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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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The bill seeks to amend the Crimes Act 1914, the Proceeds of
Crime Act 2002, the National Anti-Corruption Commission Act 2022, the
Telecommunications (Interception and Access) Act 1979 and the
Telecommunications Act 1997.
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Portfolio
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Attorney-General
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Introduced
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House of Representatives on 27 March 2024
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Bill status
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Before the House of Representatives
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2.59 Item 6 of Schedule 1 to the bill seeks to insert proposed section 3FA into the Crimes Act 1914 (the Crimes Act). Proposed section 3FA would allow an existing search warrant to authorise additional things in relation to the search of digital assets. Proposed subparagraph 3FA(5)(a)(v) would provide for an executing officer to access account-based data in relation to a person who uses or has used the computer found in the course of a search authorised under a warrant. This is in order to determine whether the relevant account-based data suggests the existence of a digital asset that may be seized under the warrant. Proposed paragraph 3FA(5)(d) authorises this data to be copied where it appears to be relevant for the purposes of determining whether the data suggests the existence of a digital asset that may be seized under the warrant, or suggests the existence of a digital asset that may be seized under the warrant. In addition, proposed subsection 3FA(3)(b) permits the executing officer to alter or delete data obtained through these processes when using electronic equipment to seize a digital asset.[180]
2.60 In addition, item 30 seeks to insert proposed section 228A into the Proceeds of Crime Act 2002 (the Proceeds of Crime Act). Similarly to proposed section 3FA of the Crimes Act, proposed section 228A would expand the authority for executing officers in the exercise of search warrants in relation to digital assets under the Proceeds of Crime Act.
2.61 In Scrutiny Digest 6 of 2024 the committee requested the Attorney-General’s advice as to:
• the privacy protections that apply to account-based data that is accessed as a result of proposed subparagraph 3FA(5)(a)(v) of the Crimes Act 1914;
• why it is necessary and appropriate for the authority of existing search warrants to be expanded by proposed section 3FA of the Crimes Act 1914 to capture account-based data, including that of third parties;
• why it is necessary and appropriate to be able to obtain the account-based data of any person who has ever used the target computer;
• why it is necessary and appropriate that digital data accessed as a result of proposed section 3FA of the Crimes Act 1914 and proposed section 228A of the Proceeds of Crime Act 2002 can be altered, copied or deleted by executing officers;
• whether any examples can be provided of scenarios in which it is envisaged that the expansive powers provided by the various aspects of these provisions would be necessary. [181]
2.62 The Attorney-General advised that these provisions replicate existing provisions in the Crimes Act to enable search and seizure of digital assets. The effect of proposed subsection 3FA(5), the Attorney-General advised, would be to allow access to account-based data to determine whether a digital asset such as a cryptocurrency or Bitcoin exists that can then be seized under warrant. The Attorney-General advised that account-based data could include the social media, email services, subscriptions or messaging service accounts of a person of interest, or account data of another person such as a family member or friend, where the person of interest also uses those accounts. The Attorney-General advised that the bill builds on existing search warrant powers to allow a consideration of whether account-based data on a computer suggests the existence of a digital asset. Further, the Attorney-General advised that it would be impractical to limit the ability of law enforcement to searching data only connected to the person of interest as this would enable criminals to hide evidential material and proceeds of crime.
2.63 In relation to privacy, the Attorney-General advised that law enforcement agencies are required to comply with the Privacy Act 1988 and the Australian Privacy Principles. In addition, section 60A of the Australian Federal Police Act 1979 (AFP Act) prevents AFP employees from making records of or communicating prescribed information except for purposes under the AFP Act or in compliance with oversight functions.
2.64 The Attorney-General advised that the power to add, copy, alter or delete data is already in the Crimes Act, and that proposed section 3FA of the Crimes Act and section 228A of the Proceeds of Crime Act use this power as required in the context of digital assets where data may need to be altered in order to seize the asset. The Attorney-General provided an example whereby a digital asset is being moved to an AFP wallet and the data on the blockchain, which contains the transaction history, needs to be altered.
2.65 Finally, the response provided examples of how it is envisaged the power will be used, including where seed phrases are uncovered on a mobile under search warrant which then allows the officer to uncover who owns the digital assets connected to that account, to determine whether those assets are evidence or tainted property.
2.66 The committee thanks the Attorney-General for this detailed advice, and welcomes the information provided in regard to privacy safeguards.
2.67 However, the committee remains concerned that proposed section 3FA of the bill will allow law enforcement agencies to access account-based data of any third-party user who has used a device with no apparent limitations. While noting the Attorney-General’s advice that the definition of account-based data[183] is focused on a particular person, which could, in effect, be a family member or associate of the person of interest, there is nothing on the face or the bill to constrain the power, nor does the information provided indicate that the power is limited in this manner.
2.68 The committee notes the advice that these measures are necessary to ensure that criminals are not able to hide evidence or proceeds of crime, and does not comment on the policy merits of such an approach. Rather, the committee’s position is that this intention could be maintained while limiting the ability of law enforcement to access and assess private information of third parties who may have used a shared device.
2.69 The committee therefore draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of proposed subparagraph 3FA(5)(a)(v), which would provide for an executing officer to access account-based data in relation to a person who uses or has used a computer found in the course of a search authorised under a warrant.
2.70 Item 1 of Schedule 3 to the bill seeks to amend subsection 4AA(1) of the Crimes Act to increase the Commonwealth penalty unit amount from $313 to $330. The amendment would take effect from 1 July 2024. Item 2 would amend subsection 4AA(3) to provide that indexation of the penalty unit amount commences from 1 July 2026.
2.71 The effect of this amendment would therefore be to increase the maximum civil and criminal penalties that apply across the majority of Commonwealth legislation in addition to the indexation process, which sees amounts automatically increase every three years in line with the consumer price index. Further, on 1 January 2023 an amendment to the Crimes Act took effect which raised the amount of a single penalty unit from $222 (as indexed) to $275, alongside indexation.[185]
2.72 In Scrutiny Digest 6 of 2024 the committee requested the Attorney-General’s advice as to why it is both necessary and appropriate to increase the amount of a Commonwealth penalty unit by 5 per cent, noting the limited explanation provided in the explanatory materials for the increase and that the increase will apply in addition to the usual indexation process from 2026. In particular, the committee noted that consideration of this issue will be assisted if the Attorney-General’s response addresses:
• how the amount of the increase was determined;
• why it was considered necessary to introduce an increase to the Commonwealth penalty unit of approximately 5 per cent in addition to the usual indexation process;
• any evidence that the previous amount of the penalty unit was not acting as an effective deterrent;
• any evidence that the new amount is likely to constitute an effective deterrent; and
• any evidence that the increase better reflects community expectations.[186]
2.73 The Attorney-General advised that increases and indexation on the penalty unit value since it was introduced in 1992 represent an increase of 213% while average incomes have increased by 282%, and that increasing the penalty unit value to align with income levels ensures it is an effective deterrent.
2.74 The Attorney-General also advised that it is necessary for the bill to increase the penalty unit value as the next indexation process will not be for two years, with rising incomes decreasing the effectiveness of the penalty. The Attorney-General noted that as fines are the most common sentence imposed by courts in Commonwealth matters, it is important for the value of the penalty unit to be maintained so that courts have discretion to impose the most appropriate sanction.
2.75 Further, the Attorney-General advised that communities expect courts to have appropriate punishments available for sentencing, especially for serious Commonwealth criminal offences such as drug importation and people smuggling, and that the increase reflects this expectation.
2.76 The committee thanks the Attorney-General for this advice, and notes that the advice provided is similar to that provided to the committee in relation to the Crimes Amendment (Penalty Unit) Bill 2022 as reported in Scrutiny Digest 3 of 2023.[188] Considering the previous correspondence between the committee and the Attorney-General on a similar issue, the committee considers it would have been helpful for this more detailed advice to have been set out in the explanatory memorandum to the bill.
2.77 The committee accepts that it is important that penalty unit amounts are increased over time to align with income levels.
2.78 The committee also considers that it is inappropriate to only consider penalty unit amounts in the context of average incomes. Rather, it would be more appropriate to consider real wage increases, which reflect the amount of inflation over a given period. The committee notes that the Attorney General's Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers refers to inflation in this context, but not to average incomes, stating that 'expressing a penalty in penalty units (rather than a dollar figure) facilitates the uniform adjustment of penalties across legislation from time to time to reflect the changing value of money.'[189]
2.79 Given the slower growth in real wages compared to average income over the relevant period, the discrepancy between the growth in the amount of a Commonwealth penalty unit and a person's income is more significant than the percentages stated by the Attorney-General would imply. The committee also notes that average income is not necessarily representative of general income levels given income inequality rates, and that other considerations are therefore likely to be relevant in determining an appropriate Commonwealth penalty unit amount.
2.80 The committee accepts that it is necessary to ensure that the amount of a Commonwealth penalty unit is adequate in ensuring effective deterrence. However, neither the explanatory memorandum for the bill nor the Attorney-General's response has provided evidence to demonstrate either that the previous amount was insufficient or that the new amount is required to ensure deterrence. The committee also notes that no explanation has been provided for how the amount of the increase was determined.
2.81 The committee expects a thorough justification for the increase to be included within the explanatory memorandum. This is particularly so as legislated penalty unit amounts may no longer align with the original intent, noting that these amounts would have been determined based on a general understanding of the way in which penalty unit increases would occur.
2.82 At a minimum, the committee considers that it would have been appropriate had the increase introduced by the bill been justified with reference to evidence: that the previous amount of the penalty unit was not acting as an effective deterrent; evidence that the new amount constitutes an effective deterrent; and information explaining how the new amount was determined.
2.83 The committee continues to have concerns about increasing the amount of a Commonwealth penalty unit outside the usual indexation process, noting the limited explanation provided in the explanatory materials for the increase and that the increase will apply in addition to the automatic indexation process.
2.84 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of item 1 of Schedule 3 to the bill amending subsection 4AA(1) of the Crimes Act 1914 to increase the Commonwealth penalty unit amount from $313 to $330, with no justification provided as to how that amount was reached.
2.85 Item 3 of Schedule 4 to the bill seeks to insert proposed section 7A into the Telecommunications Act 1997 (the Telecommunications Act). Proposed subsection 7A(2) provides that for the purposes of the Telecommunications Act the Home Affairs Minister may, by legislative instrument, specify a person, body or class of such to be a Communications Security Coordinator. Proposed subsection 7A(3) provides that only APS employees (or classes thereof) within the Home Affairs Department may be specified by legislative instrument under proposed subsection 7A(2).
2.86 In addition, item 62 of the same Schedule would substitute proposed section 6R, which provides the same measures in relation to the prescription of a Communications Access Coordinator within the Attorney-General’s Department.
2.87 In Scrutiny Digest 6 of 2024 the committee requested the minister’s advice as to:
• why it is necessary and appropriate to allow the roles of Communications Access Coordinator and Communications Security Coordinator to be delegated to any APS employee at any level within either the Home Affairs or Attorney-General’s Departments respectively and by delegated legislation;
• the scope of powers that might be delegated; and
• the categories of people to whom it is envisaged these roles will be delegated to, including whether any specific training, skills or experience will be a pre-requisite and, if so, whether consideration can be given to providing such a requirement on the face of the bill.[191]
2.88 The Attorney-General provided detailed information on the roles and duties of the Communications Access Coordinator and the Communications Security Coordinator and advised that there is a mix of decision-making which affects legal obligations, security functions, and routine and administrative tasks. Due to this variation of tasks, the Attorney-General advised that is it necessary for delegations to lower level APS departmental staff to be made by legislative instrument.
2.89 Further, the Attorney-General provided background information about previous scrutiny concerns raised by the Senate Standing Committee for the Scrutiny of Delegated Legislation which resulted in the Attorney-General agreeing to limit some delegations to SES level.[193]
2.90 The Attorney-General also identified the relevant legislative functions of each along with the proposed delegation level, and the committee welcomes that these proposed delegations go no lower than the EL level.
2.91 In addition, the Attorney-General noted that while it would be open under proposed section 6R to require training, skills or experience as set out in the delegation instrument, this is not proposed due to the broad scope of functions. Rather, staff with delegated functions will be supported with on the job training and professional development, and the department will continue the current practice of consulting partner law enforcement and security agencies for specialist advice to inform delegated decision making.
2.92 The committee thanks the Attorney-General for this detailed advice and notes the additional information in relation to the skills and training provided to staff delegated functions of the CAC or the CSC.
2.93 The committee requests that an addendum to the explanatory memorandum containing the key information provided by the Attorney-General be tabled in the Parliament as soon as practicable, noting the importance of these explanatory materials as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).
[178] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Crimes and Other Legislation Amendment (Omnibus No. 1) Bill 2024, Scrutiny Digest 7 of 2024; [2024] AUSStaCSBSD 123.
[179] Schedule 1, item 6, proposed section 3FA; and Schedule 1, item 30, proposed section 228A. The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(i) and (ii).
[180] Similar powers would be provided for in proposed paragraphs 3FA(4)(b) and (5)(b).
[181] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 10–13.
[182] The minister responded to the committee’s comments in a letter dated 3 June 2024 A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).
[183] As set out in section 3CAA of the Crimes Act 1914.
[184] Schedule 3, item 1, section 4AA of the Crimes Act 1914. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).
[185] Crimes Amendment (Penalty Unit) Act 2022, section 1.
[186] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 13–14.
[187] The minister responded to the committee’s comments in a letter dated 3 June 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).
[188] For a copy of the Attorney-General’s response considered in this Digest, see the committee’s website.
[189] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, May 2024, p.41.
[190] Schedule 4, item 3, proposed section 7A; and Schedule 4, item 62, proposed subsection 6R(2). The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(ii) and (iv).
[191] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 15–16.
[192] The minister responded to the committee’s comments in a letter dated 3 June 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).
[193] Further detail on this can be found in the attached ministerial correspondence.
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2024/123.html