Consideration in Detail

Mr HAYES (Fowler) (11:46): My question is also to the Minister for Justice. As the minister would be aware, I am the chair of the Parliamentary Joint Committee on Law Enforcement. Since 2009 the committee has been very interested in the application of unexplained wealth as a technique for targeting serious and organised crime. Unexplained wealth represents a relatively new form of criminal asset confiscation where serious and organised criminals who cannot account for their wealth could be held liable to forfeit it. The value of unexplained wealth provisions lies in its ability to undermine the business model of serious and organised crime. The effect is that it removes incentive for participation and puts in doubt the profits that could be otherwise recommitted into furthering other criminal endeavour.

Minister, my committee was very encouraged in 2009 after conducting an international review of unexplained wealth and made recommendations to the government which were agreed to. The Proceeds of Crime Act of 2002 was subsequently amended. But during the bill’s rather tortuous passage through the parliament it was so amended that the resulting piece of legislation providing for unexplained wealth became, in our opinion, seriously unworkable—unworkable certainly to the extent of law enforcement. With these provisions being established, which was very much at the vanguard of attacking serious and organised crime, not one prosecution has been mounted since the passage of this legislation. My committee has more recently conducted a review of the legislation, which I know you are aware of. For the purpose of these proceedings, I would like you to explain why you believe it is absolutely essential that we have national unexplained wealth laws and how you see that combating serious and organised crime.

Mr CLARE (Blaxland—Minister for Home Affairs, Minister for Justice and Minister for Defence Materiel) (11:44): I thank the member for Fowler for the question and for his excellent report. The work that he and his committee did in the area of unexplained wealth is very important, and if we can get the support of the states and territories for some of the recommendations in that report to create a national unexplained wealth regime then its impact will be very significant. It will mean that we will seize more money off criminals, which will mean more money in the Proceeds of Crime Fund, which ultimately means more money for the budget, which is a good thing. As the member rightly points out, in March his committee released its report into its inquiry into Commonwealth unexplained wealth legislation and arrangements. It recommended a national approach to unexplained wealth laws to make it more effective than the current regime. That ultimately would require the referral of powers from state and territory jurisdictions. By way of background, the federal government enacted its own unexplained wealth legislation in 2010. Some states and territories—WA, Northern Territory, New South Wales, Queensland and South Australia—also have unexplained wealth laws. As the committee’s report points out, there are significant differences and limitations in the way the state laws operate. There are also significant constitutional limitations on what the Commonwealth laws can achieve. They can only be used for offences against the Commonwealth. I agree—and I know that the Attorney-General agrees—that there are improvements that can be made in this area.

That is why we have written to the states and territories asking them to refer us the constitutional powers we need to enact the national unexplained wealth laws. We did that in April. In April we raised the issue with the attorneys general across the nation, and we are looking forward to receiving a positive response from the states and territories to this request.

The advice from law enforcement and the findings of the parliamentary committee that the member chaired are clear: strong national unexplained wealth laws are a powerful way of attacking organised crime. National laws will help the federal government and the states and territories. National laws would give organised crime nowhere to hide their assets. Why is this important? It is important, as the member knows, because organised crime is ultimately driven by money, and because it costs the Australian economy more than $15 billion a year. Take away their profits and it reduces the incentive to commit crime. Organised criminals are more afraid of having their wealth seized than they are of spending time in jail. That is why we need these powerful unexplained wealth laws.

Another reason for these new laws is that it makes it easier for law enforcement to seize the assets of criminals. It effectively reverses the onus of proof. It means that people have to prove their wealth was obtained through legitimate sources rather than law enforcement being forced to prove that it was not. Over the past two years we have more than doubled the value of the assets seized, from about $18 million to more than $40 million. So far this year we have almost doubled it again, seizing $75 million. We are taking mansions, Lamborghinis, Ferraris, yachts and so forth, which takes away the incentive for criminals to commit crimes. Just like in the story of Al Capone, you can catch criminals by following the money.

The national laws that the member is talking about will help the federal government and all states and territories to crack down on serious organised crime. It means the Mr Bigs have to prove their wealth was obtained legally, which makes it easier to confiscate their assets. This makes it one of the most effective ways to tackle organised crime. That is why we will be pursuing this issue with the states and territories with a view to creating national laws. To tackle organised crime we have to hit criminals on the street and at the border, but we also have to do it at the hip pocket. These new laws will help to hit criminals where it really hurts—in their hip pocket.