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Thursday, 4 June 1987
Page: 3955


Mr SPENDER(10.31) —The Cash Transaction Reports Bill 1987 seeks to control the distribution or laundering of criminal profits by imposing checks on large cash transactions and facilitating the monitoring of financial accounts with financial institutions. The principal object of the Bill is to prevent tax evasion, but the Bill is also intended to support the enforcement of Commonwealth and State laws generally-for example, the offence of money laundering recently created by the Proceeds of Crime Bill 1987. Mr Costigan, Queen's Counsel, during his Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, encountered a difficulty in following what he called the `money trail'. Among other things, he criticised his inability to gain access to financial records, both domestic and international, and the length of time for which records were kept. He made recommendations regarding these matters and recommended the introduction of reporting requirements.

This Bill, in part, is a belated response to some of Mr Costigan's recommendations. It will be remembered that Mr Costigan's recommendations were made some years ago. The Proceeds of Crime Bill, debated in this place last week, contains other provisions in dealing with financial records. The Cash Transaction Reports Bill sets up the Cash Transaction Reports Agency, to which cash dealers are to report cash transactions involving more than $10,000. Where such transactions are not conducted in cash, the theory is that they will be detected through the improved access to financial records given to law enforcement agencies through the Proceeds of Crime Bill. So on the one hand, the Proceeds of Crime Bill provides access to non-cash records-that is, records of transactions not made in cash-and, on the other hand, we have this Bill.

The information collected by the Agency set up under this Bill is to be made directly available to the Australian Taxation Office and, with the permission of the Director of the Agency, to the Australian Federal Police, the State or Northern Territory Police, the National Crime Authority and the Australian Customs Service. In addition, the Bill requires financial institutions to obtain from prospective account holders statements containing identification details. This information must also be obtained over a period of time from all existing account holders and also when signatories to an account are changed. Failure to comply with the provisions of the Bill attracts a number of penalties provided therein.

The Bill itself is based on the American system which operates under banks secrecy legislation. Whilst there are conflicting accounts as to what has been achieved under that legislation, which came into being some years ago, in the report of 12 June 1986 to the Committee on Governmental Affairs Permanent Sub-committee on Investigations of the United States Senate, the Assistant Secretary of the Treasury Enforcement, Mr Francis Keating, said:

The Bank Secrecy Act has proven beyond all doubt its effectiveness as a law enforcement tool against drug trafficking, organised crime, and the illicit financial activity that supports it. The investigations that the Departments of Justice and Treasury have conducted, particularly those under the President's Organised Crime Drug Enforcement Task Force Program, have relied on the Bank Secrecy Act data and the analysis of this data that Treasury has prepared. In approximately three years of full operation, these task forces have initiated 1,350 cases and resulted in the indictments of 8,649 individuals, 3,678 of which have been convicted.

The Opposition welcomes the Government's final Bill before this Parliament, in its belated attempt to deal with organised crime. The package is certainly not perfect, and significant recommendations by royal commissions still remain in the too-hard basket or have been ignored. However, we have had some action, and some of the recent legislation is supported by the Opposition. There are particular problems with this Bill in relation to its regulatory impact. In saying that I do not in any way qualify the Opposition's determination to root out organised and serious crime, but when legislation is presented to this House we must understand what it does.

The Australian Bankers Association and the Australian Association of Permanent Building Societies have provided estimates of what they calculate to be the costs involved in complying with the Bill, especially the requirements for opening accounts. Officers from the Attorney-General's Department have informed me that there has been some consultation, but it is obvious that the financial institutions still disagree with what the Government proposes. I have received representations from the financial institutions and, no doubt, the Attorney-General has also receive them. The major spread of financial institutions through the Australian Bankers Association, the Australian Association of Permanent Building Societies, and the Australian Federation of Credit Union Leagues claim that some 60 million accounts will be affected at a cost of $180m, and that more than 15 million new accounts being opened each year will be affected at a cost of $75m. They also claim that the Bill will be ineffective in combating organised crime.

In its submission to me, the Australian Bankers Association recommended that the Bill be referred to a parliamentary committee for consideration of its cost effectiveness, the determination of alternative strategies for inhibiting criminal use of legitimate financial intermediaries and the detection of money launderers. Alternatively, it recommended that a provision for the reporting of cash transactions over $10,000 be passed and the issue of personal identification be deferred until resolution of the broader issues of the Australia Card and other personal identification systems.

It is plain that I am not in a position, the Opposition is not in a position and, without a full inquiry, the Government is not in a position, to reach a conclusion one way or the other on the claims made by the financial institutions about the cost involved. On any reading of the Bill, however, it is obvious that it imposes a substantial regulatory burden. Where that is imposed, the sensible course-and one that we understand to be in accordance with the Government's policy-is to refer the proposal to the Business Regulation Review Unit for an assessment of the cost involved. That applies not only to legislation of this nature, but to all legislation, unless we are dealing with something that has obvious urgency and where, for reasons beyond the Government's control, it cannot be referred to the Business Regulation Review Unit. But, whilst this is an important piece of legislation, and in principle we wish to see legislation of this kind in place as soon as possible, there seems to be no good reason why after all these years there should not be a speedy examination of the way in which the Bill will work, the costs involved in implementing it and whether there is a better way of going about things.

It is very difficult to understand the Government's persistent failure to have the Business Regulation Review Unit check out the cost effectiveness of its legislation. I understand that the Attorney-General's Department takes the view that in the case of legislation of this kind, which is directed to stamping out or curbing evasion and cash transactions involving the proceeds of crime-we entirely support that objective, as I have made clear-it is thought to be unnecessary to refer it to the Business Regulation Review Unit. I make the point that, regardless of the kind of legislation with which we are dealing in this House, we need to know the costs involved. While supporting the legislation in principle, I propose an amendment to the motion for the second reading to the effect that the Bill be referred to a parliamentary committee for detailed examination of its cost effectiveness. I move:

That all words after `That' be omitted with a view to substituting the following words:

`the Bill be referred to a select committee of both Houses to report to Parliament as soon as possible'.

The Parliament is about to rise. We will resume some time after 11 July and we could have a speedy examination of the way in which the Bill will operate. If there is a better way of achieving the objectives, we need to know what it is. If the costs are as high as the financial institutions claim, we want to know. Let us get the financial institutions to substantiate their costs. I certainly do not assume that their claims as to the order of magnitude of those costs are correct. But certainly it is a matter that should go to the Business Regulation Review Unit. The institutions could put their proposal to that Unit; if the Bill is sent to a committee as we propose, the same could be done. It may be that we could have a proposal which was very much better one for the purposes of achieving the laudable objectives that this Bill is designed to achieve.

I do not think it necessary to say much more about the detail of the Bill. As I have said before in this House, organised crime and serious crime are major threats to our society. They continue to increase. The law enforcement authorities have been given some new tools, slowly, by this Government. But they still labour under problems of resources, personnel and a failure to implement, or to bring out for public examination in a statement of the Government's position, a whole host of recommendations that have been made, for example, in relation to the taxation system and the way in which the taxation system could be used to pursue organised crime. While these problems remain-problems of law enforcement will always remain with us-organised crime will flourish. We all believe that, if there were an opportunity to float on the Sydney Stock Exchange an organised crime company, people would be killed in the rush to take up shares. The truth is, as everyone who looks at the figures knows, that crime does pay. Serious crime pays very well, and the most serious of crimes pay extraordinarily well. Drug trafficking is an investment for criminals conducting the business of drug trafficking, and for a relatively small amount of money they can reap huge fortunes. We all have a common interest in stamping that out.

This is the last occasion on which I shall be facing the Attorney-General from this side of the table before the next election. Whilst we have had our disagreements from time to time, we have managed to maintain a sense of humour. I wish him happy campaigning but only the success that the Hawke Government deserves. That means that he will be either taking up a new occupation or addressing Parliament from this side of the House. As the new Attorney-General I will look forward to the kind of co-operation that can be expected from a shadow Attorney-General of a party that has been thrown out of power by the decision of the Australian people, which will be given by them on 11 July. So happy campaigning, Mr Attorney. I look forward to the times when, in the very near future, we can once more gaze at each other but from different positions in the House.


Mr DEPUTY SPEAKER (Mr Leo McLeay) —Is the amendment seconded?


Mr Cadman —I second the amendment.