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Tuesday, 24 March 1987
Page: 1392


Mr PORTER(4.32) —The Australia Card Bill 1986 [No. 2], which the Hawke Labor Government has introduced into the House of Representatives for the second time, is part of a most deceitful and misleading campaign ever managed by an Australian Government. The Government continues to blatantly mislead the public by saying that the identity card will be effective in combating tax evasion and welfare fraud and that those opposing the legislation are friends of the evaders and rorters. The Government's claim is in direct conflict with the findings of the Joint Select Committee on an Australia Card which investigated the proposal. It is contrary to the report of the Standing Committee on Expenditure entitled `A Taxing Problem' and it is contrary to the findings of five Auditor-General's reports on the massive loss of revenue as a result of Australian Taxation Office inefficiency. Despite the overwhelming weight of evidence that the ID card will not work, the Government continues to pursue the proposal, not because it believes that the card will be effective but because it believes it can fool the people and put heat on the coalition by making it a double dissolution Bill.

Let me remind the House of the findings of the Joint Select Committee. The Committee was established with the single purpose of reviewing the Government's ID card proposal and it found:

Having considered the Government's proposal for a national identification system, as well as alternatives such as the use of photographic cards and the extension of the use of the current tax file system, the majority of the Committee rejects all proposals for the issuing of identity cards, with or without a photograph.

Why did the Committee take this decision? It stated:

The majority of the Committee takes this view because such proposals fail to address the major problems which were to be overcome by the introduction of the national ID system, namely:

to combat tax evasion;

to reduce welfare fraud; and

to identify illegal migrants.

Again, I remind the House that the report was signed by members of the Australian Labor Party, the Liberal Party of Australia, the National Party of Australia and the Australian Democrats. The Committee spent months reviewing the Government's proposal. It had access to experts in the field and took evidence from the departments that were to use the ID card. Nevertheless, the Government ignored that expert Committee's findings and continues to peddle the dishonest and misleading line that the ID card will stop welfare fraud and tax evasion.

The coalition believes that the people of this country have a fundamental right to expect that their elected representatives will ensure the efficient administration of the departments under their control so as to protect them from those who are operating dishonestly within the tax and welfare system. The people of this country have a right to expect that the Government will efficiently administer the laws of the country so that everyone contributes his fair share of tax. People have a right to expect that the eligibility criteria established for the payment of welfare benefits will be strictly applied and that only those who are truly entitled to benefit will receive it. They have a right to expect the Government to know which of those people who have entered the country temporarily have stayed on illegally and are operating within our system illegally. Finally, and very importantly, the people of Australia have a right to expect governments to safeguard individual rights to privacy and civil liberties.

Similar objectives were identified by the Minister for Health (Dr Blewett) in his second reading speech on this legislation. But, regrettably, this Government has dismally failed to meet those objectives. The reason why the Government has failed is that it has run an open door welfare policy and an inefficient Taxation Office. It has proved to be grossly incompetent in administering public programs. The ID card legislation is a cynical attempt to transfer the blame away from itself. The coalition remains firmly opposed to the ID card proposal and we will remain opposed because it will not stop the creation of false identities. As a consequence, it will not stop identity fraud and evasion fostered by this Government's totally incompetent administration. It will increase the size of government by the employment of at least 2,150 new public servants. It is not cost effective. In fact, given the successful computerisation of the Tax Office, the ID card will cost the Government and the business sector more than it raises in revenue. In its present form it will cause chaos for the banking and other sectors as credit card and other bank transactions become unworkable. It is the most significant erosion of our individual rights of privacy and individual liberties ever to be undertaken by an Australian government.

The Government has failed to address the problems of principle that we and others have raised. It has failed to address the problems of detail. Instead, the Government has mounted a cynical and simplistic campaign based on the Goebbels principle that, if you repeat a lie often enough, it will be believed. For example, how often have we heard the Prime Minister (Mr Hawke) say that the card will stop fraud and evasion and that only those who are rorting the system have anything to fear? Of course, nothing could be further from the truth, as I shall explain in a moment. The Government claims that we have no policy and yet a substantial proportion of the Minister's second reading speech was a feeble attempt to try to undermine our alternative policies. The Government claims that the proposal is cost effective. But it has totally ignored the cost to business and it continues to refuse to disclose its estimate of those costs.

The daddy of all the distortions is the Government's claim that the ID card legislation will actually enhance our rights to privacy and the civil liberties of the individual. Through a mixture of misrepresentation, exaggeration, distortion and scaremongering, the Government has sought to sell this massively expensive, massively bureaucratic and massively intrusive ID card by painting those who oppose it as friends of the tax cheats and welfare rorters. As I have said, this must rank as the most dishonest campaign ever undertaken by an Australian government.

Let me focus on some of the fundamental flaws in the proposal which the Government has failed to answer. One of the most important elements of a successful program to use ID cards is the prevention of the creation of false identities and the issue of false cards. The Government was clearly caught in a bind. If it enforced very strict proof of identity requirements it may be difficult for people, including refugees in this country, to satisfactorily establish their identity. In addition, a very strict proof of identity procedure would involve long delays and, given that the Government wants to issue all 15 million Australians with cards over a relatively short period, the task would be impossible. Therefore, the Government settled on less rigorous proof of identity procedures-indeed, less rigorous than identity procedures required to obtain a passport. The result will be that those with a will to do so will be able to create a false identity and obtain a false ID card in that false name. We know that even with the strict proof of identity requirements for a passport false passports are obtained.

The Australian Federal Police have advised me that organised crime is already establishing false names in government records to ensure that they can apply in those false names for ID cards and that, when a check is made as to whether the name of the person applying is known to government, it will obviously appear on government records. If it is possible for people to obtain false ID cards, the central purpose of the ID card falls to the ground. The simple facts are that the ID card will not stop the generation of false identities and, if that is the case, clearly it will not stop people working under false names, claiming welfare benefits under false names or opening interest paying deposits in false names and so on.

The Minister referred to the question of the creation of false identities and he chose his words very carefully. He did not say that it would be impossible to create false identities; rather he said that he believed it would be more difficult to create false identities. But the question is: More difficult than what? Is he saying more difficult than currently, as it is very easy to create a false identity at present because so many of the States issue birth certificates on the receipt of a telephone call and the payment of an application fee. Are we going from a situation where it is very easy to obtain a false identity to a situation where it is just easy to obtain a false identity? The situation is made even more ridiculous by the Government establishing the means under clause 36 whereby a piece of paper can be substituted in the place of the supposedly high integrity ID card. If one cannot readily obtain a false ID card, it will be very easy to obtain a certificate which can be used instead of the ID card. A mere certificate will be easily forged or duplicated.

I repeat that the Government's ID card proposal will not stop the creation of false identities and as such the whole proposal is fundamentally flawed. For argument's sake, let us say that the Government changed the proof of identity requirements and made them extremely strict so that it was extraordinarily difficult, if not impossible, to obtain a false ID card. In that event, are the other claims that the Government makes in relation to the card correct? For example, is the card going to be cost effective? The Government claims that the cost to the Federal Government of the introduction of the ID card is some $760m. That is a very conservative estimate. The cost is more likely to be around $1,000m. The Government has excluded from its costing the cost to other levels of government-State and local-and has ignored the cost to the individual and the cost to business.

The cost to business of the ID card is likely to be around $2,000m. The Government contests that figure, saying that the 2:1 ratio generally applied to the cost to the private sector of government regulation is not applicable in this case. It failed to explain why it is not applicable. All it has said is that the 2:1 formula-that is, for every dollar spent by the Government on regulation, business costs will be $2-established by the Business Regulation Review Unit is not applicable. We have not been told whether the Business Regulation Review Unit has suggested that the appropriate ratio to be used is more or less than 2:1. What we do know, however, is that the Business Regulation Review Unit opposed the introduction of the ID card because of the massive cost of business compliance.

I applied to the Government in mid-November for details of the estimates for the cost of compliance with the ID card. Only after I appealed to the Administrative Appeals Tribunal did the Government agree to provide me with details, but it will only provide them to me on 21 April this year-that is, after the debate on the ID card legislation is scheduled to be concluded. If the Government is confident of its case, why is it refusing to provide these details?

The Minister continually refers to the cost of compliance for the banks and says that, because it will cost them something under $100m, the cost to the business sector could not be $2,000m. I say to the Minister that the compliance costs of the banks are likely to be minimal compared with other areas of the private sector. The significant costs will be for the private employers, stockbrockers, stock agents, real estate agents and so on, all the small businesses which under this legislation will be required not only to record the ID card number of their clients but also to provide details to the Australian Taxation Office of each transaction made. Most of those small businesses are not currently required to report transactions to the Tax Office. Hundreds of thousands of those businesses are not highly computerised and, therefore, to meet the Tax Office's new reporting requirements they will have to report separately each transaction for taxation purposes. This will be a mammoth task.

Providing that the banks' computer systems can handle an additional 12 digit number on each record they keep, it will be comparatively easy for them to meet the Government's requirements. It will not be so easy and it will be far more expensive for all the other small businesses in this country. I repeat: The cost to the banks of compliance with the ID card proposal is likely to be the smallest of the costs to the private sector.

Whilst the Government has grossly underestimated the cost of introducing and complying with the card by some $2,000m it has also grossly overestimated the likely revenue from the card. The major area of expected revenue is tax and the largest area of supposed evaded tax is undisclosed interest. The Auditor-General has issued five reports in recent times on the administrative shortcomings in the Australian Tax Office. The House of Representatives Standing Committee on Expenditure has also reported on the Australian Taxation Office in a report called `A Taxing Problem'. The Expenditure Committee said:

. . . in its initial inquiries became aware of a number of serious shortcomings within certain ATO philosophies and operations. These shortcomings indicated inefficiencies within ATO's taxation assessment and collection operations, and suggested that significant losses to taxation revenue were being incurred. Unnecessary costs have also been imposed upon the taxpayer.

The Committee went on to say:

. . . it was estimated by the Auditor-General, in the interest and dividend area alone, that between $308m and $512m is lost in taxation revenue each year by taxpayer non-disclosure of income and subsequent non-detection by ATO. Given that these figures represent only one source of income, taxation revenue losses through non-detection of total taxpayer incomes could conceivably amount to several billion dollars each year . . . In large measure it can largely be attributed to ATO's internal inadequacies.

It went on to say that it was `astounded that the ATO had persevered so long with this labour intensive approach when funding for ADP acquisitions has been so significantly underspent over recent years'. The Committee reported:

The ATO has over a ten year period underspent by at least $49.0m its appropriations for computer plant and equipment.

The Expenditure Committee concluded:

It has been estimated that each year $2,000m in tax revenue is lost as a result of deliberate or inadvertent understatement and non-reporting of taxpayers' income. Because of the inadequacy of ATO's current information and checking system, the probability of detection is low and as such this form of tax evasion continues virtually unfettered.

The Expenditure Committee went on to say:

The cause of ATO's current inadequacies can be attributed to the aggregation of a number of factors. The lack of computerisation inter-twined with the continuation of labour intensive work practices has certainly retarded ATO's efficient operation. It is this surprising adherence to labour intensive practices that has created many of ATO's woes. It is as though the ATO has been caught in a time warp.

It found that ATO's inability to adapt its operations to a changing environment has really compromised the effectiveness of ATO's revenue collection abilities. In other words, the Expenditure Committee found that some thousands of millions of dollars of tax revenue were forgone each year because of grossly inadequate administration and the lack of automatic data processing facilities in the Tax Office. It is worth recalling that the Expenditure Committee consists of representatives of both sides of the House and includes Labor members-the honourable member for Banks (Mr Mountford), the honourable member for Charlton (Mr Robert Brown), the honourable member for Lindsay (Mr Free), the honourable member for Canberra (Mrs Kelly), the honourable member for Fraser (Mr Langmore), the honourable member for Grayndler (Mr Leo McLeay), the honourable member for Macarthur (Mr Martin) and the honourable member for Calare (Mr Simmons). The Government will undoubtedly respond by saying that the Treasurer (Mr Keating) has recently announced a major computer upgrading program for the ATO in response to the Expenditure Committee's report. I welcome that commitment, but I say to the Government: `You can't have it both ways. If you accept the Expenditure Committee's report and invest hundreds of millions of dollars in computer upgrading because you believe, as the Committee did, and as the coalition does, that such action will overcome the problems of identified tax evasion, you can't claim the same revenue as being a benefit of the ID card. It is a simple case of double counting'.

The revenue estimates given to the Joint Select Committee on an Australia Card are near enough to being exactly the same revenue estimates as the Expenditure Committee has disclosed. What is more, both the Joint Select Committee on an Australia card and the Expenditure Committee came to the same conclusions-that there needed to be a major improvement in the administrative efficiency of the Tax Office to garner in this revenue rather than pursue the ID card proposal. It is, therefore, absolutely wrong for the Government to state that it is confident that the revenue from the ID card will exceed the cost. I repeat: The Government has understated the cost and grossly overestimated the revenue as a result of double counting. It has overestimated tax revenue by as much as $700m a year. It is interesting that the Minister for Social Security (Mr Howe) in the area of welfare fraud is widely claiming the success of recent Department of Social Security crackdowns. These crackdowns are, in fact, only a tightening up of the previous slack administration of eligibility criteria for benefit. What is important is that again the Government is acknowledging that without the ID card it is supposedly cracking down on welfare fraud, something which previously it had been saying it could do only with an ID card. Not only will the ID card cost business a fortune, but also the Bill will severely disrupt everyday transactions.

The Australian Bankers Association, without commenting on the merit of the proposal, has made it clear that, unless there are amendments to the Bill, in a substantial number of cases it will be necessary for it to refuse to transfer funds, to refuse cash withdrawals and other transactions through automatic teller machines and to refuse bank credit transactions when the account records are not able to be validated. Further, the banks say that the ordinary use of credit cards such as Bankcard, Visa and Mastercard will be unworkable unless the legislation is changed. On 5 February this year the Minister announced the Government's decision to make minor amendments to the legislation. He said that that demonstrated its `willingness to accept any reasonable suggestions'. In typical fashion, the Government has now broken that commitment and has indicated that it will not amend the legislation.


Mr Blunt —He got rolled.


Mr PORTER —Maybe he did get rolled but, again, it is just another example of how this Government cannot be trusted to keep its word. It clearly has dropped all pretences of wanting workable ID card legislation and now is interested only in establishing a double dissolution trigger. The Prime Minister (Mr Hawke) said that the Government wanted to push the legislation through in a hurry to see what Budget allocations for next year were necessary. The amendments would not have delayed the passage of the legislation and, as the Minister announced these amendments almost two months ago, surely they are prepared and ready to be introduced. Not only is the legislation flawed in principle, as the Australian Bankers Association has indicated, but it is also flawed in practice. The Government falsely claims that confidential health, tax and social security records will remain secure under the ID card proposal. A similar claim was made in relation to confidential Medicare records, but some of them have been leaked and they appeared on the front page of a Sydney morning newspaper.

The Minister claims that limitations on access to computer records ensure confidential Medicare data is kept secure, that only 20 people have access to the data and that, when they do access it, their access is logged. But the true situation was revealed in a leaked Special Minister of State document. That document states that the Australian Federal Police investigating the leaking of confidential Medicare records said that they had identified 197 people throughout Australia who had access to the information notwithstanding the fact that only 20 possess computer access codes. In other words, the same system which is to be invoked to maintain security of confidential records under the ID card proposal has been found by the Federal Police not to work. What is more significant is that, for the first time under the ID card proposal, tax, health and social security records will be linked with a common identifier and, therefore, all the very personal and highly sensitive material will be much more readily accessible. Of course, there are also going to be some 2,150 new public servants administering the ID card proposal and accessing the computer data terminals.

Finally, and significantly, the ID card legislation constitutes a serious erosion of our individual privacy and civil liberties. No longer under this legislation will the Government be responsible to the people; rather, the people will be responsible to the Government. In other words, as individuals we will have to prove our identity to a public servant in order to obtain an ID card. We will not be able to operate in our community without an ID card. Despite the Government's protestations, the card will have to be carried all the time to undertake almost every financial transaction. This point has been amplified by the Australian Bankers Association submission, which indicates that without the card it would be difficult to undertake bank transactions, including credit card transactions. The Prime Minister has repeatedly claimed that the Opposition opposes the ID card proposal because, he claims, we support tax cheats and dole bludgers. The lie is given to this statement because the Opposition has consistently linked its rejection of the ID card proposal to alternative, less costly, less invasive and more effective proposals.

The coalition, in government, will establish a centralised computer register of births, deaths and marriages. In the area of tax, we will ensure that the Australian Taxation Office immediately upgrades its technological capability, undertaking at the same time a review of all administrative procedures within the Tax Office to make sure that the tax department makes use of all the information available to it. We will require the Tax Office to enforce existing legislation requiring interest-paying agencies to provide to the Tax Office information relating to all dividend and interest payments. We will require all interest-paying institutions to record the name, address and date of birth of account holders so the information can be matched with tax returns.

In the area of social security: With respect to welfare fraud, the coalition will impose strict identification procedures on recipients of social security payments, requiring the use of prime identification documents such as birth, marriage or citizenship certificates. We will not accept, as this Government does, second class proof of identity. We will enforce the existing eligibility tests with regular checks. For example, for the unemployment benefit we will enforce the work test and we will introduce work for the unemployment benefit scheme. We will increase field officer checks and give them power to investigate all accusations of fraud. Labor refuses to give them this power. Our alternative is $2,735m more cost-effective than the ID card and it does not require enormous community expenditure or the massive intrusion into the personal affairs of every Australian which is involved with the Hawke Labor Government's ID card proposal. We oppose the Bill.


Mr DEPUTY SPEAKER (Mr Mountford) —Order! The honourable member's time has expired.