Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

It gives me great pleasure to rise this evening to speak on the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015. About 230 years ago the great economist Adam Smith wrote:

It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.

That is a fundamental point of our economy: when we encourage individuals to engage in economic activity that creates real wealth they benefit themselves and make a profit but the ultimate winner is the society. That is the point that Smith was trying to make. That is why we need to ensure that our laws encourage people to take up activities that create wealth and benefit our society. When people go down a path of crime they are not actually adding wealth; they are stealing from others, causing damage not only to the people they steal from but to our entire society.

I was trying to explain to a school group recently how government works and how it raises and prints money. One of the students came up to me and said, 'If you can print money, why don't you just print money and give everyone a million dollars?' I can see the member for Moreton over there smiling and nodding, and I am sure there would be many on the other side who would think it is a good idea to fire up the printing presses and hand out a million dollars to everyone. I am sure that that young gentleman has a great future in the Young Labor movement—unless we can correct his ways of thinking!

These kids were about 11 years old; they were in fifth class and going into sixth class. Compared to when I was an 11-year-old they actually have been given a million dollars. If you look at the opportunities that they have, and the lower cost and greater variety of goods and services, they actually have a million dollars. That wealth has been created because people in our society have taken up wealth-making opportunities.

I have a few examples. Mr Deputy Speaker Vasta, you may be a few years younger than I am—you are nodding your head—or maybe a decade or two, but let's compare the things we had when we were 10 or 11 to what students have now and the lower cost and the benefits of that. Firstly, think of travel. When we were kids, going to Melbourne or Brisbane for a weekend away was unaffordable. Today, in our society, you can fly from Sydney to Melbourne or Brisbane for $100. The possibility that you can actually afford to jump on an aeroplane and go for a weekend away is the extra wealth that the kids and families of today have.

Think of the lower cost of communications and the opportunities kids have on their iPhones today—things like music. I am sure, Mr Deputy Speaker, that you would have saved up your pennies to go and buy an old vinyl record. Today, kids can download those same songs on their iPhones and, rather than having to play them on an old record player in one particular room in the house, they can carry them around and play them through earphones. When we were kids, to do that would have cost thousands and thousands of dollars.

Or think of motor vehicles. I am sure you can remember when you bought your first car, Mr Deputy Speaker; it was probably still a couple of thousand dollars. We know that the cost of many cars today is the same in dollar terms as it was 30 years ago. But it is not only that; you get a safer, better and more fuel-efficient car.

And it even goes to food. I was in one of the food courts in the Sydney CBD the other day. For $10 I could buy any variety of food from 20 different expert chefs from around the world—Chinese, Japanese, Korean, Mexican, Vietnamese and so on. In past generations, this was not available to us.

It goes on and on and on. But the best thing we have given these kids is greater life expectancy. Through the innovations and medical breakthroughs that we have made, kids in high school today have 10 to 15 years greater life expectancy than my generation had.

All of this has come about because we have an economic system that has encouraged people to go out and create real wealth. But if we allow a system where people can actually build up wealth through criminal activities, we undermine that in its entirety. With our proceeds of crime legislation we send the message out there that, if you think you are going to create your wealth from criminal activity, the government is coming after you. But if you create your wealth through real wealth-creating activities that benefit society, you deserve everything that you get and all the success that you have.

The previous speaker, the member for Throsby, talked about the problems we have with drugs, particularly methamphetamines, on the supply and demand side. I would like to talk about how we have to work on supply and demand in relation to criminal activities. I have great concern about the talk of raising the price of cigarettes to $40 a packet, because that is not going to kill off demand. If we were to raise the price of cigarettes to $40 a packet, I am sure some people would still find the money to buy them, but it would be a boon to the bootleggers and the black marketeers. In most Asian countries, you can buy a packet of cigarettes for the retail price of $1. That is the retail price, not the wholesale price. If you can buy them lawfully overseas for $1 but you make the retail price in Australia $40, all you do is create a great gulf where you encourage criminal activity. We are already seeing it. If any of us in our electorates were to go around to small tobacconist shops, we would see that they are selling black-market cigarettes. There are people selling home-grown tobacco. If we increase the price of cigarettes to $40, whatever benefit there is to society from the reduction in smoking, there will be at least the same problem, if not more problems, with illegal activity in that space.

I turn to the specific provisions of the bill. Schedule 1 of the bill contains amendments to the Proceeds of Crime Act to clarify the operation of that act's non-conviction based confiscation scheme in light of recent court decisions. That is where there may not yet have been a conviction but the court can put an injunction on someone's assets. Schedule 2 creates two new offences of false dealing with accounting documents. It will strengthen Australia's compliance with the OECD anti-bribery convention. The offences will criminalise conduct where a person makes, alters, destroys or conceals an accounting document or fails to make an accounting document that the person is under a duty to make; and either intends or is reckless to the fact that this conduct would facilitate, conceal or disguise the offender or any other person receiving or giving a benefit, or another person incurring a loss, where that benefit or loss is not legitimately due. Schedule 3 makes amendments to improve the clarity of serious drug offences.

Schedule 4 makes several amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act to remove operational constraints that have been identified by a number of law enforcement agencies. We need those provisions to be very strong. We do not want to see wealth earned in this country diverted into terrorist activities. We do not want to see people who have engaged in criminal activities being able to use our institutions to launder money. We do have a problem in this area. There is overseas legislation that is similar to our Anti-Money Laundering and Counter-Terrorism Financing Act. As a result, we have seen the banks closing down many small businesses in what is called the home remittance industry. You generally find that the people running these businesses are from ethnic communities, where they are the pillars of trust and confidence. People trust them to give them their money to organise it, to transfer it to a friend or relative overseas. Even though these people comply with all the legislation, with all the red tape and with all the antiterrorism requirements, they are 90 per cent cheaper than the banks. It is often thought that you need to be big to be efficient. This is an example where you think, 'How could these people do it more efficiently than the banks?' Yet they are able to run these businesses, organise money transfers overseas and charge one-tenth of what the banks are charging. The banks are closing them down, whether for convenience or whether the banks think there is some genuine risk.

At the moment, when money goes through this small home remittance industry, everything is documented and detailed through AUSTRAC. Where money is diverted for a terrorist activity or to criminal activity, the system, through AUSTRAC, works. The system picks up these people. The last thing people in the home remittance industry want to do is have their businesses closed down because they have not complied with the legislation. But their accounts are being closed down. We had a reasonably transparent system, but an unintended consequence of enforcing this legislation is that the banks are closing down their accounts. The money is now being transferred under the counter. We heard examples in committee hearings of people taking hundreds of thousands of dollars in cash on aeroplanes because the banks have closed down accounts. So we are losing the transparency that we had. There are so many ways for people to transfer assets overseas. In closing down a legitimate sector of business, a sector that is complying with legislation, that is reporting any suspicious activity, the legislation is having the reverse effect to what it was trying to achieve. This is something that we need to look at as a government because for many third-world nations it makes up a huge proportion of their GDP.

It is the work that people do here in Australia and then transferring that money back to their families—$60 billion. That is more than 10 times our official government foreign aid. That private foreign aid is sent directly to a family to start up a small business or to help someone who needs it. This is something that we need to address. We cannot let these people close down and be driven out of business.

With that, I am very pleased to hear that the opposition is supporting this bill and I commend it to the House.

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