STATUTES AMENDMENT (FINES ENFORCEMENT AND RECOVERY) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 1 May 2013.)

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (12:16): I rise to speak on the Statutes Amendment (Fines Enforcement and Recovery) Bill 2013.

The DEPUTY SPEAKER: You are the lead speaker?

Ms CHAPMAN: Indeed, I am. I will probably be the only one from this side, but I think some of the Independents are keen to make a contribution and, no doubt, we will be well served by listening to the contribution they have to make in due course. This bill was introduced by the Attorney-General on 1 May, after there had been a consultation paper released in September 2011. The draft bill was tabled in October last year. I will refer shortly to the consultation period allowed but, nevertheless, there were a number of suggestions presented to the government from a working group on this matter.

The implementation of the inquiry, of course, came from a staggering increase in the level of debt that was owed in unpaid fines to the South Australian government. Suffice to say, this has exploded under the watch of the current Attorney-General to a staggering $275 million in unpaid fines. The increase, of course, has lurched to new heights since the new Attorney-General was appointed in March 2010. I do not know whether people just thought he would be a bit of a soft touch compared to the last attorney but, nevertheless, under his watch, this mess has developed. It is fair to say, I think, that any right-minded person observing this phenomena—the 'Rau leap'—would have to say that—

The DEPUTY SPEAKER: I just remind the member that we refer to ministers by their title or by their seat, please.

Ms CHAPMAN: Indeed, sir. The 'Rau leap' is now going to be like Thatcherism, I think.

The DEPUTY SPEAKER: Yes, but you can't use that terminology.

Ms CHAPMAN: It will be a new 'ism'—a 'Rauism'. However, I thank you for your guidance on that. What I outline though—and this is really in his defence—is that even his predecessors were hell-bent on ensuring that every single fine that we had in this state was massively increased, so, of course, even before his contribution to the cabinet, all the seeds had been laid for the growth of this exponential increase in fine accumulation debt because of the massive increase in fines in just about every piece of legislation that the former attorney brought in and other ministers had included. As a consequence, you have more and higher fines and so, not surprisingly, there will be a proportionally higher unpaid debt accumulating to the government. Nevertheless, it is a rather sad indictment under the current regime.

If you look at the unpaid fines, they were down to about $150 million when he came to office, and now, this year, they are up to some $275 million. I do not know what they have they have accumulated to in recent months, but it is a rather sad tale. The fines, it is fair to say, include not just court fines (that is, the fines imposed by magistrates, justices and judges) but also expiation notices for those who are dealt with in a summary way before or without any court application or review. They include expiation notices from issuing authorities such as South Australia Police and local government.

The briefing that was provided by the Attorney-General estimated that there are approximately 150 issuing authorities in South Australia. So, a number of people have the power to issue notices to people who are in breach of a regulatory or legislated behaviour which is outlawed for whatever reason or which attracts a fine if there is any breach. The level of unpaid fines has been compounded by the victims of crime levy being doubled from 1 January 2011. Members may be aware that during the 2011-12 financial year victims of crime levy receipts increased by 31 per cent from the previous financial year to $21 million.

It is noted that, alongside this accumulation of moneys that has increased in crime levy receipts, there has been a massive explosion in the value of the Victims of Crime Fund itself. Members might well be aware that there is now over $100 million in this fund, which is a very substantial amount of money. I think, tragically, it is still sitting there and has not been applied to the payment of some who are clearly deserving to receive it.

Members would be aware of the many long and tortuous debates we had in this house to provide support after the Mullighan inquiry for those who are the victims of institutional sexual abuse, as children, and which has had, I think, a very unsatisfactory resolution in the provision of compensation to many of the victims of that appalling behaviour. Nevertheless, it is important to note in this debate that the fund includes a significant level of unpaid moneys that the victims of crime levy has imposed and which has expanded as a result of being doubled.

The bill was presented in the media as being significantly reforming. I think a headline in The Advertiser on 28 March 2013 was, 'Squad to hit fine dodgers'. I think this is to be like a new posse out there under the instruction of the Attorney. I note that they have to be existing public servants and have a number of other qualifications to become a member of the Attorney-General's hit squad; nevertheless, we will come to that in a moment. Really, it is the establishment, the obligations and powers of the special task force, the unit—whichever way we are going to describe it—of the Attorney's fines enforcement and recovery officers (alias posses), which form a very substantial part of this bill.

Essentially the bill proposes that a range of new enforcement measures to recover debt include the clamping and impounding of vehicles under section 70O. Members may be aware that previously a vehicle could be confiscated but could not have these interim measures imposed. There is also provision for the sale of a debtor's primary place of residence if a debt is more than $10,000, and placing charges on the land. That was under clause 11 and covers section 70G.

I might say at this point that even I am old enough to remember the enforcement powers that used to be available under the old Community Welfare Act for debts of outstanding child maintenance payments to be secured by caveat over the house property of the defaulting payer—usually the father in those days, but perhaps more often than not now mothers, if they have an obligation to pay child maintenance. In those days the defaulting child maintenance payer was vulnerable to the then minister for community welfare having the power to place a caveat on the defaulting payer's property, and that caveat could only be removed by ministerial authority.

I am just trying to remember the name of the minister that was there in the late 1970s. It was one of ours. I will think of his name during the course of this debate. He told me that he used that power quite often and it was very effective. It would usually operate on this basis: the caveat would be placed on the house and sooner or later the defaulting party would want to borrow some more money, extend their mortgage or even sell their house and move with the new girlfriend to another place or whatever. There would usually be some event that would mean that they would trot back into the bank to renegotiate their financial arrangements. At that point the minister was able to say, 'Well, that's fine, but this caveat is not coming off until you have paid the $14,650 in child maintenance.' It was a very effective tool.

I cannot be certain of this, but my understanding is that that capacity disappeared in the reform of legislation during the 1980s—I can only assume under the Bannon era—to wipe what I think was an effective means of enforcement when there had been a persistent non-payment of a legal liability; in that case it was child maintenance. I think it was around that time that the old debtors' prison cells were converted to accommodation for life prisoners out the back of the women's prison, which used to be there for 10-day orders for people to serve if they failed to pay debts.

Historically, we have had provision for enforcement of debt when there has been a consistent non-payment and, for whatever reason previously, those have been abandoned in probably well-intentioned reforms at the time. There is one thing for sure: house ownership is still a goal of many and is achieved by a number, and is often relied upon for the purpose of security of funds, so sure enough, eventually, one day they can be caught up with. So, some sort of caveat procedure on a property is very effective. In this instance, it will make provision for a charge to be placed on the land. I am not sure what priorities that takes over, but I do not doubt it will be up there with taxation and others as an early charge on the property for enforcement. Usually, debts to the Crown are pretty high on the ladder.

I make the point that the application of securing a charge over a debtor's primary place of residence I think probably in the long term is wise, and raises the question of why it should have been abandoned in other areas in the past.

The Hon. J.D. Hill: Is it John Burdett you were thinking of?

Ms CHAPMAN: John Burdett, yes. I am assisted today—thank you—by the member for Kaurna, who has indicated that the Hon. John Burdett was the minister for community welfare and I think a few other things in the late 1970s in the Tonkin administration, and an interesting fellow he was. In any event, I will just move on. The other areas of reform are to publish the debtors' names on a website as a means of serving notices where the debtor is unlocatable and, finally, an open-ended licence disqualification provision. These raise some interesting initiatives. Obviously, in the electronic world, it is not unreasonable that the website be used as a means of notice. I am not certain that it is going to be adequate, but it may be a reasonable halfway point.

Historically, we have required in lots of laws in this parliament that publication in a daily newspaper or a series of daily newspapers is necessary for the purposes of fulfilling a reasonable public notice, and that goes on. One only has to flick through the only statewide paper that we have published on a daily basis here, namely The Advertiser, and the public notices that are in there, and there a lots of pieces of legislation that require that. That, of course, can be on the electronic form of the news editions that we receive.

It is not unreasonable that there be some web page notice. There was recently a bill that came to my attention which proposed the abolition of publications, not in this house, I hasten to add. I do not think I am breaching any rules about current legislation. It was a clause which suggested that it should no longer be necessary to publish in the daily newspaper and that in fact a notice on a particular department's website should be enough to give notice.

I, for one, have raised some questions about that, for this reason alone: whilst websites are really just electronic libraries of information, it does require that somebody sit there and actually check it from time to time or have some trigger to be able to identify that information is actually in the library. It is a bit like going into a library and them saying, 'It's in the library here somewhere and there might be an updated periodical, but we're not going to tell you when that happens and you can just keep an eye on it.'

Fortunately, these days you do not have to walk through the library and check every volume, but even with websites, they do require someone to monitor it and to be able to check on that. So, we will have a look at that. There is also the open-ended licence disqualification provisions under 70M, so I will come to those individually. The bill sets up parallel enforcement provisions in the Criminal Law Sentencing Act 1988 and the Expiation of Offences Act 1996.

An initiative also in this bill is that it will no longer require debt enforcement agencies to follow a predetermined process to escalate the debt collection measures. All the measures will be available as soon as the debt is overdue. I think there are new ways upon which enforcement can occur. A streamlined approach is offered, a new squad is going to be deputised to do it and, finally, the axe is going to come down the minute the bill is overdue. It seems that, in this new streamlined process, there are some instances where you will not even get a second notice, which is a common practice, for example, of local councils. You are going to be vulnerable to these measures the minute the debt is overdue.

In the time I have been here in the parliament, a fairly effective other means has been there, I think, and that is in respect of land obligations and taxation particularly. The minute something is overdue, suddenly there is a massive rate of interest which accrues on the bill, and that is usually a fairly effective means of ensuring that there is some payment. We are dealing with fines here as distinct from a taxation assessment which remains unpaid, but the Stamp Duties Office for this state seems to have a pretty effective means of recovering a large amount of its debt, not the least of which is that a huge impost immediately applies the minute something is overdue.

I have noticed that there has not been a reciprocal interest payment for those occasions when the government has kept our money and paid it out at a later time. I recall not long after being in the parliament receiving a land tax bill, and then the government, under the former member for Ramsay's regime, with the former member for Port Adelaide as his treasurer, suggested that there should be some refund—and this was announced.

A year later, I received a cheque for a quarter of the money that had been paid in a land tax payment, with a glowing letter from the then premier saying, 'Dear Ms Chapman, we are pleased to enclose a cheque as a refund for the monies we have' ripped off you—that of course was not in the letter; nevertheless, some of it was coming back, but not one cent of interest was paid with it. However, I suppose we got some of it back, even if it was a year later. I make the point that the imposition of high interest rates for a number of civil debt obligations to the Crown has been very effective in the past.

I turn now to the squad; that is, the fine enforcement recovery officers who are to be appointed to enforce the pecuniary sums under the act. They must be a person employed in the Public Service, and the officer can appoint agents to whom a fine must be paid. So, they can nominate the agency that is to receive the fine under the payment regime.

The new powers extend to youth under the age of 18, although greater flexibility for substituting pecuniary orders with community service exists for that age cohort. The officer can exercise full discretion to waive payment of whole or any part of an amount payable by a debtor. This is interesting because it moves from an enforcement role to really a judicial role to exempt or waive the obligation to make whole or part of a payment and to undertake that assessment. So, this is a new era of Public Service judiciary to handle debt collection.

They can also investigate a debtor's means to pay and give written notice to compel the debtor to produce documents or other materials relevant to the investigation within the stated period, and the maximum penalty for noncompliance is $10,000. Interestingly—but not surprisingly for this government—the proposal in this bill is that the onus of proof is to be on the defendant to prove that they had a reasonable excuse as to why they did not comply with the request.

Consistent with the government's myriad other amending bills in this house, they are going to introduce an army of enforcement officers; in this case, they are going to be backed up by the authority to extend to up to $10,000 in fines for people who disobey them. So, it is not just a task force: we are clearly going to have the hit squad on this issue with these enforcement officers.

Interestingly, they can compel a government agency, except those prescribed by regulation—it will be interesting to see how long that list is—to hand over contact details for a debtor in their possession. I am assuming (but we are yet to hear from the minister) that this would include, for example, the Housing SA department, which may have a record of someone's prior accommodation, residential addresses, or current or last-known addresses, to be able to provide that information.

The obligation will be on the government agency to share the prescribed particulars about a person with interstate authorities. That is consistent with the sharing of information between government agencies. We have seen where that has comprehensively failed in the past. Again, historically, there has always been a reluctance to provide information, for example, from Centrelink, which is the principal federal agency for the provision of pensions and, yet, this has been a reservoir of information, usually because the last connection that people have with government agencies if they are avoiding payment and leaving addresses without forwarding addresses etc., is Centrelink, on the basis that it is the source of a pension income, and surely would be a valuable resource from which to get the information.

There are exceptions already that require Centrelink to produce information about a person's address or payments that they might receive, for example, where there is an attempt to trace the whereabouts of a child under our federal laws and, of course, upon that information being required to be produced under subpoena and the like, but these are processes that usually involve existing, or require, court applications to be made. We do note that there appears to be an effort here to share information for the purposes of debt collection. I assume that that is supported by the principle that the taxpayer needs to have enforcement of what is owed to the government on the basis that it is the property of the taxpayer and, therefore, should be pursued, and that it is in the public interest for that money to be recovered.

The officer may also require a person to produce identification if they reasonably suspect the person to be a debtor. Again, not surprisingly by this government, the onus of proof is on the defendant to provide a reasonable excuse as to why they did not comply with the request. I think members would be aware that this is not the sort of information that is normally provided unless you are seeking a particular service from an agency, i.e. you want to apply for a pension for which presentation of identification is a prerequisite. In this instance, it requires the production of identification if the new fines and enforcement recovery officer reasonably believes that person to be a debtor, and I expect that there will be some who have a comment on this based on the onus of proof obligation.

There is the capacity for the officer to place a charge on the land—not a court or anyone else—that power is now going to be the public servant's domain, unlike the old minister caveat procedure which I referred to under the old community welfare act. Under section 70K(2) the officer can sell the land if the debt exceeds $10,000. So, again, these officers are not just going to be there for enforcement, to make inquiry and to report back to a minister or a court, they are going to be able to make the assessment themselves, require the production of documents, compel the release of information from government agencies and exercise the power to release whole or part of the obligation, all within this one person's power.

Here we come to the extra powers as well which include the power to confiscate personal property to satisfy the debt. A person with an interest in any personal property or land must apply to the court or use the Magistrates Court where applicable for the land or property to be excluded from sale or to receive their share of the proceeds. It has always been the case in the current debt collection process that once the debt has been identified, it has been confirmed by a determination by a magistrate and/or judge, and that there has been evidence of non-payment, there are various routes upon which the victim of non-payment can proceed with a course for the enforcement, from issuing a summons to recovering bankruptcy notices.

Notwithstanding that, there were always lots of anecdotal stories in the days when we had private investigators serving summonses and recovering debts. They would arrive at a house and—back in the days when televisions were actually worth something—if they were identified in the lounge room and there was an indication of the amount of money to be paid under the summons, that could be attended to promptly if the television were put in the back of the car of the person serving the summons.

These are the sorts of stories you would hear about; on the face of it, some intimidation into payment accompanied, or not, by people threatening all sorts of disaster or pain if they were not paid. I am not going to go down that line, but I just make the point that there have been some rather novel methods of enforcement over the years—or certainly reports of that. We do not want to exacerbate that; however, I would be interested to see what these officers will be doing, whether they will require police officers to attend with them if they propose to enforce this new provision, which will give them the power to confiscate personal property to satisfy debt. The mind boggles as to how that will actually operate.

The determinations will not automatically result in a conviction. At present, if a person does not pay their expiation by the due date and the Registrar issues an enforcement order under section 13 of the Expiation of Offences Act 1996, the person is taken to have been convicted of the offence by the court. This provision will be removed under this bill. Instead, if a person does not pay their expiation notice by the due date, the officer—the fines enforcement and recovery officer—will make a determination, and the person will be treated as though they had expiated the fine, with the amount still owing however, and, therefore, not convicted by the court.

In these instances, demerit points and other penalties that would usually apply upon expiation would take effect upon a determination being made. The person issued with the expiation would retain their right to dispute the matter in court, but, again, this is a streamlining process by the officer.

The bill also provides the officer with the discretion to determine that an expiation notice should not have been given to the applicant in the first place; that procedural requirements were not adhered to; that the applicant failed to receive notice; that the issuing authority failed to receive a statutory declaration or an election to be prosecuted; or that the applicant has already paid the fine. I call this a remedy clause, a provision to enable that to be administratively attended to, and, on the face of it, that seems to be sensible.

The applicant may also apply to the court for a review of an enforcement determination. Essentially, in considering the Attorney's second reading speech on this matter, it seems that the government expects that this new squad will be largely responsible for the enforcement of what is owed to the government, and that the current magistrate's role will be spared the management of the recovery of debt. If that is the case then, on the face of it, yes, it will have a direct benefit to the special justices' time, because obviously it will free them up to do other work. That is an admirable outcome. We will see whether that is the case or whether the actions of the squad are not as effective as anticipated and there is a further reliance on the court process.

I think it is fair to say that whilst everyone agrees that, as much as possible, people who are in our courts need to be applying their wisdom, high academic training, status and cost of the whole process to the important decision-making and not to administrative matters, this legislation takes a quantum leap in transferring that to the administrative management and enforcement by public servants.

There is also a power to negotiate payment plans. The hardship requirements that restrict negotiable payment options to ordinary fine defaulters will be abolished. Members would be aware that under our current legislation, when the courts were faced with an application of enforcement, they would commonly have to make an assessment of whether the debtor had a capacity to pay.

There were frequent submissions under the hardship requirements as to the lack of income in a household; the lack of employment by the debtor; the number of dependents for whom the debtor had to provide; sick relatives; or some disability or injury sustained by the income earner. All these types of things were raised and supported the plea that there be some relief for the debtor because of their impecunious state.

That goes and will be replaced by a list of options that can be instituted without showing hardship; that is, you can have the opportunity to come along and enter into these payment plans with the officer without having reached that threshold, which include: payments by instalments for a period of up to 12 months; an extension in time to pay; the taking of a charge over land; the surrender of property to the officer; payment from other sources (i.e., direct credit, such as from wages and bank accounts—the old garnishment-type process); and any other agreement entered into that is agreed upon between the debtor and the officer. Again, the officer has a high level of discretion to enter into a negotiated arrangement.

Provided there are no unreasonable impositions with this, that in itself does seem to be a process that is worthy of support. I think it works on the principle of negotiating an agreement and there is participation in that. It is a bit like a child having a behaviour agreement with their parents, where they sit down and identify what the problems are, the parent and child sign up to the commitments they make to ensure that there is some enforcement of good behaviour, and they set in advance what the agreed penalties are if the child is not home on time, or they have overrun their mobile phones (which is a good thing that could be kept in check with young children today, because parents usually have to pick up the bill; they are usually the underwriting guarantor for those things).

In any event, I just make the point that where there is a process for an officer, in this instance, to negotiate with a party a reasonable plan of repayment that is achievable and supported by an agreement under a plan, one likes to think that that would be an opportunity to give it a go. In essence, it is exactly what happens when there is some agreed course of repayment recorded at a courtroom.

The minister has the power to declare an amnesty for costs, fees and other charges, and may apply to a debtor or a class of debtors. We are yet to see what happens with this. We have amnesties for all sorts of things, including the right to give up guns that are not registered and to have some protection against prosecution, usually in exchange for delivering up some goods or effect.

I am not certain how this will apply, but I would have thought that the minister already has power to do a number of those things, not necessarily by an amnesty per se but to authorise the release of any further action to pursue a debtor. Certainly, for example, the Treasurer has certain powers to authorise the exemption of an obligation in respect of a particular tax.

I can remember writing to the former member for Port Adelaide to ask him to favourably consider the relief of taxation by way of stamp duty on insurance policies for a private hospital. When we went through the HIH insurance collapse, the consequences were very high premiums and sometimes inaccessibility for institutions to access insurance. Private hospitals were really under the pump in relation to even being able to access insurance.

Suffice to say, these massively increased premiums bought a major windfall to the government of the day. I wrote to minister Foley and pleaded for some mercy for a particular hospital to be relieved of the massive windfall that the government received on the stamp duty. I do not need to go through in any detail the response, but it was pretty brief and it was totally negative. The government was not interested in giving any relief, even though the treasurer of the day had the capacity to provide that relief, so I am not sure why it is necessary to have an amnesty power.

If the Attorney-General—I assume it is the Attorney-General, but whichever minister is going to be responsible for it—wishes to have an amnesty power, it does raise the question: if they are going to provide relief for payment of a fine, then perhaps they also need to consult with the administering authority that will lose the revenue that comes with it in those circumstances. I will refer to local government in particular shortly.

There is also power for the officer in question to decide to waive the amount payable under an agreement. They must notify the victim of that fact. The person will be allowed to seek compensation for the debt from the debtor through civil proceedings. I think it is important that there is a capacity to recover at the civil level.

I come to the Victims of Crime Fund collection. Here is where this new squad, rather than the Crown Solicitor, is going to have responsibility for recovering money owed to the Victims of Crime Fund. If we are going to have a task force—even if I or others in another place think ultimately that the process is in need of some reform—if we are going to have a hit squad, then it is probably reasonable that they undertake the role of the recovery of the Victims of Crime Fund as well.

This is usually an item that is ordered to be paid at the time of conviction or the sentence being issued or the fine being applied but of course there are a number of other cases where there is an order for a Victims of Crime Fund payment, and it would be sensible, probably, to put it in the same hands. The changes will make it explicit that a levy imposed cannot be exchanged for community service. I think I am right in saying that that is currently the position, that you cannot get out of that obligation by undertaking a number of hours of community service. I seek leave to continue my remarks.

Leave granted; debate adjourned.

[Sitting suspended from 13:00 to 14:00]