Chris Ellison (WA, Liberal Party, Manager of Opposition Business in the Senate) Share this | Hansard source

I present the first report of 2008 of the Senate Standing Committee for the Scrutiny of Bills. I also lay on the table Scrutiny of Bills Alert Digest No. 1 of 2008, dated 12 March 2008.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

I seek leave to incorporate a short statement in Hansard.

Leave granted.

The statement read as follows—

In tabling the Committee’s Alert Digest No. 1 of 2008 and First Report of 2008, I would like to draw the Senate’s attention to the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008.  This bill is very similar to a 2007 bill of the same name, which the Committee commented on in Alert Digest No. 12 of 2007.

At that time the then Chair of the Committee, Senator Ray, drew particular attention to the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2007 when he tabled the Committee’s Alert Digest No. 12 of 2007. Senator Ray highlighted the Committee’s concern that the explanatory memorandum to the bill failed to live up to its name and actually explain the rationale behind various provisions.

I regret to report that the explanatory memorandum to the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008 is similarly flawed. 

Of particular concern to the Committee are numerous provisions that create offences of strict liability. Under the Criminal Code, if a law that creates an offence provides that the offence is one of strict liability, there are no fault elements for any of the physical elements of the offence. This means that, for example, the prosecution only has to prove that the person committed the act in question, not that they intended to do so. 

The Committee is of the view that fault liability is one of the most fundamental protections of criminal law and to exclude this protection is a serious matter. Where legislation seeks to apply strict liability to an offence, the explanatory memorandum to the bill should explain, on a case-by-case basis, why strict liability is considered appropriate in the particular circumstances of that offence. Such explanations should clearly demonstrate that the principles outlined in the Guide to the Framing of Commonwealth Offences, Civil Penalties and Enforcement Powers have been taken into account.

In the case of the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008, the explanatory memorandum seeks to justify the creation of strict liability offences on the basis that they are ‘offences for non-compliance with basic regulatory requirements that should be complied with by all persons’ and that the use of offences of strict liability ‘is designed to enhance the effectiveness of the enforcement regime in deterring contravention of key prudential requirements.’ 

In its Sixth Report of 2002, the Committee acknowledged that strict liability may be appropriate where it is necessary to ensure the integrity of a regulatory regime.  However, it also indicated that strict liability should only be introduced after careful consideration on a case-by-case basis of all the available options, rather than by applying a rigid formula.

The Committee is of the view that the justification provided in the explanatory memorandum for the imposition of strict liability appears to be a generic one, which fails to demonstrate that consideration has been given to its application on a case-by-case basis.

It is of particular concern to the Committee that these bills are not the only occasion on which explanatory memoranda have included generic justifications for the application of strict liability. The explanatory memorandum to the Financial Sector Legislation Amendment (Simplifying Regulations and Review) Bill 2007 also sought to justify strict liability offences on a similar basis.

The Committee commented on that bill in its Alert Digest No. 8 of 2007 and the then Treasurer responded on 18 September 2007. A copy of that response is included in the Committee’s First Report of 2008. The response provides a clear rationale for provisions in that bill that create offences of strict liability. Had a similar explanation been included in the explanatory memorandum to the bill, the Committee may not have had to trouble the Treasurer for advice.

It is disappointing to the Committee that, having raised this issue on numerous occasions, bills continue to come before it supported by poorly articulated explanatory material.

The Committee has sought the advice of the Treasurer about the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008. Pending receipt of that advice, I draw these provisions to the attention of Senators.

Question agreed.