Andrew McLachlan (SA, Liberal Party) Share this | Hansard source

I rise to speak to the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019, and I would like to associate myself with many of the remarks of Senator Scarr who, like me, has spent some time in regulatory and corporate positions.

An honourable senator: Do you associate yourself with the remarks of Senator McKim?

I will get to Senator McKim in a moment. Whilst I don't have a great deal of knowledge of the property market, unlike my honourable friend Senator McKim, having listened to his contribution to the debate, I would have thought that these provisions would act upstream to regulate or observe the flow of money before it went into a real estate agent's bank accounts. So I'd have to say in response to Senator McKim that I wasn't entirely convinced by his arguments and I will reflect on those after the debate.

I do notice with some interest, as a legislator, that we are also, in part 7, putting in the provision 'Dishonestly representing conferral of police awards'. It is an interesting amendment in what is a very complex and considered bill addressing money laundering and counterterrorism. I've always found it of interest that some people feel they need in life to confer on themselves awards for personal advancement. Certainly I would endorse this amendment, since police officers work very hard and contribute much to our security in society and our sense of safety, and their awards are justly deserved and should not be undermined by the actions of those seeking to improve their own standing, social or otherwise.

I go back to the substantive matters of the bill. I too have had to grapple with the compliance obligations associated with anti-money-laundering measures and I fully endorse the thrust of this legislation and the acts that came before it and will come after it. It is certainly an area of law that has to be constantly revisited and addressed. We are fighting an ongoing battle with innovative crime syndicates who are constantly trying to undermine our regulatory arrangements. As a consequence, we must be increasingly flexible as legislators, as a parliament, to be able to address these things. At the same time, every time we try to shut the gate, as it were, to a particular innovative measure we increase compliance costs on industry, and those compliance costs are then inevitably passed to the client, including the ordinary Australian who deals with financial institutions. So we also need to be very careful in balancing our response so that we don't increase costs for ordinary Australians—the same Australians that Senator McKim pointed out are, in his view, suffering from higher house prices, although I don't necessarily accept that point. So we have a trade-off, and it is pleasing to see that this legislation, if passed, will reduce compliance costs. As I said, I know from a previous life that complying with Commonwealth legislation can be an industry in itself, and you often reflect: are we really protecting the state, at the end of the day? I commend the government for this initiative on the basis that it's achieving its regulatory intent but, at the same time, with an eye on those who are using the system.

The previous speakers in this second reading debate have not addressed the issue of privacy. Again, this is another difficult trade-off. The more you impose a regulatory burden and require the exchange of information, which you always need to ensure compliance and to restrain and, hopefully, stop terrorism organisations from using their moneys, the more a client's individual details have to be shared. In my understanding of this bill, and in my reading of its provisions and the submission from the Office of the Australian Information Commissioner, it does strike the right balance between privacy impacts and law enforcement and national security objectives. Of course, again, that is, for any government, a watching brief and a careful balance to maintain.

The bill targets shell banks and prohibits financial institutions from entering into relationships with those shell banks. It also prohibits the tipping off of individuals, and that would certainly apply to private client advisers or banks that may feel, incorrectly and wrongly, an obligation to their client over and above their obligation to their fellow Australians and to law and order. There is also strengthening of cross-border movement of monetary instruments and physical currency. Again, these provisions reflect the efforts of the government to match the innovation of the crime syndicates.

Terrorism has to be financed. It is financed often with criminal activity, more generally in the world of drugs, from my understanding and my reading, so we have two effects to address: the first is the actual criminal activity of drug dealing. The second is the money that comes from drug dealing has to be brought back into the legitimate financial system, and that is what we're trying to prevent. And then there is also the flow, if it does manage to find its way into the legitimate financial system, to organisations which have ill intents and seek to take on our way of life and challenge it with violence. In my experience, this bill is to the credit of the government, and I commend it to the chamber.