Chapter 2
Concluded matters
2.1
This chapter considers the responses of legislation proponents to
matters raised previously by the committee. The committee has concluded its
examination of these matters on the basis of the responses received.
2.2
Correspondence relating to these matters is included at Appendix 1.
Social Security Legislation Amendment (Debit Card Trial) Bill 2015
Portfolio:
Social Services
Introduced: House
of Representatives, 19 August 2015
Purpose
2.3
The Social Security Legislation Amendment (Debit Card Trial) Bill 2015
(the bill) seeks to amend the Social Security (Administration) Act 1999,
and make consequential amendments to a number of other Acts, to provide for the
trial of cashless welfare arrangements.
2.4
The bill would enable a legislative instrument to be made which would
prescribe locations, or locations and classes of persons, in three discrete
trial areas which would trial 'cashless welfare arrangements'. This would mean
that persons on working age welfare payments in the specified locations would
have 80 per cent of their income support restricted, so that the restricted
portion could not be used to purchase alcoholic beverages or to conduct
gambling.
2.5
Measures raising human rights concerns or issues are set out below.
Background
2.6
The committee previously considered the bill in its Twenty‑seventh
Report of the 44th Parliament (previous report) and requested
further information from the Assistant Minister to the Prime Minister as to the
compatibility of the bill with the right to a private life, right to equality
and non-discrimination, right to social security and right to privacy.[1]
2.7
The bill passed both Houses of Parliament on 14 October 2015 before a
response was received from the Assistant Minister, and achieved Royal Assent on
12 November 2015.
Restrictions on how social security payments are spent
2.8
As set out above, the bill provides the legislative basis on which a
trial could be conducted whereby 80 per cent of a person's social security
would be placed in a restricted bank account. A person subject to the trial
would not be able to access their social security payments in cash; rather
their social security payments would be provided on a debit card that could not
be used to purchase alcoholic beverages or gambling. This would be achieved by
ensuring the debit card could not be used at excluded businesses.
2.9
It is not clear what businesses will be excluded businesses, for which
any money linked to a welfare restricted bank account will not be able to be
spent. This is because the bill leaves much of the detail as to how the trial
will work to be dealt with in a future legislative instrument.[2]
Little detail is provided in the explanatory memorandum or the statement of
compatibility.
2.10
The statement of compatibility does explain that the trial is in
response to a recommendation from Mr Andrew Forrest's Review of Indigenous Jobs
and Training.[3]
In this review, Mr Forrest recommended that specific retailers would be
excluded, such as bottle shops, and that retailers who sell a mixed range of
goods may be able to prohibit certain purchases at the point of sale.[4]
2.11
The bill also leaves to a legislative instrument the locations that will
be the subject of the trial and the class of person who would be subject to the
trial.
2.12
The restriction on how a person can spend their social security payments
engages and limits the right to a private life. It may also engage and limit
the right to equality and non-discrimination, as the measures may impact
disproportionately on particular persons. In relation to these two rights, it
also engages and may limit the right to social security.
Right to a private life
2.13
Article 17 of the International Covenant on Civil and Political Rights
(ICCPR) prohibits arbitrary or unlawful interferences with an individual's
privacy, family, correspondence or home.
2.14
Privacy is linked to notions of personal autonomy and human dignity: it
includes the idea that individuals should have an area of autonomous
development; a 'private sphere' free from government intervention and excessive
unsolicited intervention by others. The right to privacy requires that the
state does not arbitrarily interfere with a person's private and home life.
2.15
However, this right may be subject to permissible limitations which are
provided by law and are not arbitrary. In order for limitations not to be
arbitrary, they must seek to achieve a legitimate objective and be reasonable,
necessary and proportionate to achieving that objective.
Compatibility of the measure with
the right to a private life
2.16
The statement of compatibility does not acknowledge that the bill
engages the right to a private life and therefore provides no justification as
to any limit on this right.
2.17
Restricting how a person can access, and where they can spend, their
social security benefits, interferes with the person's right to personal
autonomy and therefore their right to a private life. In addition, being able
to only access 20 per cent of welfare payments in cash could have serious
restrictions on what a person is able to do in their private life. There are
many instances where a person would only be able to use cash to purchase goods
or services, such as at markets.
2.18
The committee considers that reducing immediate hardship and
deprivation, reducing violence and harm, encouraging socially responsible behaviour,
and reducing the likelihood that welfare recipients will be subject to
harassment and abuse in relation to their welfare payments, is a legitimate
objective for the purposes of international human rights law. However, in
addition to a measure having a legitimate objective, it is necessary to
demonstrate that the measure is rationally connected to that objective.
2.19
The committee notes that the measure, in quarantining a person's welfare
payments and restricting where that quarantined payment can be spent, is very
similar to the existing program of income management.
2.20
As the committee has previously noted in relation to income management,
the government has not clearly demonstrated that the measure has had the
beneficial effects that were hoped for.[5]
Indeed, the most recent government‑commissioned evaluation of income
management in the Northern Territory has concluded that income management has
been of mixed success. In particular, it found no evidence income management
has achieved its intended outcomes.[6]
2.21
Given the similarities between income management and this proposed trial
of cashless welfare arrangements, and the apparent failure of income management
to achieve its intended outcomes, it is incumbent on the legislation proponent
to explain how the measures are likely to be effective (that is, rationally
connected) to the stated objective.
2.22
In addition, it is necessary for the legislation proponent to explain
how the measure is proportionate to its stated objective.
2.23
The committee therefore sought the advice of the Minister for Social
Services as to whether there is a rational connection between the limitation
and that objective, in particular, whether there is evidence to indicate that
restricting welfare payments in this way is likely to be effective in achieving
the stated aims of reducing hardship, deprivation, violence and harm,
encouraging socially responsible behaviour and reducing the likelihood of
harassment and abuse; and whether the limitation is a reasonable and
proportionate measure for the achievement of that objective, including that
there are appropriate safeguards in place, including monitoring and access to
review.
Assistant Minister's response
1. Question - Whether there is a rational connection
between the limitation and the objective of the Bill, in particular, whether
there is evidence to indicate that restricting welfare payments in this way is
likely to be effective in achieving the stated aims of reducing hardship,
deprivation, violence and harm, encouraging socially responsible behavior and
reducing the likelihood of harassment and abuse.
Government response
In asking this question, the committee has noted that
restricting how a person can access and spend their social security benefits
interferes with a person's right to a private life.[7]
As noted in the statement of compatibility of human rights
accompanying this Bill, the Social Security Legislation Amendment (Debit
Card Trial) Bill 2015 seeks to achieve:
the legitimate
objective of reducing immediate hardship and deprivation, reducing violence
and harm, encouraging socially responsible behavior, and reducing the
likelihood that welfare payment recipients will be subject to
harassment and abuse in relation to their welfare payments.[8]
Excessive alcohol consumption, drug use and gambling is
harmful and costly to the broader community, causing health problems, high
crime rates, domestic and community violence, family breakdown and social
dysfunction.
Alcohol related harm results in 3,000 deaths and 65,000
hospitalisations every year in Australia. The total cost of alcohol related
problems is estimated to be between $15 and $31 billion per year in Australia.[9]
Problem gambling is associated with a range of health, social
and economic problems.
Problem gambling costs the Australian community an estimated
$4.7 billion per year, and individuals with gambling problems lose on
average $21,000 per year- a third of the average Australian salary.[10]
As part of the trial, 80 per cent of payments received by
people on a working age welfare payment such as Newstart Allowance, will be
placed in a cashless bank account. A person will not be able to use the debit
card linked to the restricted account to access cash or purchase gambling
products/services, alcohol or illegal drugs.
As the Bill seeks to limit the amount of cash available to
individuals which can be spent on gambling, alcohol and illegal drugs, there is
a rational connection between the legitimate objective the Bill seeks to
achieve, and any limitation on an individual's right to a private life.
The committee has noted that 'given the similarities between
income management and this proposed trial of cashless welfare arrangements, it
is incumbent on the legislation proponent to explain how the measures are
likely to be effective (that is, rationally connected) to the stated
objective.'[11]
The trial of cashless welfare arrangement seeks to test
different policy parameters and delivery arrangements from the current income
management programme. Unlike income management, where most participants only
have 50% of funds income managed, trial participants will have 80% of their
payments directed to a cashless account. This clearly distinguishes the trial
from income management. Indeed, the purpose of the trial is to test whether a
reducing the amount of money available to be spent on alcohol and gambling is
effective in reducing violence and harm in trial areas (see objects at s124).
Although the trial is different to income management,
parallels can drawn between the programmes to the extent that they both seek to
restrict how a person can spend their social security benefits. The existing
income management legislation sets out restrictions around how individuals are
able to use income management funds. Similarly, the trial legislation prohibits
trial participants from spending their restricted funds on alcohol and gambling
products. Under the trial, participants will have more freedom in how they
spend their money, as the debit card associated with the restricted account
will be accepted at all merchants, except those selling alcohol and gambling
products. Additionally, restricted funds will not have to be spent on priority
needs, as is required under income management. Rather, trial participants will
be able to choose how their money is spent, as long as it is not spent on
alcohol and gambling. Formal evaluations of income management have shown that
the programme has reduced expenditure on alcohol for many individuals in many
circumstances. In addition, significant reductions in alcohol consumption have
been self-reported by many participants and observed by case workers.[12]
The trial will involve the application of income support restrictions on a
larger proportion of individuals within the community, so community level data
will be more relevant for analysis. However, any perceived and real effects of
the programme at an individual level will still be analysed, and no conclusions
about the effectiveness of the trial will be reached without appropriate
consideration of the limitations of data sets and other potential contributing
factors.
2. Question - Whether the limitation is a reasonable and
proportionate measure for the achievement of that objective, including that
there are appropriate safeguards in place, including monitoring and access to
review.
Government response
The trial will take place in two or three locations where
there are high levels of welfare dependence, where gambling, alcohol and
illegal drug abuse are causing unacceptable levels of harm, and there is an
openness to participate from within the community. The trial is a reasonable
and proportionate response to address these social issues.
Ceduna was the first location announced for the trial.
Community leaders from the town approached the government and requested that
Ceduna be considered as a trial location.
After significant consultation that included visits to each
community by government, public meetings that carried formal resolutions to
support the card from community and a willingness to participate from the
Ceduna District Council, the government signed an MoU with the community to
proceed with a trial in Ceduna subject to passage of the legislation.
The government is also in advanced discussions with the with
leaders of the East Kimberley after several community leaders approached the
government requesting that the East Kimberley be considered as a trial location
The committee has queried whether there are effective
safeguards or controls over the measure. The trial of cashless welfare
arrangements will be subject to an independent, comprehensive evaluation which
will consider the impacts of limiting the amount of welfare funds that may
contribute to community level harm. The evaluation will use both quantitative
and qualitative information to explore perceived and measurable social change
in trial communities.
Section 124(1) of the legislation is a sunset clause,
specifying the trial will commence on 1 February 2016 and end on 30 June 2018.
The policy intention is that the trial will only run for 12 months in each
location. Indeed, funding has only been appropriated for 12 months, reinforcing
that this is a trial. The sunset clause acts as an appropriate and effective
safeguard, as Parliament must amend the legislation to continue the trial
beyond 2018.[13]
Committee response
2.24
The committee thanks the Assistant Minister to the Prime Minister for
his response. The committee reiterates its previous analysis that the
stated objective of the bill, in seeking to reduce hardship, is a legitimate
objective for the purposes of international human rights law. The committee
notes, in particular, the importance of reducing alcohol-related harm.
2.25
The committee notes the assistant minister's advice that, in seeking to
limit the amount of cash available that could be spent on gambling, alcohol and
illegal drugs, there is a rational connection with the objective of the bill.
In particular the committee notes that the purpose of the trial is to test
whether reducing the amount of money available to be spent is effective in
reducing violence and harm in the trial sites. Evaluations of income management
have concluded that income management has been of mixed success and has not
achieved its intended outcomes. However, the committee notes the assistant
minister's advice that this trial is intended to be different from that of
income management, and on this basis the committee makes no conclusion at this
stage as to whether the limitation on the right to privacy is rationally
connected to the stated legitimate objective.
2.26
In considering whether the limitation on the right to a private life may
be proportionate, the committee notes the assistant minister's advice that the
trial will be subject to an independent, comprehensive evaluation (though
noting there is nothing in the bill that would require this evaluation to be
undertaken). The committee also notes the assistant minister's advice that the
bill contains a sunset clause specifying the trial is time-limited and will end
by 30 June 2018, with a policy intention that the trial will run for 12 months
in each location. In addition, the committee notes that the bill does allow a
community body to vary the amount of money restricted (from 80 per cent to a
minimum of 50 per cent) in individual circumstances.
2.27
The committee is currently undertaking an evaluation of the human
rights compatibility of income management as part of its Review of Stronger
Futures in the Northern Territory Act 2012 and related legislation, which
it intends to report on shortly. As the human rights issues raised by the trial
are similar to those of income management, the committee intends to finalise
its consideration of the compatibility of the bill with human rights when it
publishes its final report on the Stronger Futures measures.
Right to equality and non-discrimination
2.28
The right to equality and non-discrimination is protected by articles 2,
16 and 26 of the ICCPR and article 2 of the International Covenant on Economic,
Social and Cultural Rights (ICESCR).
2.29
This is a fundamental human right that is essential to the protection
and respect of all human rights. It provides that everyone is entitled to enjoy
their rights without discrimination of any kind, and that all people are equal
before the law and entitled without discrimination to the equal and
non-discriminatory protection of the law.
2.30
The ICCPR defines 'discrimination' as a distinction based on a personal
attribute (for example, race, sex or religion), which has either the purpose
(called 'direct' discrimination), or the effect (called 'indirect'
discrimination), of adversely affecting human rights. The UN Human Rights
Committee has explained indirect discrimination as 'a rule or measure that is
neutral on its face or without intent to discriminate', which exclusively or
disproportionately affects people with a particular personal attribute.
2.31
Articles 1, 2, 4 and 5 of the Convention on the Elimination of All Forms
of Racial Discrimination (CERD) further describes the content of these rights
and the specific elements that state parties are required to take into account
to ensure the elimination of discrimination on the basis of race, colour,
descent, national or ethnic origin.
2.32
Articles 2, 3, 4 and 15 of the Convention on the Elimination of All
Forms of Discrimination against Women (CEDAW) further describes the content of
these rights, describing the specific elements that state parties are required
to take into account to ensure the rights to equality for women.
2.33
The Convention on the Rights of Persons with Disabilities (CRPD) further
describes the content of these rights, describing the specific elements that state
parties are required to take into account to ensure the right to equality
before the law for people with disabilities, on an equal basis with others.
Right to social security
2.34
The right to social security is protected by article 9 of the ICESCR.
This right recognises the importance of adequate social benefits in reducing
the effects of poverty and plays an important role in realising many other
economic, social and cultural rights, particularly the right to an adequate
standard of living and the right to health.
2.35
Access to social security is required when a person has no other income
and has insufficient means to support themselves and their dependents.
Enjoyment of the right requires that sustainable social support schemes are:
-
available to people in need;
-
adequate to support an adequate standard of living and health
care;
-
accessible (providing universal coverage without discrimination
and qualifying and withdrawal conditions that are lawful, reasonable,
proportionate and transparent); and
-
affordable (where contributions are required).
2.36
Under article 2(1) of ICESCR, Australia has certain obligations in
relation to the right to social security. These include:
-
the immediate obligation to satisfy certain minimum aspects of
the right;
-
the obligation not to unjustifiably take any backwards steps that
might affect the right;
-
the obligation to ensure the right is made available in a
non-discriminatory way; and
-
the obligation to take reasonable measures within its available
resources to progressively secure broader enjoyment of the right.
2.37
Specific situations which are recognised as engaging a person's right to
social security, include health care and sickness; old age; unemployment and
workplace injury; family and child support; paid maternity leave; and
disability support.
Compatibility of the measure with
the right to equality and non-discrimination and the right to social security
2.38
The statement of compatibility states that the cashless welfare
arrangements trial will not be applied on the basis of race or cultural
factors. The statement of compatibility makes no reference to whether the
measure may impact disproportionately on women or people with a disability.
2.39
Where a measure impacts on particular groups disproportionately, it
establishes prima facie that there may be indirect discrimination. However,
under international human rights law such a disproportionate effect may be
justifiable.
2.40
It is difficult to say whether this measure will have a disproportionate
impact on people of a particular race as the locations for the trial are not
set out in the bill but are to be established by a legislative instrument.
However, as the statement of compatibility acknowledges, these amendments are
in response to a key recommendation made by Mr Andrew Forrest's Review of
Indigenous Jobs and Training. This review examined options to help 'end the
disparity between Indigenous Australians and other Australians'.[14]
2.41
It is also difficult to know whether the measure will disproportionately
impact on women and people with a disability, though statistically overall,
women and persons with a disability are more likely to be receiving social
security payments.
2.42
The committee therefore also sought the Minister for Social Services'
advice on the questions set out at paragraph [2.23] regarding the right to
social security and the right to equality and non-discrimination.
Assistant Minister's response
3. Question - Whether there is a rational connection
between the limitation and the objective of the Bill, in particular, whether
there is evidence to indicate that restricting welfare payments in this way is
likely to be effective in achieving the stated aims of reducing hardship,
deprivation, violence and harm, encouraging socially responsible behavior and
reducing the likelihood of harassment and abuse.
Government response
The committee has highlighted that while a measure may be
neutral on its face, in practice it may have a disproportionate impact on
groups of people with a particular attribute. The committee has noted that it
is unclear whether this measure will have a disproportionate impact on people
of a particular race, on women and on people with a disability, and that if
this is the case, the measure will limit the right to social security and the
right to equality and non-discrimination.[15]
As noted in regards to the right to a private life, the Bill
seeks to achieve:
the legitimate
objective of reducing immediate hardship and deprivation,
reducing violence and harm, encouraging socially responsible behavior, and
reducing the likelihood that welfare payment recipients will be
subject to harassment and abuse in relation to their welfare
payments.[16]
The debit card will not reduce the amount of income support
payments a recipient receives.
The trial participants will be able to use their debit card
at any EFTPOS terminal to purchase anything they would like, except alcohol and
gambling products. Cash cannot be withdrawn using the card.
Participants will still be able to use their existing bank
account for the cash component of their payment.
Should participants require more cash because they find the
card restrictive, they will be able to apply to an authority to reduce the
cashless component of the debit card.
The committee has acknowledged that the locations for the
trial will not be chosen on the basis of race or cultural factors. Rather, as
outlined in the statement of compatibility, they will be chosen on the basis of
non-race based objective criteria, 'such as high levels of welfare dependence
and community harm, as well as the outcomes of comprehensive consultation with
prospective communities.'[17]
These criteria clearly relate to the legitimate objective of the Bill. There is
therefore a rational connection between any limitation on the right to social
security and the right to equality and non-discrimination and the objective of
the Bill.
Evidence of the effectiveness of the measure has been
provided in terms of the right to a private life.
4. Question - Whether the limitation is a reasonable and
proportionate measure for the achievement of that objective, including that
there are appropriate safeguards in place, including monitoring and access to
review.
Government response
At this stage, the only confirmed trial location is Ceduna.
Community consultation remains ongoing with the East Kimberley. The committee
has noted that a high proportion of the population in Ceduna and the East
Kimberley are Indigenous and it 'therefore appears likely that the measures may
disproportionately impact on Indigenous persons, and as such may be indirectly
discriminatory unless this disproportionate effect is demonstrated to be
justifiable.'[18]
In the Ceduna trial site, Indigenous people make up 72% of
the total income support payment population who will become trial participants.
Women make up 53% and participants receiving the disability support pension
make up 24%.[19]
In the possible East Kimberley trial site Indigenous people
make up 91 % of the total income support payment population who will become
trial participants. Women make up 56% and participants receiving the disability
support pension make up 29%.[20]
In Ceduna there is clear evidence of the harm caused by
alcohol in the community. The deaths of six Indigenous people related to
alcohol abuse and sleeping rough were the subject of a coronial inquest in
2011. In March 2013, the Ceduna Sobering Up Unit had 89.7% occupancy, there
were breath alcohol readings of 0.40 which is as high as the machine measures,
as well as many readings in the 0.30 to 0.40 range.[21]
In a submission to the Senate Standing Committee on Community
Affairs, the mayor of Ceduna, Alan Suter, provided an unsigned affidavit
stating that in his role, he has participated in various initiatives to assist
with the problems caused by alcohol abuse in Ceduna. Mr Suter stated that the
most effective attempt 'was a restriction of sales.... [which] reduced the
availability of take away alcohol and helped considerably until it was
withdrawn by the licensees.'[22]
In light of this evidence, any limitation on the right to
social security and right to equality and non-discrimination is reasonable and
proportionate. As noted above in relation to the right to a private life, the
trial will be subject to an independent, comprehensive evaluation. The
evaluation will act as a safeguard, by testing whether the measures implemented
are effective.[23]
Committee response
2.43
The committee thanks the Assistant Minister to the Prime Minister
for his response. The committee notes the assistant minister's advice that
women in the proposed trial sites make up roughly half of those who would be
subject to the trial, and persons with a disability make up around one-third to
one-quarter. This roughly equates to the percentage of persons with these
attributes who receive income support.[24]
On this basis the committee is of the view that the measures are unlikely to
disproportionately impact on women or persons with a disability.
2.44
However, the committee notes the assistant minister's advice that in the
selected trial site of Ceduna, 72 per cent of people who will be subject to the
trial are Indigenous, and in the proposed trial site of East Kimberley, 91 per
cent of potential participants are Indigenous.
2.45
The committee accepts that the bill does not constitute direct
discrimination on the basis of race as it is clear that the trial sites, and
its participants, are chosen on the basis of high rates of disadvantage rather
than on the basis of race. However, as the committee outlined previously, while
the bill does not directly discriminate on the basis of race, indirect
discrimination may occur when a measure which is neutral on its surface has a
disproportionate impact on groups of people with a particular attribute, such
as race. Where a measure impacts on particular groups disproportionately, it
establishes prima facie, that there may be indirect discrimination.
2.46
In this case it seems clear, based on the statistics as to how many
likely trial participants are Indigenous, that Indigenous people will be
disproportionately affected by this measure. However, under international human
rights law such a disproportionate impact may be justifiable if it can be
demonstrated that it seeks to pursue a legitimate objective, is rationally
connected to that objective and is proportionate. The committee notes that this
test is largely the same as that examined in relation to the right to a private
life. While the committee accepts that the bill seeks to achieve a legitimate
objective for the purposes of international human rights law, the committee has
concerns over whether the limitation on rights is rationally connected and
proportionate to that objective.
2.47
The committee is currently undertaking an evaluation of the human
rights compatibility of income management as part of its Review of Stronger
Futures in the Northern Territory Act 2012 and related legislation, which
it intends to report on shortly. As the human rights issues raised by the trial
are similar to those of income management, in particular in relation to
indirect discrimination on the basis of race and the right to social security, the
committee intends to finalise its consideration of the compatibility of the
bill with human rights when it publishes its final report on the Stronger
Futures measures.
Disclosure of information
2.48
The bill also seeks to introduce two new provisions which would allow
the disclosure of information about a person involved in the trial if the information
is relevant to the operation of the trial.
2.49
Proposed new sections 124PN and 124PO would allow an officer or employee
of a financial institution, and a member, officer or employee of a community
body (as specified in a legislative instrument), to disclose such information
about a person to the Secretary of the relevant Commonwealth department. This
is stated to operate despite any law in force in a state or territory.
2.50
In addition, if such information is disclosed, the bill would also
enable the Secretary to disclose any information about the person to a member,
officer or employee of a financial institution or community body for the
purposes of the performance of their functions or duties or the exercise of
their powers.
2.51
Disclosing personal information engages and limits the right to privacy.
Right to privacy
2.52
As noted above at paragraph [2.13] to [2.15], article 17 of the ICCPR
prohibits arbitrary or unlawful interferences with an individual's privacy,
family, correspondence or home. This includes respect for informational
privacy, including:
- ·
the right to respect for private and confidential information,
particularly the storing, use and sharing of such information; and
- ·
the right to control the dissemination of information about one's
private life.
Compatibility of the measure with
the right to privacy
2.53
The statement of compatibility does not acknowledge that the bill
engages the right to privacy and therefore provides no justification as to any
limit on this right. However, disclosing personal information clearly engages
and limits the right to privacy. Any such limitation must be justified in order
to be compatible with human rights.
2.54
Of particular concern is that these disclosure powers apply despite any
law in force in a state or territory, which would include laws regulating
privacy.
2.55
As noted above at paragraph [2.16], the committee's usual expectation
where a measure may limit a human right is that the accompanying statement of
compatibility explain how the measure supports a legitimate objective and how
it is rationally connected to, and a proportionate way to achieve, its
legitimate objective.
2.56
The committee therefore sought the advice of the Minister for Social
Services as to whether the proposed changes are aimed at achieving a legitimate
objective; whether there is a rational connection between the limitation and
that objective; and whether the limitation is a reasonable and proportionate
measure for the achievement of that objective.
Assistant Minister's response
Question - Whether the proposed changes are aimed at
achieving a legitimate objective.
Government response
Sections 124PN and PO seek to achieve a legitimate objective
and are necessary for the trial to operate effectively and to be evaluated. In
order to establish bank accounts for trial participants, the Department of
Human Services (OHS) will need to transfer customer information to the
financial institution. The financial institution will then need to provide new
account details back to OHS. While the trial is operating, the financial
institution will need to transfer information about participants (its
customers) to the Department of Social Services (DSS). DSS will use this
information to evaluate the trial.
The purpose of establishing community boards is to test
whether involving the community assists with decreasing violence and harm in
trial areas. Community bodies will also have the power to vary the percentage
of funds that a person has restricted, subject to that person's agreement
(s124PK). To allow this provision to operate, community bodies will need to be
able to confirm with OHS what percentage of funds a person has restricted, and
will need to be able to advise OHS to change that percentage.
6. Question - Whether there is a rational connection
between the limitation and that objective.
Government response
There is a clear, rational connection between sections 124PN
and PO and the objectives they are trying to achieve. In the absence of these
sections, information could not be shared between Government and the financial
institution/community body, and the trial could not be implemented.
7. Question - Whether the limitation is a reasonable and
proportionate measure for the achievement of that objective.
Government response
Sections 124PN and PO do not provide a blanket exemption from
privacy laws for Government/the financial institution/the community body - they
simply allow the sharing of information that is necessary for the trial to be
implemented and evaluated. This means there are still safeguards in place to
protect individual privacy. Government and the financial institution will still
be required act in accordance with privacy laws, more generally, and the
Australian Privacy Principles (APPs). The APPs set out strict rules around how
personal information can be used. For example, they prohibit the disclosure of
personal information for direct marketing. Notably, Government will not be able
to see what people are buying with their welfare money.[25]
Committee response
2.57
The committee thanks the Assistant Minister to the Prime Minister for
his response. In particular, the committee notes the assistant minister's
advice as to why it is necessary to enable the information to be shared, namely
to facilitate the conduct of the trial, and consider, as noted above, this is
likely to be considered a legitimate objective for the purposes of
international human rights law. The committee also notes the assistant minister's
advice that privacy laws will continue to apply to the financial institutions
and the department.
2.58
Accordingly, the committee considers that the new disclosure of
information powers are likely to be compatible with the right to privacy.
Crimes Legislation (Consequential Amendments)
Regulation 2015 [F2015L00787]
Portfolio:
Justice
Authorising
legislation: Australian Crime Commission Act 2002; Crimes Act 1914;
Crimes Legislation (Serious and Organised Crime) Act 2010; Financial
Transaction Reports Act 1988; Law Enforcement Integrity Commissioner Act
2006; and Proceeds of Crime Act 2002
Last day to
disallow: 8 September 2015 (Senate)
Purpose
2.59
The Crimes Legislation (Consequential Amendments) Regulation 2015 (the
regulation) makes amendments to a range of Commonwealth instruments that
support Australian criminal justice arrangements. In particular, the
regulation:
-
makes amendments to a number of instruments to reflect the new
name of the Queensland Crime and Misconduct Commission;
-
amends the Proceeds of Crime Regulations 2002 to update
references to state and territory proceeds of crime laws and update the list of
offences that are considered 'serious offences' for the purposes of the Proceeds
of Crime Act 2002 (POC Act); and
-
makes technical amendments to remove redundant references.
2.60
Measures raising human rights concerns or issues are set out below.
Background
2.61
The committee previously considered the regulation in its Twenty‑sixth
Report of the 44th Parliament (previous report) and requested
further information from the Minister for Justice as to the compatibility of
the regulation with the right to a fair trial and right to a fair hearing.[26]
List of 'serious offences' under the Proceeds of Crime Act
2.62
Under the POC Act various actions can be taken in relation to the
restraint, freezing or forfeiture of property which may have been obtained as a
result, or used in the commission, of specified offences, including a 'serious
offence'. The term 'serious offence' is defined in the Act as including 'an
indictable offence specified in the regulations'.
2.63
The regulation amends regulation 9 of the Proceeds of Crime
Regulations 2002 to expand the type of indictable offences that will be
considered as a 'serious offence' under the POC Act. This will include new
offences relating to slavery-like practices, trafficking in persons and child
sexual abuse material, and infringement of copyright.
2.64
The committee considered in its previous report that the measures, in
expanding the application of the POC Act to apply to a new range of offences,
engage and may limit the right to a fair trial and fair hearing.
Right to a fair trial and right to
a fair hearing
2.65
The right to a fair trial and fair hearing is protected by article 14 of
the International Covenant on Civil and Political Rights (ICCPR). The right
applies to both criminal and civil proceedings, to cases before both courts and
tribunals. The right is concerned with procedural fairness, and encompasses
notions of equality in proceedings, the right to a public hearing and the
requirement that hearings are conducted by an independent and impartial body.
2.66
Specific guarantees of the right to a fair trial in the determination of
a criminal charge guaranteed by article 14(1) are set out in article 14(2) to
(7). These include the presumption of innocence (article 14(2)) and minimum
guarantees in criminal proceedings, such as the right not to incriminate
oneself (article 14(3)(g)) and a guarantee against retrospective criminal laws
(article 15(1)).
Compatibility of the measure with
the right to a fair trial and right to a fair hearing
2.67
The statement of compatibility for the regulation states that
proceedings under the POC Act do not engage the fair trial rights in article 14
of the ICCPR.[27]
2.68
However, as set out in the committee's Guidance Note 2, even if a
penalty is classified as civil or administrative under domestic law it may
nevertheless be considered 'criminal' under international human rights law.
2.69
The committee has previously raised concerns that parts of the POC Act
may involve the determination of a criminal charge.[28]
The POC Act enables a person's property to be frozen, restrained or forfeited
either where a person has been convicted or where there are reasonable grounds
to suspect a person has committed a serious offence. As assets may be frozen,
restrained or forfeited without a finding of criminal guilt beyond reasonable
doubt, the POC Act limits the right to be presumed innocent, which is guaranteed
by article 14(2) of the ICCPR.
2.70
The forfeiture of property of a person who has already been sentenced
for an offence may also raise concerns regarding the imposition of double
punishment, contrary to article 14(7) of the ICCPR.
2.71
As the statement of compatibility does not acknowledge that the right to
a fair trial is engaged and limited, no justification is provided for this
limitation.
2.72
Because the POC Act engages and may limit the right to a fair trial and
right to a fair hearing (see above), it is therefore necessary to assess
whether expanding its application to the new offences is justifiable under
international human rights law.
2.73
The committee previously considered that a legitimate objective had been
set out for the expansion of the POC Act in regards to the creation of new
offences relating to slavery-like practices, trafficking in persons and child
sexual abuse material, but not to new offences relating to copyright
infringement.
2.74
The committee also considered that in assessing the proportionality of
the regulation against the right to a fair trial and fair hearing, it is also
relevant as to whether the POC Act itself sets out sufficient safeguards to
protect this right.
2.75
The committee therefore sought the advice of the Minister for Justice as
to whether there is reasoning or evidence that establishes that the stated
objective addresses a pressing or substantial concern or whether the proposed
changes are otherwise aimed at achieving a legitimate objective; whether there
is a rational connection between the limitation and that objective; and whether
the limitation is a reasonable and proportionate measure for the achievement of
that objective.
Minister's response
Article 14 of the ICCPR provides two separate sets of
obligations. Article 14(1) provides for the right to 'a fair and public hearing
by a competent, independent and impartial tribunal established by law', both in
the cases of a 'criminal charge' and the determination of one's rights and
obligations in 'a suit at law'. Article 14(2) to (7) then provide the minimum
guarantees which apply to criminal proceedings only.
When considering the content of fair trial and fair hearing
obligations to which the committee refers, it is important to consider whether
a matter is either a criminal charge or a 'suit at law'. This establishes
whether one or both sets of rights under article 14 apply.
I note that the committee has stated that:
'even if a penalty is
classified as civil or administrative under domestic law it may nevertheless be
considered 'criminal ' under international human rights law. A provision that
is considered 'criminal' under international human rights law will engage
criminal process rights under articles 14 and 15 of the International Covenant
on Civil and Political Rights (ICCPR), such as the right to be presumed
innocent'.
In General Comment 32, the United Nations Human Rights
Committee set out its views in relation to article 14(1) of the ICCPR. It
stated:
The right to a fair and public
hearing by a competent, independent and impartial tribunal established by law
is guaranteed, according to the second sentence of article 14, paragraph 1, in
cases regarding the determination of criminal charges against individuals or of
their rights and obligations in a suit at law. Criminal charges relate in
principle to acts declared to be punishable under domestic criminal law. The
notion may also extend to acts that are criminal in nature with sanctions that,
regardless of their qualification in domestic law, must be regarded as penal
because of their purpose, character or severity [citing Communication No.
1015/2001, Perterer v. Austria, para. 9.2].[29]
There is little other jurisprudence from the United Nations
Human Rights Committee as to when it considers that an act designed as civil in
domestic law may be found to constitute a criminal charge as a result of the
purpose of the law, its character or its severity.
The European Court of Human Rights' test for whether a matter
should be characterised as a 'criminal charge', also reflected in the
Committee's Guidance Note 2, relies on three criteria: the domestic
classification of the offence; the nature of the offence; and the severity of
the penalty.[30]
Asset recovery actions under the Proceeds of Crime Act
2002 (the POC Act) make no determination of a person's guilt or innocence,
but are civil actions designed to complement criminal laws that criminalise
conduct such as drug trafficking and corruption. These proceedings cannot in
themselves create any criminal liability, do not result in any finding of
criminal guilt and do not expose people to any criminal sanction. The POC Act
authorises the imposition of penalties that aim to confiscate the proceeds of
offences, the instruments of offences and the benefits derived from offences.
These are stand-alone penalties aimed at preventing the reinvestment of illicit
proceeds and unexplained wealth amounts in further criminal activities. These
penalties are not able to be commuted into a period of imprisonment, and are
separate from and less severe than the criminal penalties imposed by a court
with respect to a person's conduct. The committee has already been advised of
other safeguards that apply to these proceedings in its consideration of the
Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012.
The Regulation does not affect these safeguards.
For these reasons, obtaining a proceeds of crime order under
the POC Act against the person should not be viewed as involving a 'criminal'
penalty.
As a result, the Regulation, which broadens the application
of the POC Act to include certain copyright offences as 'serious offences' for
the purposes of that Act, engages the rights to a fair hearing in Article 14(1)
of the ICCPR but does not engage rights in Article 14(2)-(7) relating to
minimum guarantees in criminal proceedings. As these proceedings provide for a
right to a fair hearing consistent with Article 14(1) they do not limit the
right to a fair trial in Article 14.
I note that the committee has sought further information on
the objectives of listing the copyright offences. The following information
addresses this request.
Copyright piracy is a pressing and substantive concern. The Copyright
Amendment Act 2006 that you introduced as Attorney-General implemented a
range of major reforms to address copyright piracy, and harmonise the criminal
law offence provisions in the Copyright Act 1968 with the Criminal
Code Act 1995. It introduced a tiered system of criminal offences to
provide indictable, summary and strict liability offences for copyright
infringement.
As you would be aware, the Copyright Amendment Act aimed to
provide remedies under the POC Act for the indictable offences. The Explanatory
Memorandum states that 'stronger enforcement measures such as proceeds of crime
remedies will also assist in minimising lost remedies to the Government through
the detection of other economic related crime such as tax evasion and money
laundering'. The inclusion of copyright offences as 'serious offences' for the
purposes of the POC Act gives effect to the original intention of the 2006
amendments. A measured and targeted approach was taken to listing copyright
offences. Only those indictable copyright offences contained in Parts V and XIA
of the Copyright Act 1968 are included in this list of serious offences
by the Regulation.
Expanding the number of offences to which a wider range of
proceeds of crime orders can attach to include serious intellectual property
crime could counter the growth and impact of these crimes.
A key harm of intellectual property crime is the channelling
of substantial illicit proceeds to criminal networks, organised crime and other
groups. The Australian Crime Commission's Organised Crime in Australia 2011
report notes that 'counterfeit goods constitute an expanding criminal market in
Australia'[31].
The 'high profit and low penalty nature' of intellectual property crime
provides an incentive for criminal networks and gangs to engage in piracy and
counterfeiting activity. The ACC identifies increasing global intellectual
property crime with an Australian presence, reporting that:
Members of outlaw motorcycle gangs
and Italian organised crime groups have been identified as being involved in
importing counterfeit goods into Australia... Middle Eastern and Asian
organised gangs are known to be prominent in specific areas within the counterfeit
goods market globally. Given the known presence in Australia of these groups,
it is probable that they do, or will in the future, have some involvement in
the domestic counterfeit goods market.[32]
The rapid increases in technology will only facilitate
intellectual property crime. The ACC reports that counterfeit goods importation
is influenced by factors including:
...the high profit and low penalty nature of the crime
market, the large potential market size, the power of genuine brands, demand,
and the established distribution networks. An increasingly important driver is
the ability to raise funds this way to facilitate other crime types[33].
Further, there is compelling evidence of a broad connection
between film piracy and organised crime. The 2009 report 'Film Piracy,
Organised Crime and Terrorism' by the US-based RAND Corporation found that
DVD piracy has a higher profit margin than narcotics and combined with the
minimal risks of enforcement, is attractive around the world as an element of
criminal portfolios.[34]
Committee response
2.76
The committee thanks the Minister for Justice for his response. The
committee agrees with the minister's assessment that the test for whether a
matter should be characterised as a 'criminal charge' relies on three criteria:
-
the domestic classification of the offence;
-
the nature of the offence; and
-
the severity of the penalty.
2.77
In relation to (a), it is clear that the asset recovery actions are
defined under Australian domestic law as civil in nature.
2.78
In relation to (b), the committee's Guidance Note 2 states that a
penalty will likely be considered criminal under international human rights law
if it is intended to punish and deter and the penalty applies to the public in
general as opposed to being in a particular regulatory or disciplinary
context. It is clear that the POC Act has wide application and applies to
general criminal conduct that may occur across the public at large.
2.79
The response states that the POC Act authorises the imposition of penalties
that aim to confiscate the proceeds of offences, the instruments of offences
and the benefits derived from offences and otherwise prevent the reinvestment
of illicit proceeds and unexplained wealth amounts in further criminal
activities. The committee notes that section 5 of the POC Act sets out the
objectives of that Act which includes 'to punish and deter persons from
breaching laws of the Commonwealth or the non‑governing Territories'.[35]
Accordingly, a core purpose of the POC Act is to punish and deter. This is also
confirmed by analysis prepared by the Australian Institute of Criminology which
noted that:
[Asset] [c]onfiscation also entails punishment for
wrongdoing, which may deter further offending by both the criminal and others
in the community.[36]
2.80
Moreover, the POC Act is structured such that a forfeiture order under
the Act is conditional on a person having been convicted of a serious criminal
offence, or a court being satisfied on the balance of probabilities that a
person has engaged in conduct constituting a 'serious criminal offence'. Such a
judgment would appear to entail a finding of 'blameworthiness' or 'culpability'
on the part of the respondent, which, having regard to a number of English
authorities would suggest that the provision may be criminal in character.[37]
2.81
In addition, the Canadian courts have considered confiscation, or
'forfeiture proceedings' as being a form of punishment, and characterised them
as a 'penal consequence' of conviction.[38]
2.82
In relation to (c), the severity of the penalty, the response notes
that:
These penalties are not able to be commuted into a period of
imprisonment, and are separate from and less severe than the criminal penalties
imposed by a court with respect to a person's conduct.
2.83
However, the committee notes that the forfeiture orders can involve
significant sums of money, sometimes far in excess of any financial penalty
that could be applied under the criminal law. For example the AFP's 2012-13
Annual Report notes that one single operation resulted in $9 million worth of
assets being forfeited.[39]
2.84
This short analysis of the POC Act suggests that asset confiscation may
be considered criminal for the purposes of international human rights law,
because of the nature of the offence and the severity of the penalty. The
committee notes that the POC Act was introduced prior to the establishment of
the committee and therefore before the requirement for bills to contain a
statement of compatibility with human rights. It is clear that the POC Act
provides law enforcement agencies important and necessary tools in the fight
against crime in Australia. Assessing the forfeiture orders under the POC Act
as involving the determination of a criminal charge does not suggest that such
measures cannot be taken – rather, it requires that such measures are
demonstrated to be consistent with the criminal process rights under articles
14 and 15 of the ICCPR.
2.85
Finally, in relation to the copyright offences added by the regulation
to the type of indictable offences that will be considered as a 'serious
offence' under the POC Act, the committee notes that the minister draws the
link between copyright offences and organised crime in Australia. In this
regard, the committee notes that the Australian Crime Commission's most recent
report (from 2015) states:
It remains likely that organised crime involvement in piracy
of these products [film, music, television and computer software] should
decrease as consumers increasingly download them illegally from the Internet
without paying. Already some law enforcement agencies have reported that the
decrease in the number of detections of pirated copies of music, films,
television programs and software has been greater than that observed for other
unauthorised goods.[40]
2.86
Accordingly, it is unclear why it is necessary to add these specific
copyright offences at this time given the current criminal trends identified in
this report.
2.87
The committee's assessment against article 14 of the
International Covenant on Civil and Political Rights (right to a fair trial and
fair hearing) of the inclusion of copyright offences as 'serious offences' for
the purposes of the Proceeds of Crime Act 2002 (POC Act) raises
questions as to whether expanding the application of the POC Act is a
justifiable limitation on the right to a fair trial and right to a fair
hearing.
2.88
As the POC Act was introduced prior to the establishment of the
committee and no statement of compatibility was provided for that legislation,
the committee recommends that the Minister for Justice undertake a detailed
assessment of the POC Act to determine its compatibility with the right to a
fair trial and right to a fair hearing in light of the committee's comments
above.
The Hon Philip Ruddock MP
Chair
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