Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

I rise to talk on the Combating the Financing of People Smuggling and Other Measures Bill 2011. The coalition supports the bill in principle. The purpose of the bill is to reduce the risk of money transfers by remittance dealers being used to fund organised crime, including counterterrorism, people-smuggling and other serious crimes, by introducing a more comprehensive regulatory regime for the remittance sector.

I would like to point out at the outset that the title of this bill was of some contention within the Senate Legal and Constitutional Affairs Legislation Committee, which reported on the bill yesterday. The committee listed the title of the bill as one of the key concerns with this piece of legislation. In submissions to the inquiry, both the Australian Privacy Foundation and Liberty Victoria made the point that, by highlighting only one offence which may utilise the remittance sector—that is, the financing of people-smuggling—the title of this bill is uninformative and misleading and should be amended to more properly reflect the bill’s intent and content. I will explain some of these comments a little later on, but they are of course part of the government’s unrelenting spin campaign to do very little to stop the people-smuggling trade by constantly pretending to take action.

It is no secret that organised crime is about generating profit. It has been estimated that organised crime costs the Australian community approximately $10 billion to $15 billion a year. This money has to be laundered and has to resurface somewhere in the legitimate economy somehow. As confirmed by Mr David Ross, from the Australian Crime Commission, one of the primary methods that organised crime uses to get that money offshore is by using alternative remittance dealers. They present a lot of advantages over the regulated financial system—for example, banks. There is less visibility, it is easier to collude with remittance dealers and it is easier to infiltrate that particular sector than, say, the traditional banking sector. It comes as no surprise that it is particularly attractive for organised criminal syndicates to use the remittance sector to launder money. There is less risk of getting caught in doing it this way. With around 6½ thousand providers of remittance services in Australia, in terms of legislation it is essential and integral to ensure that it will be useful and effective in combating the challenges presented by organised crime.

Whilst the title of this bill is misleading, I believe it is important for us to discuss the issue of people-smuggling. Anybody who is familiar with the record of this Labor government would know full well that this is a government that is the best friend that people smugglers have ever had. When it came to office it inherited a system where we had on average three boat arrivals per year. That is one every four months. That record continued for the first year it was in office. Then in August of 2008 it made the very fateful and foolhardy decision to alter the robust system of border protection that it had inherited from the previous Howard government, a system of border protection that had largely driven people smugglers from business.

When those decisions were made that gave a green light for people-smuggling syndicates which had been very active in the past to go back into that evil and insidious trade. As a result, once that green light went up, the people-smuggling syndicates, which are very sophisticated organised crime syndicates operating out of South-East Asia, smuggled down to Australia 215 boats illegally, containing over 10,500 people. This has led to the sorts of incidents we have seen over the past week in our detention network but particularly on Christmas Island where we had the extraordinary sight of Australian Federal Police officers being forced to retake a Commonwealth facility by force because the immigration department had lost control over that immigration detention centre.

The title of this bill, although it refers specifically to people-smuggling, is really part of the government spinning the idea that they are somehow doing something about people-smuggling when this bill relates more broadly to organised crime. I will just turn to people smugglers quickly because they are people who obviously use these money-laundering techniques to generate profits by putting more and more people on each vessel. As we have seen lately, some of these vessels have been getting larger, containing more people. By putting more and more people on each vessel, they increase their profits but they also run a greater risk of a disaster occurring as we saw on Christmas Island in December last year.

The trend towards more people being put on boats has been occurring for some time. Yet, regardless of what the people smugglers do and regardless of how successful they are, the Labor government remain wedded to their policy failures. Labor’s rolling detention crisis puts at risk the lives of not just detainees but Commonwealth officers who are policing these detention centres. The incentive provided by the current immigration regime in Australia for people to come here illegally puts children at risk. The denial of humanitarian visas to thousands waiting offshore is also a moral burden that Labor must now carry for their weak decisions and failed policy.

Last week I had a meeting in my office—and I have often had meetings of this nature—with people who have immigrated to Australia under our generous humanitarian program. Many of them settle in Stirling. They now seek to have a family member who is waiting in a refugee camp, particularly in Africa—in fact, almost exclusively in Africa—brought to Australia to get the protection of the Australian government. Not always but usually the people they come to see me about are women. Very often they are women with children who are trapped in these refugee camps. They lead very difficult lives. They are in grave danger as refugees who are essentially stateless in these enormous refugee camps. There are grave dangers to their health. There are grave dangers to their physical safety. Often they come with terrible stories about their mistreatment at the hands of people in these enormous refugee camps. Quite rightly, their relatives who are in Australia are deeply worried about their welfare. When they apply to Australia for our protection, they apply for a limited number of places. They apply for one of the 13,750 places that we have in our humanitarian program. Sadly, for every person who comes here illegally, the chances of one of those people who are trapped within these terrible refugee camps in Africa of getting one of those humanitarian visas decreases markedly. That is the moral burden that the Labor Party must bear because, when people have the wherewithal to pay US$15,000 to a people smuggler and come down to Australia illegally and are granted protection by the Australian government, they take the place of somebody else who might be sitting in one of those refugee camps in Africa—often a vulnerable woman with children. They take a place from someone who could have legitimately applied for protection from the Australian government.

Last year it was revealed that the Rudd-Gillard government were warned as early as 25 February 2008 that the decisions that I have referred to, which weaken the border and protection regime and immigration regime, carried enormous inherent risks. Advice from the Department of Immigration and Citizenship stated at the time that a range of risk management strategies had prevented significant boat arrivals in recent years. They were referring to the policies pursued by the Howard government, which did manage to successfully drive the people smugglers from business. Rather than strengthening our border protection regime in the face of these threats, the Labor government did exactly the opposite. They knowingly and wilfully dismantled a successful border protection system that had had this issue under control, and the strong working regime they inherited from the coalition has subsequently been completely destroyed. Of course the final nail has been driven into their coffin this week, when the Labor government decided that because they had lost control over the Christmas Island detention centre they could not take new arrivals to Christmas Island, as has been the custom for many years. They have now had to bring them directly to mainland Australia. Thus ends the idea of us having an immigration system with any sort of integrity.

Not only have the Labor Party invited this flood of boat arrivals to our shores; subsequently, the pressure on our detention centres both on Christmas Island and on the mainland led to what we witnessed last week. We witnessed extreme unrest at the Christmas Island detention centre in particular, with detainees lighting fires and creating a situation that forced security staff to barricade themselves into the gym for protection. The way the government reacted to this unrest I think sows the seeds for further unrest down the road, because they essentially caved in to the demands of those rioting asylum seekers. They granted them their wish and transferred many of them to the Australian mainland. They sent additional Australian Federal Police reinforcements and firefighters up to Christmas Island to back up the already substantial numbers of officers that were there. Christmas Island residents are now, rightly, fearful for their safety and they can only imagine what chaos might erupt on their island, which in the past has been quite idyllic.

Astonishingly, the immigration department and indeed the immigration minister were not able to say whether or not all the inmates have subsequently been returned to the detention centre—and in fact they wilfully misled about the fact that they have no idea. Different advice has been given by different people, but the latest advice we have, which contradicted what the immigration minister said just before question time, is that four people remain missing. So they cannot even tell the residents of Christmas Island how many people remain at large. Clearly, the residents of Christmas Island are right to be concerned about that and they are sick of their island being used and abused in this way.

On ABC radio last week a resident of Northam, which is due to host a very similar facility to Christmas Island, a facility that will hold 1,500 single men, spoke about the fears of his community in the wake of the riots on Christmas Island. Graeme said: ‘We are generally fearful for our safety. Like I said all along, I asked questions as to what procedures were in place if there was a break-out or something like that and was basically told that it wouldn’t happen, it would never happen, it can’t happen. But, as you see, it does happen.’ The fears expressed by Graeme on ABC radio are quite valid. Under Labor our immigration detention regime has descended into absolute chaos and anarchy and we are hearing daily reports of yet another break-out, riot or disconcerting event. Had the Rudd-Gillard governments not dismantled the coalition’s border protection regime, there would not have been the chaos that we have witnessed of late and the people smugglers would not have had a wonderful product to sell, which is permanent residence in Australia, as they do now. People smugglers are of course typically another money-making arm of larger organised crime syndicates.

The aim of this bill is to ensure that the people who pose an unacceptable risk by engaging in money laundering—that is, organised criminals, people smugglers or people who may finance terrorism—will not be allowed to provide remittance services in Australia. The bill seeks to reduce the risk of remittance dealers being involved in the financing of people-smuggling, money laundering or the financing of terrorism. The bill aims to improve intelligence sharing and aims to protect against criminal infiltration of this sector. It also aims to ensure that the Australian Transaction Reports and Analysis Centre, AUSTRAC, can crack down on remitters acting unlawfully.

It should also be noted that AUSTRAC is Australia’s anti-money-laundering and counter-terrorism-financing regulator and specialist financial intelligence unit. The agency works in conjunction with Australian industries and businesses in their compliance with anti-money-laundering and counter-terrorism-financing legislation.

As noted on the AUSTRAC website, money laundering can occur in various ways. One of the newer and more sophisticated methods is the laundering of money through bank accounts of unsuspecting third parties and this is known as ‘cuckoo smurfing’. That term was coined by international authorities after the nesting behaviour of the cuckoo bird and the tiny blue figures of a popular Belgian cartoon. Birdwatchers have long noted that bird’s practice of laying its eggs in the nests of other birds, which then hatch the chicks as their own. ‘Smurfing’ refers to a division of large sums of criminal money into smaller amounts. ‘Cuckoo smurfing’ is described in AUSTRAC’s money-laundering methodologies report as something that begins when a legitimate customer deposits funds with an alternative remitter in a foreign country for transfer into another Australian’s bank account.

This is a legitimate activity and is often a cheaper and faster alternative than using a mainstream bank. Unbeknown to the customer, the alternative remitter is part of a wider criminal syndicate involved in the laundering of illicit funds. This criminal remitter, while remaining in a foreign country, provides details of the transfers, including the amount of funds, to a criminal based in Australia, including the account details of the intended recipient in Australia. The Australian criminal deposits illicit cash profits from Australian crime syndicates into the bank account of the customer awaiting the overseas transfer. The cash is usually deposited in small amounts to avoid detection, under transaction threshold reporting requirements. After an account balance check, the customer believes that the overseas transfer has been completed as legitimately arranged. The Australian criminal travels overseas and accesses the legitimate money that was initially deposited with the alternative remitter. Now that the illicit funds have been successfully laundered, the criminal owes nothing but a commission to the money-laundering syndicate for its work.

These are the sorts of things that this bill seeks to address. As mentioned earlier, the alternative remittance sector in Australia provides businesses and individuals with the ability to transfer funds overseas, often external to the formal banking sector. The system operates via agents who enter into agreements to receive money from businesses or individuals in one country and who pay funds to businesses or individuals overseas. The alternative remittance sector can transfer funds relatively quickly, securely and cost effectively and is especially important in countries where established banking networks are not common. In the alternative remittance sector, businesses vary in size and sophistication, ranging from community based independent remittance dealers, which are sole operator businesses, to large multinational entities that have extremely sophisticated operations. It is estimated by AUSTRAC that there are approximately 6,500 individual providers of remittance services in Australia, the majority of which form part of larger networks. Currently, under the Anti-Money Laundering Counter-Terrorism Financing Act, reporting entities are required to report international funds transfer instructions and threshold transactions over A$10,000 to AUSTRAC. In their submission to the Senate Legal and Constitutional Affairs Legislation Committee’s inquiry into the bill, the Australian Crime Commission said that the remittance:

… sector is an intersection point where many critical threats and vulnerabilities meet: specialist money-laundering syndicates operating as professional service providers—

weak or absent anti-money-laundering controls that enable ID crime—

poor quality reporting, including misreporting which distorts money trails; susceptibility of criminal manipulation or infiltration; and signs of trade based money laundering and close connections to higher risk countries or regions.

With this in mind I will now briefly turn to the amendments proposed within the bill. As noted in the bill’s explanatory memorandum, schedule 1 amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to strengthen the Commonwealth legislative framework on the regulation of remittance dealers and the providers of remittance networks. Schedule 2 amends the same act to expand a list of agencies with which AUSTRAC can share intelligence. Schedule 3 amends the same provision in the Privacy Act to enable reporting entities to use credit reporting data to verify the identity of their customers. Schedule 4 amends the Financial Transaction Reports Act to enable the AUSTRAC CEO to exempt a person from one or more provisions of the act.

As I mentioned earlier in the speech, the Senate Legal and Constitutional Affairs Legislation Committee has had a detailed look into this bill. I want to touch on some of the comments that have been made in relation to that inquiry—particularly, as you might imagine, by the Liberal senators on that inquiry into the bill. Their report was tabled only yesterday, and they were of the view that the title of the bill does not relate to either its content or its intended purpose. While the key measure in the bill deals with enhanced regulation of the remittance sector, the title of the bill focuses only on one aspect of the possible misuse of the remittance sector—namely, the financing of people smuggling. The title of the bill is clearly uninformative and misleading and Liberal senators believe that it should be amended to reflect the bill’s actual content and intended purpose.

The Liberal senators also recommend that the following matters be addressed: the public release and consideration of the anti-money-laundering and counter-terrorism-financing rules, the establishment of appropriate memoranda of understanding for the sharing of intelligence between AUSTRAC and the new designated agencies, and a reassessment of the regulatory burden imposed by the bill on businesses in the remittance sector and a clarification as to whether the proposed changes create efficiencies or merely shift costs within the sector.

In conclusion there is one other issue that is worth noting. It was brought up by the ACC in their submission to the Senate inquiry. The registration of remitters should be a useful tool to increase the regulation of the remittance sector. However, a potential consequence of increased regulation may be that illegitimate remittance providers might be more covert and more into the unregulated and non-reporting environment than currently exists. This black market would need to be carefully monitored over an extended period of time to identify what, if any, emerging methodologies might be used to facilitate financial crimes, including money-laundering activities or the financing of people-smuggling and trafficking activities.

With organised criminal methodologies constantly evolving, it is imperative that our front-line agencies are adequately resourced to deal with the increased sophistication of these criminal networks. While the coalition supports this bill in principle we reserve the right to foreshadow potential amendments in the Senate. Clearly, those areas that have been highlighted by the Liberal senators on the Senate committee will be one area that we will be looking at. I condemn the government for naming this bill in such a way that it pretends to do something about the crime of people-smuggling when clearly this government has done so much to encourage the trade. We will certainly be looking at rectifying that and some of the other points that have been brought up by the Liberal senators once this bill reaches the other place.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I would like to welcome guests who are visiting the Main Committee today from overseas. I hope that you enjoy your experience visiting the Australian parliament.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I can be of a little assistance. Our guests are from Vietnam Sydney Radio and are people whom I know are very passionate about human rights issues in Vietnam.

I too join in the support of the Combating the Financing of People Smuggling and Other Measures Bill 2011, which amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. It will help reduce the alternative remittance sector being used as a means of financing people-smuggling and other areas of serious and organised crime. It will also amend the Privacy Act 1988 and make it easier for businesses, particularly financial institutions, to verify the identity of their customers electronically and, importantly, allow the Australian Transaction Reports and Analysis Centre, AUSTRAC, to share the information with other intelligence services, consistent with the current practice of the Australian Federal Police and the Australian Crime Commission.

Unfortunately, the remittance sector often plays a significant role in serious and organised crime, particularly people-smuggling, providing the funds needed to organise smuggling ventures and to support other organised criminal activities. AUSTRAC needs greater powers to identify potential sources of financial assistance to people-smuggling and other organised criminal activities. We know that the victims of people-smuggling often pay an extremely high price and that, regrettably, that price is sometimes their lives. People-smugglers who have profited from the desperation and vulnerability of others are often able to walk free with minimal punishment and with profits in hand. It is essential that we address this issue at the grassroots, that we attack the profit motive that underpins people-smuggling.

The government is committed to carrying the message that people-smugglers and traffickers will be caught, prosecuted and punished. I congratulate the Australian Federal Police for the significant role they are playing both in Australia and internationally in the detection and disruption of people-smuggling activities. We believe in human life and we see that this criminal activity puts people in unrealistic danger day in, day out. It is well known that people-smuggling and people-trafficking are a well-established and lucrative business throughout the Asia-Pacific region. Quite frankly, it is a criminal trade that rivals the smuggling of drugs and firearms in terms of profitability. It is among the world’s most lucrative criminal activities at the moment. I know that is a sad reflection of modern society. Many in this world do not value human life.

Making it tougher and having more stringent requirements to register as a remittance dealer will allow AUSTRAC a greater ability to control, refuse or cancel any remittance suspected of assisting people-smuggling and other organised criminal activities. Streamlining the flow of money for people-smuggling and other organised crimes will also attack the profit motive at the grassroots level. The $2 million invested in combating people-smuggling and enhancing border protection over the last two budgets was used to focus on prevention, stabilisation, deterrence, detection and interception. If we ever need a reminder of how vile and ruthless these people-smugglers are, we need only think back to the Christmas Island tragedy which claimed 50 people, including children. It is important that we do something not only to shut down this business but to protect people. When discussing the issue of people-smuggling one can draw a parallel with the other heinous global crimes, as I have mentioned, of drug and firearm smuggling.

Criminals are nothing other than nefarious businesspeople. They are attracted to their particular business by a profit motive. What we are seeking to do through this legislation is to make it more difficult to realise a profit from the crime of either people smuggling or people trafficking. Until the exploitation has occurred, I have to say it must be very difficult to distinguish between people-smuggling and people-trafficking cases. Internationally, about 800,000 people are trafficked each year into slavery, of whom 80 per cent are female, 50 per cent of whom are children. What I have been able to discover through my research is that the average cost of a human slave today is US$90.What a value to put on the life of a child. Again, this is a very sad reflection of our world and it is why we need to work together in a way that addresses crimes such as people trafficking and people smuggling.

It is a shocking and unacceptable fact that in this day and age around the world slavery and servitude are still a daily reality for a number of people. According to the International Labour Organisation, 2.45 million out of 12.3 million people are trapped into forced labour and/or trafficked internationally. This clearly indicates the need for far more efficient monitoring and detection of illegal transaction activities such as people trafficking and smuggling. Again, I pay credit to the good work that I know is being done by Commissioner Tony Negus and the Australian Federal Police. I have been able to visit a number of their facilities internationally and have seen firsthand the level of intelligence and activity being conducted by the Australian Federal Police. It is certainly a credit to them and also a credit to our nation that that effort is being made.

Human trafficking is the third largest source of income for organised crime, only exceeded by arms smuggling and drugs. The Minister for Justice recently indicated that non-government organisations play a very significant role in raising awareness of human trafficking, identifying cases and providing support to victims. The victims of these activities are the ones who we must not forget.

In November last year I met with the Josephite Counter-Trafficking Project and the Australian Catholic Religious Against Trafficking in Humans, one of the organisations focusing on assisting victims of human trafficking. The Josephite Counter-Trafficking Project is organised by the Sisters of Saint Joseph of the Sacred Heart. This project was established in 2005 to promote in a holistic way the spiritual, physical and emotional development of people who have undergone the trauma of being trafficked into Australia. Since 2005 the sisters have developed a network, in collaboration with other religious groups, the Department of Immigration and Citizenship, the Australian Federal Police, the Red Cross, the Salvation Army and other NGOs. Sister Margaret from the project indicated to me that any response to the trafficking of persons into Australia should have at its root the human rights aspect of the approach. I seek leave to present a document on the Josephite Counter-Trafficking Project.

Leave granted.

As I previously stressed, next to assisting the victims and upholding their rights, it is essential that we work at the grassroots of this issue—that is, to attack the business nature of the crime itself. It is essential that we muster all avenues available to us to shut down these criminal operations, but to do that we must be able to detect them. One way of doing that is to give AUSTRAC the powers in this bill and particularly, in respect of remittance dealers, to be able to make a valued assessment, which is effectively criminal intelligence, of the operations that are being funded, whether those are people-smuggling operations or other organised criminal activities.

Referring again to the people who are the subjects of these people-smuggling and people-trafficking operations, I think it is only fair that we acknowledge that most of these people come from highly disadvantaged backgrounds and have suffered very desperate conditions. That is why it is very important that we as a country continue to participate in the progress of the Millennium Development Goals. We cannot let people smuggling and people trafficking deter us from our obligations as a nation that values and champions human rights protection.

In 2009, there were over 43 million people forcibly displaced worldwide, over 15 million refugees and close to one million people seeking asylum. The question is not whether we should assist; I humbly submit that the question should be: what activities do we undertake to address these issues and combat the crimes associated with people smuggling and people trafficking? It is therefore important that we put the focus on the organisers of people smuggling and their operations, and commit our energies to disrupting this criminal enterprise. Amending the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 will give AUSTRAC greater control in its attempts to achieve greater scrutiny of remittance dealers and offshore money transfers so as to be able to detect and share that intelligence with partner agencies, with a view to shutting down these illegal operations.

In the short time I have had available to me, I have acknowledged representatives from Vietnamese Sydney Radio. As I said at the outset, I am quite aware of how passionate they have been in championing human rights in Vietnam to date. With the assistance of Vietnamese Sydney Radio, I have been in contact with people in Vietnam, including Father Ly, who is once again being detained by the authorities. It is a reality that, in this day and age, there are still places all over the globe where people can be detained without trial—including Vietnam, where there are over 400 people currently in detention—and where people are simply denied their human rights.

Human rights are central to what we are doing with this bill with regard to people smuggling. It is not simply about trying to shut down the illicit, criminal activity involved. As I indicated, we are very much focused on the victims of people smuggling because we believe in human rights. If we believe in human rights for people in this country or when they come to this country, we too have an obligation to uphold human rights and pursue that internationally.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I want to commend the member for Fowler for his proper and valid concern for human rights and his ongoing compassion towards other human beings. It is something that we share in this place. And his remarks on slavery and all of those other worthy causes are of course welcome. In speaking on the Combating the Financing of People Smuggling and Other Measures Bill 2011, however, I think the member for Fowler is also courageous—courageous in standing up to his party’s machine and speaking out about the problems that we face in Australia today because of the upsurge in people-smuggling and the failed policies of the Gillard and Rudd Labor governments. We see here there are only three brave members from the Labor Party prepared to speak out on this bill—just three brave people coming forward to say that they believe that not enough is being done to combat people-smuggling in Australia today. The coalition has four times the speakers here today, coming forward to highlight what we see as a very serious problem for Australia’s future—in the context of riots in detention centres and an overburdened system—where people-smuggling is rampant and a lot of money is being made by people-smugglers. That is of course why we have this bill and its provisions in front of us today. So I do commend those three brave Labor Party souls. And I know the member for Dobell is going to come forward and strongly condemn people-smuggling and the government’s performance in this regard. I look forward to his remarks on how we are going to do better as a government and as a country.

I had the opportunity to meet with an Israeli prosecutor some months ago who has spent her time prosecuting terror groups and those institutions that finance them—banks, and anybody who holds money for groups that are responsible for terror activities around the world. She has had some success in many jurisdictions, notably the United States, including prosecuting North Korea and other different institutions and countries, for helping to finance activities related to terrorism. She has done that through seeking damages, by suing on behalf of victims of terror activities. This is a worthy instrument in terms of the purposes of this bill—that we should seek to hinder and hamper the operations of people-smugglers by restricting the ability of them transfer funds and to house funds and to use money in what is an illegal activity. So I want to commend her efforts in fighting terrorism.

The intention of this bill is a worthy one. It is sad that we have so much people-smuggling today that we have to introduce a bill like this, because this does affect a legitimate sector of the economy—the alternative remittance sector, which is a legitimate business with people conducting legitimate activity. One of the things I never enjoy in this place is our rush to regulate whole sectors of the economy in order to deal with very specific and defined problems and some people who are causing trouble. It places a burden on all of the rest of the sector. And that, again, is the undesirable element of this legislation that we are considering today.

With a more comprehensive regulatory regime for the remittance sector, the remittance sector are being made to pay because of an increase in criminal activity in relation to people-smuggling. An increase in criminal activity, which we would argue is a result of failed policy at a governmental level leading to a marketplace for people-smugglers and an increase in people-smuggling, has now placed a burden on the legitimate operators and the people in the sector who are conducting legitimate economic activity.

We know that the alternative remittance sector is entirely legitimate. It provides businesses and individuals in Australia with the ability to transfer funds overseas outside the formal banking sector. There is nothing wrong with that. We do not have to mandate that they go through banks or particular financial institutions, considering the diversity and enormity of the global economy today. The remittance sector can transfer funds quickly, securely, cost-effectively and is invaluable in countries where established banking networks are not commonplace or sophisticated. So this is an important sector of our economy that plays an important role in the international transfer of funds, something that is particularly important to a country like Australia, which relies heavily on foreign investment and the transfer of financial capital in and out of our financial markets on a daily basis. So it is an unwelcome development that we must over-regulate this sector because of criminal activity that we are not dealing with sufficiently as a nation. I want to reject Labor’s approach in handling people-smuggling, in handling border protection in general, which has led us to the point where we have this problem today.

There are of course other activities that are not related to people-smuggling that are impacted by this bill. In those intentions, it is a worthy act of the government and this bill in acting to deal with the practice of what is commonly referred to as ‘cuckoo smurfing’. I have not heard many members talk about cuckoo smurfing here today, but it is an interesting area—something I had the opportunity to read about and learn a little bit about. It is effectively money laundering. The term originates from a cuckoo bird, which lays its eggs in the nests of other birds.

The cuckoo smurfing technique involves a legitimate financial transaction occurring in one direction and an illegitimate flow in the other direction—this is criminal activity, in other words. These smurfs involved in this activity are engaged in an insidious crime using genuine recipients of their money. When you think of the smurfs, you think of the cartoon show. I used to watch it when I was growing up—the member for Ryan agrees with me there—with Papa Smurf and all of their related activities. But these smurfs are not nice characters, unlike most of the smurfs in the cartoon. In fact, there are master smurfs that spend all their time engaged in this process making a lot of money. It has been estimated that crime in Australia generates up to $6.3 billion a year, which is a lot of money. Money laundering activity in cuckoo smurfing is worth up to five per cent of global gross domestic product, which is $56 billion here, an amazing amount of money when you think about it.

What is being discussed here in relation to increasing the regulation provisions are worthy objectives, particularly the legislative framework on the regulation of remittance dealers and of the providers of remittance networks—that is, not just the dealers but those who house many dealers and provide networks for them—is a worthy objective in dealing with money laundering. We must have those frameworks in place to ensure that the law is adequate in emerging areas of the global economy. This is an emerging area of the global economy where the use of alternative networks for the transfer of funds is becoming increasingly more common. Therefore the law needs to be adequate in order to deal with them.

The term cuckoo smurfing is interesting. But when you look at the way that this money and these transfers work, for this bill to be entitled Combating the Financing of People Smuggling and Other Measures Bill, I am sure this is not the only mechanism that is used by people smugglers to conduct their insidious trade. Perhaps a more comprehensive suite of measures directed at people-smuggling would be better brought to this place. Of course, we know there is a lack of will in dealing with people-smuggling at the moment because of the associated problems with border protection, the failures and the government policy—and that is a sad thing.

It is the case that financial institutions that engage or house money for criminal organisations or outfits should understand they may be held liable for the actions, outcomes and consequences of housing or transferring that money. That is the exact principle that the Israelis are following up in relation to terrorism right now, and it is working. Damages are being awarded by courts internationally in relation to the consequences of financial institutions housing money for criminal activity.

In relation to people-smuggling, I would say to those financial institutions that may or may not know or have done their due diligence in understanding that if they are housing money for people smugglers or transferring funds for people smugglers they may be held liable down the track for the victims of the very sad situations we see when boats are sunk or when people lose their lives or when family members come forward to sue those institutions. As tragic as those events are, that is the system of law we all uphold—that is, people do have the right to come forward and hold everybody in the chain of what led to those events accountable, including financial institutions. There is no separation in law of the responsibility where events in criminal activity have occurred when these institutions have been involved.

While the government is keen to dress this up as a ‘very tough on people-smuggling’ measure, and indeed it will have some impact, the coalition does have some concerns in relation to some provisions that are being proposed here today. The coalition does support the bill in principle, and I have made it clear why that is. We have always had a good record on border protection. We have taken measures that needed to be taken in a timely fashion to ensure we did not get to this point where we are in effect penalising a whole industry for the operation of one criminal sector of that industry, and that is what we are doing here today. No member of this place should enjoy the fact that we are doing it, even though we have to do something to crack down on this insidious trade.

There has been an inquiry in the Senate, and we are foreshadowing amendments to this bill. I support many of the potential considerations the Senate is raising on this matter, including a legitimate concern with privacy relating to the increased ability of agencies to share information. The government reports that this bill is enhancing information sharing to ensure that government agencies work together in a coordinated way. However, there are some concerns that are valid when you think about the agencies that are involved. AUSTRAC can share financial intelligence with the Department of Foreign Affairs and Trade, the Defence Imagery and Geospatial Organisation, the Defence Intelligence Organisation, the Defence Signals Directorate and the Office of National Assessments under the provisions of this legislation. When looking at all of those providers we mentioned—I think it is up to 2,500 or maybe more, I might have the figure wrong; many thousands of those providers—when you are thinking about the impact upon that sector, then there is an argument to be had here and we have foreshadowed potential amendments to this legislation.

While we do in principle support this legislation it is unfortunate that it has come to this. If this is the government’s sole response to the very tragic situations that we have seen, which have been some years in the making in relation to the protection of Australia’s borders and the dramatic increase in people-smuggling activity we have seen in recent years, this will not be sufficient. This legislation will address only a very small symptom of a broader problem and not address its fundamental causes or roots.

No member of this place and no member of our community out there listening or that hears about this particular legislation, which has such a tough-looking bill title, should believe that this is going to solve what is becoming a rapidly growing problem for Australia today. It is not. The lack of interest shown by Labor members in speaking on this bill highlights that. Some will come out and say that we are very tough on border protection. Kevin Rudd had a view under his government that we were tough but compassionate at the same time. Members opposite are agreeing with me. But we have seen what tough and compassionate means. Who are we tough to and who are we compassionate to? When we are using tear gas and firing rubber bullets in detention centres I am getting very confused about who we are being tough to and who we are being sympathetic to when people-smuggling is flourishing and this insidious trade is increasing. It is confusing, and out there today in the world we are seeing the effects of this policy confusion. This bill is a response to this inherent policy confusion and failure from a Labor government that is desperately seeking some answer to a crisis of its own making.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Combating the Financing of People Smuggling and Other Measures Bill 2011. It is interesting following the member for Mitchell because you would have thought with his opening remarks that it was in fact a coalition bill, but it is a government bill. That clearly needs to be pointed out. The government is proud of the work we are doing in relation to disrupting people-smuggling and border protection generally. These issues are complex and sophisticated and they require complex and sophisticated measures. This is not an area where a cheap slogan can be thrown out there and it will solve the issues and the problems throughout the globe. We have issues in relation to the movement of people throughout the world. The problems are starting at source countries where particular circumstances mean that people are desperate to try to improve their lives and move from those countries to safer places such as Australia, Canada, the United States and different countries in Europe. It is happening throughout the world that, where there are severe disruptions and threats to people’s lives, they try to find a better place to move. That is the first area that is the cause of people moving.

The second area that we need to be concentrating on is our laws and the efforts we make to disrupt people-smuggling through those transitional countries along the way where people are moving from their original source country looking for asylum in safer places. This bill goes to that question in relation to looking to disrupt the financing of people-smuggling. The bill seeks to reduce the risk of the alternative remittance sector being used to finance people-smuggling and other serious and organised crime by introducing a more comprehensive anti-money laundering and counter-terrorism financing regulatory regime for the alternative remittance sector.

The Privacy Act 1988 is being amended to introduce measures that will allow the electronic verification of data, making it easier for people to open bank accounts online or use online payment systems. It will also allow the Australian Transaction Reports and Analysis Centre—AUSTRAC—to share information with more intelligence agencies, consistent with the practices of the Australian Federal Police and the Australian Crime Commission. Further, it will replicate the exemption provisions in the AML/CTF Act in the Financial Transactions Report Act 1988.

This government is committed to combating people-smuggling and strengthening Australia’s border security. We want a framework of countries to work together to break the business model of people smugglers. Talks are progressing with our regional partners. This government is working hard to make lasting improvements to the region’s response to irregular migration and to undermine the people-smuggling trade in our region. We know that these smugglers prey on people in very difficult circumstances, which is why we are trying to break their business model with tough people-smuggling laws and by removing the incentive for onward travel.

Looking at the action that this government has taken, in the last two budgets the government has invested almost $2 billion on a whole-of-government strategy to combat people-smuggling and enhance border protection. The strategy is focused on prevention, stabilisation, deterrence, detection and interception. The government takes any suspected cases of people-smuggling very seriously. That is why we acted to strengthen Australia’s people-smuggling laws in May 2010, introducing tougher penalties and extending mandatory minimum penalties for people involved in people-smuggling offences. Law enforcement authorities have identified international cash transfer services provided by alternative remittance dealers as a key method used to pay people smugglers.

The bill introduces measures to strengthen the existing anti-money laundering and counter-terrorism financing regulation of the alternative remittance sector and forms part of the government’s broader prevention and detection strategy for combating people-smuggling announced in April last year. The remittance reforms will reduce the risks of criminal infiltration and abuse of the remittance sector by giving AUSTRAC greater knowledge of, and control over, those operating in the sector.

AUSTRAC works collaboratively with Australian industries and businesses in their compliance with anti-money laundering and counter-terrorism financing legislation. As Australia’s financial intelligence unit, AUSTRAC contributes to investigative and law enforcement work to combat financial crime and prosecute criminals in Australia and overseas. The reforms will provide AUSTRAC with more effective enforcement powers by expanding their ability to issue infringement notices and breaches of the AML/CTF Act. This will ensure that AUSTRAC can take proportionate enforcement action in a timely manner and will act as a deterrent for non-compliance. They will also shift the compliance burden away from small business agents who make up the vast majority of the remittance sector and on to the large remittance network providers, for example, Western Union. This reflects the existing structure and practices of the sector.

The bill will enable AUSTRAC to share financial intelligence more broadly with the Australian intelligence community to ensure a more holistic approach to Australia’s national intelligence effort on national security and organised crime issues. The government’s December 2008 National Security Statement recognised the growing threats of these transnational activities to Australia’s national security and identified the need for improved coordination amongst Commonwealth agencies, including enforcement, regulatory and intelligence agencies, in response. The current arrangements do not allow for the contribution that financial intelligence could make to the analysis of national security issues, particularly organised crime, terrorism and the like.

Adding DFAT as a designated agency is important given their role in combating terrorism financing and administering Australia’s UN sanctions regime. The measures in the bill build on the steps already taken by the government to enhance information sharing amongst agencies, such as the new Criminal Intelligence Fusion Centre in the Australian Crime Commission, which was launched in July 2010 to generate and share information and intelligence on organised crime. Financial intelligence plays a strong role in the enforcement and regulatory responses to criminal and terrorist threats. There is considerable potential for financial intelligence to inform reporting and assessment on national security issues. This bill will enhance information sharing with intelligence agencies to ensure that the government agencies work together in a coordinated way to counter threats to Australia’s national security.

The verification of identity measures implement one of the recommendations made by the Australian Law Reform Commission in 2008 and will make it easier for consumers to access designated services online. Banks and other businesses that are subject to the AML/CTF legislation are presently required ‘to know their customer’; that is, they have to confirm the identity of anyone who wants to open a bank account, transfer money or provide a variety of other financial services. Businesses can presently verify the identity of their customers using document or electronic-based means, or a combination of the two. The electronic sources available for businesses to verify their customers’ identity are limited. As a result, the success rate for checking identity online remains low which impacts on business. Where a bank is unable to confirm identity electronically, consumers who want to open a bank account online—for example, ING who only operate online—need to go into an Australia Post outlet to have their identity verified in person. This is costly for business and an inconvenience for consumers, which inevitably leads to consumers being attracted to the larger banks with traditional branch structures. This change will open up another electronic data source, credit reporting information, to improve the success rates for electronic verification of identity checks.

A number of privacy provisions have been implemented to balance the expanded use of credit reporting data. For example, customers must consent to their personal information being disclosed to a credit reporting agency for the purposes of verification and alternative verification options must be provided to the customer. A credit reporting agency can only provide an overall assessment of the extent of the match between the personal information provided to it and what it holds on file, it cannot disclose information that is held on a credit reporting file. Reporting entities and credit reporting agencies must retain records for seven years and then delete them, and enable individual’s access to such records. The unauthorised access of verification information, obtaining access to verification information by false pretences and unauthorised use or disclosure of verification information are offences which carry a penalty of 300 penalty units, which is currently $33,000. The measures will decrease compliance costs for businesses and increase competition between online businesses and those businesses that have traditional branch structures.

This bill is designed primarily to help stem the flow of money for people-smuggling ventures as well as other serious crimes. People smugglers need money to launch their dangerous ventures. The Gillard government is committed to stopping them from getting the funds they require to ply their illegal trade. Law enforcement agencies are concerned about the role the remittance sector can inadvertently play in facilitating people-smuggling. We are dedicated to doing all that we can to help our law enforcers to stop this terrible trade in human life. To this end, the Combating the Financing of People Smuggling and Other Measures Bill introduces amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to strengthen the regulation of the remittance sector. These measures will help limit the risk of remittance dealers facilitating people-smuggling, as well as money laundering, terrorism financing and other serious crimes.

This bill complements laws introduced last year that mean people who provide material support to people smugglers now face up to 10 years jail and fines of up to $110,000. A lot of rhetoric has gone on both in this place and outside of this place on the effects of people-smuggling and on how strong and tough people are in combating these issues. This government has taken a systematic approach to making sure that we do everything we possibly can to stop people-smuggling, to stop them putting vulnerable people’s lives at risk. This piece of legislation is but one part of that important approach and is important legislation. I commend the bill to the House.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

The Combating the Financing of People Smuggling and Other Measures Bill 2011 does make sound amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Financial Transaction Reports Act 1998 by strengthening the regulatory framework for remittance dealers, especially by giving AUSTRAC, the Australian Transactions Reports and Analysis Centre, greater scope to refuse or apply sanctions to the registration of people and businesses providing remittance services. However, the name of this bill is somewhat confusing, given that it does little to actually combat the financing of people smuggling. Under the Anti-Money Laundering and Counter-Terrorism Financing Act and the Financial Transaction Reports Act, reporting entities such as financial institutions and bodies dealing with monetary transactions are required to report all international funds transfer instructions, any transactions over $10,000 in physical currency and any suspicious transactions regardless of amount or destination. This information is collected and analysed by AUSTRAC, playing a key role in stopping transnational crime and money laundering activities.

Of these reporting entities, those falling under the alternative remittance sector are recognised as high risk for money laundering and criminal financing. These are usually non-bank entities that specialise in international money transfers or small to medium businesses that provide the service alongside other, unrelated services. The vulnerability of the alternative remittance sector is evidenced by the growing trend in criminal money laundering of cuckoo smurfing. The unusual name is a reference to the cuckoo bird’s habit of laying its eggs in another bird’s nest which then hatches the eggs as their own; and ‘smurfing’ refers to the division of large sums of money into smaller amounts. AUSTRAC’s typologies report of 2008 describes the process in four steps. In the first step, a legitimate customer outside of Australia deposits funds with an alternative remittance dealer to be transferred into an Australian bank account. The second step is that, unknown to the customer, the remittance dealer is part of a criminal syndicate; the remittance dealer provides details of the intended transfer, including the amount and the receiver’s bank details, to a remittance dealer in Australia also working for the criminal syndicate. The actual transfer of funds does not take place. In the third step, the criminal remittance dealer in Australia deposits dirty money from the proceeds of crime into an innocent Australian receiver’s bank account. As both the amount and the transfer details match with what was legitimately arranged, the receiver believes the overseas transfer has occurred. Finally, in the fourth step, the clean money, retained by the criminal remittance dealer overseas, is passed on to the criminal syndicate. The process is repeated numerous times until all the illicit funds are laundered into clean overseas currency. In one case documented by the Queensland Crime and Misconduct Commission reported in the Australian on 21 January 2010, $1.7 million in drug money was deposited into the unwitting recipient’s Australian based bank account over a six-week period, through 61 separate cash deposits ranging from $3,500 to $150,000.

Cuckoo smurfing relies on remittance dealers engaging in illegal activity. Members of organised crime syndicates may become remittance dealers or may coerce previously legitimate dealers to engage in laundering. Unfortunately, even where remittance dealers are known to have or are suspected of having links to organised crime syndicates, the Chief Executive Officer of AUSTRAC currently does not have the discretion to refuse an application to become a remittance dealer due to the unsuitability of the applicant. Section 76 of the Anti-Money Laundering and Counter-Terrorism Financing Act states that, if a person makes a written application to the AUSTRAC chief executive officer for their details to be entered on the register of providers of designated remittance services, and the person’s name is not already on the register, then the AUSTRAC chief executive officer must enter the person’s details.

The result of this inflexibility, stated in the explanatory memorandum to this bill at page 7:

… means that criminals are able to legally operate as an alternative remittance dealer.

Schedule 1 of this bill introduces measures to remedy this anomaly. These include requiring a person seeking registration to provide information which will assist the CEO of AUSTRAC to determine that person’s suitability; allowing the CEO of AUSTRAC to refuse, suspend, cancel or impose conditions on the registration of a provider of remittance services; and introducing enforcement measures, including penalty provisions and infringements, to assist in regulating the sector.

Whilst being welcome changes—as some of my colleagues have said, we welcome these changes—these measures are targeted towards remittance agents who knowingly deal with funds in a criminal manner, such as in cuckoo-smurfing money-laundering systems. Cuckoo smurfing is described by AUSTRAC as a ‘sophisticated money-laundering technique’, with all examples outlined in AUSTRAC’s case study reports and the media involving only the laundering of funds from illegal drugs.

How this measure in this bill will disrupt payments to people smugglers is somewhat unclear. This point is reaffirmed by Western Union’s submission to AUSTRAC on 9 December 2010 regarding this bill. The submission states at paragraph 6.1:

Western Union does not refute that money remittance services may have been used in order to fund people smuggling activities. But we submit that the reference to “people smuggling” in the title of this Bill is fundamentally misleading. More to the point, the Bill is concerned with improving the efficiency of regulation of the money remittance sector. No aspect of the Bill relates directly to people smuggling.

Even the Minister for Home Affairs’s own media release on 9 February this year speaks of ‘the role the remittance sector can inadvertently play in facilitating people smuggling’. As I have described, the measures in this bill target remittance agents who knowingly deal with funds in a criminal manner, not those who inadvertently or unknowingly transfer money which ends up in the hands of people smugglers.

On 13 April 2010 the Daily Telegraph reported on the people-smuggling trade in an article titled ‘Dreams die in a Palace of Lies’. The article makes sobering reading. It says:

… for anyone who has ever wondered how people can pay exorbitant travel fees—

and I mean people-smuggling fees—

the answer is that many do not pay upfront … the agent pays for the journey … [the travellers]—

the asylum seekers—

must pay that money back.

This is not just something that happens to asylum seekers; there is also prostitution and other criminal activities that this applies to. But for those who pay smugglers upfront offshore, this legislation will have no effect. For those transferring money from within Australia, establishing whether payments are to smugglers can be difficult. Money can be legitimately sent to family, friends or relatives overseas, who can then pass on the funds to smugglers. Alternatively, amounts under $10,000 can be withdrawn in Australia without the need for them to be reported and physically passed to agents in Australia who then on-send the money.

At this point I wish to impress that people who are paying off their debt are victims of this pernicious people-smuggling trade. In fleeing desperate circumstances, they utilise desperate measures. Smugglers threaten their lives or the lives of their family members to ensure that the debt is paid. The Daily Telegraph article quotes their source as saying:

… if they run away, maybe it’s ‘bang’—

they are shot—

maybe their family members in their own country will suffer.

We often hear a lot of talk about how these people can afford to come to Australia, but I can assure you, Mr Deputy Speaker, that often the cost they pay is the ultimate cost, the life of themselves or their family when that money is not paid back.

Whilst the initial transaction destination outside of Australia can be traced, the flow of money from then on is much more difficult to ascertain. Throughout South-East Asia and the Middle East the informal system of hawala is used to transfer money. Upon receipt of money, hawala brokers, or hawaladars, call other brokers and give instructions on how or to whom money is to be paid, with a promise that the debt will be settled at a later date. No formal transaction takes place and no records are kept of individual transactions except for a running tally of the amount owed by one broker to another.

In some countries hawaladars are required to be licensed but no records are kept of transactions; in other countries the system is unregulated or exists illegally, although tolerated to some extent by local authorities. Tracing proceeds to final recipients, the organised crime figures who profit from this trade, is therefore almost impossible.

Combating the finance of people-smuggling therefore requires great emphasis on regional cooperation through bilateral agreements and multilateral organisations such as the Asian Development Bank, which has been assisting countries in the region to formulate regulatory frameworks for all types of money transfers, including hawala. Through improved regulatory systems and financial intelligence cooperation, funds can be tracked to their destination recipient. Complementing this investigative ability, however, must be effective laws prohibiting not only people-smuggling but also the possession and receipt of funds gained through people-smuggling. Such laws are in their infancy in our region. Malaysia and Indonesia only last year committed to introduce laws outlawing people-smuggling. Australia must work cooperatively to ensure that such laws are maintained and continually strengthened as needed.

Criminalising money laundering is not an end in itself. The Australian government simply must work with regional counterparts to investigate effectively and prosecute people-smuggling rings and to investigate the criminal elements within Australia who stand over the victims of this trade. Australia must do more to reduce the demand for such services, working at the other end of this. That can be done by working with UNHCR to establish proper processing points in the region.

I have spoken in the House previously about practical measures that we can take to avoid the terrible tragedies and the spectacles that we have witnessed: last year, the drowning of many people in the boat that crashed at Christmas Island and, recently, the overcrowding of Christmas Island together with the use of teargas and plastic bullets, which, it seems to me, is totally unacceptable. We have to work at the other end of this, but we must do so in accordance with our responsibilities under the refugee convention, in a manner that demonstrates our social and moral obligations to people fleeing for their lives from places where terrible violence has been inflicted upon them.

While this bill is supported—I have heard a number of my colleagues speak on it today—it will not do a great deal to stop people-smuggling, because combating people-smuggling is a complex task. It requires effective international cooperation, rigorous investigation and targeted measures. While I welcome the provisions in this bill, as I am sure all in this House do, to stop money laundering—hopefully it will take some steps towards stopping money laundering—I have to say that the name of this bill belies the true effectiveness that these measures will have.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

The Combating the Financing of People Smuggling and Other Measures Bill 2011 is part of the government’s commitment to tackling the financing of people smuggling and terrorism. Over the last two budget cycles, the government has invested almost $2 billion to fund a strategy to combat people smuggling and to enhance border protection. This bill presents measures to enhance the current provisions relating to money laundering and counter-terrorism financing in the alternative remittance sector. It also introduces measures to enhance the sharing of information between the Australian intelligence community and the Australian Transaction Reports and Analysis Centre or AUSTRAC.

People and businesses wanting to transfer funds can make these transfers in a number of ways. In our community and Western society, in general this is most commonly achieved through banks and other conventional financial institutions. However, money can also be transferred through so-called remittance services. Originating in South-East Asia and India, users of these systems transfer funds through the use of agents. These agents enter into an agreement with each other to receive money from overseas, typically from foreign workers, and pay that money to a nominated relative or friend.

By way of example, I cite an Australian Institute of Criminology case study. In the case study, person A in Australia wants to transfer $1,000 to person B in India. Person A pays the alternative remittance provider in Australia and is given a code or number to relay to person B in India. The Australian alternative remittance provider instructs a counterpart in India to pay the $1,000 to person B upon receipt of the number or code. The funds are paid in India to person B, although money has not left Australia. Now the provider in Australia owes the provider in India a debt to be paid at a later date.

This is seen as ideal for these people as it can occur without the use of modern or established banks or electronic funds transfers, which in many cases do not exist in these regions. These dealers sometimes operate within large networks and this has been called alternative remittance, underground or parallel banking. It is legal in many countries. However, it has been found that this system could be used to fund criminal activity and terrorism. Certainly there is evidence to suggest that in the Australian context this service has been used to pay for the services of people smugglers. There is also evidence to suggest that it is also used to fund or launder funds from other serious crimes.

In recognition of this, currently all alternative remittance providers are required to apply to become registered with AUSTRAC before they can provide services. Failure to do so carries up to two years in prison, a $55,000 fine or both. There are some limitations to this current arrangement. Firstly, as registration is automatic upon application, there is no provision to deny a person registration, to cancel their registration or to impose conditions. Secondly, there are only limited sanctions available to AUSTRAC to take action against those providers who breach their obligations under the law.

This bill goes some way towards addressing these issues. It expands the provisions for those who need to be registered—from individual providers to those businesses that operate as providers of remittance networks. It also requires that providers of remittance networks, their affiliates and individual providers must re-apply every three years for registration. It further requires those individuals to provide information relevant to their suitability. The bill also gives the CEO of AUSTRAC the ability to obtain information from other persons for the determination of suitability. The bill further allows the CEO of AUSTRAC to refuse, suspend or cancel the registration of a provider or impose conditions on them.

Beyond the enhanced regulation of alternative remittance providers, this bill will also allow AUSTRAC to share information with the Australian intelligence community. This is part of the government’s plan to ensure a holistic approach to Australia’s national intelligence effort so that we can come down hard on organised crime and protect our national security. For example, adding the Department of Foreign Affairs and Trade as a designated agency recognises the important work it does in combating the financing of terrorism and in monitoring the various UN sanction regimes.

As it stands, financial intelligence is not recognised in the current arrangements, despite the important role it plays in the enforcement of laws and regulations and in the prevention of terrorism. Deep Throat said in All the President’s Men, which I saw recently, and swooned again over Robert Redford, to ‘follow the money’.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

Swooned?

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

Swooned. He is my favourite. This bill strengthens our ability to do this.

People smugglers are individuals who seek to make a quick buck out of the suffering of some of the must vulnerable people in the world. Targeting the ability of these individuals to make money out of their illicit trade and attacking the systems used to handle payment will make it more difficult for them to do business. Every time we make it harder for people smugglers to do business, we force them to analysis why they engage in the business in the first place.

Aside from strengthening the government’s response to people-smuggling and terrorism, this bill will also make it easier for consumers to access certain services online. Currently, banks and other businesses must know their customers—that is, they have to confirm the identity of anyone who wants to open a bank account and transfer money, among other things. Currently this is done using hard-copy documents, which sounds very old-fashioned. There is only limited availability for the use of electronic sources for identity checking. As a result, the take-up of electronic verification has been low. This has been costly for business and inconvenient for customers and consumers. This bill proposes to change that and open up another source of electronic verification—credit reporting information. This will improve the take-up rate and success of electronic identification.

Importantly, the government has introduced a number of privacy protections in recognition of the potential for harm that could arise from this electronic process of doing business. First, consumers must consent to have their personal information disclosed for the purposes of verification. Alternative options must be presented. Second, a credit reporting agency can only provide an overall assessment of the extent of the match between personal information and what it holds on file. It cannot disclose any further information. Reporting entities and credit-reporting agencies must retain records for seven years and provide access by those individuals to those records.

Finally, on the unauthorised access of verification information, obtaining access to verification information by false pretences or the unauthorised use of disclosure will carry a penalty, which at present is $33,000. This change will make it easier for consumers to access financial services, it will decrease the compliance cost of business and it will open up competition in the sector, particularly between online and traditional branch structures.

This is a comprehensive bill that covers a range of areas. I have just touched on a few of them. Most importantly, it strengthens provisions around the transfer of moneys through alternative remittance providers. It will make it more difficult for these services to be used for criminal ends and forms a core part of the government’s approach to combating people-smuggling, terrorism and organised crime. I commend the bill to the House.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

I rise to add some comments on the Combating the Financing of People Smuggling and Other Measures Bill 2011. The coalition supports the bill in principle. The purpose of the bill is to reduce the risk of money transfers by remittance dealers being used to fund ostensibly organised crime, including counterterrorism, some people-smuggling ventures and other serious crimes, by introducing a comprehensive regulatory regime for the remittance sector. I would like to point out from the outset that, when this bill was considered by the Senate Legal and Constitutional Affairs Legislation Committee, there was significant disquiet, including about the fact that the title of the bill was misleading in the fact that this bill is not primarily about combating the financing of people smugglers; it is about combating the financing of those who will seek to use it for illicit crime. People-smuggling is one of a long list of those criminal activities.

The aim of the bill is to ensure that those people who pose an unacceptable risk of money laundering, terrorism or indeed people-smuggling will not be allowed to easily use remittance services in the community. It seeks to reduce the risk that remittance dealers will be involved in these types of nefarious activities. It aims to improve intelligence sharing to protect against criminal infiltration of the sector and to ensure that the Australian Transaction Reports and Analysis Centre, or AUSTRAC, can deal with remitters who tend to act unlawfully.

But it also needs to be added from the outset that this will impose a heavier regulatory burden on the alternative remittance sector. It certainly raises a range of privacy concerns arising from the enhanced information sharing and the use of credit reporting data that this bill brings to the fore. The point should also be made that this is just one more level of regulation and encroachment upon legitimate businesses and the daily lives of Australians. I always hark back to Kevin 07, who stood there in 2007 and said, ‘For every one regulation we will introduce, we will take one away.’ By mid-2010 I think some 15,000 had been added and 46 had been taken away. I guess that is one more hollow, broken promise to add to the huge number already on the public record.

However, the bill has an interesting name, and it is the name we should look at: Combating the Financing of People Smuggling and Other Measures Bill. So let us look at the issue of people smuggling and let us understand why the government has chosen a misleading title for the bill. The answer is quite simple. As early as 25 February 2008 the Rudd government was warned that there would be significant risks with the decision to weaken the border protection and immigration regime. Come August 2008 the very effective Howard government regime was torn down and a new one was put in place. It is easy to see metrically, empirically, in a statement of fact, that the now Gillard Labor government, following on from the Rudd Labor government, has comprehensively and utterly failed to manage our borders. It has lost complete and utter control of the asylum seeker policy. Since it wound back the coalition’s highly successful policies in that fateful month of August 2008, to date more than 200 boats have arrived unlawfully, including three this week alone. Over 10,000 irregular maritime arrivals have come to our shores. This of course includes the ill-fated SIEV36, which was deliberately set alight, killing four people, putting lives of defence personnel at risk as they sought to save those who were in the water. And there was the tragedy of SIEV221, which crashed against the rocks of Christmas Island, killing around 50 people. The images that ensued were devastating.

As a direct consequence of these changes, as a direct consequence of these failures in policy, we have seen the three boats a year under the Howard regime become three boats a week—fact, without contention. The push factors have not changed, as every UNHCR report has shown. The number of people seeking asylum around the world has not changed significantly. Push factors have not changed, but the pull factors have changed substantially. As a direct consequence of what Labor has done, our detention network is now strained beyond even the widest capacity. We are seeing violent riots on Christmas Island and the mainland. When the coalition left office, there were four people who had arrived illegally by boat and were in detention—not 400, not 4,000, just four. Today what is the number? It is not 400; it is not even 4,000—it is 6,300, including a hundred children. Today we learnt in parliament that the people responsible for SIEV36—which was deliberately set alight, and four people were killed because of that—have been given permanent protection visas. Apparently seeking to sink the boat, causing the loss of four lives and endangering our military Defence Force, does not run foul of the character test. The question is, does it run foul of the pub test? Ask the average Australian whether people seeking asylum who deliberately set their boat on fire, leading to the death of four people and substantially putting in harm’s way everyone else on the boat, including our Defence Force personnel, are of a fit and proper character to come into this country. The Labor Party says yes. That is absolutely and utterly outrageous.

If we just look to the budget since Labor came to power, there is a total blow-out of over a billion dollars in running costs alone. The member for Canberra spoke before about the government committing $2 billion to deal with the issue. They are committing $2 billion to deal with the mistake and the litany of errors that they have caused. And after this $2 billion, after the deaths of so many people, after the riots and the fires and the damage and the disputes, the boats keep coming. Nothing is stopping them from coming. Of the more than 10,000 irregular maritime arrivals, about 160 have been returned to their countries of origin. We know, as a statement of fact from the UNHCR, that if you are seeking asylum out of Afghanistan you have a one in 10 chance of actually getting asylum in a second or third country. But if you jump on a boat, if you pay a people smuggler to come to Australia, you have a 97 per cent chance after appeal of coming to the country. Now, I ask you: if a people smuggler comes to you in Afghanistan and says, ‘If you take a bus through Pakistan, jump on a plane and come across to Jakarta, Jogjakarta and down to the coast, pay us $20,000 and wait your turn, and you’re are prepared for six months incarceration, you have a 97 per cent chance of getting here’? Surprise, surprise! The boats keep coming. And what is disturbing is that that is not fanciful, it is statements of fact.

What is equally vexing is that the impact of this failed policy has seen a reduction in humanitarian visas granted to offshore applicants. Under the humanitarian program, 13,500 people will come in. It was 6,000 under the previous Labor administration. The Howard government increased it to 12,000; this government, to 13,500. We are the most generous nation on earth per capita in receiving people on humanitarian visas, and that is something we as a nation should be extremely proud of. We are a generous and compassionate nation. But every one person that comes by boat—and let me be very clear: every one person that pays a people smuggler to jump the queue—means one person in a desperate situation offshore, in a desperate refugee camp, does not have the opportunity for their humanitarian visa to be processed. Humanitarian visas go through, we cap it at 13½ thousand, and if that number is full you wait till next year, and the next year, and the next year. And as our humanitarian visa program is filled more and more by those coming illegally on boats, those desperately needing asylum do not get it.

That is the irony and the perversity of what Labor—the so-called party for the working man, the dispossessed and those seeking assistance—have put in place. Indeed, in 2009-10 there were just 3,233 offshore humanitarian visas granted, compared to a peak of over 6,700 in 2005-06. The number of humanitarian visas being granted has halved under Labor—fact—because Labor will not control the borders and prefer a largely middle-class refugee seeker who is prepared to pay for a better set of economics to flee to the country. And rather than deal with the core problem of watering down our border protection regime, they seek to put forward bills that are certainly looking at combating the financing of criminal syndicates but call the financing of people smuggling as part of their spin to try and deal with it. Two days ago we saw in question time that, rather than deal with the problem, the Minister for Immigration and Citizenship, Minister Bowen, has just added six more spin-doctors, at $600,000, to the department to deal with the problem and to spin it so it sounds like Labor is indeed doing something. Despite leading Australians to believe that there would be no expansion of our onshore detention prior to the last election, another 4,900 beds have been added to the detention network onshore since the election, costing more than $400 million.

Let me be clear: the coalition supports an immigration and humanitarian program that is non-discriminatory, and believes that our processes for selecting those who come to Australia should be open and transparent. We will continue to honour our international obligations in relation to those seeking asylum. But we will not support processes that create a bias in favour of illegal maritime arrivals or illegal arrivals, full stop. We will not support a program or a process that provides people smugglers with a product that they sell to encourage people to get on a boat. And be under no doubt: if you have a 97 per cent chance of coming to this country, that is a product, it is saleable, and it is effectively being sold on the market today.

The coalition will not need misleading titles of bills to deal with the asylum seeker process. Indeed, the Prime Minister, if she were genuine about dealing with this, could spend 10 minutes and pick up the phone to the President of Nauru, rather than worrying about trying to spin the issue of a never-never solution on East Timor. That is never going to occur. That is never going to take place.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Why doesn’t the Prime Minister ring the President of Nauru?

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

A remarkable question!

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I would ignore that, if he wants to speak next!

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

Why doesn’t the Prime Minister call the President of Nauru? The coalition will. The coalition will pick up the phone and speak to the President of Nauru. We will introduce third-country processing of all illegal boat arrivals on Nauru. We will do that once elected. We will reintroduce temporary protection visas for illegal entrants and apply mutual obligation to payment of benefits. We will presume against refugee status for those who are believed to have deliberately discarded their identity documentation. We will return failed asylum seekers to their country of origin. We will restore the single case officer appeal process for asylum. We will provide priority processing for offshore asylum applicants over illegal arrivals. We will restore the requirement for onshore asylum applications to be made within 45 days of arrival. We will introduce mandatory minimum sentences for people-smuggling crimes and longer sentences for aggravated offences. We will introduce a full private sponsorship program for offshore asylum applications, and we will oppose the introduction of complementary protection, which widens the grounds for asylum seekers to make successful onshore claims.

All of this, as coalition policy, has been succinctly explained, presented and presided over by the member for Cook, Scott Morrison, many times. This has been out in the public domain as the coalition’s policy. It is clear. It is concise. There is no ambiguity as to what the coalition will do to stop illegal people-smuggling. We will take the product away. We will not rely on bills that simply try to spin a title, no matter how effective the bill may be—as indeed this one, agreed in principle, is in dealing with the financing of those who would seek to gain, with criminal intent, an advantage from the use of remittances and the moving of money. We will take real, tangible action. And I guarantee you, Mr Deputy Speaker: we will stop the boats.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Thank you for that guarantee.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Every week, I get a list of concerns that constituents have when they phone my Fisher electorate office, situated on the Sunshine Coast. And every week the issue of unauthorised arrivals, illegal arrivals, and illegal immigration—people smuggling—is one of the top-order issues of concern for residents of my part of the Sunshine Coast. And I suspect, Mr Deputy Speaker, that in your own electorate office you would also get phone calls from many people who are concerned over the failure of the government’s policies in relation to border protection.

The member for Fadden, in his contribution, pointed out that it would be advantageous if the government were to lift the telephone and call the President of Nauru. The facilities, I gather, are already on that island, in that country. They have been paid for by the Australian taxpayer and it is simply a question of unlocking the gate and putting illegal arrivals into immigration detention in Nauru.

I do not know why the Prime Minister and the government have invested—and, in my view, forfeited—so much public regard in pursuit of what is an unrealistic option: that is, to establish immigration detention facilities in Timor-Leste. No-one in East Timor has given the slightest indication that he or she is in favour of that country being an immigration detention centre for Australia, although, given the dollars that would flow to the host country, one finds it very difficult to understand why East Timor has resisted the blandishments offered by this government. After all, East Timor does owe Australia a lot. If it were not for the Howard government, East Timor possibly would not be free today. The former Prime Minister took a very strong public stand, and Australia took a very proud and, in my view, morally correct decision when we sought to encourage the people of East Timor to have self-determination, which ultimately of course resulted in the independence of that country from the Republic of Indonesia.

So I do not really know why East Timor is showing such a lack of gratitude to Australia and in particular to the current Prime Minister. But it should be obvious to anyone that the East Timor solution is not a solution at all. It is obviously going nowhere. I do not know why the government continues to invest prestige in seeking a solution which is simply not realistic. On the other hand, Nauru is a country in the Pacific not far from Australia which is prepared to host an immigration detention centre. That centre has already been constructed. It probably could be open next week if the government approached the government of Nauru, and yet I suspect that there has been an element of bloody-mindedness. The government refused initially to consider Nauru, and now it would be perceived as being too much of a backdown were the Nauru option to be once again looked at as realistic by the government.

I believe that the Australian people are running out of patience with the situation where the government has created an open-door policy. The government has turned the seas around Australia into a superhighway. What the government has done, whether the government intended to do this or not, is to put out a welcome mat for people smugglers and unauthorised arrivals. Frankly, if the views of the people of the Sunshine Coast are in any way, shape or form typical of the views of the people elsewhere in the country, overwhelmingly the people of Australia feel that the government has let the country down, has taken its eye off the need to have border protection and has encouraged people smuggling. While the Combating the Financing of People Smuggling and Other Measures Bill 2011 has laudable aims, it simply does not address the major problem, and that is that, when Australia is perceived as being a soft touch, obviously the immigration scams will continue and the people smugglers will have something to sell.

When the former immigration minister, the member for Berowra—who has just entered the chamber—was a senior minister in the former government, the boats were stopped. We sent a very strong message to the world that people smugglers were out of business. People knew that there was no point in bringing unauthorised arrivals to Australia, because we simply were not prepared as a nation to tolerate it. The former government said, ‘We will determine who crosses our borders,’ and the former government did that. My view is that the former government at the time was completely in sync with the views of the Australian people. It is my submission to you, Mr Deputy Speaker Sidebottom, as a discerning person, that the views of the people of Australia have not changed. The people of Australia have had a gutful of the fact that we are now seen as being an easy touch, a soft target, and consequently the people smugglers are able to carry out their evil business. As we all know, far too many people have lost their lives through the activities of people smugglers. People smuggling is inhumane and unscrupulous, and we as a nation should do all that we can to stop it.

The Liberal-National opposition is certainly supportive of the intent of this bill. We are against people smuggling and we oppose the abhorrent practice of immoral and greedy people smugglers preying on the desperation of others and demanding from them massive amounts of money to provide risky passage to what they are promised will be a better life. A few years ago I decided, given all the publicity in relation to immigration detention, that I would visit the Woomera detention centre and the Baxter detention centre, both of which were situated in South Australia. The day before I was to visit the centre I drove out to the Woomera detention centre. I must confess that they were a little bit suspicious of this person driving a vehicle around the boundaries of the immigration centre. When they asked me what I was there for, they were quite happy when I told them that I was there by appointment to visit the centre the following day. I must say that, despite what people said about the allegedly inhumane treatment of people at Woomera, I personally was impressed with the approach of the people who were in charge of that facility. I spoke to a woman who held a senior role there and I noticed that the glass on the door of her office was broken. She told me that a detainee had sought to attack her with a piece of four-by-two, and consequently people in the centre were clearly very wary and being very careful.

At the Baxter detention centre I spoke to a person who was of a faith I had not heard of before. That faith was the Sabaean Mandaeans—

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

Followers of John the Baptist.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Followers of John the Baptist. Apparently it is necessary for their religion for them to be positioned close to water. The Iranian regime is quite brutal towards these people. I sat down and spoke to a lady, and what she had done was to travel from Iran to Jordan. In Jordan she bought passage from someone and paid some $20,000 for the air tickets from Jordan to Jakarta. When she got to Jakarta she and her family made their way overland to a people-smuggling port where they bought passage to Australia. She felt indignant that she was locked up in the Baxter detention centre because she felt that she had entered into a commercial transaction to provide a new life for her and her family in Australia. I found her quite a delightful person and I must say that my heart went out to their family circumstances. But clearly she and her family had paid what they saw was commercial passage to people smugglers. I do not ultimately know what happened to that family, but the reality is that if the government is prepared to put out a welcome mat to people smugglers then more and more people will be prepared to enter into what they consider to be commercial transactions. As we all know and from what we have seen, the conditions on these boats are life-threatening. They endanger life, and the result is that people have lost their lives and more people will lose their lives because of the inappropriate approach we currently have towards people smuggling.

The government today in question time failed to answer the question on whether people who were found responsible for endeavouring to sink a boat were successful in obtaining visas and entry to Australia. I can only suggest that in fact some of those people must have gained visas to remain in Australia because otherwise the question would not have been asked. I am waiting with interest to hear what the Prime Minister has to say to the parliament when she comes back, having researched that particular situation.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

I think it is probably higher than that now.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Well, it is probably higher now but in those days it was a million people. So Australia can afford to pick and choose. I do not really think that our system should allow people who would seek to sink a ship and cause people’s deaths, or people who are prepared to riot and endanger life and property, should be eligible for consideration as possible migrants to Australia.

The government has been soft on border protection, but it is not too late for the government to ring the President of Nauru and say, ‘We would like to access the facilities paid for by the Australian taxpayer and open an immigration detention centre on Nauru.’ Nauru is a country which does have certain economic challenges and I am sure that Nauru would benefit from the inflow of funds which would occur were the Nauru solution to return to operation. It was very successful when the former government used Nauru. Nauru is a friendly nation not far from Australia.

But it is very important that we send a powerful message to people smugglers and to unauthorised arrivals that they are not welcome in Australia. As a country we should do whatever we can do to stamp out this evil trade, to prevent people from having their lives placed at risk and, of course, to stop people jumping the queue.

Apart from Canada, Australia has the most generous humanitarian refugee program anywhere in the world—and when I say ‘apart from Canada’, I think that is on a per capita basis. The problem is that the government, when it allows people to come in via the back door, is reducing the opportunities for people who legitimately apply to be received on a humanitarian basis in this country. The reports have shown that some 135 boats arrived in 2010 with a total of 6,889 passengers and crew. So far, 2011 has seen five boats with 326 passengers. This compares with just 32 boats in the entire period from 2002-03 to 2007-08 under the previous Liberal-National government.

The Combating the Financing of People Smuggling and Other Measures Bill 2011 certainly has laudable aims, and the opposition does not oppose it. But, at this late hour, the opposition does plead that the Prime Minister should pick up the telephone, ring the President of Nauru, and solve this problem once and for all. Until we send a powerful message to people smugglers that Australia is closed to their evil trade, the boats will continue to come, the misery will flow and people’s lives will continue to be lost.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

The Combating the Financing of People Smuggling and Other Measures Bill 2011 relates more to other serious transnational crimes than it does to the people smuggling contained in its title. When I read through the bill, this fact was confirmed by the number of times I read the words ‘people smuggling’.

I would have to say that there is very serious concern in the community about the riots on Christmas Island. It is resonating right throughout the community. When I was out over the weekend, at the Harvey Harvest Festival, people were literally rushing up to me, and that was the one thing they wanted to talk about. They take it very seriously. They are seriously angry about the riots. They are also concerned about what will happen as a result of those riots and about whether those people will be allowed to stay in this country and whether they actually should have the right to do so.

I am very well aware that the Howard government had a very strong, unequivocal stance on border protection, and that strong, unequivocal stance gave a very clear message to people smugglers. That was the intent of that particular legislation. There is no doubt that that strong stance in protecting our borders and our national interest came in for much criticism, mainly from the Labor Party and social commentators at the time. The tough stance was, however, very necessary because people smugglers were becoming increasingly active and increasingly wealthy, and more and more people were putting their lives at risk as a result of that. As a result of the numbers of suspected illegal entry vessels that were arriving with increasing regularity—it was just a fact of life—in 2001, when the Howard government took its strong stance, when John Howard made his now famous statement, people smugglers had successfully completed 43 incursions into Australian waters. However, in 2002 they made just one. In fact, over the remaining years of the Liberal-led government, 25 boats entered Australia illegally. That is an average of just over three a year from 2002 to 2008.

But it all changed dramatically in 2008, when the newly elected Labor government threw open Australia’s doors to people smugglers, seriously increasing their wealth at the same time. This also placed thousands and thousands of people at risk—as we have seen by the thousands who have arrived in Australia—in leaky and unseaworthy boats. And we have recently seen the tragic outcome at Christmas Island. In 2009, people smugglers reached Australia 61 times, and in 2010 they earned their illegal, very lucrative income through at least 135 successful incursions. That is over 200 in total.

It is this background of Labor’s border security policy failures that is supposedly the genesis of this bill, which the government today seek to use to paper over some of the cracks of their policy. Well, it will not work. There was an effective and solid border security policy. There is now a Labor papier-mache version, to which this bill merely seeks to add a little more paper and flour.

I went up to Darwin to have a firsthand look at Operation Resolute and the enormous job that our Navy and Air Force in particular are undertaking. It is a very serious job, and it is constant. They do an enormous service in the way that they carry out their duties. But what concerned me was the fact that, when they do pick up a SIEV, it takes four days to take those asylum seekers from Ashmore Reef to Christmas Island, and often they have to be accommodated on a vessel that is not built for that purpose. You see these service men and women having to spend hours and hours taking guard duty on these boats until the time they are given orders as to what to do next. They are very trying circumstances and they do put their lives at risk.

As I said, other serious transnational crimes will be a major target of changes in this bill, as opposed to people smuggling. The government is attempting to do this through a bill which will require greater scrutiny of third-party money transfers internationally and will make the results of this scrutiny available to a wider range of Australian security organisations. It is meant to enhance the identification of the senders and recipients of moneys sent across international borders.

The measures in this bill may well aid in the identification of money used for drug smuggling, arms smuggling, people smuggling, international terrorism or a range of other serious criminal activities, but the government should not be calling this a people-smuggling bill; it should be calling it a control of remittance services bill. This bill is supposed to improve the monitoring of those who act as a third party in sending money around the world, including those who do so to fund illegal activities. One of those activities is people smuggling, but there are many other activities that will be caught. In fact, apart from the title, as I said, the term ‘people smuggling’ only appears three times, in schedule 1. In each of these three short references, the bill determines that the Australian Transaction Reports and Analysis Centre must have regard to whether a person would be a risk of engaging in money laundering, financing of terrorism or people smuggling when registering them or cancelling their registration on the new or old register to provide remittance services—and that is it. Just those three short references are the entire link to people smuggling in a bill of 53 pages, apart from the title.

The point that needs to be made is that the measures in this bill impose substantially increased regulatory burdens on the alternative remittance sector, and I do know that privacy concerns have been raised as a result of the enhanced information-sharing provisions and credit-reporting data. Whilst I understand that Australian law enforcement agencies are rightly focused on the role the sector may inadvertently play in facilitating payments for people smuggling, I note the provisions for a more comprehensive registration scheme and the provision of tiered penalties. I am, however, concerned about the additional regulatory and compliance effects on what are legitimate business activities. There are over 6,500 remittance dealers operating in Australia, conducting legitimate business, but I do understand that cybercrime is also a serious and growing transnational security issue. The NBN and its proposed 100 megabits per second will facilitate crime at a speed and frequency we have never experienced before.

Another part of the bill which requires further examination is that which directs credit-reporting agencies and reporting entities to retain information relating to verification requests for seven years. This may well enhance the transparency of the verification process; however, it is the broader issue of how and where this information is stored that I am concerned about—who has access to it and how this access is audited and monitored. That must be addressed given the capacity of local and transnational hackers. It is just a fact of life now.

I note the expanded list of designated agencies that can access AUSTRAC information. Again, how the volume of shared information is stored, accessed and protected needs to be defined. It is only common sense that, the more agencies have access to information, the more opportunities exist for that information to be passed on or accessed. I therefore support a comprehensive examination by the Senate Legal and Constitutional Affairs Committee; however, the provisions contained in this bill should not be considered in any way as a solution to the Labor government’s soft and very risky approach to border protection.

Philip Ruddock (Berowra, Liberal Party) Share this | Link to this | Hansard source

The Combating the Financing of People Smuggling and Other Measures Bill 2011 may assist in combating the financing of people smuggling, but it will not deal with people smuggling. It will not deal with unauthorised border arrivals. This is not a comprehensive approach to dealing with the enormous problem that we as a nation now face.

The measure is supported because it may assist law enforcement in identifying those people who are in Australia who are paying moneys for people smuggling. I must say that I wanted to find out from the second reading speech what the government might know about people smuggling and the way in which the information they receive, profiling targets, might give us a guide to what is happening.

I thought it appropriate in the context of this legislation to speculate a little about what this bill is seeking to deal with. I suspect that this bill is seeking to deal with identifying not only people smugglers but those people who pay people smugglers. I ask you, Mr Deputy Speaker—and you are nodding very approvingly—who would pay a people smuggler in Australia? Is it somebody doing so out of the goodness of their heart, who thinks that they might be helping somebody abroad, or is it something more insidious?

I suspect that there is more not said in this speech that we ought to be aware of. I suspect that there are people in Australia, quite frankly, who are very much involved in paying people smugglers. And I suspect the number of people is quite significant; we would not be legislating in this way if we did not think it was a significant trade. I suspect that the only people who would be paying people smugglers from Australia would be people who have identified relatives that they would like to see come to Australia. That is what this legislation is designed to deal with. What it is telling us is something that the government does not tell us, and that is that, while there may be some people on boats seeking to come to Australia for protection, there are many people on boats coming because they are seeking some form of family reunion which they might not otherwise be able to obtain. By using the protection method, they can make claims—whether fabricated or not—and if they get through the system, they are in the door. When you know that something like 10,000 people have come to Australia on boats recently and only 160 have been removed, you can understand why they might think that this is a reasonable prospect.

I have been talking about Australian multiculturalism and I have been very defensive of it. But I do regard it as a genuine handshake that people should make when they come to Australia, and that is that if they expect to be treated tolerantly and with understanding and their culture to be accepted, they have to be accepting of the broader Australian mores. They have to be prepared to accept that in Australia we have rules. They have to be prepared to accept the rule of law—that we have a parliamentary democracy. And one of the offences under our law is people smuggling.

I would suggest—and I would be very interested to hear how the government is going to respond to this; advisers might take note—that there are other people besides people smugglers who are committing offences when moneys are paid to bring people to Australia unlawfully. They would normally be called accessories. I suspect we are dealing with a very large pool of people who are engaged in using people smugglers, paying people smugglers to bring people to Australia who would not otherwise be entitled to come. I have often had to say to people, ‘25 per cent of Australians are overseas born.’ Think of all the uncles, nephews, nieces, cousins, brothers and sisters that we have to say no to. But there are some people who think that if you can get round the system by paying people smugglers that is in some way all right.

I have obviously had an interest in these issues over a long time, but I think it ought to be repeated again: I do not come to these issues with some malicious view about the way in which we should deal with these issues—that we should be demonising those people who seek to come, or that we should be trying to punish those people who seek to come to Australia looking for protection. I have had a longstanding interest in refugees. I have spent more time in refugee camps than perhaps any other member of the Australian parliament, all around the world. And I am very conscious that we have to look at those people who have no prospect, wherever they are, of returning home, who are in immediate danger where they are. I recognise that there are 10 million people in those circumstances who have been assessed. I recognise that many of those people who get onto boats have never been assessed before they come here—do not seek to put their claims to be judged against the others who may have greater need.

This is a problem that we are having to deal with: a situation where something like 10,000 people on more than 200 boats have now arrived unlawfully; where people have died because a vessel was set fire to, as we know from reports made by some of the people on board; where a large number of other people died on the rocks of Christmas Island; where we hear from Australian relatives ringing up to ask: ‘We think one of our relatives is on a boat and it hasn’t yet turned up; can you find out where that boat is?’ I suspect that there are, tragically, many more people who have died.

I think there are very good reasons for us to be angry that after we had largely destroyed the people-smuggling operations the government, who wanted to show that they could deal with these issues ostensibly more humanely than their predecessors, took a number of decisions which have reopened this trade. Temporary protection visas: what was the argument there? They had to be abandoned because more women and children were getting on boats, yet we have over a thousand children who have still travelled on boats to Australia when we are now giving permanent protection. How disingenuous was the argument that temporary protection visas had the insidious impact of putting more children on boats, when we know that children are still getting on boats?

I read some material in one of the newspapers today which I thought was particularly germane to the issue we are discussing. This is an issue in which all of the government’s excuses have now been exposed. They have argued that Australia got more people not because of changes to government policy but because there were more push factors encouraging people to seek sanctuary and therefore we have more people getting on boats to Australia. Yet we have a story today by Lanai Vasek which really gives the lie to this excuse. It says:

Asylum applications lodged in Australia last year increased 76 per cent on 2009—

so last year they increased by 76 per cent—

despite an overall decline in claims among industrialised nations.

The latest UNHCR figures on asylum trends also reveal the number of visa claims from Afghan refugees rose 277 per cent in the first half of last year for the Australasian region while the average in 44 survey countries was a decline by 5 per cent.

So the number of Afghans coming here was up by 277 per cent, but in other industrialised countries that figure was down by five per cent. Canada, a similar country to Australia, saw a 41 per cent drop in asylum applications in the first half of last year. This is an issue in which the changes of government policy have led to more people seeking to come to Australia unauthorised by boat, exposing themselves to risk.

I look at the measures that need to be taken, and the argument is that we need to do things at a regional level. The government says, ‘Look, if we can work better with Indonesia and some of our partners in the region, maybe it will improve.’ I have to say that our alleged partners in the region do not feel like helping us, and the reason they do not feel like helping us was told to us directly by numbers of officials in that Asian way—almost inscrutable—when they said, ‘We’ll help you when you do something about the sugar.’ Not everybody understands that, but it is quite clear that they are saying: ‘You take the incentives off the table, take the sugar off the table, and maybe we will look at how we can help you. But while you’re encouraging them to come, why should we do anything about it?’ That is why the coalition policy is the only way in which you are able to deal with these issues, the only way in which you will get international cooperation and regional cooperation—when it is seen that we are prepared to play our part.

I know it is too much for the government, the way in which this speech was written to obscure what they were really saying, but all they have to do is to adopt the measures that the Howard government put in place. You will not have people on boats. You will not have deaths at sea. You may be accused of being inhumane when you reintroduce temporary protection visas, but I suspect not; when you introduce third-country processing of illegal boat arrivals on Nauru—the Pacific solution; when you turn back boats when it is safe to do so; when you presume against refugee status for those who are believed to have deliberately discarded their identity documents; when you return failed asylum seekers to their country of origin. Ten thousand, and only 160 weren’t refugees? Is that what we’re saying? You’ve got to be kidding! You can provide priority processing for offshore asylum applicants over illegal arrivals. Why wouldn’t you want to help those who are in immediate danger over those who happen to have money to pay a people smuggler? And you can increase the mandatory minimum sentences for people-smuggling and deal with those who are accessories, breaching our law. None of this appears to be happening at the moment.

At a regional level, yes, you can work with your partners to combat people-smuggling; you can share intelligence and put in place surveillance operations. But they will only treat you seriously when they think you treat it seriously. That is the point that needs to be made. I do not think it is any accident that it seems to take an enormous amount of time to get people-smuggling laws through the Indonesian parliament. I would like to think it is only because they want to look at the laws very closely, but we have been talking to them about doing this for years. Why don’t they do it? I suspect the reason they do not do it is because they do not believe that we have played our part.

This legislation I think is particularly important. It can help. But I think it is more important because it has disclosed that this government is not really serious about dealing with people-smuggling. If it was, all of the measures that we had proposed would have been pursued quickly and vigorously by the government.

Teresa Gambaro (Brisbane, Liberal Party, Shadow Parliamentary Secretary for Citizenship and Settlement) Share this | Link to this | Hansard source

I rise to speak on the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Financial Transaction Reports Act 1988 and the Privacy Act 1988. The purpose of this bill before us, the Combating the Financing of People Smuggling and Other Measures Bill 2011, is to tighten regulation over the remittance sector in Australia. It is a significant action by government to intrude or trespass upon the legitimate business activity of individuals and bona fide business firms. The Australian public are rightly sceptical about such possible intrusions, and it is always preferable for a government to be organised enough to avoid this particular situation. But the Gillard government is anything but organised, and we have just heard in the contribution by the member for Berowra about the disarray that has been occurring particularly with illegal boat arrivals.

The further intrusion into the freedom of remittance sector operations should not be taken lightly, but with a government that is not functioning well on any level it seems that such an intrusion is necessary. However, the coalition holds a very strong view that national security and the fight against terrorism must prevail. As such, the coalition supports in principle the Combating the Financing of People-Smuggling and Other Measures Bill 2011. The bill’s purpose is to reduce the risk of money transfers by remittance dealers being used to fund people-smuggling ventures and other serious crimes. There is one thing for sure: people-smuggling and the proceeds of people-smuggling are on the increase. We have had 10,000 arrivals in more than 200 boats, and the numbers are increasing. There are genuine people offshore that are making claims. A couple of weeks ago I returned from the Thai-Burma border where 170,000 people have been in camps for periods of up to 20 years and they are making genuine claims through the UNHCR. However, we have an increase in the amount of people-smuggling that is going on and a system at the moment that is in complete disarray.

The bill’s purpose is to reduce the risk of money transfer by remittance dealers being used to fund people-smuggling ventures and other serious crimes. It has obviously been put in place, as the previous member said, because this is on the increase. The bill’s intention is to introduce a more comprehensive regulatory regime for the remittance sector, and whilst there has been a long-held international concern about the exploitation of the world’s financial system for criminal purposes such as money laundering, the surge in people-smuggling activities and their links with sophisticated crime networks have led to further regulation of formal and alternative financial sector activities—such as the banking and remittance sector—aimed at preventing the financing of people-smuggling and terrorist activities.

There is obviously and unfortunately a very genuine need to combat the increased activity of people smuggling—a situation that has reached absolutely unacceptable levels in recent times. The aim of this bill is to ensure that those who pose an unacceptable risk of people smuggling, money laundering or terrorism financing will not be allowed to provide remittance services in the community. The bill seeks to reduce the risk that remittance dealers will be involved in financing people smuggling, money laundering or financing terrorism.

Some notable examples of money laundering occur in various ways. One of the newer and much more sophisticated methods is laundering money through bank accounts of unsuspecting third parties. This is known as cuckoo smurfing. Using this system requires a very complex structure; initially a very innocent customer who may be in Australia or overseas, a criminal alternative remitter located overseas, an Australian criminal seeking to transfer funds overseas, an organiser or coordinator in Australia and associates of this organiser who make the third-party deposits into the Australian customer’s account. Crime gangs and groups also launder proceeds of crime by business revenue manipulation, in which illicit funds are funnelled through a firm’s otherwise legitimate accounts.

This web of activity needs detailed and comprehensive surveillance and investigation. The expense involved in such an investigation is considerable, and money-monitoring agency AUSTRAC believes that such related crime in Australia generates up to $6 billion a year—an unbelievable amount, and obviously an amount that is increasing, otherwise this government would not have the need to bring in such legislation as is before us today.

This is all the more reason for the Gillard government to ensure that the people-smuggling activity is minimised, and that that is done as soon as possible. It is only when there is a confident and successful sense of national security that concentrated efforts to end criminal and dangerous activity will prevail. This government needs to get the basics right, and it is clearly not doing that. It has failed in so many ways: it has failed to stem the tide of people smuggling that we have seen—it is only increasing—and it now needs to put in measures in order to combat the people-smuggling financial remittance. The government really needs to get its basics right; clearly, it needs to improve our national security, and the failure that it has had all along in protecting its borders.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

The matter dealt with by the Combating the Financing of People Smuggling and Other Measures Bill 2011 is very serious, and one that is the constant focus of debate—sadly, for all the wrong reasons. Those reasons are the unparalleled failures of this government in the area of border protection—a failure to protect and to control our borders has now extended to a failure to hold control even of our immigration detention network, which is in a rolling crisis. If anybody needed to be convinced of that, and to understand just how serious this issue has become and how urgent is the action that is necessary, they only needed to see the buildings burning on Christmas Island the other evening—a situation which the Prime Minister said on the previous Sunday was under control.

I commend my colleagues on the comments they have made—the member for Brisbane, and in particular the Father of the House, the member for Berowra, whose experience in these matters is unparalleled in this parliament, and I would suggest elsewhere as well.

Where the government does something that is positive that assists to address this matter, I am happy to support it. Sadly, I do not have too many opportunities to do that in this parliament. Almost without exception—and I would say that this bill is an exception—every time the government has touched this area it has literally turned to mush. This has been the case whether it was their decision to dismantle the border protection regime put in place by the Howard government, literally brick by brick, that has led to more than 10,000 people turning up and over 200 boats, or whether it was their decision to implement a discriminatory asylum freeze that saw the average time in detention increase threefold and the number of people in detention double, contributing to the chronic situation we see in our detention network today, a policy that the Prime Minister said was in the national interest when she was the Deputy Prime Minister. Whether it is these issues or, more broadly, the government’s failures in the area of border protection, when they do something positive I am happy to say so, and this bill is a positive step. It is not a big step, but at least it is a positive step and it is something that we can refer to in positive terms.

In this area some 10,000 transactions have occurred in relation to these matters. There are 6½ thousand individual providers of remittance services in Australia and reporting entities are required under the Anti-Money Laundering and Counter-Terrorism Financing Act to report international fund transfer instructions and threshold transactions over $10,000 to AUSTRAC. The measures that are outlined in this bill seek to provide further powers to ensure greater cooperation, intelligence sharing and the mandatory provision of information going to these transmittance agencies that are used in the informal sector of the economy, largely, and which are abused by those involved in criminal activity, especially in the area of people smuggling. This bill seeks to try to effect some positive regulation in bringing these areas under the eye of our authorities.

The coalition’s approach to dealing with these issues is based on a simple understanding that people smuggling is a business that exploits the refugee convention, of which we are one of the original signatories, and proudly so, to promote and facilitate secondary movement of people. It was recently revealed in the Senate estimates that 40 per cent of those who had come to Australia illegally by boat had spent at least 12 months in a place other than the country from which they say they were seeking asylum. So they had not come to Australia directly seeking a country of asylum. In fact many of them had spent more than a year in another country, predominantly Pakistan and Iran. And what takes place in these areas where those seeking asylum congregate is a business and that business provides a passage all the way from Pakistan and Iran through Malaysia or Indonesia and onto a boat, and on they come to Australia. That is the product they seek to sell and, as someone who was actually once involved in the tourism industry, it is not that dissimilar from the way tourism packages are sold around the world. This is an end-to-end package put forward by the smugglers that also includes finance in many cases, though it is not the sort of finance that anyone in this place or anyone in this country would like to contract with. If people think that they have got complaints with the banks, well, the banks will not turn up at your family’s doorstep if you refuse to pay the interest and deal with you violently. Those are the sorts of people we are dealing with, who are engaged in this activity. So we understand that this is a business and we understand that to destroy this business you need to remove the incentives and the infrastructure and opportunities that exist to make this business function.

To give you an idea of how much money is at stake, it was revealed in Senate estimates that the average price paid per passage was $10,000 per person. That was to get on a boat to get to Australia. That means that the boat that recently arrived carrying 147 asylum seekers was worth just under $1.5 million to people smugglers. That was a pretty bountiful passage for the people smugglers. That boat turned up just a few days ago. So there is a lot of money involved. What the coalition’s plans and policies are designed to do is to deny the people smugglers a product to sell. The way that we have done that—and I stress that we have done it; it is not a theory; it is not just a policy; it is something that has been proven—is by denying a product by removing the certainty of the immigration outcome that is potentially on offer to people who seek to get on these boats through paying the people smuggler.

We did that through only offering temporary protection visas to those who would seek to come to Australia illegally by boat. No permanent residency was offered, unlike under this government, which provided permanent residency to the three individuals who were involved, according to the Northern Territory coroner, in what was ‘part of a plan to scuttle the boat’ that led to the deaths of five fellow passengers, injured 40 more and put Defence Force personnel at risk. Those three individuals received permanent protection visas in this country. They subsequently qualified after the suggestion by the government that this would be reviewed under the general character test—which I note is the same general character test that this government is going to apply to those who were responsible for the riots on Christmas Island. That is where the government sets the bar on these things: if you scuttle a boat and that leads to the death of five people, we will still give you a visa and we will not take it off you on the general character grounds under section 501 of the Migration Act. If that is the test that they are going to apply to those who set Christmas Island alight last week, I do not think that those people are shuddering in their boots.

This government has literally no form or backbone when it comes to dealing with the realities of what happens in this space. Whether it is the detention network or the people-smuggling business, this government just does not get it. They do not understand that it is not just the measures but the back-up and the resolve that sits behind them. That is what is important. We can have measures like the ones in this bill but, if they are not backed up with the resolve to follow through on many other measures, they will not work. They need to be backed up with the reintroduction of temporary protection visas, the resolve to turn boats back where the circumstances permit and the resolve to reintroduce third party processing—as we have proposed for Nauru. Why Nauru? Because they would agree to do it, as opposed to the farcical plan for East Timor.

I note Nauru, because the government likes to say that it was not effective. Apart from the fact that the Labor senator Peter Cook concluded that it was effective, I note the statement by Senator Evans in February 2008. When commenting on the Nauru and Manus Island experience—the Pacific solution—he said that, of the 1,637 people who were detained at Nauru and Manus Island, 1,153 or 70 per cent were ultimately resettled from those centres to Australia or other countries and, of that 1,153, around 61 per cent, 705 people, were resettled in Australia. Those are the facts. The Pacific solution created uncertainty in the minds of those people who may have been going to pay a people smuggler about whether they were going to get what they paid for.

When the boat may not end up in Australia and when the only opportunity that you are going to get on the other side if it all goes right is a temporary visa under which you cannot have access to the family reunion program then you may well choose not to come. The family reunion program is why we see predominantly single males sent out here. They are coming as anchors. They seek permanent residency so that they can make the applications for family to join them. We see the even more abhorrent situation in which minors under the age of 18 are sent out on the boats to act as anchors to draw other family members out. That requires a response that is more than just changing legislation. There needs to be some resolve here. Scuttling the business is necessary. This bill tries to frustrate the channels of finance that pays people smugglers.

The father of the House made an excellent point in his contribution to this debate. This bill assumes that there are people providing finance for the passages of people to come out to Australia and that they live in Australia. This bill is designed to try to ensure that we have the information available to enforcement authorities to find those people. What I am not convinced about is that this government, even if they found them, would prosecute them. It is important, as the father of the House said, that all people who live in Australia regardless of their background, regardless of where they have come from, conform to the requirements of Australian law.

I think it is very important that communities across this country work with Australian authorities, whether it is with Customs and Border Protection, the Australian Federal Police or others. If you know that a boat is leaving Indonesia then tell the Federal Police. That is your responsibility as an Australian. That is your responsibility as someone who has residence in this country. You should inform the Federal Police if you are aware that an illegal activity is about to take place. That phone call may save lives. Those phone calls certainly would have contributed to the saving of lives last December when that boat crashed against the rocks at Christmas Island. People knew that boat was going to leave Indonesia. They had tried to talk people out of getting on that boat but did any of them call the Federal Police to let them know it was leaving? Was there any intelligence shared by those who knew that boat was leaving?

That goes to the heart of what this bill is about—the networks of support that exist within this country through financing. That financing may be coming directly from the family network or friends of those who are seeking to come; there may be other forms of finance which have been provided by other lenders or others who can resource this vile business. This bill is designed to provide intelligence to ensure that they can be tracked down and prosecuted and they should be. I would urge those who are in those networks of support to understand that it is the law of this country to try to stop people smuggling. It is the law of this country to have a refugee and humanitarian program that has integrity. We have processes that we believe strongly in because we want to make sure that those places under our program go to those who we as a country have decided are in greatest need. We do that every year. Sadly, in recent times that decision has been taken away from us and given to people smugglers who are deciding who the thousands of people are who are now getting permanent visas, including those who scuttled SIEV 36 and have been allowed to stay and potentially to bring other members of their families here who have been involved in this vile business.

In the few moments I have remaining, I want to say that we also need to deny the means. That involves ensuring that we can prosecute people smugglers themselves and deny them the infrastructure in those villages throughout Indonesia, the vessels and those who might participate. To do that we need the help of our friends in Indonesia and Malaysia. As the father of the House said, there is no great incentive for them to help us when we will not take care of business on our side of the fence. We are not taking care of business on our side of the fence and it is not surprising that they are not falling over themselves to try to help us. I seek leave to table the full suite of measures that we have announced as a coalition that are designed to nip this issue in the bud and deal with it dramatically. I seek leave to table the document as the coalition’s full policy on domestic, regional and international measures that can deal with this scourge of people smuggling.

Leave granted.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

I certainly welcome this opportunity to speak on the Combating the Financing of People Smuggling and Other Measures Bill 2011. This bill makes certain amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. As we know, that was created by the Howard government. It talks to the requirement for the reporting of international funds transfers of over $10,000. So those performing remittances need to report those transactions to AUSTRAC. This was a bill for the time. There were issues regarding terrorism—as there still are today—and issues regarding criminal activity, the money-laundering problems that still exist today. So it was very much an act for the time. There is no doubt that it served its purpose. I pay tribute to Senator Ellison for the work that he did to bring that bill and then act before the parliament.

That is one thing. That is what the act at the time was designed to achieve: to make sure that those transactions that took place were properly reported and then investigated if required. That was what it was all about. On the other hand there was the issue of border control and the people smuggling that took place. To fix that problem, the government at the time decided on a different set of measures. Those measures were ultimately successful, as they reduced the boat arrivals to a mere trickle. I think there was one boat arrival in 2002, and it was pretty much along the same lines after that. So there was a law for money laundering and counter-terrorism financing. And there was a policy with Nauru and temporary protection visas. That solved the other problem.

When we look at this bill—and I am holding up a copy of the minister’s second reading speech—what we see is an attempt to convert the original Anti-Money Laundering and Counter-Terrorism Financing Act into something which the government is putting out there and suggesting is going to represent progress on solving the problem of people smuggling. It has already been pointed out by so many speakers before me that there is very little reference in the second reading speech—or the bill, really—with regard to people smuggling.

The problem is that the ultimate problem is not going to be solved by this sort of thing. We know how to solve the problem. Those members who were here before knew how to solve the problem. The member for Leichhardt was around when the problem was solved before, when the measures were put in place that actually stopped all the boats—or stopped all but one or two boats a year. But, unfortunately, the government cannot bring itself to put those measures back in place which would solve the problem. So we are shadow-boxing around with this bill, where the government brings it before the parliament and supposes that this is going to be the panacea that will result in a reduction in people smuggling. But we will get to that.

This bill is about the 6½ thousand providers of remittance services. This bill is about those other organisations and bodies that might also end up providing remittance services. It is basically about more remittance providers being included under the original act and the ability for more government agencies to be informed about the remittances that take place. That is basically what this bill is all about. We know that it supposes itself to be an attempt to reduce people smuggling. That is what it supposes. I noted, when I was listening before to this debate this evening in my office, a number of comments that were made. I think it was the member for Canberra and the member for Dobell who waxed lyrically about the $2 billion that the government has spent on its anti people-smuggling border control strategy.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

They are still coming!

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

Yes, exactly right. But I would suggest that what we do not have here is a strategy. What we have is the purchase of a number of very expensive bandaids. I do not call it a strategy when you are faced, over a couple of years, with such a huge expansion of demand for beds that you have to start bringing extra money out to provide those beds—4,900 more beds since the election, $400 million—none of which was forecast in the budget. It was all a surprise, but that is no strategy. This is catching up; this is a bandaid and a very big and expensive bandaid indeed.

Clearly as the government tries to address the primary problem of stopping these boats—addressing the problem not with the means, not with the tools that have worked in the past for this country but through just shadow-boxing around, trying to achieve something without doing what needs to be done—of course what needs to be done is the reintroduction of temporary protection visas. What needs to be done is making presumptions against the refugee status if someone turns up without identity papers.

The coalition policy is well known and it has been tabled again tonight, so I am very happy about that. I recently got figures back regarding a question on notice I put to the minister for immigration. I asked how many people who came from, for instance, Pakistan in 2010 used aircraft on their way here. The result was around 2,600 of those people came from Afghanistan. Rather they said that they used aircraft. I suspect that there were probably more that used aircraft but did not say that they did. In fact, there must be a whole lot more than that who came from Afghanistan. An interesting point is that of all of those who came from Afghanistan, only about 550 or 600 people had identity papers when they got here. That is an interesting point. I am sure the member for Solomon agrees with this: there are huge numbers of people coming, thousands of people coming, and yet, despite the fact that they have travelled through places like Indonesia, through airports—Jakarta, maybe Kuala Lumpur or however—by the time they get here a mere fraction still retain their identity papers.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Strange, isn’t it?

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

I think it is strange indeed. Most countries have a requirement that you need a passport or some form of identity paper to progress through immigration control. But sadly, or conveniently perhaps, by the time someone gets on a boat, there must have been a bad wave or something like that because so many of their identity papers are floating around in the Timor Sea—maybe conveniently so. I really do wonder how ASIO and other agencies identify the people who are on these boats given the fact that clearly a vast majority of them have tried to conceal their identities. Who knows how you would identify someone who has no photo identification and will tell you basically what they think is going to work. Clearly, these are the problems that need to be fixed and these are the problems that this bill is not going to address.

On the point of the bill specifically: a couple of weeks ago a constituent came to me in my office and said that she had recently been standing near one of the post offices not far from my office. This had been a couple of weeks before she saw me. She said to me that there were two people talking about how they were transferring money back to Afghanistan or Pakistan or one of those two countries; she was not clear on that. They were sending as much money as they possibly could—$3,000 or $4,000 at a time—and this had been a regular thing. This lady said to me, ‘You know what that is all about?’ I suspect that I do know what that is about. I suspect that that is, as the member for Berowra was saying earlier, about people having decided, ‘The best way to get our relatives here is not to apply through the proper channels; the best way is to send money back home so that the people smugglers can be engaged and the money paid, subverting the system.’ As the member for Berowra said, we used to call them accessories. Maybe we could even call that a conspiracy to bypass the laws of this country. So there might be some value in this bill, but I really wonder whether, for those who do send money out of Australia to help their relatives bypass the system, this bill will still do what needs to be done and whether the $3,000 to $4,000 that might go at each point will actually be addressed here. I suspect not.

I go back—and I really have taken too much time tonight on this matter—to this: the ultimate problem the government faces is that there must be a true discouragement to those who come by boat; they have got to believe that the money that they might spend in paying people smugglers would be wasted and that there would be no guarantee of coming to this country. That is done through temporary protection visas; that is done through offshore processing. It has been achieved in the past. The problem was fixed back in 2001; John Howard fixed it. People were not losing their lives out on the Timor Sea. People were not losing their lives out on the Indian Ocean if they were coming from Sri Lanka. To me, the compassion in this argument is, very clearly, in putting measures in place that are going to discourage people from risking their lives. That is a damn good way to go.

Louise Markus (Macquarie, Liberal Party) Share this | Link to this | Hansard source

I rise to support, in principle, the Combating the Financing of People Smuggling and Other Measures Bill 2011 and to speak on the absolutely unacceptable practice of people smuggling and how this legislation, it is hoped, will cut off the funding that allows this despicable trade to flourish. The bill we have before us has a purpose, and that is to catch, hopefully, those who are breaking the law, who conduct financial transaction services to launder illicit money—money that is then used to finance people smuggling.

In Australia, one impact of the deregulation of the banking system has been a rise in remittance dealers who operate outside the mainstream banking system and offer alternative financial services including the transfer of money into and out of Australia on behalf of clients or who arrange for the service to be provided. People trading in this way are known by many names: remittance dealers, money remitters, money transmitters, alternative remitters. They operate on the open market and within many ethnic community groups. There are a broad range of operators from owner-operator businesses to large, multinational entities. Transfers are commonly made electronically by phone, fax, email or SMS, or through a clearing house, and the transaction is undertaken when remittance dealers accept cash, cheques, monetary instruments or stores of value. They then pay an equivalent amount of cash or value to a beneficiary in another location. It is a legitimate and profitable business venture, and there are approximately 6,500 individual providers of remittance services in Australia.

Having said that, within the alternative financial transactions framework there are many scams and complicated, sophisticated schemes designed to avoid detection. This bill, it is hoped, will improve intelligence sharing and surveillance to capture the corrupt operators and, at the same time, protect the genuine operators by strengthening the regulation of that sector of the financial services industry. For those operators who do the right thing: you have nothing to fear. For those who are part of a money-laundering process: this bill will expand the number of agencies that monitor and report on fund transfers and it will extend the methods by which reporting data is collected and end recipients identified; you are on notice.

The Australian Transaction Reports and Analysis Centre, known as AUSTRAC, is in the portfolio of the Attorney-General. AUSTRAC is Australia’s anti-money-laundering and counter-terrorism-financing regulator and specialist financial intelligence unit and shares information with a number of other government agencies. Under the Anti-Money Laundering and Counter-Terrorism Financing Act, a wide range of businesses and financial institutions that deal in cash, bullion and financial transactions must report to AUSTRAC on all transactions above $10,000. These include banks; building societies; corporations; insurance companies; security dealers, such as stockbrokers; most unit trust managers and trustees—some are exempt; travellers cheque or money order issuers; cash carriers and payroll preparation businesses; casinos; bookmakers, including totalisator agencies; bullion dealers; and, of course, some solicitors. Transactions which must be reported are currency of $10,000 or more, or foreign currency of that value; international funds transfer instructions, either into or out of Australia, of any amount; and suspicious transactions of any kind, being transactions that the dealer may reasonably suspect of being part of tax evasion or crime or that might assist in a prosecution. Even members of the public are obliged to report to AUSTRAC if they carry $10,000 or more into Australia. This is done, as we all know, on forms available from the Australian customs service at airports and seaports.

The ABC reported on 27 January this year that Australian Federal Police statistics show that 302 people have been arrested for people-smuggling offences in Australia and 104 convicted. The Australian newspaper on 7 April 2010 reported that the people-smuggling trade through Jakarta has become such a big business that spotter’s fees of up to $540 a person are being offered for getting asylum seekers onto boats headed for Australia. While in principle the coalition support this bill, we do not believe that it is all that is required to stop people-smuggling. We would contest and argue that the changes in policies by the Labor government have in fact made people-smuggling easier and more accessible. While the bill goes some way to strengthening the intelligence-gathering and reporting functions of the financial services community, and should in this regard be supported, in its current form it does not answer all the questions or bring all the solutions required to stop people-smuggling.

The bill also imposes a heavier regulatory burden and cost on the alternative remittance sector and raises significant privacy concerns from enhanced information-sharing provisions and the use of credit reporting data. This will have an impact on those who are doing the right thing. I support the bill in principle but note the pending Senate Legal and Constitutional Affairs Legislation Committee inquiry into the bill, so the coalition reserves the right to make additional amendments. I commend the bill to the House, but I have to say that I hope the Labor government will be prepared to take further measures that will make a real difference to those people who are being impacted directly by people-smuggling, in many instances having faced the loss of their lives.

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Home Affairs) Share this | Link to this | Hansard source

in reply—Firstly, I present a correction to the explanatory memorandum for the Combating the Financing of People Smuggling and Other Measures Bill 2011. I thank all those who have contributed to this important debate with respect to measures to regulate the remittance sector. This is a very important piece of legislation which, if enacted, will enable the financial intelligence agency of the Commonwealth, AUSTRAC, to provide greater regulation of the remittance sector. It is a very important initiative that was part of a suite of measures the government announced in April last year to combat people-smuggling.

As people might recall, on 9 April we announced measures to combat people smuggling by introducing penalties of up to 10 years jail or $110,000 for people who provided material support for people smuggling. That legislation was enacted in budget week last year and complements those arrangements. This is about ensuring the remittance sector is properly regulated and providing AUSTRAC with the power to terminate registration or ensure that those who are involved in the remittance sector are of good character. This is about ensuring greater accountability and transparency in this sector. For that reason, the government is seeking the support of the coalition, Independents and Greens in this matter.

I understand that comments have been made on other matters. It is true to say that if we were to strengthen the regulation of the remittence sector we would have a greater capacity to identify money laundering. The advice I have received is that money laundering is a challenge in this country as it is in countries around the world. This bill will help mitigate those threats. It is also true to say that serious and organised crime will be challenged by these regulations because the stronger the financial regulations of a given sector the greater difficulty serious and organised crime have in engaging in unlawful conduct in the sector. I believe that would be the case as a result of the initiatives enclosed within this bill.

It is unfair to categorise the bill as not directly going to the issues of people smuggling. The government believes that people smuggling is a significant problem in this country. We believe that we need to tackle it in a variety of ways. This is one of many ways the government is seeking to combat this very challenging area. We do so by engaging with law enforcement agencies in the region. We do so by working closely with our neighbours in the region, such as Indonesia and Malaysia. They dedicate resources, like we do, in order to target people smugglers. This is very important because, in the end, we are seeing people reap profits as a result of acting unlawfully, as a result of luring people onto unseaworthy vessels and taking people, in many cases, on journeys where they perish. For those reasons it seems absolutely critical that we do everything we can to reduce the likelihood of people profiting from the crimes and to reduce the likelihood of, in many cases, desperate people being encouraged to get onto such vessels. We do not want to see another disaster like that which occurred on Christmas Island on 15 December last year, where approximately 50 people perished. We do not want to see people profiting from people-smuggling offences. This bill will assist in that regard. Therefore I reject out of hand the assertions made by the shadow minister for justice in his contribution to the debate and those on the other side who suggest that this bill is inappropriately titled. I understand some organisations raised this issue during the review of this legislation before the parliamentary committee.

But, in the context of the government announcing increased prison sentences for people who provide material support, along with a better form of regulation to the remittance sector, it is quite appropriate that this bill indicate that, along with other measures, the government is targeting people-smuggling, as outlined by its title. I do not accept the proposition that it is misdescribed or that the purpose of the bill is in some way not properly reflected. For that reason I do not accept the notion that we would accede to an amendment that would change the description of the bill. The facts are that there is sufficient information for us to conclude that these measures and these forms of regulation within the remittance sector are required. I would be therefore very surprised if the coalition were not to support the substance of these provisions. I understand there have been a number of other amendments foreshadowed. In the end we will discuss these issues with the coalition and other members who may have an interest, but I believe the bill has the right balance between ensuring that the remittance sector provides greater accountability for its oversight of its clients, its customers, and at the same time provides them with sufficient security. In the end this is about not only targeting crimes but also preventing the sector’s reputation being brought into disrepute.

There was evidence to suggest that the remittance sector is not a place where people-smuggling activities occur. I would strongly oppose that position. Indeed, the parliamentary report into the matter cites a departmental officer who gave evidence on the matter. In that evidence he said:

… enforcement agencies are aware that the remittance sector is being used to finance serious criminal activity, including people smuggling …

Certainly there was evidence provided to the committee that that was the case.

The other issue I would raise is that I understand there was a report by the Australian Institute of Criminology suggesting that cash transfer services provided by remittance deals have been used to pay the organisers of people-smuggling ventures. It goes on to say, however, there were not many documented instances of this. I say to that, and I say in respect of the assertions made by the AIC, that, yes, they were right; that there was indeed evidence of people-smuggling activities when we looked closely at the remittance sector. But I also suggest that the AIC and other bodies, and, indeed, those that have contributed to the debate, should understand that the intelligence the government receives on these matters goes beyond the public comments made in respect of these matters. I want to inform the House that the government thought long and hard about taking this approach. It did so on the advice of our law enforcement and intelligence agencies, which are concerned that the remittance sector is used for improper purposes.

This legislation complements, as I said, the legislation that was enacted last year. It is an important step to ensure a greater likelihood that the remitting of money for improper purposes will be detected and people will be prosecuted as a result. This is of course going to assist us with serious and organised criminal matters—money laundering from the proceeds of drug trafficking, for example—but among those things the people-smuggling matter is front and centre in the government’s concerns about tackling this issue; that is, dealing with this very complex matter. I therefore suggest that those members who have suggested that there are concerns with the construction of the bill rethink their view. This has been properly considered by the parliamentary committee, and I support the majority decision of that committee. I ask the parliament to understand the importance of this legislation, ensure that it is supported and ensure that we have as robust a regime as possible in the remittance sector to prevent people smugglers profiting from that terrible crime.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.