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Wednesday, 6 July 2011
Page: 7830

Ms PLIBERSEK (SydneyMinister for Social Inclusion and Minister for Human Services) (17:55): I present the explanatory memorandum to this bill and I move:

That this bill be now read a second time.

The Social Security and Other Legislation Amendment (Miscellaneous Measures) Bill 2011 contains a number of amendments to protect the integrity of Australia's social security system.

Australia is a society that looks to provide a safety net for those that are most in need. Social security payments provide that safety net to many thousands of Australians.

While the great majority of social security recipients claim payments to which they are rightfully entitled, successive Australian governments have recognised that some people will attempt to receive payments to which they are not entitled. It is necessary, therefore, that there are robust measures in place to ensure the integrity of the social security system.

The bill amends the Social Security (Administration) Act 1999, the administ­ration act, to address issues that have been identified, dating back to the commencement of the administration act in 2000, as a result of the recent case of Poniatowska versus the Commonwealth Director of Public Prosecutions.

For many years the CDPP has prosecuted cases involving social security fraud under various sections of the Criminal Code, particularly section 135.2, 'Obtaining a finan­cial advantage'. These offence provisions involve, for the physical element of the offence, proving that the defendant engaged in conduct, where the relevant conduct is an omission—namely, failing to inform the department of an event or change of circumstances that might affect the person's social security payment or qualification for a concession card.

Section 4.1 of the Criminal Code provides that engaging in conduct includes an omission to perform an act. Section 4.3 provides that an omission to perform an act can only be a physical element of an offence if (a) the law creating the offence makes it so; or (b) the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform.

In the recent case of Poniatowska, a majority of the full court of the Supreme Court of South Australia held that 'section 135.2 does not define any duty or obligation relevant to an offence committed by way of omission'. It further noted that the CDPP had not relied on any notice issued to the defendant to establish a duty to inform the department of an event or change of circumstances, and that the administration act did 'not create a separate "stand alone" obligation'. On this basis, the court set aside the convictions which had been recorded against the defendant.

The Commonwealth has appealed the Poniatowska decision to the High Court, which has reserved its decision. The current position is that a large number of past convictions are at risk of being overturned on appeal on the basis of the decision in Poniatowska.

Since the decision, the CDPP has adjourned or discontinued a large number of matters of this kind before the courts. The CDPP is also not commencing new procee­dings of this kind, pending the determination of the appeal before the High Court.

Since the 2000-01 financial year, the CDPP has prosecuted approximately 36,500 defendants for social security fraud. Without a detailed analysis of each case, it is not possible to state definitively how many matters of social security fraud have been committed via omission since the introduc­tion of the Criminal Code. However, the government's best estimate is that as many as 40 per cent of this number, or around 15,000 convictions, may now be open to question as a consequence of the decision in Poniat­owska. To ensure the past convictions cannot be called into question, this bill amends the administration act to insert a stand-alone obligation for a person to inform the department of events or changes of circum­stances that might affect the payment of a social security payment to the person or the person's qualification for a concession card.

This provision will operate both prospec­tively and retrospectively to 20 March 2000, the date that the administration act comm­enced.

Successive Australian governments have not lightly pursued retrospective legislation. However, in this case there are exceptional circumstances justifying retrospectivity, namely that it would not be appropriate for a significant number of prosecutions condu­cted from 2000 for social security fraud to be overturned on the basis of previously unidentified legal technicalities.

One of the criticisms that can be directed at retrospective legislation in relation to criminal offences is that people will be unaware that their conduct is an offence. In this case, however, the convicted persons would all have been aware that they should have informed the department of the specified events and changes of circumst­ances listed in the notices given to them by Centrelink in relation to their social security payment or concession card. The effect of the retrospective application of this provision is to confirm convictions already made.

As members would be aware, Centrelink has more than seven million customers. Its operations depend on the use of computer programs to generate decisions based on the requirements of the social security legis­lation.

Considerations in light of the Poniatowska decision have also raised some doubt that there is sufficient evidence to prove that, with respect to the period from 12 June 2001 to the present, decisions made by Centrelink under the social security law by the operation of computer programs have satisfied all legislative requirements.

To ensure that these decisions are not open to question, the bill provides that the requirements of subsection 6A(1) of the administration act are taken to have been complied with in relation to decisions made under the social security law by the operation of a computer program for the period 12 June 2001 to the date of royal assent.

Finally, the bill makes technical amend­ments to the Family Assistance and Other Legislation Amendment (Child Care and Other Measures) Act 2011 and to the Family Assistance Legislation Amendment (Child Care Rebate) Act 2011 to correct drafting oversights.

I conclude by noting that the bill has been designed such that there will be no practical impact on the ordinary course of Centrelink's business, or on a person's obligations to rep­ort changes in their circumstances to Centrelink.

Every person who receives a social security payment or a concession card is currently sent notices by Centrelink. These notices require that the person inform the department of events or changes of circum­stances which might affect the person's social security payment or qualification for a concession card. This will not change as a result of this bill.

The bill is necessary to protect the integrity of the social security system. It has been brought forward by the government, based on advice from the Commonwealth Director of Public Prosecutions and the Solicitor-General, to address technical issues that have been brought to light by recent litigation. It does so without disturbing the existing protections that the law guarantees for Centrelink clients.

Leave granted for second reading debate to continue immediately.