Jenny McAllister (NSW, Australian Labor Party, Minister for Emergency Management) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING AMENDMENT BILL 2024

The Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 implements long overdue, major reforms to Australia's anti-money laundering and counter-terrorism financing, or AML/CTF regime. 'Tranche-one' of these reforms was introduced in 2006, and this bill will finally deliver on vital 'tranche-two' reforms.

These reforms are a key pillar of the Albanese Labor Government's efforts to protect the community from serious and organised crime, and growing national security threats.

Right now, Australia is an attractive destination to store, launder, and legitimise proceeds of crime. That can not continue—and this bill will put an end to it.

Money laundering is not a victimless crime. Each year, billions of dollars of illicit funds are generated from criminal activity such as drug trafficking, cybercrime, child exploitation, tax evasion, and other illegal and corrupt practices. It is also used by authoritarian regimes to fuel corruption, and undermine the rule of law across the world.

Money laundering diminishes tax revenue and diverts government resources that could otherwise be used to assist all Australians through greater investments in education and health services. Instead, it increases the burden on law enforcement.

It also distorts markets. Hard working Australians have to compete in the housing market against criminals with dirty cash, or run their businesses against loss making, criminally owned enterprises.

AUSTRAC's National Risk Assessments on money laundering and terrorism financing, released on 9 July 2024, found that Australia's economy continues to be exploited by money launderers, and risks financing terrorist organisations.

Money launderers still prefer to conduct their operations via traditional methods using cash, banks, luxury goods, real estate and casinos. Lawful domestic financial channels are a significant pathway for money launderers to funnel their wealth and are also the preferred channels for moving funds for terrorism.

For almost 18 years, Government inaction has led to significant regulatory gaps leaving Australia vulnerable.

The AML/CTF Amendment Bill delivers on the Albanese Labor Government's commitment to protecting Australians by strengthening our AML/CTF regime. It means preventing criminals from enjoying the profits of their illegal activities, and putting an end to funds falling into the hands of terrorists and authoritarian regimes.

There are three overarching elements of these reforms.

Regulating 'gatekeeper' professions

First, we are regulating so-called 'tranche-two' entities—Australia's 'gatekeepers' against criminal activity and terrorism. They are entities who are internationally recognised as high risk for money laundering and corruption—including real estate agents, accountants, lawyers, and precious stone dealers.

'Gatekeeper' businesses will be asked to assess their illicit financing risks and put in place controls to prevent the exploitation of their services. Information from these businesses will help law enforcement and national security agencies to protect the Australian community.

Simplification and clarification

Second, we are simplifying and clarifying parts of the legislation that can be complex for industry to comply with—while maintaining the integrity and strength of the regime. It means more guidance, less confusion, and better financial intelligence to support law enforcement investigations.

Modernisation

Third, this bill will modernise the AML/CTF regime to ensure it responds to the increasingly digital, instant nature of our global financial system. It will close the loopholes that we know increasingly sophisticated, professional criminal organisations can currently exploit.

Regulating Australia's 'Gatekeepers'

Regulating 'gatekeeper' professions means partnering with more sectors to monitor suspicious and criminal activity, and it will make a world of difference.

AUSTRAC's National Risk Assessments found that these professions and the products and services they deal with are often relied upon by criminal networks to facilitate money laundering, either wittingly or unwittingly.

Given their roles as entry points to Australia's legitimate economy, these reforms will strengthen and protect these professions against criminal exploitation and reputational damage.

When businesses implement measures, they will make it more difficult for criminals to launder the proceeds of their crimes—and help weed out the bad actors in those sectors.

Law enforcement in Australia sees case after case of these professions creating structures and obfuscations to hide the proceeds of crime, and facilitating serious financial crimes. This bill puts them on notice.

The bill also provides stronger, more tailored protections for information that may be subject to legal professional privilege. This includes clear exemptions and mechanisms for regulated entities to comply with their reporting and disclosure obligations without being required to disclose privileged information to AUSTRAC and other agencies.

Simplification of existing obligation

Expanding the sectors covered by the AML/CTF regime will have regulatory impacts. But we are minimising regulatory burden wherever possible, while maintaining the overall integrity of the regime.

For instance, the AML/CTF program obligation will now focus on high-level outcomes to be achieved—identifying and assessing the risks of illicit financing, and then taking steps to mitigate and manage those risks. It means the reforms will provide businesses with the flexibility to achieve these outcomes in a way that works best for them, based on the risks of their particular business. This moves the regime further away from prescriptive, tick box compliance.

The bill will introduce simplified measures for AML/CTF programs, enabling business groups such as corporate groups, franchises and partnerships, to implement single, group-wide AML/CTF risk management and compliance frameworks. This better reflects the reality of modern business structures.

The bill will also streamline the ability of Australian businesses to provide services to customers engaged overseas, by clarifying AML/CTF requirements for their foreign branches and subsidiaries.

Reforms to customer due diligence requirements will implement a simpler, risk-based approach that reporting entities can more easily understand and comply with. This will support Australian businesses to better prevent financial crimes and result in higher quality reporting to AUSTRAC.

This aspect of the reforms is intended to lower regulatory costs and support industry compliance, while also addressing a number of inefficiencies throughout the AML/CTF regime.

The Government will also be repealing the current Financial Transaction Reports Act 1988 (FTR Act). When the AML/CTF Act was first introduced in 2006, parts of the FTR Act were repealed or became inoperative. However, other parts of the FTR Act continued to impose residual obligations on cash dealers and solicitors. This created two AML/CTF reporting regimes, which is inefficient and complicated. So, the FTR Act will be gone.

Digital and virtual asset services

These reforms will bring Australia's regime in line with current international standards by expanding the regulation of digital currency services so they are on a level playing field with the rest of the financial sector.

Amendments to the AML/CTF regime in 2017 were intended to be the first legislative step in improving Australia's regime, and expanded it to cover exchange services involving digital currencies such as Bitcoin. These amendments made our regime world-leading at the time, but we have since fallen behind global partners in recent years.

Currently, the AML/CTF regime only covers exchanges between virtual assets and fiat—or government-backed—currencies by digital currency exchange providers. This will be expanded to also include exchanges between different forms of virtual assets, transfers on behalf of customers, administration of virtual assets, and related financial services.

Technological advancements over the past decade have made it harder to detect and track innovative and ever-evolving illicit transactions. These amendments will assist AUSTRAC to generate actionable financial intelligence on how criminal networks are using these services to manage the proceeds of their crimes—and how to stop them.

Updating value transfer regulation

The bill will also help close gaps in AUSTRAC's financial intelligence holdings, which can hinder law enforcement investigations. The bill will update the 'travel rule', which is a FATF requirement about payer and payee information that helps to ensure end-to-end transparency of who is making and receiving payments. Amendments will also reform International Funds Transfer Instruction reports, which are a critical source of financial intelligence.

The bill will streamline value transfer services, which is currently unnecessarily complex and fails to cover the transfer of digital assets.

Enhancing AUSTRAC's regulatory powers

The bill makes a number of timely updates to AUSTRAC's regulatory and information-gathering powers to ensure AUSTRAC can effectively monitor, investigate and enforce compliance with the AML/CTF regime.

These amendments will bring AUSTRAC in line with other regulatory agencies that conduct large numbers of complex investigations.

The reforms are accompanied by safeguards and protections around AUSTRAC's use of these powers.

Consultation and partnership with industry

The Attorney-General's Department conducted two extensive rounds of public consultation with stakeholders between April 2023 and June 2024, with over 270 submissions received, and over 100 stakeholder meetings, including industry roundtables.

The AML/CTF regime is a partnership with industry at the frontline of prevention.

The Government is committed to ensuring industry is supported to meet its obligations under the new AML/CTF regime.

We demonstrated our commitment to this task with over $160 million invested to implement these overdue reforms, including comprehensive education and guidance to support newly regulated businesses on the requirements of the Act and accompanying AML/CTF Rules.

AUSTRAC will commence engagement and consultation with industry on concepts and a draft of the AML/CTF Rules in the coming months. This will ensure they are tailored and appropriate for different sectors, and will enable sufficient time for industry to transition to additional obligations.

Grey Listing

Critically, these reforms will bring Australia in line with the international standards for combatting money laundering and terrorism financing set by the Financial Action Task Force, or FATF, the global financial watchdog.

In 2015, the FATF found that Australia had failed to comply with a number of vital standards. They singled out Australia's failure to extend our AML/CTF regime to 'gatekeeper' or 'tranche-two' professions.

Australia was a founding member of FATF, yet today, we are one of only five jurisdictions that are non-compliant with the FATF standards on regulating 'gatekeeper' professions.

Without these reforms, Australia risks being seen by the global community as a jurisdiction with a weak AML/CTF system—or being 'grey listed'. A grey listing would have significant economic impacts for all Australians as the global financial sector and other regulated professions around the world would be required to treat Australia as a high-risk jurisdiction.

It would lead to increased costs for businesses, and damage to Australia's international reputation—and we can not let that happen.

Conclusion

Any further inaction on our AML/CTF regime will enable criminals to continue to exploit our systems and businesses—and launder the proceeds of their crime through the Australian economy.

These reforms are a critical and long overdue step in ensuring Australia's compliance with international standards, so that Australia does not become an international 'back door' for illicit funds.

We are acting now to prevent the criminal abuse of our economy—and the harm and suffering caused to our entire community. .

You cannot put a price on the need to fight against terrorism and child abuse. We must do everything we can to protect Australia from the dangers of money laundering—and we are.

This is about protecting the interests of all Australians. It is about keeping us safe—and protecting the fair go.

We are taking up the fight against money laundering and terrorism financing in Australia—and it is about time.

I commend the bill to the House.

UNIVERSITIES ACCORD (NATIONAL STUDENT OMBUDSMAN) BILL 2024

Last year I sat down with a group of remarkable women here in this building.

And they spoke to me about their experiences on university campuses.

For most of us who have the chance to go to university it is a time of learning new skills and making friends.

An experience that changes our life for the better.

That sets us up for life.

But their stories weren't like that.

These women were from the STOP campaign and from End Rape on Campus and from Fair Agenda.

And their stories were of what had happened to them and to people they knew at university.

People among the one in 20 who have reported being sexually assaulted since they started university.

The one in six who have reported being sexually harassed.

And stories of a confused and inadequate response process within our universities.

Of inconsistent complaints processes.

Of a lack of materials on how to even make a complaint to begin with.

A lack of education on consent.

A lack of feedback when a complaint had been made.

A response process where one in two students felt like they weren't being heard when they made a complaint.

In short, a protracted failure of the higher education sector, and of government, to do anything to properly address a situation summarised so poignantly—and so heartbreakingly—in the words of this student:

"I'm sick of my friends being assaulted,

I'm sick of begging to feel safe,

and I'm sick of feeling ignored."

For the last 10 years, Sharna Bremner has been fighting for the rights of students like this.

That's what her organisation, End Rape on Campus does.

She's here in the Chamber today.

And she's not alone.

Camille Schloeffel and the team at The STOP Campaign, Renee Carr from Fair Agenda, and Dr Allison Henry are here too.

In truth, they have always been here.

Fighting for this day.

Alongside thousands of students and staff who want a better system.

Who want to be heard.

Who want to feel safe.

And who want action, not more words.

Well today, we act.

This bill amends the Ombudsman Act 1976 to establish a National Student Ombudsman as a new statutory function of the Commonwealth Ombudsman.

This is a first.

A dedicated, national body to handle student complaints within our higher education system.

Across campuses. Across the country.

The National Student Ombudsman will have the powers:

It will have strong investigative powers, similar to those of a Royal Commission, including:

The Ombudsman is another recommendation of the Universities Accord report which this Government is turning into a reality.

When I spoke to those students last year the Universities Accord panel was already looking at this issue.

After that meeting it was clear to me that this work needed a dedicated process.

And it was clear to the Universities Accord panel as well.

In their Interim Report released in July 2023, they recommended as one of five priority actions to immediately engage with the state and territory governments on addressing this problem.

My Department convened a working group of Commonwealth, State and Territory Governments to make recommendations about how an ombudsman and other measures might be delivered.

That working group was supported by Ms Patty Kinnersly, the Chief Executive Officer of Our Watch, and a national leader in the primary prevention of violence against women and their children in Australia.

They developed a draft Action Plan that I presented to the Meeting of Education Ministers last November.

From November 2023 to the end of January this year, we conducted a broad consultation on that draft Action Plan, and one of the things that students and victim-survivors in particular strongly supported was a National Student Ombudsman.

An ombudsman isn't a new concept.

It's something that advocates have been calling for, for many years—particularly after university student surveys in 2016 and 2021 that painted a shocking picture of safety on university campuses.

Those calls were ignored by the previous Government.

But not by this one.

In February this year, my fellow Education Ministers agreed to a final Action Plan Addressing Gender-based Violence in Higher Education and we got to work immediately on measures to implement it.

The measures in this bill have been designed with the benefit of the collective expertise and wisdom of the working group.

The National Student Ombudsman will provide a trauma-informed complaints mechanism accessible to higher education students.

This is particularly important in recognising the serious impacts these issues can have on students, and in making sure their concerns are handled with care and respect.

The Ombudsman will be independent, impartial and will provide a vastly improved complaints mechanism.

And it will go further than addressing gender-based violence in universities.

It will be able to consider and address a broad range of complaints made by students about the actions of their university.

For example, complaints about a university's handling of a student safety and welfare matter, where a student is subjected to homophobia, anti-semitism, Islamophobia or other forms of racism on campus.

Or about whether a university is providing sufficient staffing to meet students' educational and academic needs.

Or complaints about disciplinary processes and procedures.

Or whether a university is making reasonable adjustments for students with a disability.

The Ombudsman will have a wide jurisdiction.

And one that is truly national.

We have negotiated with the states and territories to ensure that matters that might have been reported to their state and territory ombudsmen are able to be referred to this dedicated national one.

It means that a single Ombudsman can bring to bear a national perspective and experience of what is going on across our universities, and give students a consistent complaints process.

The Ombudsman will work proactively with the higher education sector to set up best practices in complaint handling and make sure that the student's welfare is at the centre.

And it will work with regulators to share information and identify systemic issues.

As an oversight body, the Ombudsman will work cooperatively with the Tertiary Education Quality and Standards Agency and with my Department.

It will also work cooperatively with state and territory ombudsmen and other relevant bodies, such as human rights, anti-discrimination and equal opportunity bodies.

There will be annual reporting to Parliament on the numbers and types of complaints and the actions of universities.

The Ombudsman will also make an important contribution to the work to end gender-based violence in one generation, which is being led by the Minister for Social Services.

And it will be followed by other measures from the Action Plan agreed between education ministers.

As part of that I intend to introduce a second piece of legislation, which will further support the work of the Ombudsman by implementing a mandatory National Code for universities to prevent and respond to gender-based violence.

The National Code will set standards that higher education providers must meet to make our students and staff safer.

It will be enforced and regulated by a new specialist unit at the Department of Education, that will regulate the standards and support universities to achieve better outcomes for students.

The consultation for that Code is well underway.

The National Code will set standards that providers must meet across seven key areas.

They are summarised in this document, which sets out how the Code will work and gives some examples of the standards which will be set.

Standards like ensuring that Vice-Chancellors and CEOs are held responsible for compliance with the National Code.

Compelling providers to update their policies to specify that gender-based violence is unacceptable, and identifying the potential consequences for perpetrators.

Specifying procedures that providers must follow to ensure that students consistently receive a swift response to their reports of gender-based violence.

Requiring ongoing prevention and response education to staff and students.

Creating a national dataset to monitor providers' performance.

Setting strict requirements that university owned and/or operated student accommodation must meet to keep students safe in that setting.

And—very importantly—requiring that universities implement the recommendations of the Ombudsman.

The Code and the Ombudsman will work together to improve responses to students and the accountability of all higher education providers.

I will release more information on the National Code when I introduce the bill which will give it effect.

Mr Speaker, our reforms to higher education are deliberately and unapologetically focused on supporting Australian students.

That includes wiping $3 billion of HELP debt.

For the first time ever providing financial support for students when they do their practical placement.

And now this—another national first.

A National Student Ombudsman.

Mr Speaker, can I thank my friend and colleague the Attorney-General, and our respective Departments and offices, for their work in bringing this bill to the Parliament today.

I thank my colleagues behind me for their support.

Can also I thank members of the crossbench here and in the Senate for their support.

I also thank the Leader of the Opposition for his comments in this chamber some months ago, pledging his support.

Most importantly, can I thank Sharna, Renee, Camille, Allison and all those who have fought for this, year after year after year.

They should get the last word here.

Shortly after we made the announcement, Sharna said: "After 50 years of student-led advocacy, we've finally gotten reform."

It has taken too long, but that reform is now here. Because of Sharna and people like her.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.