Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

I rise to speak on the Bankruptcy Amendment (Discharge from Bankruptcy) Bill 2023. The coalition will be supporting this bill and, like the other urgent bill introduced into the House this week, the Crimes and Other Legislation Amendment (Omnibus No. 2) Bill 2023, we will facilitate its passage through the House.

This bill is intended to preserve the status quo. It addresses a technical issue concerning the dates on which a person is treated as being bankrupt under the law. In order to receive the benefits of bankruptcy, a person must file a document called a statement of affairs. This is a document that sets out the person's financial position to allow a trustee to administer the bankrupt person's estate. The filing of a person's statement of affairs starts the clock on that person's bankruptcy. Under section 140 of the Bankruptcy Act, the person will be discharged from bankruptcy three years after the statement of affairs is filed. Where a person has a status as an undischarged bankrupt, important legal consequences flow. For example, the estate of the undischarged bankrupt will be administered by a trustee and, subject to the limitations set out in the law, the bankrupt's property is divisible amongst creditors. The person only gains the legal protections that go with bankruptcy once that period has commenced, and the trustee only has legal powers to deal with the person's property until it ends. In other words, the dates when a person's period of bankruptcy start and finish are critical.

There are technical and process issues that have important implications for the dates over which a person is bankrupt. Under section 149 of the Bankruptcy Act, the period of bankruptcy will continue for three years and one day after the statement of affairs is filed. The longstanding business practice of the Australian Financial Security Authority, or AFSA, and its predecessors has been to treat a person's statement of affairs as having been filed on the date it is accepted. This allows for back-and-forth between AFSA and the individual concerned to ensure the statement of affairs is complete and adequate. Once AFSA accepts a person's statement of affairs, it records that date on the National Personal Insolvency Index, at which point the period of bankruptcy is triggered. This is a sensible approach that has been widely accepted amongst the community.

What this bill does is ensure that the law reflects the current practice and the settled understanding of most in the sector. It makes it clear that the filing date for a statement of affairs is the date on which it has been accepted by AFSA. This affirms the longstanding practice of AFSA and creates certainty for users of the bankruptcy system. It applies both prospectively and retrospectively to preserve the status quo.

Technically speaking, the amendments ensure the bankruptcy period of those who are or have been bankrupt is consistent with the dates recorded by the official receiver prior to commencement in respect to the bankruptcy. This will provide certainty to everyone who relies on the dates in the national personal insolvency index to ensure their decisions and actions are valid. It benefits bankrupted persons, trustees and others.

There is a carve-out in relation to criminal law: retrospective validation does not apply to criminal proceedings. However, the coalition accepts the government's assurances that this carve-out simply means a person who believes they were wrongly convicted of a crime due to a mistaken understanding as to whether or not they were bankrupt at a particular time will be able to challenge a conviction.

This bill provides certainty and stability to Australia's bankruptcy system, and I commend it to the House.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

This government promised transparency but it's not delivering it. This bill, the Bankruptcy Amendment (Discharge from Bankruptcy) Bill 2023, was introduced yesterday and we received our first briefing on it this morning, and now we're being asked to debate and vote on it. This bill may be an urgent bill but there has been no case made by anyone about the supposed urgency of it. It may a technical bill, but we don't have the basis or the time to consider that and seek advice from stakeholders or others. It may be that what has in fact happened is the government just didn't get its act together to draft a bill in time, to give us the usual courtesy of the ability to examine it and get advice on it. When this happened under the previous government, Labor railed against it. When the Liberals came in here and introduced legislation one day and said, 'You've got to vote on it the same day or the next', they said, 'No, we need time to consider it.' And they were right then, but it seems that transparency and the ability for this parliament to scrutinise evaporates as soon as Labor hits government.

The parliament shouldn't have to just take the executive's word for it that something is urgent. We have the right to test that. And the parliament shouldn't just have to take the executive's word for it that something is technical. We should have the right to test that. That's what inquiry processes in this parliament are for. That's what debate is for. That's why, in the ordinary course, when legislation is introduced, there is a period of time for people to go away, read it, take advice, take briefings and then come back with a considered position. But for some reason the government has decided not to do that. You've always got to watch out as you get towards the end of the year in this place, because when you get to the end of the year they all come in here and tell you: 'Something's urgent and it's got to be passed, and we've got to chuck scrutiny overboard. Just take our word for it.' It may well happen a number of other times between now and the end of the year.

If it's the case that this is so urgent, then explain why and tell us why, if it's that urgent, it took until this morning to get a briefing. If it's really that urgent, surely the government must have been drafting the legislation over a period of time. They could have come to us and said: 'Here, it's urgent. We're going to introduce this. Let us give you some information about what's happening to satisfy you.' No, they didn't do that. They just come in here and say: 'We'll tell you about it. Take our word for it that it's urgent and there are going to be no unintended consequences—absolutely none.'

Only this week we had ministers getting up in the House and speaking in favour of amendments they said improved their own legislation because those amendments were discovered during an inquiry process and they said they made the bill better; that's what debate in this place does. But instead we're being asked to accept we should have no right to debate or scrutinise legislation. The opposition may be happy with that; they may have got earlier briefings and been brought into the tent earlier on this, I don't know. Maybe they've got access to information the rest of us haven't. The penny doesn't have seemed to have dropped with Labor that the two-party system is over. There is a bigger crossbench in this parliament than there has been in any other parliament. When the Liberals and Labor sit down and do a deal, they are excluding the third of the country that have said they want third voices in here, in part to ensure integrity in this place and to ensure deals are not done that adversely affect people.

We on the crossbench have the right to consider government legislation, and if we'd had the opportunity to consider this piece of legislation we might well have agreed with the Attorney that it's technical legislation that is urgent, and we may have been in a position to support it. But, instead, Labor has deprived us of the opportunity to scrutinise their legislation, and they're just asking us to take their word for it.

It may well be that actually what is going on is revealed in the next bill, because the next bill—in the limited time that we've had to look at it—is retrospective. It retrospectively changes the laws of this country back to 2013, and the government is just asking us to take their word for it that it's all okay. That should raise huge alarm bells, and, again, I'll speak to this more in the next bill, because that may be legislation that people are prepared to support. But instead we get this Christmas Eve special from the government that there's legislation, some of which is retrospective, and that we've just got to take their word that it's technical.

I want to ask Labor this: why are the members of the crossbench being denied the usual opportunity to scrutinise this legislation and go and get stakeholder feedback? Why do we not have the capacity to go and check, understand and look at a review of the legislation or an inquiry into the legislation, seek our own advice and satisfy ourselves about what the government has said? No basis has been provided for it, so we're not in a position to support passage of this bill or the other bill today, and we reserve our position as the Greens in the Senate. I say very, very clearly to the government that the crossbench has a right to scrutinise legislation and to debate it. In the absence of a compelling case of urgency—which could have been made to us well before this week, because I'm sure the legislation wasn't drafted yesterday morning—you could have made this case to us well before this week. In the absence of a compelling case for urgency, every single member of the crossbench has as much right as any other member of this parliament to consider legislation.

If you want to know why the two-party system is in decline, I say to the government, through the Deputy Speaker, to have a look at your processes. Labor's vote went backwards at the election. They still won enough seats to just crawl into majority government, but their vote went backwards. We now have a situation in this country where less than a third of the country voted for the government, a bit more than a third of the country voted for the opposition and a third voted for someone else. Part of the reason for that is that people are sick of the public being kept in the dark and just told to accept what the government tells them and accept it at face value. If you want to start returning some integrity into politics then start with the processes of this place and give everyone in this place time to debate and consider legislation.

I repeat the point that it may well be that this legislation is non-controversial, and had the government just done what they do with every other piece of legislation—introduce it, give us time to consider it and time debate it and then bring on a vote—it may well have got the unanimous support of parliament. But I don't know, and we won't know, because the government has deprived us of an opportunity. Labor promised transparency, and they're not delivering it.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank the member for Bradfield for his contribution to the debate on the Bankruptcy Amendment (Discharge from Bankruptcy) Bill 2023 , but it is really difficult to thank the member for Melbourne for the puffed up indignation we have just had on display, with not one single word about the content of the actual bill that's before the parliament. To make the point clear about this puffed up indignation, what we've heard from the member for Melbourne is a complaint about some imagined deficiency in process. Other members of the crossbench, not including the member for Melbourne, attended the briefing provided by the government and they were satisfied as to the need for this legislation.

I will now go to the actual content of the legislation. Perhaps I could invite the member for Melbourne to have an actual look at what the bill does. The bill amends the Bankruptcy Act 1966 to accurately reflect the way automatic bankruptcy discharge dates have been calculated by the Australian Financial Security Authority and its predecessors for over 30 years. The government is committed to ensuring that there is legal certainty for those who have engaged with the bankruptcy system over this 30-year period. The retrospective application of the bill ensures that past decisions are validated. It confirms the position people already believed themselves to be in and allows for any orders of the court to be upheld. The bill will also—and this is prospective—allow the official receiver to assess a statement of affairs for adequacy.

Bankrupt persons are usually automatically discharged after three years and one day after the filing of their statement of affairs. Historically, in most cases, the Australian Financial Security Authority, in its capacity as official receiver, has calculated the discharge date from the acceptance date of a bankrupt person's statement of affairs. In a majority of cases, the statement of affairs is accepted on the day it's filed. However, there have been instances where the date of acceptance was later than the date of filing. Where this has occurred, it will have impacted on the calculation of a person's automatic discharge date. In practice, persons filing for bankruptcy may require assistance from the Australian Financial Security Authority to provide an adequate statement of affairs. Rather than rejecting any inadequate statement of affairs, the debtor or bankrupt person is provided with an opportunity to provide further information. This process is designed to support debtors when engaging with the system.

The provisions contained in this bill provide current and future Australian bankrupt persons certainty over their automatic discharge date and allow the Australian Financial Security Authority to continue its practice of assessing bankruptcy applications for adequacy in order to assist with the effective administration of bankruptcy statements. The new provisions will require the official receiver to either accept or refuse to accept a statement of affairs within 14 days of receiving it. The time frame will ensure decisions are made within a reasonable and transparent time. The bill will also ensure that the bankruptcy period of those who are or have been affected by this issue is consistent with the dates recorded by the official receiver prior to the commencement in respect to the bankruptcy. These amendments will validate decisions made before the commencement of the bill in reliance on those dates. The bill provides certainty for those who are currently in or have previously entered the bankruptcy system over the past 30 years and clarifies the process of accepting a statement of affairs.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the bill be read a second time.

A division having been called and the bells having been rung—

Milton Dick (Speaker) Share this | Link to this | Hansard source

As there are fewer than five members on the side for the noes in this division, I declare the question resolved in the affirmative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question agreed to.

Bill read a second time.