing with unlicensed transmissions, equipment standards and interference emissions. These bodies do not fall within the traditional definition of a “police force”.

The amendments to the Radiocommunications Act will also streamline the licensing provisions of the Radiocommunications Act to enable specified bodies to lawfully operate covert surveillance devices for the specific purpose of investigating serious crime and corruption.

The proposed provisions will also expand the objects clause of the Radiocommunications Act to provide that an object of the Radiocommunications Act is to make adequate provision of the radiofrequency spectrum for use by agencies involved in the defence or national security of Australia, law enforcement and emergency services and for use by other public or community services.

Schedule 4 to the Bill makes one amendment to the Telecommunications Act 1997 to abolish the specially-constituted Australian Communications Authority. In 1998, a `specially-constituted ACA' (SC-ACA) was established under the Telecommunications Act comprising the Chairman of the ACA and six specialist `eligible associate members'. The primary purpose of the specially-constituted ACA is to consider carrier applications for facilities installation permits under Schedule 3 to the Telecommunications Act. In the SC-ACA's four years of operation, no such applications have been made. Accordingly, it is proposed to abolish the `specially-constituted ACA' , by repealing clause 40 of the Telecommunications Act with effect from 1 April 2003, the date on which the appointments of the eligible associate members expire. The Australian Communications Authority will then assume any residual responsibilities.

Schedule 5 to the Bill makes a number of minor amendments to the Telecommunications (Consumer Protection and Service Standards) Act 1999 in relation to the National Relay Service, the revocation or variation of a customer service guarantee standard and the Telecommunications Industry Ombudsman Scheme.

The National Relay Service or NRS provides people who are deaf or hearing or speech impaired with access to a standard telephone service on terms comparable to the terms on which other Australians have access to that service. The NRS is provided by the Australian Communications Exchange under contract with the Commonwealth and is funded by a quarterly levy imposed on telecommunications carriers, with contributions based on shares of telecommunications revenue.

The collapse of One.Tel highlighted problems with the existing funding arrangements for the NRS as One.Tel continued to accumulate an NRS levy debt under the existing provisions of the Act which could not be reallocated to other carriers and had to be absorbed by the Commonwealth.

The proposed amendments in Schedule 5 to the Bill will improve the mechanisms for the effective funding of the NRS and provide for a carrier's NRS levy liability to be determined by reference to the carrier's operation in the industry in the period for which the levy is assessed. It will also allow the Minister to modify, by written determination, the formula for calculating each carrier's NRS levy contribution and enable the ACA to vary assessments of a carrier's NRS levy contributions.

A customer service guarantee standard made by the ACA under section 115 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 is a disallowable instrument for the purposes of the Acts Interpretation Act 1901. The proposed amendment to section 125 of that Act will clarify that a revocation or variation of a customer service guarantee standard made under section 115 is also a disallowable instrument.

The Telecommunications Industry Ombudsman (TIO) was established in 1993 under the Telecommunications Act 1991 as a free dispute resolution scheme for residential and small business consumers. All carriers and eligible carriage service providers (including Internet service providers) are required to be members of the TIO scheme.

A TIO member is charged a complaint handling fee when the TIO receives a complaint from one of the member's customers which acts as an incentive for members to develop and maintain effective complaint handling and customer service procedures. Since there have been instances where the TIO complaint handling fee has been passed on to customers, the Bill contains an amendment to clarify that end-users are not liable for any charge in relation to complaints made to the TIO about their telephone or Internet service.

The Bill also makes an amendment to clarify that paragraph 128(6)(a) of the Consumer Protection Act, which provides that the TIO scheme must not investigate complaints on tariff levels, does not preclude the investigation by the TIO of complaints about tariff levels pertaining to charges or fees not directly related to the supply of telecommunications carriage services, such as early contract termination fees for mobile phone services.

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TERRORISM INSURANCE BILL 2002

Since the terrible events in the United States of 11 September 2001, we have witnessed a world-wide withdrawal of commercial insurance coverage for terrorism risk.

In Australia, there is virtually no traditional terrorism risk insurance available for commercial properties and infrastructure. What limited cover is available is generally regarded as too expensive by the market, and remains unsold.

The withdrawal of terrorism insurance results from a market failure—the lack of adequate information to price the risks arising from terrorism. The risks are very difficult to assess for insurance purposes as terrorist events may be infrequent, but are likely to result in significant consequences.

The Australian Prudential Regulation Authority advises that the potential for a high payout from a low probability event is not a risk that can be managed through increased capital or through increased premiums.

As such, an adequate supply of terrorism risk insurance does not appear likely to return in the short-to-medium term—in either the domestic or global markets.

The Government is concerned that this lack of comprehensive insurance cover for commercial property or infrastructure may lead to less financing and investment in the Australian property sector; and consequentially, wider economic impacts.

Commercial property owners, banks, superannuation funds and funds managers have been forced to assume insurance risk as existing policies reached their expiry date and were renewed excluding previously-provided terrorism risk cover. These institutions are not set up to manage insurance risk, and in the case of some bodies, notably superannuation funds, are specifically precluded from absorbing such risks.

In addition, the Australian Bankers' Association has advised that there is a risk that financiers will be unprepared to provide finance to some large projects or large scale infrastructure if terrorism cover is withdrawn and the new assets are exposed to an uninsurable risk. In the United States, such risks have already materialised, with one recent survey estimating that $US15.5 billion worth of construction projects have been suspended because of a lack of comprehensive insurance cover.

Until such time as the risks from terrorism are considered sufficiently small that insurers are willing to cover them once again; or until the industry develops an appropriate method for pricing those risks, Government intervention will be needed to fill the gap.

To ensure comprehensive coverage, terrorism risk cover will also need to be extended to cover business interruption and public liability risks associated with commercial property.

A number of our OECD counterparts have reached this same conclusion. France, Germany and the United States, for example, each recently established Government schemes to address the current problem of lack of commercial insurance for risks arising from terrorism.

In establishing this scheme to provide reinsurance for terrorism, the Government is mindful of the need also to foster the re-emergence of a commercial insurance market in this area. The Government therefore will be closely monitoring developments in the commercial insurance and reinsurance markets both domestically and globally. The Government intends to wind-down its scheme, and ultimately withdraw from the market completely, once adequate commercial provision of terrorism risk insurance has re-emerged.

Debate (on motion by Senator Mackay) adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.