Tanya Plibersek (Sydney, Australian Labor Party, Minister for Human Services) Share this | Link to this | Hansard source

I present the explanatory memorandum to this bill and I move:

That this bill be now read a second time.

The Social Security and Other Legislation Amendment (Miscellaneous Measures) Bill 2011 contains a number of amendments to protect the integrity of Australia's social security system.

Australia is a society that looks to provide a safety net for those that are most in need. Social security payments provide that safety net to many thousands of Australians.

While the great majority of social security recipients claim payments to which they are rightfully entitled, successive Australian governments have recognised that some people will attempt to receive payments to which they are not entitled. It is necessary, therefore, that there are robust measures in place to ensure the integrity of the social security system.

The bill amends the Social Security (Administration) Act 1999, the administ­ration act, to address issues that have been identified, dating back to the commencement of the administration act in 2000, as a result of the recent case of Poniatowska versus the Commonwealth Director of Public Prosecutions.

For many years the CDPP has prosecuted cases involving social security fraud under various sections of the Criminal Code, particularly section 135.2, 'Obtaining a finan­cial advantage'. These offence provisions involve, for the physical element of the offence, proving that the defendant engaged in conduct, where the relevant conduct is an omission—namely, failing to inform the department of an event or change of circumstances that might affect the person's social security payment or qualification for a concession card.

Section 4.1 of the Criminal Code provides that engaging in conduct includes an omission to perform an act. Section 4.3 provides that an omission to perform an act can only be a physical element of an offence if (a) the law creating the offence makes it so; or (b) the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform.

In the recent case of Poniatowska, a majority of the full court of the Supreme Court of South Australia held that 'section 135.2 does not define any duty or obligation relevant to an offence committed by way of omission'. It further noted that the CDPP had not relied on any notice issued to the defendant to establish a duty to inform the department of an event or change of circumstances, and that the administration act did 'not create a separate "stand alone" obligation'. On this basis, the court set aside the convictions which had been recorded against the defendant.

The Commonwealth has appealed the Poniatowska decision to the High Court, which has reserved its decision. The current position is that a large number of past convictions are at risk of being overturned on appeal on the basis of the decision in Poniatowska.

Since the decision, the CDPP has adjourned or discontinued a large number of matters of this kind before the courts. The CDPP is also not commencing new procee­dings of this kind, pending the determination of the appeal before the High Court.

Since the 2000-01 financial year, the CDPP has prosecuted approximately 36,500 defendants for social security fraud. Without a detailed analysis of each case, it is not possible to state definitively how many matters of social security fraud have been committed via omission since the introduc­tion of the Criminal Code. However, the government's best estimate is that as many as 40 per cent of this number, or around 15,000 convictions, may now be open to question as a consequence of the decision in Poniat­owska. To ensure the past convictions cannot be called into question, this bill amends the administration act to insert a stand-alone obligation for a person to inform the department of events or changes of circum­stances that might affect the payment of a social security payment to the person or the person's qualification for a concession card.

This provision will operate both prospec­tively and retrospectively to 20 March 2000, the date that the administration act comm­enced.

Successive Australian governments have not lightly pursued retrospective legislation. However, in this case there are exceptional circumstances justifying retrospectivity, namely that it would not be appropriate for a significant number of prosecutions condu­cted from 2000 for social security fraud to be overturned on the basis of previously unidentified legal technicalities.

One of the criticisms that can be directed at retrospective legislation in relation to criminal offences is that people will be unaware that their conduct is an offence. In this case, however, the convicted persons would all have been aware that they should have informed the department of the specified events and changes of circumst­ances listed in the notices given to them by Centrelink in relation to their social security payment or concession card. The effect of the retrospective application of this provision is to confirm convictions already made.

As members would be aware, Centrelink has more than seven million customers. Its operations depend on the use of computer programs to generate decisions based on the requirements of the social security legis­lation.

Considerations in light of the Poniatowska decision have also raised some doubt that there is sufficient evidence to prove that, with respect to the period from 12 June 2001 to the present, decisions made by Centrelink under the social security law by the operation of computer programs have satisfied all legislative requirements.

To ensure that these decisions are not open to question, the bill provides that the requirements of subsection 6A(1) of the administration act are taken to have been complied with in relation to decisions made under the social security law by the operation of a computer program for the period 12 June 2001 to the date of royal assent.

Finally, the bill makes technical amend­ments to the Family Assistance and Other Legislation Amendment (Child Care and Other Measures) Act 2011 and to the Family Assistance Legislation Amendment (Child Care Rebate) Act 2011 to correct drafting oversights.

I conclude by noting that the bill has been designed such that there will be no practical impact on the ordinary course of Centrelink's business, or on a person's obligations to rep­ort changes in their circumstances to Centrelink.

Every person who receives a social security payment or a concession card is currently sent notices by Centrelink. These notices require that the person inform the department of events or changes of circum­stances which might affect the person's social security payment or qualification for a concession card. This will not change as a result of this bill.

The bill is necessary to protect the integrity of the social security system. It has been brought forward by the government, based on advice from the Commonwealth Director of Public Prosecutions and the Solicitor-General, to address technical issues that have been brought to light by recent litigation. It does so without disturbing the existing protections that the law guarantees for Centrelink clients.

Leave granted for second reading debate to continue immediately.

Kevin Andrews (Menzies, Liberal Party, Shadow Minister for Families, Housing and Human Services) Share this | Link to this | Hansard source

Australia has a generous social welfare system. When people find themselves in necessitous circumstances whether by way of unemployment or disability, or some other affliction in their lives, then the commitment of the Australian people shared across the aisle of politics is that we provide them with welfare. That has been done for many decades in Australia and, by any internat­ional standards, the provision of that welfare in this country is most generous.

That welfare, of course, does not come out of nowhere. It comes from the taxes which are contributed by other Australians to ensuring the common good of all people in this country. I say that because there is a concomitant responsibility or duty on the part of people who are in receipt of welfare, and part of that duty is to be truthful and frank about their financial circumstances. If, for example, a person's financial circum­stances change and they are in receipt of more income than they were at the time that they received their welfare or they become the owner of some asset, they have the responsibility to inform the social security authorities through Centrelink of those changed circumstances so that a reassess­ment of their situation can be made consistent with providing welfare to them and consistent with the broader objective of meeting the common good of all Australians.

That is why the social security legislation contains provisions that require a person whose circumstances have changed finan­cially to notify the department or notify Centrelink about those changes. This is something which is commonly understood and known throughout the Australian population. Indeed, if a person was unaware of that and they are in receipt of welfare, they are regularly reminded of that comm­itment, that obligation, in letters that they receive in regard to their particular payment from the government.

This bill arises because of a difficulty, which has come to light, in relation to people who have defrauded the Commonwealth. Defrauding the Commonwealth might sound like the defrauding of some remote institution, but the reality is that defrauding the Commonwealth is defrauding all Austra­lians, because all Australians who are taxpayers make contributions to the funds which enable these payments of welfare to be made.

It was assumed, as the minister has pointed out, for quite a number of years after the implementation of the Criminal Code in this area that a prosecution brought pursuant to the Criminal Code met all the legal requirements. However, in a case in the South Australian jurisdiction that ultimately ended up in the full court of the Supreme Court of South Australia—the case of Poniatowska—it was decided in a majority decision that one of the elements was missing, namely, that the legislation did not define a duty by way of an omission, and therefore, on technical grounds, what were thought to be proper and appropriate and lawful prosecutions that had been brought over a number of years are in danger of being overturned. Indeed, if that was the last say on that case in those particular circumstances, the prosecution would have been overturned. The minister said that this is a matter currently before the High Court and we are waiting for the High Court to pass judgment.

It could be argued that the parliament should wait for the High Court to hand down its judgment. That is a principle which I think in most cases we would subscribe to, because until the High Court does hand down that judgment there is still some uncertainty or some final determination to be made by the judicial officers of this land. However, the danger in this case is that, if we do wait, there are potentially thousands of cases that could be overturned, and not only overturned by people seeking to quash those convictions but potentially compen­sation claims made against the Common­wealth.

The principle of retrospectivity, which has been mentioned in this debate, is an important one. Nobody in a legislative mode approaches retrospectivity lightly. As a general proposition, we do not wish to say that something which was regarded as lawful in the past is now unlawful and to go back to those past events. It is one thing to do it prospectively but it is another thing entirely to do it retrospectively. So it is appropriate that concerns about retrospectivity be raised in relation to this case. However, there is a difference here. We are not creating an offence anew. People have been charged with offences and they have been convicted of welfare fraud. Nobody will be affected or captured by this legislation who had not already been caught and penalised before. In fact, if the legislation does not pass and the High Court upholds the majority finding in the South Australian Supreme Court, the prospect is that many people who had been convicted of offences before may be able to seek to have those convictions quashed and be paid compensation.

I say this is different because it is quite clear on the face of the social security legislation that there is that obligation to inform Centrelink, the social security authorities, of a change of circumstances. Whilst one may argue about the technic­alities of the law, this is a case where we ought to go back to what the law is based on. The law is based on a moral or ethical principle which I was seeking to describe at the outset. Yes, we are generous in terms of welfare, but a person in receipt of welfare has to be honest and frank about their particular financial circumstances.

It would not be justice for society generally and the community, and it certainly would not be justice for the taxpayers whose taxes contribute to welfare payments, if a situation were to arise where, because of the technical interaction between the Criminal Code and the social security legislation, for what had been regarded properly as welfare fraud offences were overturned. Whatever one argues about the legal technicalities of this case—being a lawyer myself, one can always find a legal argument to advance, and I am not convinced that this is retrospectivity as we normally understand it—even if one does not agree with me, I think there is in this case a broader moral or ethical principle that this parliament should seek to uphold. It is for that reason we on this side of the chamber will not be opposing this legislation that the government has brought forward.

I will refer to some cases, because we are talking in many instances not about some mere trifle where somebody had overlooked the fact that they had mown the lawns a couple of times for neighbours and been paid $20, $30 or $50 for that but about very substantial fraud against the taxpayer, against the Commonwealth, in many cases. Let me just give the chamber some examples. These are drawn from the annual reports of the Commonwealth Director of Public Prosecutions. One is that over a period of more than 10 years a person failed to notify Centrelink that they had worked and earned income while in receipt of Centrelink benefits. As a result, the person obtained social security payments to which they were not entitled of over $100,000. The person was charged pursuant to the Criminal Code, convicted and sentenced to imprisonment.

Another case was that of a person with power of attorney over a parent's financial affairs who failed to inform Centrelink of the parent's death and continued to receive the parent's fortnightly payments for around 10 years. The person defrauded the Common­wealth of over $80,000. Again, there was a prosecution, a conviction and a sentence of imprisonment.

The third case is one where, over two separate periods totalling eight years, a person claimed parenting payment (single) while living with a partner. The person neglected to inform Centrelink when the couple had reconciled and, in relation to a separate period, falsely claimed that the couple had separated. The person received over $80,000 in social security payments to which they were not entitled. In this case they were charged under the Criminal Code, convicted and released on condition that they be of good behaviour for a specified period.

I will give the House one more example. Over almost seven years, a person received over $70,000 in social security payments to which they were not entitled through failing to inform Centrelink of their earnings from full-time employment. The fraud was discovered as a result of a data-matching exercise between Centrelink and the Aust­ralian Taxation Office. Again, this person was prosecuted, convicted and sentenced to a period of imprisonment. I do not believe that any reasonable Australian would regard a circumstance where, because of what is largely a legal technicality, people who had been convicted in those circumstances would have the possibility opened up to them to quash those convictions and, more than that, possibly even claim compensation from the Commonwealth. To use a colloquial expres­sion, it fails the front pub test. It fails the common-sense test of ordinary Australians. That common-sense test is based on this notion that, yes, we are generous, but there is a concomitant duty or responsibility to those who are generous in relation to these payments. It is on the basis of that principle that we will not be opposing this legislation.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I will speak very briefly on the Social Security and Other Legislation Amendment (Miscellaneous Measures) Bill 2011. I do think this is a very important bill that should be passed by the House and I am pleased that there is support on both sides of the chamber. I am very proud to be an Australian because in Australia we do provide a safety net for those in need. This is something that is ingrained in our psyche as Australians. When people are doing it tough, they do get assistance. I think there is broad support in our community for those who need help to actually get that help. So I am proud that we have a safety net and a social security system in this country.

This bill reinforces that the social security system has integrity. The vast majority of Australians that go into their local Centrelink in times of trouble and times of need are very upfront and honest and deserve the support that they get, but there are instances, as the previous speaker pointed out, where this is not abided by. A very small minority go in and are not upfront and honest, despite knowing that they should be. This does unfortunately call into question the integrity of all those people receiving these social security payments. It is unfair that the actions of the few cast aspersions on the many who do that right thing. I believe these amendments are very important for the integrity of this system.

As the previous speakers have outlined, this bill arose as a result of a court case in South Australia. I believe the intentions of the Commonwealth and the requirements placed on social security recipients have been clear, but based on this technicality that clarity is being called into question. As a result, in many instances where fraud has been proven in a court of law people may get off those charges. That is a concern. It is also a concern that new charges of defrauding the Commonwealth are not necessarily proceed­ing as quickly as they could have because of the lack of clarity at the moment. It is important that we bring forward and pass this legislation, despite the fact that this matter is still going through the High Court. It is the duty of the parliament and the Common­wealth, being responsible for the social security system, to bring this legislation forward. So I am pleased that it has the support of the House.

I want to use this opportunity to talk about the hardworking people at Centrelink. The many people around the country administ­ering our social security system do a great job on the front line. In my electorate there is a great amount of work being done at the Noarlunga Centrelink office. It is sometimes a tough job. At times there are distressed people, upset people and people in real difficulty, but I believe that Centrelink staff right around this country do a great job. I would like to talk about Noarlunga in particular because I know the staff there do not just sit back and wait for people to come to them; they play a real outreach role in the community. In fact, I attended a special fair day for those suffering from mental illness where all the services got together to talk to the local community. Centrelink was there with the staff and the manager. The manager of a large Centrelink office was there on the front line talking to people, letting them know what they can access and what is available. We know that those who are most vulnerable often do not know what they can access. They can access different payments and services, and sometimes they do not know. Our Centrelink staff have been out there doing that.

There have been many other opportunities where Centrelink staff from Noarlunga have done outreach work. Whether it be youth or Indigenous people, they go into those comm­unities to talk to those people in need who may benefit from a number of services and payments. I would like to take this opportunity to congratulate Centrelink staff, specifically at Noarlunga but also right around the country, who work in this area. They also need to have confidence that, when they assess someone and they are getting information, they can be confident to act on that information. This legislation ensures that there is that mutual responsib­ility for people to acknowledge when their income changes—and as the previous speaker said, it can be by quite a lot. People know that their income changes. While it might be only a few people, it is important that this legislation is supported. We have an obligation to support it and pass it through the House now because the Australian people, while very generous in their nature and willing to help people in need, do not want to be defrauded. This legislation is really important to ensure that we can have confidence in the integrity of our social security system, that we continue to support those people in need and that those people who defraud the Commonwealth face the consequences of doing so. I commend the bill to the House.

Andrew Laming (Bowman, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services and Indigenous Health) Share this | Link to this | Hansard source

The opposition support the government on this occasion, even though we appreciate that there is a significant element of retrospec­tivity in what is being introduced. We feel that it does not contravene any fundamental principles of fairness to do so and, on those grounds, we do support the bill. We also want to note that Australia has a long tradition, as previous speakers have noted, of a strong welfare safety net—but also a community expectation that the money has to come from somewhere. Therefore, we are one of the few countries that so effectively, and in such a targeted way, means-test our welfare payments.

Many people do not realise that many of the social welfare economies of the rest of the OECD do not means-test in the way we do. In fact, they are far less progressive in that way. They allow people to take an age welfare payment commensurate with their earnings through their career, something that does not happen in Australia. We never want to forget that many hard-working Australians end up being means-tested out of further state support. Regardless of your view about that, we need to remember there is a significant working middle class that do not get the aged-care support that in identical circumstances in other countries they might well have.

Over the last two decades, we have seen a shift in thinking from the belief that welfare is a fundamental right to the belief that it is, after all, a privilege—that it is first of all collected from other Australians and then paid as part of the privilege of being an Australian. We therefore have laws and expect everyone, from east coast to west coast and whatever their background, to adhere to those. You have to play by the rules. I think the Australian sense of fairness comes out no more strongly than in the idea that one should never abuse payments that one receives through our welfare system.

There are many dimensions to combating welfare fraud and I think every state wants to strike a balance between having strict eligibility tests that are easy enough to understand and that everyone can appreciate and feel are fair and having a robust prosecution policy for those who willingly and knowingly contravene the rules. The fact that there have been over 30,000 prosec­utions is, I think, a fair indication of the latter. Ordinary Australians out there would understand that being a dole cheat or a welfare cheat is not something that is acceptable any more, not something that you can laugh about or pat your mate on the back about. That change has come about, quite significantly, over the last two decades through the policies of successive adminis­trations.

One does not want to have such an invasive and aggressive policy that it deters people from applying for Centrelink support or an approach that it is overly intrusive or punitive. There still needs to be an element of self-reporting and that needs to be encouraged, not dissuaded. What is very important about this amendment is, as the shadow minister has suggested, that there will be no new prosecutions as a result of this change. It just ensures that none of the old prosecutions are brought back for review through, potentially, the new light of a High Court decision.

In all of this, you are constantly weighing up the prima facie case of whether there is a need to overturn versus the public interest. I think most people here, together with most Australians, would admit that it is in the public interest to support the prosecutions which have occurred over the last two decades. The great risk of not standing up to it is that fraud then becomes more prevalent and Australians around the country lose their confidence that this is a welfare system that properly targets those who need it most.

Social security recipients, certainly those in my electorate, understand the rules and will stand by them. But we feel that, if this legislation is not supported, a whole lot of new cases could potentially be opened. The last thing we want is those prosecutions being called into question. While there is not really any understanding of how many of those are potentially coming before the courts, it may only be a matter of days or weeks before that does occur. Were this bill not passed promptly and expeditiously, we could potentially be exposing Centrelink and the Commonwealth to an enormous burden in having to defend cases which, given how much time has passed and the level of detail in the records we hold, would be very difficult cases to defend.

These sorts of changes are, I think, completely in line with what the average person would have thought were held in the first place. Although it now looks like you can basically drive a bus through a loophole, at the time it was extremely difficult for those Centrelink drafters of Commonwealth law to understand that what they were drafting could run contrary to an element of the Criminal Code. That is a very important reason for the changes. We also note that the Commonwealth has ceased prosecuting a whole range of cases that, most of us would argue, should be prosecuted and not delayed. That is another very good reason to continue the great work that Australia has done in avoiding Centrelink fraud—to ensure that that is not derailed.

Finally, there are some changes which make it very clear that people currently making a claim for social security or access to a concession card, people currently receiving social security or who hold those concession privileges and people not currently receiving social security payments or holding a concession card but who have at one time been paid social security or received such concessions will also be subject to these new rules. I think it is completely reasonable that we should support these changes and I think it is very important that Centrelink fraud is never considered a legitimate activity in this country. That is the important reason both sides should be supporting these changes.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Human Services) Share this | Link to this | Hansard source

In summing up, I thank the shadow minister for his contribution and for his support for this legislation. I also thank the member for Kingston and the member for Bowman for their contributions. It is a good thing that we have had the government, the opposition, the Independ­ents and the minor parties all agreeing it is very important to uphold the principle that, if someone has knowingly done the wrong thing and been pinged for it, they are not let off down the track on a legal technicality. I thank the House for its cooperation.

Question agreed to.

Bill read a second time.