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Thursday, 11 March 2004
Page: 21377

Senator MURRAY (1:11 PM) —Radical reform to the customs department systems is a consequence of the legislation passed after a very contentious inquiry and debate in the year 2001. The Democrats were obliged to exercise their balance of power on the original bill and, having made that judgment, have a stake in seeing that the outcomes are as intended. The Customs Legislation Amendment (Application of International Trade Modernisation and Other Measures) Bill 2003 implements a range of measures designed to assist with transitional arrangements required for the ongoing program of customs international trade modernisation and the transition between the current Australian Customs Service electronic reporting systems and the new integrated cargo system as part of the cargo management re-engineering project.

This customs omnibus bill seeks to clarify aspects of the major reforms associated with new electronic communication arrangements aimed at: implementing the program of customs international trade modernisation, enhancing customs border controls, clarifying cargo reporting requirements, and clarifying calculation of customs duties on alcoholic beverages. The Import Processing Charges (Amendment and Repeal) Amendment Bill 2003 simply extends some transitional provisions in its parent act. I do not want to take a lot of time discussing the provisions of the bills, as we have all agreed that these two bills should proceed cognately as non-controversial. There are, however, a couple of points I want to make about this first bill and the cargo management re-engineering project more generally.

Firstly, I turn to the project itself. As we are all aware, this undertaking by Australian Customs has been in train for several years now. To say the least, it is taking a lot longer than Customs and the minister told us it would. It is a reminder that when the minister stands in this chamber and says, `Trust me,' he needs to be able to back up that trust and fulfil the obligation that he puts to the chamber. The Australian Customs Service initially released its cargo management strategy in 1997 and its draft customs management re-engineering business model in 1999. Since 2000, this project has been considered in a range of different bills, inquiries, reports, and hours of estimates committee hearings. Generally at those times I am otherwise engaged on the Senate Finance and Public Administration Committee—

Senator Mark Bishop —We've missed you, Senator Murray!

Senator MURRAY —I am always grateful for the diligence with which Senator Bishop my colleague in the Labor Party does attend to these matters, but that does not mean to say that I do not keep an eye on it. Last year we passed the Customs Legislation Amendment Bill (No. 2) 2003 granting an extension of the legislative deadline for the project until 2005.

The parliament has devoted a great deal of time to this matter of these new systems and has been very accommodating in granting the government and Customs a deal of latitude with respect to this project—indeed, it is being accommodating again today. More than a year overdue, more than $100 million over budget and with the most complex phase of the project yet to be completed, our patience is wearing thin—and when I use the word `our' I do not just use it with respect to my own party. A decade or so ago, Customs got itself into terrible trouble with the parliament and acquired a poor reputation in its corridors. Customs and its minister need to be alert to the growing irritation with poor outcomes in this IT process. This entire affair suggests poor planning and poor project management on the part of the government and the department. While I remain hopeful the new systems will eventually be very beneficial to importers and exporters, as outlined in the original bill and the original projections, this kind of delay and overspending is unacceptable.

Recent press commentary has suggested that industry is growing ever more fearful about the workability of the new system and ever more distrustful about the assurances that it will all be up and running soon. I note that there are also concerns about the fact that matters such as the `deferral of duty' component of the accredited client program have not yet been resolved between Customs and Treasury. Frankly, Minister, the message I seek to give you and which Senator Bishop—I gather from his remarks in the second reading debate—seeks to give you is that this has gone on for long enough. If it is not sorted out soon, the minister will need to ensure heads roll. That means that management, who are responsible for this state of affairs, should pay for it as they would in the private sector, and it means that if the minister does not sort it out he should pay for it as well.

I am somewhat encouraged by comments of Customs officials in the most recent estimates hearings that the last phase of the project, the building and testing of the software components for the imports side, is due to be completed in May this year. While I understand that the process of integrating these new systems may take several months more, it is reassuring to be told that the new July 2005 deadline will be met. More than enough time, money and effort has been expended on this project already.

I will turn finally to just one provision of the bill. The Senate Scrutiny of Bills Committee raised concerns that item 5 of schedule 2 to this bill gives the minister an apparently unfettered, non-reviewable discretion to order Customs to detain certain goods. The committee pointed out that:

... although the provision states that the Minister must consider that the detention is `in the public interest', there is apparently no means by which the owner of those goods could challenge the exercise of the Minister's discretion.

The Scrutiny of Bills Third Report of 2004, dated 10 March, reported the response of the minister. In part, he said:

The Government protects the Australian community by restricting the import of certain goods, such as dangerous weapons and drugs. Primarily this is achieved through the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Imports Regulations). New or amending regulations are disallowable instruments.

The proposed new provisions will only apply to imports which are restricted by the Prohibited Imports Regulations.

.... the Bill also prohibits the Minister from delegating his or her powers under the new provisions—item 2 of Schedule 2 to the Bill refers. On this basis the Government does not propose that the Minister's decision be subject to merits review.

The Government anticipates that the Minister would only need to consider exercising this power in extreme circumstances. Where this occurs the importer, under the terms of proposed new section 77EF, will be entitled to receive compensation on just terms unless the situation is amicably resolved earlier.

The committee accepted this explanation and the safeguards outlined, as do I. It is a pity the explanatory memorandum did not explain this issue fully in the first place and save a lot of time and trouble for those concerned.

In closing, I am aware that there are many very fine people in the customs department. Many are doing a really good job and applying themselves in Australia's interests. I think that some of the achievements of Customs have been really notable and commendable on the operational side, but I want to repeat that this particular issue of the systems of Customs matters so much to Australia. It is not just a question of money, although the money is huge, but it matters so much to Australia's national interest that Customs really does have to get its act together.