Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise to speak on the Crimes and Other Legislation Amendment (Omnibus No.1) Bill 2024. The omnibus bill makes a range of changes to our criminal law investigation and enforcement apparatus. It is a bill that has received appropriate scrutiny through the Parliamentary Joint Committee on Intelligence and Security, and as a result of the scrutiny of that bill there are some minor changes that will now take place. Following that scrutiny, the government worked with the coalition to settle the amendments that will be made to the bill and otherwise improve the bill. We welcome that sensible approach, and in light of the amendments, as accepted by the government and recommended by the PJCIS, we are pleased to support the bill.

In terms of the bill itself, there are five schedules. The first schedule relates to the seizure of digital assets. The first schedule amends the Crimes Act, the Proceeds of Crimes Act and the National Anti-Corruption Commission Act to enhance the legal framework relating to the seizure of digital assets. The proposed amendments are going to expressly clarify that a warrant may authorise the seizure of digital assets and that an executing officer is able to access a person's digital wallet and transfer its contents as a means of, in this case, 'seizing' the digital asset.

It's 2024. Technology has rapidly advanced, as have our criminals. They are increasingly sophisticated and they are now using cryptocurrency as a way of storing and distributing the proceeds of illicit activities. In fact, evidence before the PJCIS has made it very clear that this is an issue that is frequently encountered by the Australian Federal Police. Indeed, the AFP made the point to members of the PJCIS that it had restrained more than $41 million in cryptocurrency across the 2022-23 financial year alone. In fact, in one large-scale disruption of a money-laundering operation in 2023, the AFP executed 13 warrants and charged 10 alleged offenders with approximately $215 million in criminal assets restrained to date, including over $30 million in cryptocurrency.

There is no real argument about the scale of the problem or the need to have adequate powers to issue search warrants for and to seize digital assets such as cryptocurrencies. Currently, under the Crimes Act, police are permitted to seize certain items discovered in the course of executing the warrant. To lawfully do so, the officer must believe on reasonable grounds that the item is evidential material in relation to the offence and seizure is necessary to prevent concealment, loss, destruction or its use in committing an offence. Unfortunately, these thresholds just don't cut it, and again this refers to the advancement of technology. We're in 2024, so these technologies just don't cut it in the age of digital assets and cryptocurrency.

By way of illustration, where large sums of physical cash are found during a search warrant, it maybe relatively easy for an executing officer to believe on reasonable grounds that the funds are tainted property—that is, the proceeds of crime—and that seizure is necessary, but the same cannot be said of digital assets like cryptocurrency. The mere holding of large amounts of a digital asset is unlikely on its own to be suspicious. There would need to be a level of analysis to develop some understanding of the source of those funds and the reason for holding digital assets that presently have a large value. Among other reasons, this is because there are sometimes legitimate reasons to hold digital assets that have a large value. For instance, the value of the asset may have changed significantly since it was obtained, noting that cryptocurrencies are notoriously volatile and changes in their value are therefore common.

On the other side of the ledger, if police cannot take immediate action, that then means that the risk is high. Unlike physical assets such as cash, criminals can remotely and near instantaneously—this is where there is a huge problem—move a digital asset beyond the reach of law enforcement via an online transaction. To deal with those issues, schedule 1 of the bill proposes to lower the threshold for lawfully seizing digital assets. To seize those assets, an officer must reasonably suspect that the digital asset is evidential shall material and that seizing the digital asset is necessary to prevent the digital asset's concealment, loss or destruction or its use in committing an offence.

We would say that the revised threshold is appropriate given the unique challenges created by the discovery of digital assets in the course of executing a search warrant. In relation to schedule 2, digital currency exchanges, schedule 2 of the bill relates to the Proceeds of Crime Act and its interaction with digital currency exchanges. The Proceeds of Crime Act gives law enforcement agencies broad powers to monitor, freeze, restrain and forfeit proceeds and instruments of a crime. This includes investigative and freezing powers in relation to financial institutions. The proposed amendments to the bill that we have before the Senate will extend those investigative and freezing powers in relation to certain digital currency exchanges. Importantly, this expansion of the Proceeds of Crime Act retains the existing safeguards. These existing safeguards include independent oversight by a magistrate, limitations on the time during which orders made under the act can operate and powers to vary a freezing order in appropriate cases. When you look at the amendment to the act but also the fact that we are retaining the existing safeguards, you see that the net effect of this is to ensure that freezing and monitoring orders under the Proceeds of Crime Act can be applied to Australian based cryptocurrency exchanges in the same way as to traditional financial institutions. Again, these are appropriate changes and we welcome them.

Schedule 3 to this bill deals with what are known as Commonwealth penalty units. Schedule 3 to the bill will increase the value of a Commonwealth penalty unit to $330. In other words, $330 will be the value of one Commonwealth penalty unit. What a penalty unit does is to set the maximum financial penalty that can be awarded by a court for an offence. Ordinarily, the value of a penalty unit is indexed every three years in accordance with CPI. The value of a penalty unit at the time that the coalition left office in May 2022 was $222. This is now the third time in less than two years that the Albanese government has increased the value of penalty units, so there's been a 49 per cent increase in the value of Commonwealth penalty units over an 18-month period. On 1 January 2023, the value of penalty units increased from $222 to $275, and then, in July of 2023, they increased it to $313. When the changes in schedule 3 of this bill—the measure we are discussing—come into force, they will lift it to $330.

The government explains the rationale for the latest increase as follows:

The current penalty unit amount does not act as an effective deterrent for the most serious offending.

The reality, of course, as we all know, is that this is actually a revenue measure for the Albanese government. While we do not object in principle to increases in maximum penalties imposed by courts for those convicted of a crime, there is a slew of regulatory offences, such as a failure to lodge a business activity statement on time—let's be clear about this: it is something of which small businesses should be aware—for which the ATO will impose a penalty equivalent to one penalty unit every 28 days. While we agree with the bill we are debating here in the Senate, it should not go without comment that the Albanese government has slugged small businesses. We all saw the front pages of the newspapers yesterday, which showed the record number of small businesses in Australia that are going insolvent because of the regulatory burden that has been placed on them by the Albanese government—the costs, complexity and confusion. A business that has to close employs no-one, and we now have a record high number of small businesses in this country that have closed their doors because of the regulatory burden imposed on them by the Albanese government.

So, as I said, this extends further than the bill that we're talking about. Effectively, the Albanese government has slugged small businesses with a 49 per cent increase in penalties for late paperwork, and these poor people don't sleep at the best of times. They work eight days a week, 25 hours a day. They never sleep. They don't pay themselves super, and under the Albanese government they're not paying themselves a salary. Now, for late paperwork, there is a 49 per cent increase in the penalty unit that can be applied.

Schedule 4 amends the Telecommunications (Interception and Access) Act to clarify the functions of the Communications Access Coordinator in the Attorney-General's Department and create the position of Communications Security Coordinator within the Department of Home Affairs. Essentially, this change reflects changes to the administrative arrangements under the current government. While there are no concerns about the specifics of the measure in this schedule, this is symptomatic of a broader concern, which relates to the concentration of national security operational functions in the Attorney-General's Department, the same department that exercises oversight of those functions. I am sure Senator Paterson would agree that this is a model that raises legitimate questions.

Schedule 5, information sharing with state and territory oversight bodies, deals with information-sharing arrangements under, again, the Telecommunications (Interception and Access) Act. It's going to amend the arrangements that apply to state-level bodies which oversee state based integrity agencies. I note that this is not the integrity agencies themselves—that is very important to note—like the ICAC in South Australia. It is the oversight bodies for those state agencies—so it is a fundamental difference; it is the inspectors that are meant to ensure the state integrity agencies exercise their powers appropriately.

New evidence before the PJCIS made clear that limitations in the legislations are causing difficulty for state based oversight bodies to discharge their functions. These limitations arise because, under the TIA Act, the oversight bodies are only able to receive information for a permitted purpose or for an eligible purpose, but the definitions of these terms do not capture all of the functions that the oversight bodies are meant to perform. So the changes in schedule 5 were welcomed by the PJCIS, with one minor recommendation. That has now been addressed, and, as such, we welcome the straightforward changes.

It's just worth commenting on two additional changes in the bill. In addition to the matters considered by the PJCIS, the government proposed two additional amendments and has worked with the coalition on those two issues. The first change pushes back the sunsetting arrangements for the security provisions in the Criminal Code by 18 months. The secrecy provisions are currently due to sunset on 29 December this year. What this amendment will do is push back this date to 29 June 2026, and we have no objection to this. It is in no-one's interest for Commonwealth secrecy offences to lapse without a replacement being ready to go, and it's clear the Attorney won't be in a position to pass his proposed changes to Commonwealth secrecy provisions before the 29 December deadline.

The second change relates to a particular definition in the Criminal Code: hors de combat. This is a term that, roughly speaking, describes a person who cannot legitimately be targeted in military operations. The government have told us they're replacing the existing definition to address a longstanding drafting error, dating back to the 2000s. The Attorney-General's office advises us that the gist of the error is that the definition uses the word 'and' when it should use the word 'or'. We have been assured that the changes avoid a potential unintended consequence but do not otherwise change the intended operation or effect of the definition. I am relying on the advice provided to us by the Attorney-General's office about the intent and the effect of the change and support it on the basis of the assurance that we have been provided. As such we are pleased to support the bill. (Time expired)