Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank the Senate for the opportunity this afternoon to outline the government's position on this matter. Today's order relates to recommendations of the interim report of the Senate Economics References Committee inquiry into ASIC's investigation and enforcement. As the attachments to the committee's interim report make clear, ASIC has made a number of public interest immunity claims over a number of investigation documents sought by that committee. ASIC's letters, included with the Senate Economic References Committee's interim report, outline the basis of ASIC's PII claims. There are several grounds, including the possibility of prejudicing ongoing investigations or enforcement matters, concern over disclosing publicly ASIC's law enforcement methodologies, possible prejudice to third parties' privacy and reputation, and possible disclosure of privileged legal advice. I have been advised that these documents include case files related to a number of ASIC investigations. This constitutes terabytes of data, potentially, including privileged legal advice, affidavits filed by witnesses and, most significantly, section 19 transcripts. Section 19 refers to ASIC's power to require people to answer questions under oath without any right to silence—in many ways a broader power than police forces can exercise. People can be imprisoned for failing to comply with section 19 notices.

To be clear, neither I nor the Treasurer or Assistant Treasurer have seen the relevant documents, and there is good reason for that. As an independent regulator, ASIC only shares confidential investigative information with the government in the very rare event that it is necessary and appropriate to do so. As the Senate would be aware, the government is precluded from giving ASIC directions under section 12 of the ASIC Act about particular cases, so the circumstances in which it will be necessary and appropriate to share documents that relate to particular enforcement matters with the government will be extremely rare.

I understand ASIC has indicated to the committee at the public hearing on 23 June 2023 that it is difficult for ASIC to publicly explain the specific harm that would be caused by publishing a document without revealing exactly the information that creates the harm. I'm advised ASIC has offered the committee an in camera briefing to allow ASIC to discuss their PII claim further and make further submissions using nonconfidential information that help explain the context of the enforcement matters of interest to the committee. I understand the chair, Senator Bragg, has rejected this proposal without explanation. I reiterate: we cannot provide these documents as we do not have them, nor have we seen them. I suggest to Senator Bragg and the Senate that the in camera briefing offered is the most appropriate next step to allow the committee to assess ASIC's concerns. If Senator Bragg continues to insist upon the release of these documents in spite of this offer then that will show that he is only interested in political grandstanding and media headlines.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of the minister's explanation. The very point of this inquiry was because we have a major problem with white collar crime in Australia. I think anyone who's read a paper over last six months would have noticed the good work of many of the senators, including Senator Pocock, who have worked very hard to expose this endemic problem—that we have regulators that don't actually enforce the laws that this parliament enacts. Therefore, the answer here is not to enact new laws and have ever-longer statute books but it is to look at why these enforcement agencies are unable to enforce these laws. That is why we proposed this inquiry with the support of the Greens.

The approach that the committee has taken here has been to identify a bunch of cases, some of which are open and some which are closed, and to ask for information about how ASIC has gone about doing its business. Its business, of course, is not to walk around the halls of Parliament House in Canberra and say how good it is. Its business is to enforce the laws and to ensure that we have an economy and a country where people have confidence that, if you break the law, you will face civil and criminal penalties. In order to investigate ASIC's approach to enforcement and ultimately to prosecution, it is necessary to have access to files; otherwise, how can we determine what's gone wrong here? What has gone wrong is that there are a litany of white collar crimes which are well documented in the newspapers and in the media almost every day, where ASIC does not pursue criminal and civil penalties, and, as a result, this fuels the confidence of white collar criminals that they can break the law in Australia and they can get away with it.

Our approach, to be clear, has been a mix of the tools and the powers that are vested in the Senate to inquire and investigate. They are the usage of public hearings. They are the inquiry through obtaining documents, and we have asked over 100 questions on notice. ASIC has filed 13 PII claims, 11 of which have been rejected by the committee. In terms of these case studies, we have asked questions about Nuix, ALS, Super Insider Trading and Magnus Technologies. In relation to Nuix, there is a large body of allegations of insider trading and faulty prospectus issues going back to 2020-21, where ASIC has decided to take no action and has told the committee that those cases are closed. Then you look at ALS, where there are allegations of fake gold certificates being issued into the market, where ALS itself admitted fault, admitted that it had issued certificates for fake gold and had engaged McGrath Nicol to do a review.

And then we have the super insider trading issue, where you have dozens of executives of the boards of AustralianSuper, NGS Super, Rest, First State, Hostplus and Intrust Super and a number of other funds who appear to have engaged in trades on the basis of inside knowledge during the pandemic before the market was told about revaluations or devaluations.

All these matters were reported widely. In relation to Magnus Technologies, insiders and whistleblowers provided three warnings to ASIC—written warnings—that market sensitive information was being leaked and insider trading was occurring. In all these cases, nothing has been done. There has been no attempt to secure criminal or civil penalties, and ASIC has closed these cases. We have sought these files, but ASIC has filed PII claims.

In relation to this review, which has been running for eight months now, there have been a number of conduct issues at ASIC which have come to the attention of the committee. The Chair of ASIC has had an issue where the AFR reported that Mr Longo made an abject apology to staff a week after making a statement, but the incident was deemed serious enough to trigger a Treasury assurance review, escalation to Treasurer Jim Chalmers and the manager's resignation. That is in the Financial Review of 30 January 2023. Then there is the issue of the deputy chair and the uncovering of a $200,000 Treasury investigation, where the deputy chair was subject to a very serious investigation, after dozens and dozens of allegations were raised about the deputy chair's conduct at work, and a number of these findings were upheld. So we have discovered a number of conduct issues on the commission itself.

Further, this motion to establish this inquiry was opposed by ASIC itself, and freedom of information files have shown that in internal emails, before the Senate considered voting on this motion, the chairman said: 'This is extraordinary. What can be done to narrow the breadth of the terms? Can the PJC do this?' And in further FOIs we find that internal ASIC staff talk about the use of Dorothy Dixers in this parliament in order to push away negative media attention. This is an organisation which I think has significant cultural issues. It tries to control the parliament through these internal tactics, but it also has serious governance issues on the commission, which we haven't been able to get to the bottom of through a public examination. I think that there are too many governance issues in this body for it to be sufficiently focused on its main job, which is law enforcement.

This brings me to the point of the role of the executive government where, effectively, we have seen over the past few months a position where the executive government have, regrettably, now started to run cover for ASIC. This started back at estimates in February this year, where Senator Gallagher said, 'Based on the deputy chair's evidence'—in relation to the governance issues that I just flagged—'there was a review done and no adverse findings were made.' Then we have a PII claim filed by the Treasurer to ensure that the allegations and the report—a $200,000 report—are to be kept secret from the public. The Treasurer has decided to use his powers to stop the public from seeing what is actually in this report about the Deputy Chair of ASIC. Then, only a couple of weeks ago, we have a letter from the Assistant Treasurer, Mr Jones, who suggests that we should in fact just do all this work in secret. Mr Jones says:

I urge the Senate Economics References Committee to reconsider this approach and to provide ASIC with a chance to present its claims in-camera.

This is the point I wanted to make today, which is that we have a major problem with white-collar crime. The Senate has issued this inquiry to get to the bottom of this and to do it in public, in sunlight, and what the government is trying to do, and what ASIC is trying to do, is to push this under the covers and into the dark. They want to cover up the governance issues on the commission, they want to allow ASIC to interfere with the parliamentary process, and they don't want these closed case files to be examined by the Senate. Therefore, we cannot do our job as a house of review and we cannot investigate why ASIC is deficient at law enforcement.

It is very regrettable that a government that was elected on the basis of being transparent and having a commitment to integrity wants all this to be done in secret. ASIC, of course, want to do all their meetings with the committee in secret, even though these are closed files, because they don't want to have any scrutiny on why they haven't put people in jail, why they haven't been able to secure civil penalties, why all these people breaking these laws get away with it. That is the sickness here: we are trying to do this in the sunlight but the government, through Minister Gallagher and the Treasurer and Minister Jones, are seeking to support ASIC's objective to keep it all in the dark, to stop the inquiry and for it all to go away. Why should we be surprised? When this motion was voted on in this chamber the Labor Party voted against the idea of having this exact inquiry.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

This really is quite a simple matter that the chamber is dealing with today. It's a matter that has arisen as part of the Senate economics references committee, of which I am deputy chair, inquiry into ASIC investigation and enforcement.

The Senate approved this inquiry last year, and the committee have started working their way through the evidence that we've been presented. The inquiry covers a number of matters. Some of the key terms of reference are:

… whether ASIC is meeting the expectations of government, business and the community with respect to regulatory action and enforcement;

… the range and use of various regulatory tools and their effectiveness …

  … … …

… the resourcing allocated to ensure investigations and enforcement action progresses in a timely manner …

The committee has held one public hearing with ASIC, on Friday 23 June 2023, as part of this inquiry, and more public hearings with submitters and other interested parties are scheduled for later this year. In the public hearing the commission's chair, Mr Longo, deputy chair, Ms Court, and officials from ASIC answered a number of questions on their submission to the inquiry, which is available on the references committee website.

In his opening remarks to that particular hearing, Mr Longo recognised that this inquiry is an important part of ASIC's oversight. And in his public evidence, ASIC's General Counsel, Mr Savundra, outlined that ASIC's practice in parliamentary inquiries has been to provide public submissions as well as private briefings and in camera hearings. Mr Savundra stated that ASIC was 'happy to meet or discuss with the committee about the claims we're making'.

Subsequent to this hearing, as has been canvassed today, Mr Longo wrote to the committee. This letter has been referenced by the committee chair and by the minister in her response today. Given that this matter is now being discussed in the chamber, it is appropriate to confirm that Mr Longo wrote to the committee reiterating ASIC's understanding of its responsibilities to the committee and to the parliament and offering to provide to the committee a private and in camera briefing to provide more details on the matters pursued by the committee as well as providing documents on a confidential basis, where appropriate.

My views on this matter reflect two values that I hold in relation to the important work that our Senate committees do. The first value is that witnesses to Senate inquiries should provide answers to the Senate. They should be transparent. And where they believe transparency will cause a harm, they should articulate that harm and allow committees and the Senate to determine whether the information requested should be provided.

The second value is that, when a witness like ASIC does offer a private briefing to provide information to a committee, it is usually good practice to take those private briefings. Private briefings can assist a committee to understand evidence, better understand what harms may result from provision of information where public interest immunity is claimed and consider whether further steps are needed to insist on information being provided. It is therefore my view that it would be appropriate for the committee to accept the offer of a private briefing from ASIC on the matters before the Senate today. Private in camera briefings to provide the opportunity for committees to gain important information on and understanding of the matters before them, and that includes whether the publication of particular information may harm the public interest.

Again, and in conclusion, it is appropriate for ASIC to be afforded the opportunity of a private briefing so that the committee has all available information to progress this important inquiry.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I won't go through the technical details of the inquiry that the Economics Committee has been undertaking. Firstly, my colleague and friend Senator Bragg went through that in detail. Secondly, sadly, I haven't had the time to participate in this particular inquiry, even though the topic is of great interest to me. However, I do wish to rise to speak on this matter, as we have seen a creeping stretch of the use of public interest immunity from agencies and ministers in this place.

Just two days ago I was in this place talking about a public interest immunity claim that came out of the Attorney-General's office. The claim was about a meeting that occurred with the then head of the AAT in the Attorney-General's office and was on the basis of cabinet-in-confidence, which seemed very odd to me, but also on the basis that it would in some way impact the relations between ministers and agencies—organs of the government, organs of the state. The first one was odd, but let's put that to one side. The second is one we see reflected here in the public interest immunity claims from ASIC and ministers. It's not an acceptable ground, one that this place has ever considered to be worthy of upholding a public interest immunity claim.

The Senate's job and the role of committees is to investigate, and in order to be able to investigate, the Senate committees need the information that is available. Now, of course there are times when legitimate claims are upheld by committees, and I can say, with hand on heart, that in both government and opposition, as chair of a committee, I have both upheld and rejected public interest immunity claims. When, for example, they prejudiced ongoing investigations, it has been very common in committees, regardless of which particular member of this place was chairing, for those claims to be upheld.

I'll just cite one of ASIC's particular claims. They start by saying that the material is related to an ongoing investigation. But then, two bullet points lower, they say that that investigation is closed and they're planning to take no further action. Now, if you took this approach to its logical conclusion, any material collected by ASIC which could possibly be used in a prosecution or an investigation at some future point, I suspect, would actually be every piece of information collected by an organisation like ASIC. If you took that to its logical conclusion and then extended that across other parts of the Public Service, effectively, you would have a blanket PII claim on everything. To say that the fact that a piece of information could be used at some point in the future for an investigation or a prosecution is a legitimate public interest immunity claim is patently ridiculous, and I do find it very strange that that's even found its way into a claim from what is a reputable agency—a reputable organ of the government. It strikes me as being beyond belief.

In relation to personal information: yes, again, impacts on personal privacy have been accepted as public interest immunity claims in the past, but that has to be weighed against the public interest in allowing committees of this place, committees of the Senate, to do their jobs, particularly regarding organisations such as ASIC, which has extraordinary powers—the right to enter premises, the right to bring along the AFP to do raids, and very significant powers to demand and collect information. The fact they have those powers means that the scrutiny on them needs to be there. Again, I have not looked, as Senator Bragg has, at the detail of the particular cases involved here, but in some cases that information should be brought to the light of day. As a legislating body, we do need to understand how these powers are actually being used in practice. If they are not having the outcomes that, obviously, we would want in a piece of legislation in terms of bringing criminals to justice, then we need to understand why that is the case and why serious investigations have been lapsing.

I'll continue through the public interest immunity claim here. The next item bought up by ASIC was that it would reveal legal advice. Again, the provision of legal advice is not covered as a matter of routine by a public interest immunity claim. Just because something is legal advice does not mean the option to claim public interest immunity on it is available. That has been made very clear in this place time and time again. It is one that's often wheeled out as an excuse not to reveal information. As we've seen in this place many times, from this government on a number of occasions, when it's in their political best interests to reveal legal advice, they do. Again, in the case of an ongoing investigation where it might damage that investigation or prosecution, a claim on legal advice has been accepted, but not just on the fact that it is legal advice.

Going through the list of claims made, very few of them actually stack up. And that's why I think it is completely legitimate for the committee, through Senator Bragg, to bring this matter back to the Senate and to continue to try and have this investigation—at least, as much as possible of this investigation—in the light of day. That is what the Senate committee system is for, and that is what we are all here to do.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

As a servant to the many different people who make up our one Queensland community, I thank Senator Bragg very much for his hard work trying to introduce accountability to Australia's corporate watchdog, the Australian Securities and Investments Commission. I've watched his diligence, his patience, his commitment and his determination, and I admire and acknowledge all of that.

Last October the Senate referred an inquiry to the Economics References Committee into the capacity and capability of the Australian Securities and Investments Commission, ASIC, in particular to answer the question: did ASIC meet the expectations of government, business and the community with respect to regulatory action and enforcement? A simple question.

This inquiry was prompted by complaints from everyday Australians and small business that ASIC was not doing its job. ASIC's job is to ensure a level playing field and, where a company has engaged in corrupt conduct, ensure prosecutions occur. The evidence received has indicated that there are broad community concerns and systemic issues with ASIC's investigation and enforcement capabilities. That mirrors what I have perceived. The committee has sought information surrounding a small number of closed investigations in order to understand how ASIC conducts investigations and understand its prosecution approach. The closed cases concern Nuix, ALS, super insider trading and Magnus, where there were serious allegations of commercial misconduct. Unfortunately, ASIC have shown contempt for the committee process, making public interest immunity claims to get out of handing over this information. ASIC were given one last chance to comply with this order, and here we are now. ASIC have again refused to cooperate with the Senate.

This should not be the end of the matter. The Constitution gives the Senate extreme powers of investigation and penalty on individuals for refusing to follow the instructions of the Senate. I'll say it again: the Constitution gives the Senate extreme powers of investigation and penalty on individuals for refusing to follow the instruction of the Senate. That reflects the Constitution's intent in making sure that the Senate serves the people, and I remind everyone that is the case. These powers should be considered in this case.

To say that ASIC have been dragged kicking and screaming into this inquiry is an understatement. Freedom-of-information documents obtained by Adams Economics reveal ASIC were in contact with unknown persons within the parliament to secure a watering down of the terms of reference or to deny the numbers entirely, to squash the inquiry. This is why we are here. How dare ASIC interfere to avoid review by the house of review on behalf of the people of Australia! One Nation rejected ASIC's public interest immunity claims over materials concerning closed investigations into misconduct. ASIC's reliance on public interest immunity claims to block disclosure has been an ongoing issue obstructing the committee's ability to conduct a proper investigation on behalf of the people of Australia—this is not the Senate; this is on behalf of the people of Australia—the people who pay ASIC's salaries, the people whom ASIC is supposed to serve. Public interest immunity is being used by a government that has nothing but contempt for openness and transparency.

Only today I discovered, by chance, that the industry groups the government are showing their new IR bill to are being required to sign a confidentiality agreement so that they can't say what is in the bill. That shows contempt from this government for the people of this country. What sorts of nefarious provisions are in that bill that they require a cloak of secrecy? Every government is elected with a promise of transparency, and every government then breaks that promise. The Albanese government is, however, setting a world record for how fast they broke their promise and setting a world record for arrogance towards the people of Australia. This request from the Senate goes to a small number of closed cases. They cannot possibly effect an ongoing investigation. There's no down side to revealing this information other than embarrassment, or worse, for ASIC management and the responsible minister.

I have received a report from a third party regarding ASIC senior executives using private phones for official business, and I look forward to further information around that issue. If a Commonwealth government agency spends $200,000 of taxpayers' money on a secret investigation into allegations against ASIC's deputy chair, the Senate has a right and a duty to ask what that was about. It's our role as a Senate to do that, and we would be deficient in our duties to the people of Australia if we did not do so. This matter places the career interests of bureaucrats against the sworn duties of a senator and of the whole Senate. One Nation is betting on the Senate ultimately discharging its duties without fear or favour. ASIC has refused to disclose its correspondence in relation to public interest immunity claims with the minister. The committee has formed a view that ASIC's refusal to provide the information sought is obstructing the committee's ability to conduct this inquiry. That, by the way, is an offence. ASIC appear to be all lawyers. Let me say: you should know better, ASIC.

I've got some notes in front of me that I'll divert to briefly. We are inquiring through the committee into the ability and, indirectly, the intent behind ASIC's behaviours—the intent. The government is digging a deeper hole when it comes to the intent, because as Senator Brockman and Senator Bragg have pointed out in detail, the government is covering up, and that makes it even worse. If it was innocent, the government should welcome the disclosure. If it had something to hide or something to protect in ASIC, then it would shut down, and that's what we see. I'll go to the terms of reference:

… whether ASIC is meeting the expectations of government, business and the community with respect to regulatory action and enforcement …

It's also not meeting the expectations of parliament. ASIC has failed persistently to enforce the law and investigate complaints of misconduct. Small business and consumers across Australia, who are tired of ASIC's persistent failure to enforce the law and investigate complaints of misconduct, are the customers we serve. They're the customers ASIC serves. The evidence received so far has indicated that there are broad community concerns and systemic issues with ASIC's investigation and enforcement capabilities, and my personal concerns are similar.

The committee has sought information surrounding a small number of closed investigations. I've listed them, as have Senator Bragg and Senator Brockman. The government has a choice: release the documents and remove suspicions if you have nothing to hide, or, if you have something to hide, hide and stoke the suspicions. A private briefing is not adequate because that would be just ASIC giving selective disclosure. The executive government should support an inquiry to end white-collar crime in Australia and strengthen inquiry in our financial sector. Instead, the Labor government has defended ASIC at the expense of the work of the Senate, arrogantly keeping people in the dark. I ask the question: is ASIC protecting criminals or is it protecting its own incompetence or its own lack of intent to hold criminals accountable? Who watches over the regulator? We, the Senate, do, and the people watch over us. I call on the minister to stop obstructing the Senate, and I call on ASIC to rethink their obstruction to this inquiry.

Jana Stewart (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

As my colleagues, Minister Gallagher and Senator Walsh, have already noted, this is about recommendations of the interim report of the Senate Economic References Committee's inquiry into ASIC's investigation and enforcement. The attachments to the interim report tell us that ASIC has made several public interest immunity claims over a number of documents sought by the committee. As an independent regulator, ASIC only shares confidential investigative information with the government when it is necessary and appropriate to do so. This happens rarely, and rightly so. The Senate will be aware, under section 12 of the ASIC Act, information from ASIC about particular cases cannot be provided. The information requested are documents which include case files related to a number of ASIC investigations. This constitutes potentially terabytes of data, including privileged legal advice, affidavits filed by witnesses and section 19 transcripts. Section 19 refers to ASIC's power to require people to answer questions under oath without any right to silence—in many ways a broader power than police forces can exercise. People can be imprisoned for failing to comply with section 19 notices. It is very serious business. The circumstances in which it would be necessary and appropriate to share with the government documents that relate to particular enforcement matters would be incredibly rare.

ASIC has offered the committee an in-camera hearing to allow ASIC to make its case and make further submissions using non-confidential information that helps explain the context of the enforcement matters of interest to the committee. The chair, Senator Bragg, has rejected this proposal out of hand without explanation. I would strongly suggest to the Senate that an in-camera hearing would be the most appropriate next step to allow the committee to assess ASIC's concern that legally privileged material, material obtained under oath and material that could compromise the ability of our regulators to do their jobs effectively should not be made public except for the gravest reasons. Untested allegations and unverified personal information included in affidavits or section 19 transcripts being made public could potentially result in damaging financial, reputational and personal consequences for innocent parties. That is something I hope that nobody in this Senate would want to see happen, and it's something that could potentially happen if this were allowed to go ahead.

As the Minister for Finance has indicated, no minister has seen any of the documents sought by the committee through this order. Nor would it be appropriate for them to seek, receive or assess the documents. This is a matter for the Senate Economics References Committee and ASIC. We suggest to the Senate that the most sensible and appropriate next step would be for these documents, which we understand from ASIC are highly sensitive but which ministers have not seen or been given, to be discussed to the extent possible at an in-camera briefing between ASIC and the committee. This is not a cover-up; it is simply due process out of respect for people who are engaging in the process.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this matter as someone who serves on the parliamentary joint committee with respect to corporations law and financial services. To Senator Roberts's comment, I also rise as someone who is a lawyer and who served as a company secretary and general counsel of an ASX listed mid-tier copper and gold mining company from our home state of Queensland. I want to make some introductory comments just in relation to the importance of the terms of reference of this economic references committee and what it is looking at.

With my colleague Senator Pratt, who I deeply, deeply respect, I was involved in the last parliament in relation to an inquiry into and review of the Sterling Income Trust, which was an awful, disastrous managed investment scheme which largely took place in Western Australia and where dozens and dozens of financially vulnerable people sold their homes and invested all their money into a managed investment scheme and received what they thought was a risk-free long-term residential lease which would take them right the way through to the end of their natural lives and found that not only were those residential leases invalid under Western Australian law but also their money soon disappeared and they were left with nothing. There were also people in my home state of Queensland who suffered due to that scheme, and I actually had discussions with them in my office.

One of the key issues we considered in that inquiry was the effectiveness, or otherwise, of ASIC's actions in relation to that matter and, indeed, also the actions of the Western Australian government in terms of those residential tenancies. I think there should have been intervention much earlier from the Western Australian government, to be frank. I also note that I consider that I have a very good working relationship with senior members of ASIC, and I would hope that that view is reciprocated by them. Certainly, in all my dealings through committees, I seek to be fair and reasonable with respect to legitimate claims of public interest immunity. But there are some issues here.

When this matter was brought to my attention, I did take the time to read the interim report of the Economics References Committee, and there are a number of quotes I want to give from that interim report which I think need to be carefully reflected on by the leadership of ASIC. In paragraph 1.34, it's made clear that the committee 'is only interested in pursuing information related to closed investigations'. In paragraph 1.41 it's noted that the committee 'accepted ASIC's claim for public interest immunity in relation to ongoing ASIC investigations but rejected the claims made in relation to closed matters'.

In relation to that specific issue about closed and open investigations, I can understand that a situation might arise where ongoing investigations are perhaps intrinsically related to closed investigations, and that might be a matter which requires some further consideration by the Economics References Committee and ASIC, but that engagement needs to be in good faith. I don't see how the references committee can dutifully discharge its obligation to look at the terms of reference without looking at how ASIC in particular has dealt with investigations which are closed. So I think the onus is on ASIC to demonstrate how a so-called closed investigation still relates to ongoing matters. I've read the letters from ASIC. It is certainly not good enough to say that a matter is closed but it could be reopened sometime in the future. I don't think that cuts it. There needs to be some further engagement in that respect.

I also note paragraph 1.61 and 1.62 of the references committee's report:

As for the claims relating to prejudice to legal proceedings, ASIC has not provided any clarity about specific legal proceedings which would be affected by this claim.

In the committee's view the information ASIC has provided to support its claims is very general in nature and does not address either of the two ways legal proceedings could be prejudiced. It is also unclear from ASIC's letters whether these matters are even current legal proceedings or are at the investigation stage.

Again, this goes back to the earlier point I made. If public interest immunity claims are made, they need to be made on the basis of some specifics. As is said in paragraph 1.63 of the references committee's report:

The vague statements about general harms which could occur do not satisfy the committee that a significant harm could occur from the release of the information.

I also want to make some comments in relation to ASIC's letter of 23 March 2023, which is appendix 9 of the Economics References Committee report. There were certainly a few things in that letter that leapt out to me and caused me some concern. Again, I respectfully suggest—and I do so respectfully—to the senior leadership of ASIC that they reflect on this. First, in paragraph b), 'Disclosure of confidential methodologies to enforce the law', there's a reference to a number of sets of questions and then this statement:

ASIC considers that the public interest in disclosing these documents and in so doing, disclosing ASIC's methods for investigating and enforcing the law is outweighed by the prejudice that would result to the effectiveness of ASIC as a law enforcement agency. These documents reveal ASIC's internal methodology for: (i) investigating persons of interest (including ASIC's confidential sources of information); and (ii) selecting matters for enforcement action;

It seems to me that that goes to the heart of what the references committee is trying to investigate—that is, how does ASIC go about selecting matters for enforcement action? That methodology, from my perspective, shouldn't be a confidential methodology. We should understand, as a Senate, the way that every one of our Commonwealth law enforcement agencies goes about selecting matters for enforcement action, because that goes to the rule of law. If laws are being broken, and the independent agency, be it ASIC or someone else, is deciding not to take enforcement action according to a particular methodology that is apparently confidential, surely everyone in this place has an intense interest in understanding what that methodology is. That goes to the heart of the inquiry. So I am genuinely bemused as to that ground for a public interest immunity claim.

There is also a reference to prejudice to third parties' privacy and reputation. I'm sure that is something that could be reasonably considered by the committee in all the circumstances and navigated through. Then we have the perennial issues relating to the disclosure of confidential and privileged legal advice. I can genuinely say that, when this side of the chamber was in government, I raised concerns—it's on the public record—about the use of public interest immunity claims with respect to the provision of legal advice. But there is a statement here that causes me particular concern. It says that ASIC's position in future enforcement action where similar legal issues arise may be prejudiced. Again, I want to understand, as a member of the Senate, what that legal advice is. How is ASIC interpreting the law? What's this advice they're being given which seems to have a material impact on whether or not they're going to decide to bring enforcement action or not bring enforcement action? In a situation where a legal case has been closed, I think we are quite entitled, and we should be genuinely interested, to see such legal advice. In summary, I call upon ASIC to reconsider their position.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

AVAN () (): This is a very important debate because it goes to the heart of what this chamber is meant to be about. We really have one primary task, and that is to be a house of review, to review the operations of, especially, executive government and the actions of some agencies that should be subject to that review. At least some members of the executive government here are obstructing us from doing our job. It calls into question why we then have this place. Why is it here if we're not going to be allowed to properly investigate, on behalf of the Australian people, those that have the honour, privilege and great responsibility of powers vested in them, through this parliament and the executive government?

At the start of my comments, I want to recognise the efforts of Senator Bragg, who is doing a wonderful job chairing this inquiry. As I am sure he has outlined to the chamber, there have been a number of complaints, from many people across our community, about the conduct of ASIC. I'm sure many of us get those complaints through our offices directly. But Senator Bragg, as Chair of the Economics References Committee, has taken up those complaints. He drove the initiation of this inquiry. I should recognise that it was an inquiry supported by all in this chamber, I believe, and therefore the will of the Senate was there to investigate these matters. It's just a shame it is now being held up by some senators, despite that initial support.

As I've outlined, there have been a number of clear deficiencies in ASIC's conduct over the past few years. That's been well documented through other inquiries. There have been various attempts, particularly by the former government, to get ASIC into line, to try and increase its resourcing, but there are still issues that remain; hence this inquiry.

As I said, this goes to the heart of what his chamber is about. The first thing we can do in holding governments and government agencies to account is to get access to information—information about what policies are and how they're being implemented. The right to have that information is something that I believe we should all, as senators, defend strongly. Of course, there are times when information cannot or should not be provided to the Senate, but they should be extremely limited and well documented.

I might come to some other cases if I have time, but I am very, very concerned that the public interest immunity rules are increasingly being abused by government departments and government agencies to avoid scrutiny. I do not think, from my time in government and now in opposition, that this is being driven by members of parliament directly. I am not putting the blame on ministers here for initiating this abuse themselves; I think it is being done by the agencies and office holders who, understandably, don't like the scrutiny and are seeking to wriggle out of it. Where I think ministers could do a better job is to not let them do that. They don't have to agree with the public interest immunity claims.

I think the key thing we have to put on the record here is that any public interest immunity claim must be made by a minister. Obviously there are some departments and agencies who will request such a claim or seek to have such a claim upheld, but, ultimately, the power to pursue a public interest immunity claim is vested in a minister. Ultimately, it might be a minister here who might be representing a minister in the other place. Those ministers don't have to comply; they can say no to these agencies. But I think there is sometimes a cosy relationship between ministers and the agencies they regulate, and there may be some degree of shyness or caution from ministers to not want to say no to the departments or agencies when a request like this comes forward. I think this debate is very important—that we stand up for the rights of the Senate here and put steel in the spines of the ministers, who are given this great responsibility, to push back on some of these creeping claims for public interest immunity across a range of cases.

Here we have a situation where there have been well documented complaints about certain actions of ASIC. The committee as a whole—not just Senator Bragg—has sought specific information about investigations that have closed, and we are being denied access to information about those cases, despite their closed nature. There is, obviously, a public interest immunity that is raised with regards to court actions and court cases, but in Odgers' and under the rules of the Senate that can only be used in a situation where an action is ongoing or possibly about to start. They are the times that that can be used to avoid scrutiny. The cases I'm referring to now are closed—they are closed; they are not ongoing investigations, they are not before courts and nor is there any prospect of them coming before courts any time soon. There is no justification for a PII claim on this basis.

If this is upheld here, let's be clear what we are doing. If we do not succeed, if Senator Bragg and his motion doe not succeed here, we will have to rewrite Odgers'. We will have to rewrite it, because what it says right now is not consistent with what some of the ministers in this government are seeking to uphold. It is very clear in Odgers' that you can only have this PII claim in an instance where there is an investigation happening or a court case underway. This is a new precedent to be set where, apparently, it also applies to investigations that are closed. This, effectively, means we will never be able to get information about any investigations ever again. I cannot see how that should be upheld. We should avoid the creeping growth of PII claims to prevent the Senate from doing its job. We have an opportunity here to stand up for the Senate.

As I mentioned, there are other cases I have been involved with recently as well. I have sought basic information about research that has been conducted for scientific purposes—the so-called gain-of-function research. Some of you might have heard about it. It is potentially the reason we ended up with a global pandemic called coronavirus; very credible scientists believe that gain-of-function research might be involved. Only through questioning by myself and other senators here have we found out that various Australian government agencies have been involved in 13 gain-of-function research papers over the past decade. Yet the department is refusing to provide any information about what that research was and where the papers were published. This was government funded research, and their claim for why they can't release that is it would put the safety of the scientists at risk if it were to be put in the public domain. This is untenable. How can we have proper investigations of major policy questions if government departments and agencies can abuse the PII process to have a closed shop on what they are doing? It is a complete diminution of this place.

I would ask all senators—this is not a partisan point: we should be standing up for the right of the Senate here to get information, reasonable information, reasonable requests, so we can do our job. If we're not going to do that, why are we getting paid? Why would we continue to have jobs in this place if we're not going to have the confidence and courage to do our job? Once again, I applaud the efforts of Senator Bragg. I hope we come together to support him and his reasonable request to seek information so that we, on behalf of the Australian people, can get to the bottom of what's going wrong in ASIC and get justice for people who have been done harm through financial fraud. It doesn't look like the government is willing to go on this journey, but maybe some other senators from the crossbench can put pressure on them to change their stance in this instance. I don't think it's being driven by the ministers; it's just being accepted by them. They can get some more confidence and get some more courage. Let this information go into the public domain, let Senator Bragg and his committee do their job and, most of all, let us serve the Australian people in the very honourable role we have in this place.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

I also rise to contribute to this debate. The Senate Economics References Committee has been holding an inquiry into Australian Securities and Investments Commission investigation and enforcement, and I think Senator Bragg has done an incredible job in pursuing ASIC for answers on behalf of the small-business owners and the consumers who felt have very aggrieved by a body they thought was there to assist them with matters of financial fraud and to ensure that proper process and proper legal frameworks are upheld and that they are indeed protected. Unfortunately, the conduct of ASIC through this inquiry has meant questions haven't been answered, senators have been unable to do their elected roles and this chamber has once again, unfortunately, as has so often been the case in the last 14 months, been held in immense disrespect.

This chamber and the functions of this chamber and its committees are a key tenet and pillar of our Westminster system that we enjoy here in Australia. It is unique in the world. This chamber in particular has a specific task. When you are a minister of the Crown, it is difficult sometimes to subject yourself to the will of this chamber, to the Senate estimates process, to the order for the production of documents process, to question time and to a whole raft of mechanisms this chamber has to hold the executive of this country and, through the executive, the agencies and statutory bodies that help govern arrangements in this country to account, so that we have the most transparency and therefore accountability that a democracy like ours should be able to provide for its citizenry.

This inquiry was set up because this chamber referred to the economics committee an examination of whether ASIC is meeting the expectation of government, business and the community with respect to regulatory action and enforcement. It wasn't called for by the big end of town. This wasn't something that the mighty and powerful in this country were wanting to see happen. It was called for by regular, everyday Australians who were incredibly frustrated by ASICs persistent failure to enforce the law and investigate complaints of misconduct. You would think that, at the very basic level, mums and dads, small-business owners and consumers across this country should be able to assume that an agency that has the power of ASIC is actually doing its job to protect the most vulnerable: regular Australians, who can't take the big end of town to court to have their day of justice. They have to use measures and mechanisms like these procedures to get justice. Yet ASIC not only isn't doing its job, by all accounts; it's refusing to tell us why it can't do its job. Indeed, it is using the smokescreen of public interest immunity to facilitate the cloak of secrecy around its work and why it's not delivering confidence to consumers and small businesses in this country when it comes to investigating complaints of misconduct.

I think Senator Canavan, in his contribution, was right about a minister's role in public interest immunity claims. Unfortunately, agencies often don't see themselves as being accountable to this place and to the boring, mundane and often repetitious questions of senators who might not know in great detail what their role or function is but who do have a right under our system of government to ask them, and absolutely have a right to get an answer. But, unfortunately, under this government it seems it's not just the agencies who are using public interest immunity claims willy-nilly to avoid scrutiny, accountability and transparency around their role; even in my portfolio, we've got Minister Catherine King claiming public interest immunity around the infrastructure project investment pipeline. Poor Minister Watt has had to rock up several times for her to hastily drop the letter to say, 'She's not going to answer these questions because it might prejudice state and territory relations.' We have rightly said, under the standing orders, accordingly: 'Why don't you write to the states and territories and ask them if they have a problem with you telling the Senate this information? If the states and territories do have an issue, well, obviously you have a basis upon which to make your claim of public interest immunity.' But she doesn't, because she disrespects this chamber's role and refuses to subject herself and her decision-making to its oversight.

We also have estimates, another way the Senate seeks to hold the executive government to account. It can sometimes be uncomfortable, as a minister, to have to sit there and answer the questions. But that's your job. You have grave responsibility. You have great privilege and rights, but that comes as a package. You don't just get the privilege and the rights without the responsibility to, therefore, be accountable. If you have personal integrity, then you will subject yourself to that. Catherine King's department took—

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie—

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

Minister King's.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

Minister King's department took 200 questions on notice at Senate estimates. These weren't quirky questions that a department official shouldn't be able to answer. Unfortunately, I think this government, which championed itself as the player of integrity and accountability in Australian politics, has left the citizenry and the Senate wanting because they've done anything but. At every single juncture, when they had the opportunity to stand up, be accountable for decisions, explain them to the public and be responsible for them, they've chosen to hide under a cloak of secrecy.

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie, I have been listening carefully. You are now well and truly drifting away from the matter at hand.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

ASIC's engagement with the committee thus far has confirmed all fears about the culture inherent in ASIC. As I was saying about Minister King and other ministers in the government, Treasurer Chalmers refused to comply with the order for the production of documents relating to the deputy chair investigation. So, Madam President, it's not just Minister King; it's not just ASIC as an agency; it's our own Treasurer of the country who's treating this chamber and the committees of this chamber with contempt. Similarly, ASIC has shown contempt for the committee process through its illegitimate use of the public interest immunity claim.

I think that ministers need to be respectful of this chamber. It's uncomfortable sometimes, but it is a great privilege to serve, and our democracy is better for the transparency that this chamber alone and uniquely can apply. So I commend the Economics References Committee for the work that they are doing to ensure that ASIC does its job in terms of giving assurance, to consumers and to small businesses alike, that misconduct will be investigated appropriately and publicly, and I call on ASIC—and, indeed, I call on the minister responsible for ASIC to encourage them, if she can't direct them—to actually comply with the orders of this chamber, the Senate, and of the committee that is simply seeking to do the work of the Australian people.

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I would just like to make a short contribution to this debate from a slightly different perspective. As chair of the Finance and Public Administration References Committee, I'm currently chairing the inquiry into consultancies, which has made a number of disturbing revelations. We already have one report that has been published by that committee as a part of our process of inquiring into consultancies that operate in this country. These are very large organisations.

One of the questions that has arisen as part of that process is: what is the regulatory framework under which these large consultancies sit? Some of them are large partnerships. Some of them sit under the Corporations Act. We've had a number before us. They've talked about the way in which they operate. They've talked about their structures. They've talked about all of the things they say they're going to do in order to do the right thing. But one of the questions that we as a committee are going to have to consider is: what is the appropriate framework, particularly for the large partnerships?

It is really quite disturbing that one of the major governance and government structures that we have in this country to provide oversight to corporations is not prepared to share with this parliament some of the ways in which it operates. Senator Canavan and some of my other colleagues have said that this is important information for us to have. If the committee that I'm chairing is to make sensible recommendations to the parliament and to the government, some understanding of what happens inside the black box is important. This is not for any reason other than that we will want to understand how the organisation makes its decisions. I think the point that's been made by a couple of colleagues is that we're not after information around ongoing or current investigations. That is quite properly kept within the organisation. But as for the processes around completed investigations, I don't see why that information can't be provided to the Senate. ASIC is a government instrument. The government, the parliament, the Senate has oversight of these organisations through various different mechanisms. I could go through some of the political points that have been made by some of my colleagues, but I won't because I don't see this particular matter in that light, to be frank. But I would sincerely make an appeal to ASIC and to the government to reconsider their stance on this particular matter.

It may very well be that ASIC is asked to come and present to the finance and public administration inquiry into consultants, to provide us with some assistance into what we may recommend as an oversight mechanism for these big consultancies that largely sit outside any regulatory framework right now and what that might look like. Getting good evidence in that context is going to be really important for us.

We've seen the outrageous things that have occurred through the disgraceful operations of a couple of individuals within PwC. We know things go wrong within large corporations and smaller organisations, but that's why we have these rules and these processes and these organisations, like ASIC, in place—to provide oversight, to report to the parliament, and to the Australian people through the parliament, on how those things are being managed and what the rules are. And the rules and the operational process of that are important. The point was made before: we ought to understand the rule book. Quite frankly, anyone operating under ASIC's rules should likewise be able to understand the rule book. It shouldn't be a mystery.

From the perspective that I bring, through a process I'm in the middle of right now, it shows how the work of this parliament quite often intertwines with the work that Senator Bragg's doing in his committee into the operations of what is a very important organisation providing governance in the Australian business economy, and how we might make some recommendations to the parliament for another very important part of the Australian economy. There are some obvious linkages, so the work that Senator Bragg's committee will be doing will be of interest to what we're looking to do. As I said, it may very well be that ASIC becomes a witness at our inquiry, providing important information, and it may be the questions are quite similar.

So from the perspective of enabling this place to do its work properly—sometimes these things are uncomfortable, I know, but as chair of the committee I want to be in the position, and I know my colleagues sitting with me on that committee would also like to be in the position, of making valuable recommendations to the parliament and therefore to the government around what a regulatory framework might look like if that's where the evidence takes us. But we need to be able to get the information that supports us to do that, and the information being sought by Senator Bragg and his committee is directly in that wheelhouse.

Again, I would make an appeal to ASIC and to government to reconsider their approach to this. I think it's a reasonable request that Senator Bragg's committee are asking. I don't want it to be a partisan one. I just would like it to be one about providing quality information to support the processes of the parliament. From my point of view, quality information is gold, because that's what allows us to make good, sensible recommendations around the way that the economy is run in this country. It's important to us, our standing and the way the economy works. It's one of the things that facilitates good operation of industry and business. Again, I give a final appeal to the minister representing the minister in the other place, but I also appeal to ASIC to reconsider in the broader interests of the work that we do in this place.

Question agreed to.