Unexplained Wealth (Commonwealth Powers) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 22 June 2021.)

The Hon. C. BONAROS (16:06): I rise to speak on SA-Best's behalf in support of the Unexplained Wealth (Commonwealth Powers) Bill 2021. As we know, the bill seeks to adopt certain laws of the commonwealth in regard to unexplained wealth and information sharing. Given New South Wales is the first cab off the rank, it is the lead jurisdiction and it will be the referring jurisdiction and will be an adopting jurisdiction.

The bill also amends the Criminal Assets Confiscation Act and the Serious and Organised Crime (Unexplained Wealth) Act in South Australia, with commonwealth and state laws operating concurrently. Thus far New South Wales, the Northern Territory and the ACT have enacted their legislation to harmonise commonwealth and state laws.

In practical terms it means where there has been a joint operation between the commonwealth and the state police there will be a sharing of the unexplained wealth seized. The arrangement, as I understand it, is that it will be a fifty-fifty split. Joint operations will also benefit from improved information and data sharing to close off as many loopholes as possible to apprehend major crime and drug syndicates.

The bill is very timely given the recent joint operation between the FBI, the AFP and SAPOL, which saw more than 800 suspected criminals arrested worldwide after being tricked into using an FBI-run encrypted messaging app called ANOM. The operation, jointly conceived by Australia and the FBI, as members would no doubt be aware, saw devices with the ANOM app secretly distributed among criminals, allowing police to monitor their every move, effectively, concerning drug smuggling, money laundering and even murder plots.

I think from what we have read in the press it was used very openly. There were photos. There were very blunt messages about the sorts of criminal activities that were targeted as part of this operation. Drugs, weapons, luxury vehicles and cash were seized in the operation, which was conducted across more than a dozen countries, I think. It included a staggering eight tonnes of cocaine, 250 guns and more than $48 million in various worldwide currencies and cryptocurrencies.

In South Australia 40 people have been arrested, I think, to date as part of a national sting codenamed Operation Ironside, the largest number of arrests for organised crime in one day in the state's history, according to SAPOL. SAPOL's Assistant Commissioner Peter Harvey said 460 police searched 80 premises, mostly in connection with the Comanchero outlaw motorcycle gang. The accused were charged with offences including conspiracy to murder, drug trafficking, firearms trafficking and possession and money laundering. Another 33 people had already been arrested since the underworld joint operation with the AFP began in February 2020, as I understand it.

Items seized during SAPOL's sting include $1.9 million in cash, luxury cars, boats, motorcycles, jewellery, wines, watches, accessories and guns. The drugs seized include 90 kilos of methamphetamine, 50 litres of fantasy, 350 kilos of cannabis and 10,000 ecstasy tablets. Police said that one of the industrial-level clandestine drug labs discovered as part of the sting had the potential to produce $25 million worth of methamphetamine a week. I do not need to tell anyone in here what $25 million worth of methamphetamine a week would do to our communities.

While most of the assets seized will be seen as criminal assets, given that they were acquired through criminal offending, some will be unexplained wealth and caught by the provisions of this bill, I presume. If those charged are convicted, it is easy to see that this will be a most unexpected but now potentially legislated windfall but, more importantly, as an aside, it means that these products are no longer available in the underworld and on the black market, so at least as far as those products are concerned they do not continue to pose a risk to vulnerable community members and indeed the community at large.

It is my understanding that the proceeds will be directed to the Victims of Crime Fund, but I am waiting for clarification from the minister on this, with some of the funds potentially to be distributed to the Justice Rehabilitation Fund. I will touch on that a little bit further shortly, but these operations, I think, also show how vital the information sharing provisions of this bill are and will be in the future. Sifting back for information obtained via the app will give police across the country the ability to share information about criminal activity and potentially the ability to act on crimes that have been unsolved until now.

We know crime is often electronically committed or at least electronically enabled or assisted these days, which in effect removes all the geographic boundaries that previously confined crime to one jurisdiction. It is important that we take the bigger view and deal with these criminals not just within Australia and not just within our own state boundaries. I think the police have shown very clearly that they need to be innovative and tech savvy these days to keep up with criminals and to keep ahead of them, which means operating effectively across all jurisdictions. There is no question that this bill goes towards that end. It acts as an enabler in terms of that approach.

Before closing, I will flag the discussion that I had with the minister's office during our briefing. I intend to seek some further clarification on the information that I have received regarding the Justice Rehabilitation Fund specifically. As some members in this place will recall, one of the purposes of that fund, which was negotiated in this place several years ago now—I think it was about five or six years ago—was to provide drug rehabilitation services, particularly to those who are incarcerated.

I do not need to remind members of the over-representation of individuals with drug and mental health issues in our detention setting. At first glance, though, it appears to me, based on the information that I have received—and I have only just received it today—that $200,000 of the $250,000 in the fund has already been committed to keeping victims who register with the domestic violence register aware of charges relating to perpetrators, to bail conditions, custody status, parole conditions, etc.

In addition, the funds are being allocated to the Supporting Parents' and Children's Emotions program—a program aimed at supporting young people who are pregnant or parenting and who perpetrate or experience domestic and family violence, with a specific focus on addressing the effects of violence on their children. These are obviously very important programs and services, but I note that they deal predominantly with victims, perhaps the first more than the second program that I alluded to.

I have not seen yet, based on what has been provided, the funding that has actually been targeted towards drug rehabilitation services, as was the intent when those provisions were passed by this parliament five or six years ago. That information is not in what has been provided to me. I do question why victim services were being funded via the Justice Rehabilitation Fund as opposed to the Victims of Crime Fund and how much of the total money in that fund has actually gone towards the drug rehabilitation services.

I might have this completely wrong, because again I am speaking from information that has only just been given to me, and I think it is important to note that that information exists, if you like, in what can only be described as a complicated legislative structure, which I also have before me. Notwithstanding any of that, we know that under the Criminal Assets Confiscation Act 2005 there is a requirement for prescribed drug offender confiscations to be divided in terms of where it will go.

There is no question that there is a proportion of that money that is supposed to go towards justice rehabilitation, to that fund, and there is also no question in my mind that the intent of this parliament was to ensure that money from that fund went towards drug rehabilitation services. I do not see that on the information provided and would seek further clarification from the minister in relation to that as we proceed through this debate. With those words, I indicate our support for the second reading of this bill.

The Hon. F. PANGALLO (16:16): As indicated by my colleague the Hon. Connie Bonaros, SA-Best is supporting this bill. It comes at the time—and the Attorney-General was well aware of this—that the Crime and Public Integrity Committee is looking closely at the Serious and Organised Crime (Control) Act and the Serious and Organised Crime (Unexplained Wealth) Act.

The reason for this bill, in taking a national approach to crack down on unexplained wealth arising from criminal activities, is that the state legislation has been so ineffective. The Northern Territory and the ACT have already moved in this national direction. Since 2009, there has not been one application prosecuted through our courts on an unexplained wealth order, and our law enforcement agencies have been reluctant to enforce the act because of procedural issues with establishing proof and the enormous costs involved in carrying out the investigations.

The way the act works—or has not worked—here is that it shifts the burden of proof to the respondent, who then must prove a legitimate source for their wealth, and the proceedings are instituted against that person rather than against the property. The one matter police did carry out was a six-year investigation into one person between 2013 and 2018. It cost SAPOL $2.4 million. When the hefty volume that ran into thousands of documents was provided to the office of the Crown Solicitor, it was found to be so complex and so many resources required—including the potential length of the trial, which was estimated to be 100 weeks for one FTE alone—that it was not in the public interest when compared to the prospect of a successful recovery.

So the law has never been used, although one saving grace was that police indicated that it did disrupt the activities of their target and the target's associates. Retired District Court judge David Smith conducted a review of the unexplained wealth act and the Serious and Organised Crime (Control) Act, and he recommended that South Australia should follow a national approach to recovery. He pointed out to the committee that, while the control act seemed to be effective in restricting the movement and association of organised crime gangs, there was no focus on how these individuals were making their seemingly buckets of money.

As we know, organised crime and money laundering in this country runs into the tens of billions of dollars. However, the state considered to have the most effective confiscation laws, New South Wales, collected just $15 million in one year. Mr Smith concluded that the reason for that was that New South Wales has the Australian Crime Commission working under its unexplained wealth act. The ACC has enormous coercive powers.

Mr Smith also pointed out the difficulty of police in various jurisdictions being able to get information on their targets from banks and the tax office because of privacy provisions, making the act in effect a civil one. Data collection and sharing would obviously change under this bill. Interestingly, Mr Smith said (and I will quote him from the Hansard transcript of his appearance on 12 May this year):

It is clear that the Australian Crime Commission, as it was then called, has very strong coercive powers and uses them. We need a body like that, a national body like that, and I think that would be the way to go forward for unexplained wealth.

I believe Mr Smith is of the view that Australia is calling out for a national crime-fighting body, much like the FBI and DEA agencies in the United States—a beefed up Australian crime commission that can work with law enforcement and regulatory agencies in all states.

The New South Wales model enables the use of coercive powers and the ability to require the person to answer questions about their wealth. Police Commissioner Stevens told the committee that you would be playing catch-up with unexplained wealth under the South Australian laws. As he told the committee last year:

You could use it and use it effectively against a lot of low-level people who aren't really your concern. The higher-level people will have all kinds of legal means of distancing themselves from their wealth. So it's not just a simple matter of asking questions with an investigation. Cross-examination quickly comes unstuck when they just say, 'Well, that's not mine; it's controlled by a corporate body which is the trustee for', and then on you go—and you've nothing in your armoury. So the reverse onus is not of the greatest assistance. The confiscation legislation has far greater potential.

Under this bill, assets seized would be distributed evenly between the states and the commonwealth. In closing, I point out that the Crime and Public Integrity Policy Committee is still awaiting a response from the Attorney-General for the large report canvassing this and other crime and integrity recommendations, which I filed in this place nearly eight months ago. With that, I indicate our support for the legislation.

The Hon. R.I. LUCAS (Treasurer) (16:23): I thank honourable members for their contributions to the second reading and for their indications of support for the bill.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. C. BONAROS: I would follow up with the questions that I asked during my second reading in relation to those funds from the Criminal Assets Confiscation Act and the Justice Rehabilitation Fund. I just point again to the advice that I received, which indicates the balance of the Justice Rehabilitation Fund as at 30 June this year is expected to be approximately $250,000.

However, $200,000 of this is committed to the expenditure below. That expenditure applies to keeping victims informed and the Supporting Parents' and Children's Emotions program, which, as I indicated, were victim-centric, if you like, in terms of what they deal with. My question is: how much of the funding from that fund has actually gone towards drug rehabilitation services for those incarcerated with drug offences?

The Hon. R.I. LUCAS: My understanding is the information the honourable member has been provided with is similar to the information that I have available to me here; that is, there is nothing specific in the allocations to which the honourable member refers, which is drug rehabilitation.

I am further advised, as I am sure the honourable member would be aware, the clause does not require funding for drug rehabilitation. It is a broad clause, which is at the absolute discretion of the Attorney-General. It does include the purposes for which the member has been provided information. It could include grants or allocations for the purposes to which the honourable member has referred, but on the basis of the advice I have, for 2020-21 and indeed for the proposal for 2021-22, there is nothing specific to the particular issue the honourable member has referred to.

If the honourable member was wanting the government to seek what funding is made available by health or other agencies for those particular purposes, we could follow that up, but I as I understand it that is not the question the honourable member is raising. The honourable member is raising how much of this particular pot of money is going to this particular purpose. My understanding of the advice I have is that there is nothing specific that is going to that particular purpose out of this particular fund at this particular stage.

The Hon. C. BONAROS: I am testing my memory here in terms of those provisions that did pass some five or six years ago in relation to the Justice Rehabilitation Fund and the funding of drug rehabilitation services.

The Hon. R.I. Lucas: Do you want me to read them?

The Hon. C. BONAROS: I will in a second. My next question specifically is: can we confirm that the funds that go into the Justice Rehabilitation Fund are coming from prescribed drug offender confiscations?

The Hon. R.I. LUCAS: In relation to the second question, that is the money that is paid into the fund is the source that the honourable member has indicated, which is money paid into the fund under subsection (4). It could also be any money appropriated by parliament for the purpose of the fund, any money paid into the fund at the direction or with the approval of the Attorney-General, any income from investment of money belonging to the fund, and any money paid into the fund under any other act. They are the broad provisions. The purposes for which it can be used are under subsection (5):

The Fund may be applied by the Attorney-General (without further appropriation than this subsection) in the absolute discretion of the Attorney-General as additional government funding for the provision of programs and facilities, for the benefit of offenders, victims and other persons, that will further prevent crime prevention and rehabilitation strategies.

So it is a very broad ambit. I am sure the honourable member will acknowledge that the list of purposes for which the fund is being used come within the ambit of subsection (4), but I acknowledge the particular purpose to which the honourable member has raised would also come within that particular ambit but at the absolute discretion of the Attorney-General. They are the decisions she has taken and is proposing to take.

The Hon. C. BONAROS: I just raise this point because, again, if I hark back to the debate that was had in here those years ago, there was an extensive debate on the issue of drug rehabilitation services and where that funding would come from. That was termed in the way that it was because it was anticipated that funds would come into that fund for this purpose. I am curious to know, of the balance of that fund, how much was actually directed into that fund by the Attorney-General from elsewhere, or was it purely from prescribed drug offender confiscations?

What I cannot see is a direct—and I know there does not have to be, but the point I am making is that there is no direct link, as I see it, necessarily between prescribed drug offender confiscations and the actual services that have been provided, albeit it is able to be done the way that the Treasurer has outlined.

The Hon. R.I. LUCAS: We do not have all the information but our understanding is that there is no other funding that has been allocated by the Attorney-General from other sources into the fund, so it is coming from the source the honourable member has indicated. Again, the provisions of subsection (5) do make it clear that the Attorney-General can use it for all of these purposes.

I am not privy to her decision-making process in relation to that but if I was in her position it may well be her view that there is considerable funding or sufficient funding being provided in that particular area by health or various other agencies of government in relation to drug rehabilitation services, and she has seen greater priority in terms of the purposes to which she has allocated the funding in 2020-2121 and 2021-22.

The Hon. C. BONAROS: Is the Treasurer able to provide a reason why those programs would be funded from this pool of money and not from the Victims of Crime Fund directly, given that we are again talking about, in both categories, victims of crime? I note that the second one also deals with perpetrators but the first one specifically relates to victims. Why is it funded from the Justice Rehabilitation Fund and not the Victims of Crime Fund?

The Hon. R.I. LUCAS: The frank answer is, no, I cannot. This provision makes it clear that it is at the absolute discretion of the Attorney-General. Broadly, the Victims of Crime Fund can fund a range of programs. Clearly, this particular fund can fund anything that comes within the ambit of subsection (5), and I think we both agree that the Attorney's decisions are consistent with subsection (5).

As to why this particular purpose has been selected by the Attorney-General, that is really a decision for the Attorney and she has, as I said, at her absolute discretion made those particular decisions. At some stage in the many meetings that the Hon. Ms Bonaros has with the Attorney-General over a variety of issues, she might like to inquire of the Attorney-General as to her decision-making processes in relation to this particular fund.

The Hon. C. BONAROS: I note these discussions are ones that I have had previously with the Attorney. In fact, I had a quick look at the debate from 2018, so they stretch back some time now. I suppose the only reason I make this point, and I think it is an important point to make, is that we have a Victims of Crime Fund which is, to all intents and purposes, a healthy fund, if you like, unfortunately.

Quite rightly, we expect that the funds from that be directed towards victims of crime. Overwhelmingly, that is the intent. But we know, at the same time, that the level of funding towards drug rehabilitation services in this jurisdiction, particularly in terms of those who are incarcerated, who overwhelmingly are likely to suffer from a drug addiction or mental health and drug addiction combined, is woefully inadequate.

The point that I am trying to make is that we have a Justice Rehabilitation Fund, the funds of which could go towards, and indeed were discussed in here as being earmarked to go towards, these sorts of programs, which would assist those in prison with drug rehabilitation services. But instead, we are using those funds towards other services when those funds could equally come from the Victims of Crime Fund, which without question would not be negatively impacted if the funds in question were coming from there.

I am just making the point. I will pursue those conversations further with the Attorney. I am just trying to make sense of the rationale, if you like. But I would also like to know—and perhaps this is something that has to come back to me between the houses—precisely what figure we are spending on drug rehabilitation services, specifically when it comes to those who are incarcerated.

The Hon. R.I. LUCAS: I do not know that I can offer much more clarity. I think the Hon. Ms Bonaros has summarised the issues well. It is a conversation she will obviously need to have with the Attorney-General in relation to her decision-making processes and I will leave that to the Hon. Ms Bonaros and the Attorney.

The Hon. C. BONAROS: This is my final question on this point: will we undertake to provide the figures based on drug rehabilitation services provided to those who are incarcerated?

The Hon. R.I. LUCAS: I will seek that information. I suspect that will be information we will need to seek through the Minister for Health or maybe corrections, or maybe both, and we will undertake to have me, on behalf of all of my colleagues, write you a letter summarising whatever it is that I have been able to gather from my colleagues, says he who looks at the Attorney's office. They will be responsible for coordinating that for me and I will correspond with the honourable member on behalf of the government.

Clause passed.

Remaining clauses (2 to 12), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. R.I. LUCAS (Treasurer) (16:40): I move:

That this bill be now read a third time.

Bill read a third time and passed.