Proceeds of Crime Amendment (Proceeds and Other Matters)

Federation Chamber, 15 February 2018
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Transcript 

Mr KEOGH (Burt) (11:33): The government does support the Proceeds of Crime Amendment (Proceeds and Other Matters) Bill 2017 to amend the Proceeds of Crime Act as it operates at a Commonwealth level. This piece of legislation serves to rob criminals of any benefit that they may receive from the crimes that they commit. And it mirrors, in many respects at least, a legislative intent of a similar form around the country. This particular bill aligns the Commonwealth unexplained wealth regime with other types of orders in the act to ensure that it covers situations in which wealth is derived or realised directly or indirectly from certain offences. One would have to say that we would hope with this amendment that the unexplained wealth provisions that exist at the Commonwealth level might actually now start to be used. The states have been using these provisions in their own legislation for a long period of time, and one would hope that, having such a provision in the act for quite a while now, maybe the Commonwealth will make use of the provision once it's amended.

The legislation also purports to clarify:

… that property becomes 'proceeds' or an 'instrument' of an offence under the Act—

when those—

are used to improve the property or discharge an encumbrance security or liability incurred in relation to the property, and

clarify that property or wealth will only be 'lawfully acquired' in situations where the property or wealth is not 'proceeds' or an 'instrument' of an offence.

Australia's proceeds of crime regime must be kept up to date. It must meet modern economic conditions and it must ensure that it is effective and that loopholes are not created or maintained that allow criminals to maintain wealth from their criminal activities. These loopholes, where they exist, must be addressed. However, it must also be said that the Proceeds of Crime Act as it currently stands does provide for the forfeiture of property or at least the value of such property in an extremely wide set of circumstances already, some of which may actually be quite concerning, or at least surprising, to the public at large. Foremost of those is cuckoo smurfing, the description of which is probably far too detailed for this speech but is something I'm sure the AFP commissioner and those apprised in this area of the law are familiar with and know needs to be addressed.

In dealing with this legislation, the issue I would like to turn briefly to is the changes to the definition of proceeds and instruments. Those words are used in sections 17 to 19 in relation to restraining orders and 47 to 49 in respect of forfeiture. They're also defined in sections 329 and 330, and it's important to look at those two provisions. Section 329 sets out the meaning of proceeds of crime, and section 330 describes how something becomes or ceases to be a proceed of crime. Generally, the specific will overrule the general. Section 330(4) specifically defines how property ceases to be a proceed of crime. The government is amending section 330 by inserting proposed subsection (8), which provides that whatever is in section 330 will not override or not limit section 329, but that may have the effect of actually creating more ambiguity than the provision as amended is trying to resolve because it sets up a situation where property may be a proceed of crime but it's not clear, at least for the purposes of a bona fide third-party purchaser for value, whether that property actually ceases to be a proceed of crime. It's for that reason, and to deal with those sorts of issues, that not only do we have the opportunity under the Proceeds of Crime Act to confiscate or to forfeit proceeds of crime, which is very important, but the commissioner has the opportunity to seek a pecuniary penalty order. In other words, the commissioner has the capacity to take the same value off the criminal as the proceed of crime, where they cease to hold it themselves.

In that regard, the explanatory memorandum for these particular amendments cuts straight to the chase where it says that the amendments proposed to the act are, in part, directed at the decision by his honour Justice Kenneth Martin of the Western Australia Supreme Court in the decision of the Commissioner of the Australian Federal Police and Huang in 2016. The effect of the amendments could actually be far wider than trying to deal with this case, but it is important to realise that, in that case, if the commissioner had applied for a pecuniary penalty instead of a forfeiture, he would have got the value he was seeking. So in many respects the amendments that are being sought by the government may not have been required but are in response to the poor tactical decision which seems to have been made by the commissioner in that decision. But we don't stand in the way of what the government is proposing to do here, because if there are actual loopholes in the legislation we of course support the government in closing them. I speak only to make sure that it does stand on the record that, in trying to close loopholes, the government may well just be creating others for the future.

What the government also needs to understand is that legislation alone will do nothing to fix issues relating to crime if our police continue to be under-resourced. This government pretends to be tough on crime while savagely cutting funding for the Australian Federal Police. In the 2017-18 budget, the government cut $184 million, with 151 AFP officers let go this year alone. Of course, we have to tackle crime. But, if the Prime Minister were serious about tackling crime, he wouldn't be cutting the numbers of the police force. We should be judging this government on what they do rather than just what they say, because, even though they talk a big game when it comes to law and order, their actions are seriously lacking, not only on the policing end but in actually doing work to ensure that crime doesn't occur in the first place.

But, when it comes to resourcing our primary law enforcement body, the AFP, it's inadequate, especially when it comes to financial crimes. And these are the crimes where the Proceeds of Crime Act provisions are actually the most cutting and should have the most serious effect on those who are thinking of committing crime, because those are usually the most premeditated crimes. Those are the crimes where the people who commit them are thinking about whether they will be caught and what the penalty will be. So it looms large to make sure that the Australian Federal Police, along with its other complementary agencies in the area such as ASIC, APRA and AUSTRAC, are adequately resourced to actually police Australians to make sure that financial crime does not happen.

Similarly, not only do the resources of the Commonwealth Director of Public Prosecutions, so long overlooked by successive governments I will admit, need to be increased, along with the ever-expanding scope of the work of the Australian Federal Police and our other law enforcement agencies, but a significant investment is actually required to catch it up with all of the prior expansion of law enforcement work that has been happening at a federal level in this country. Whilst they remain inadequately resourced, all we see is more and more law enforcement agencies running around trying to catch crooks, as they should; yet, they can't be, or there is a backlog in prosecuting them properly and making sure that justice is brought to bear against those that commit crimes in this country because the Commonwealth DPP is chronically underresourced. These amendments are supported, but, like much of the government's legislation nowadays which I have to speak on so frequently, it's necessity is somewhat dubious, and I really hope that we do not soon find ourselves back in this place having to fix another legislative amendment bungle by this government.