Second Reading Speech - Crimes and Other Legislation Amendment (Omnibus No. 1) Bill 2024

I rise to speak on the Crimes and Other Legislation Amendment (Omnibus No. 1) Bill 2024. This omnibus bill makes a range of changes to our criminal law, investigation and enforcement apparatus. It is a bill that has received appropriate scrutiny through the Parliamentary Joint Committee on Intelligence and Security, which recommended some minor changes. It is a bill that the coalition is pleased to support subject to those recommendations. There are five schedules to this bill.

The first schedule would amend the Crimes Act, the Proceeds of Crime Act and the National Anti-Corruption Commission Act to enhance the legal framework relating to the seizure of digital assets. The proposed amendments would expressly clarify that a warrant may authorise the seizure of digital assets and that an executing officer is able to access a person's digital wallet and transfer its contents as a means of seizing the digital asset. We know that criminals are increasingly sophisticated and use cryptocurrency as a way of storing and distributing the proceeds of illicit activities. Evidence before the Parliamentary Joint Committee on Intelligence and Security has made very clear that this is an issue frequently encountered by the Australian Federal Police. Indeed the AFP made the point to members of the parliamentary joint committee that it had restrained more than $41 million in cryptocurrency across the 2022-23 financial year alone. In one large-scale disruption of a money-laundering operation in 2023, the AFP executed 13 warrants and charged 10 alleged offenders, with approximately $215 million in criminal assets restrained to date, including over $30 million in cryptocurrency.

There is no real argument about the scale of the problem or the need to have adequate powers to issue search warrants for and seize digital assets such as cryptocurrencies. Currently, under the Crimes Act, police are permitted to seize certain items discovered in the course of executing a warrant. To lawfully do so, the officer must believe, on reasonable grounds, that the item is evidential material in relation to the relevant offence and that seizure is necessary to prevent concealment, loss, destruction or its use in committing an offence.

Unfortunately, these thresholds are no longer adequate in the age of digital assets and cryptocurrency. To illustrate: where large sums of physical cash are found during the execution of a search warrant, it may be relatively easy for an executing officer to form the belief, on reasonable grounds, that the funds are tainted property—that's to say proceeds of crime—and that seizure is necessary. The same cannot be said of digital assets like cryptocurrency. The mere holding of large amounts of a digital asset is unlikely, on its own, to be suspicious. There would need to be a level of analysis to develop some understanding of the source of those funds and the reason for holding digital assets that presently have a large value. Amongst other reasons, this is because there are sometimes legitimate reasons to hold digital assets that have a large value. For instance, the value of the asset may have changed significantly since it was obtained, noting that cryptocurrencies are notoriously volatile and changes in value are common. On the other side of the ledger, if police cannot take immediate action, the risk is high.

Unlike physical assets such as cash, criminals can remotely and near-instantaneously move a digital asset beyond the reach of law enforcement via an online transaction. To deal with these issues, schedule 1 of the bill proposes a lower threshold for lawfully seizing digital assets. To seize those assets, an officer must reasonably suspect that the digital asset is evidential material and that seizing the digital asset is necessary to prevent the digital asset's concealment, loss or destruction or its use in committing an offence. This threshold is appropriate, given the unique challenges created by the discovery of digital assets in the course of executing a search warrant.

Schedule 2 of the bill relates to the Proceeds of Crime Act and its interaction with digital currency exchanges. The Proceeds of Crime Act gives law enforcement agencies broad powers to monitor, freeze, restrain and forfeit proceeds and instruments of crime. This includes investigative and freezing powers in relation to financial institutions. The proposed amendments to the act would extend those investigative and freezing powers in relation to certain digital currency exchanges. Importantly, this expansion of the Proceeds of Crime Act retains existing safeguards, including independent oversight by a magistrate, limitations on the time during which orders made under the act can operate and powers to vary a freezing order in appropriate cases. The net effect is to ensure that freezing and monitoring orders under the Proceeds of Crime Act can be applied in relation to Australia based cryptocurrency exchanges in the same way as to traditional financial institutions. The coalition considers that this is appropriate and will help to keep laws governing the investigation and seizure of proceeds of crime workable in the modern technological environment.

Schedule 3 of the bill will amend section 4AA of the Crimes Act to increase the value of a Commonwealth penalty unit to $330, with a commencement date of 1 July 2024. We understand that the government intends to move amendments that will change this commencement date so that the new value comes into effect after the bill commences. Penalty units set the maximum financial penalty that can be awarded by a court for an offence. Ordinarily, the value of penalty units is indexed every three years in accordance with CPI. The value of a penalty unit at the time the coalition left office was $222. This is now the third time in less than two years that the Albanese government has increased the value of penalty units. In fact, there has been a 49 per cent increase in the value of Commonwealth penalty unit over 18 months. On 1 January 2023 it increased from $222 to $275, an increase of 23.9 per cent, on 1 July 2023 it increased from $275 to $313, an increase of 13.8 per cent, and on whatever date this measure comes into force the value of the penalty unit will lift by a further 5.4 per cent to $330. 

The government explains the rationale for this latest increase as follows:

… The current penalty unit amount does not act as an effective deterrent for the most serious offending.

Are we to infer that when this government took the decision to increase the value of the penalty unit just last year they ended up with a number that was 5.4 per cent short of the threshold required to effectively deter serious offending? The reality, of course—the transparent reality—is that this is a revenue measure for the Albanese government. 

The coalition does not object in principle to the increase in maximum penalties by courts for those convicted of a crime, but we do note there was a slew of regulatory offences, such as a failure to lodge a business activity statement on time, for which the Australian Taxation Office will impose a penalty equivalent to one penalty unit for each period of 28 days or part thereof that a return or statement is overdue. So it should not go without comment that the Albanese Labor government has slugged small businesses with a 49 per cent increase in penalties for late paperwork in less than two years. 

Schedule 4 to the bill would amend the Telecommunications (Interception and Access) Act to clarify the functions of the Communications Access Coordinator in the Attorney-General's Department and create the position of Communications Security Coordinator in the Department of Home Affairs. This is essentially a legislative change that reflects the changes to administrative arrangements under the current government and the transfer of functions between the Department of Home Affairs and the Attorney-General's Department. While there are no concerns about the specifics of the measures in this schedule, they are symptomatic of a broader concern. That concern relates to the concentration of national security operational functions in the Attorney-General's Department, the same department that exercises oversight of those functions. It is a model that gives rise to legitimate questions. 

Schedule 5 of the bill deals with information-sharing arrangements under the Telecommunications (Interception and Access) Act. It amends the arrangements applying to state-level bodies which oversee state based integrity agencies. To be clear, this is not the integrity agency themselves, such as the Independent Commission Against Corruption in South Australia; it is the oversight body for these state agencies—the inspectors who are there to ensure that the state integrity agencies exercise their powers appropriately. 

Evidence before the Parliamentary Joint Committee on Intelligence and Security concerning the state based oversight bodies made it clear that limitations in the legislation are causing difficulties for those bodies in discharging their functions. These limitations arise because, under the Telecommunications (Interception and Access) Act, the oversight bodies are only able to receive information for a 'permitted purpose' or an 'eligible purpose'. But the definitions of these terms do not capture all of the functions that the oversight bodies are meant to perform. The changes in schedule 5 were welcomed by the parliamentary joint committee, with one minor recommendation, which we understand the government intends to address in amendments to this bill. Subject to that recommendation being implemented, the coalition welcomes these changes. 

Finally, it is worth commenting on an additional matter. We understand that in addition to the matters considered by the parliamentary joint committee in relation to this bill, the government intends to move two additional amendments. The first is to push back sunsetting arrangements for secrecy provision in the Criminal Code by 18 months. They are currently due to sunset on 29 December this year, and the amendment will push this date back to 29 June 2026. We have no objection to this in principle. It is in no-one's interest for Commonwealth secrecy offences to lapse without a replacement being ready to go. It is apparent that the Attorney will not be in a position to pass his proposed changes to Commonwealth secrecy provisions before the 29 December deadline. 

The second area is a definition of the term 'hors de combat' in the dictionary of the Criminal Code. This is a term that roughly speaking describes when a person cannot legitimately be targeted in military operations. We understand the government is repealing and replacing the definition to address a longstanding drafting error dating back to the 2000s. We have been advised by the Attorney-General's office that the gist of the error is that the definition uses the word 'and' when it should use the word 'or'. We understand that rectifying this defect avoids a potential unintended consequence, but this is a technical change; it does not change the intended effect or operation of the definition.

The coalition is prepared to rely on the advice and assurances provided to us by the Attorney-General's office about the intent and effect of the change, and we will support it on that basis. I thank the Parliamentary Joint Committee on Intelligence and Security for its work in relation to this bill and commend this bill to the House.