CHAPTER 1


CHAPTER 1

PENALTIES FOR OFFENCES IN THE PRODUCTIVITY COMMISSION BILL 1996

The Productivity Commission and its predecessors

1.1 The Productivity Commission Bill 1996 proposed to establish the Productivity Commission by merging the functions of the Industry Commission (IC), the Economic Planning Advisory Commission (EPAC) and the Bureau of Industry Economics (BIE). The Productivity Commission was intended to be “the government's principal advisory body on all aspects of micro-economic reform”. [1]

1.2 The functions of the Productivity Commission, as set out in clause 6(1) of the Bill, are:

  • to hold inquiries and report to the Minister about matters relating to industry and productivity which the Minister refers to it;
  • to provide secretariat services and research services to government bodies as directed by the Minister;
  • (after 1 July 1997) to receive and investigate complaints about the implementation of competitive neutrality arrangements [2] in relation to Commonwealth government businesses and business activities and to report to the Minister on its investigations;
  • to provide advice to the Minister about matters relating to industry and productivity, as requested by the Minister;
  • to undertake, on its own initiative, research about matters relating to industry and productivity;
  • to promote public understanding of matters relating to industry and productivity; and
  • to perform any other function conferred on it by the Act, and anything incidental to any of the above functions.

BIE and EPAC

1.3 BIE had been a Division of the Department of Industry and Technology. EPAC was created under the then Economic Planning Advisory Council Act 1983. The functions conferred on EPAC, and the activities performed by BIE, were primarily of a research nature, and neither body had the power to hold inquiries at which witnesses could be called to give evidence. [3]

The Industry Commission

1.4 The Industry Commission was created under the Industry Commission Act 1989 (now repealed). Its functions were:

  • to hold inquiries and report to the Minister about matters relating to industry which the Minister referred to it; and
  • to do anything incidental to those functions. [4]

1.5 In performing these functions, the IC was directed to have regard to a number of general policy guidelines. These included: encouraging the development of efficient, self-reliant, enterprising, innovative and internationally competitive Australian industries; facilitating adjustment to structural change in the economy; reducing industry regulation; and recognising the interests of those likely to be affected by IC proposals. [5]

1.6 In general terms, only where the IC had reported on a matter within the previous 12 months was a Minister able to:

  • impose, remove, increase or reduce duties on goods imported into Australia;
  • prohibit or restrict the importation of goods into Australia;
  • remove a prohibition, or extend, reduce or remove a restriction on the import of goods into Australia; and
  • provide, or alter the provision of, long term financial assistance to an industry. [6]

The Industries Assistance Commission and the Tariff Board

1.7 The Industry Commission replaced the former Industries Assistance Commission (IAC), created under the Industries Assistance Commission Act 1973 (now repealed). The IAC itself replaced the former Tariff Board, created under the Tariff Board Act 1921-1972 (now repealed).

1.8 The functions of the IAC were to hold inquiries and make reports to the Minister in respect of matters affecting assistance to industries and other matters that might be referred to it in accordance with its governing Act. [7] That Act authorised the Minister to refer to the IAC “any matter relating to the giving, continuance or withdrawal of assistance to an industry” or group of industries. [8] Such matters might include:

  • the existence of facts relevant to action under dumping and subsidies legislation;
  • any matter in connection with the interpretation of any customs tariff or excise tariff or the classification of goods in such a tariff;
  • the question of the value for duty of goods;
  • matters relating to the giving of duty concessions to goods from developing countries; and
  • the reduction or removal of duties or other forms of assistance to industries in connection with negotiations for bilateral or multilateral trade agreements. [9]

1.9 The IAC Act also prevented the taking of certain actions in relation to the provision of industry assistance in the absence of an IAC report. These actions included:

  • the imposition, removal or variation of duties on particular goods imported into Australia;
  • whether the importation of particular goods into Australia should be prohibited or restricted, or whether such prohibitions or restrictions should be removed or varied; and
  • whether long term financial assistance should be provided to an industry or group of industries, or whether such assistance should be suspended, withdrawn or varied. [10]

1.10 The functions of the Tariff Board were similarly focused on specific financial matters such as appropriate levels of tariffs and industry assistance.

General observations

1.11 In summary, it can be seen that the functions of the bodies which preceded the Productivity Commission had, over time, changed from the more specific to the more general. Legislation which originally provided for inquiries in relation to the imposition or variation of tariffs or duties or levels of financial assistance to industry now provides for inquiries into matters relating to industry and productivity, and the investigation of complaints about the advantages enjoyed by Commonwealth business activities. It is against this background that the offence and penalty provisions in the Bill should be seen.

The penalty provisions

1.12 Offences under the Productivity Commission Bill, and the relevant penalty provisions, are included in Part 7 of the Bill. In general terms, Part 7 makes it an offence to:

  • hinder or disrupt the Commission [cl 50];
  • intimidate or disadvantage those providing information or assistance to the Commission [cl 51];
  • fail to comply with a notice to provide information and documents
    [cl 52(3)];
  • fail to comply with a summons to attend a hearing and provide documents [cl 53(2)];
  • fail to answer questions or provide documents at a hearing (while retaining the privilege against self-incrimination) [cl 54];
  • knowingly provide false or misleading evidence or information at a hearing [cl 56]; and
  • contravene a Commission direction restricting the publication of evidence or documents [cl 57(2)].

1.13 The penalty for each of these offences is identical, and expressed to be “imprisonment for 6 months”. A note declares that this is a maximum penalty; [11] that a court may impose an appropriate fine instead of or as well as imprisonment; [12] and that, where a body corporate is convicted of the offence, a court may impose a fine not more than 5 times the maximum fine that the court could impose on an individual for the same offence. [13]

1.14 The Committee was advised that such fines are calculated according to the formula (term of imprisonment x 5). In the case of offences under the Bill, such a fine would equate to 30 penalty units. As each penalty unit represents $110, the equivalent maximum fine for an individual would be $3300, and for a corporation would be $16,500. [14]

1.15 The Committee was also advised that the offences under the Bill are similar to offences previously created under the Tariff Board Act 1922, the Industries Assistance Commission Act 1973, and the Industry Commission Act 1989. Imprisonment has always been available as a penalty for these offences. The following Table, prepared by the Department and the Institute of Criminology, compares these provisions over the history of the legislation. [15]

Table 1: Comparison of similar offence provisions

Offence Tariff Board Act 1922-1962 Tariff Board Act 1962-1973 (applied Crimes Act offences) Industries Assistance Commission Act 1973 Industry Commission Act 1989 Productivity Commission Bill 1996
Hindering and disrupting NA NA $1000 or 6 mths [s 39] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 22] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 50]
Summons to attend hearing NA NA $1000 or 6 mths [s 32C] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 18] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 53]
Person summonsed fail to attend 500 [s 23] 500 [s 23] $1000 or 6 mths [s 35] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 19] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 53]
Notice to furnish information and documents 500 [s 23] 500 [s 23] $1000 or 6 mths [s 31B] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 15] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 52]
Refuse to answer questions or produce documents 500 [s 24] 500 [s 24] $1000 or 6 mths [s 37] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 20] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 54]
False or misleading evidence or information 5 yrs [ s 28] 5 yrs [Crimes Act 1914, s 35] $1000 or 6 mths [s 37A] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 20] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 56]
Intimidating witnesses 1 yr (or 500 under s 33) [ss 32, 33] 5 yrs [Crimes Act 1914, s 36A] NA NA 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 51]
Prejudice witness's employment 500 or 1 yr [s 34] 5 yrs [Crimes Act 1914, s 36A] $1000 or 6 mths [s 42] 6 mths or the corresponding fine under s 4B of the Crimes Act [s 26] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 51]
Disclose confidential information NA NA NA 6 mths or the corresponding fine under s 4B of the Crimes Act [s 17] 6 mths or the corresponding fine under s 4B of the Crimes Act [cl 57]

1.16 When the original Tariff Board Bill was introduced into Parliament in 1921, the then Minister for Trade and Customs observed:

    It is most necessary that penalties should be provided so that the Board in the exercise of this discretion which is given to it summons a man and puts him on oath, and asks for certain information, provision should be made to punish him in a proper way if he supplies false information. [16]

1.17 The Committee was told that similar considerations were in existence in the debate on the IAC Bill when it was expanded to cover industries beyond manufacturing. [17] However, in debate following the introduction of the Industry Commission Bill in 1989, the emphasis seemed to be on those provisions which protected witnesses rather than on those which compelled information:

    There are provisions for information to be held as confidential where a person objects and the Commission considers the evidence should be protected. The Bill maintains the protection of witnesses to an inquiry, and people making submissions to an inquiry, that are in the IAC Act. In particular the Bill provides for penalties on persons who prejudice another person's employment because of their participation in an inquiry process. [18]

1.18 The purpose of the penalty regime under the Bill is said to be “to enable the commission to operate effectively for those who, at the most extreme, refuse to comply or co-operate with it”. [19] Historically, the justification for such a penalty regime was identified by the Attorney-General's Department as follows:

  • the Productivity Commission (or its predecessor) must be given adequate power to inform itself as thoroughly as possible before giving accurate advice – to discharge this function, the body must have the power to acquire information by way of compelling others to provide that information, and a penalty is needed where a person or body will not provide that information, or not provide it truthfully;
  • protection should be conferred on witnesses, particularly where information provided may be adverse to others – therefore witnesses should not have their employment prejudiced or be subject to intimidation or threats because of their involvement in the inquiry;
  • persons involved in the Commission must also be protected from the same conduct; and
  • information of a confidential nature should be protected from public disclosure. [20]

Public comment on such a penalty regime

1.19 In 1997, the Senate Economics Legislation Committee received a reference which focused on the general policy underlying the Productivity Commission Bill 1996. However, submissions to that Committee from the Australian Council of Trade Unions (ACTU) and the Australian Chamber of Manufactures (ACM) also commented, in passing, on the penalty provisions. The ACTU simply observed that “the Offence provisions of the Bill are inappropriate for a Government advisory body”. [21] The ACM also expressed concern at the inclusion of penalties such as imprisonment and fines:

    While such penalties may be appropriate when the Productivity Commission is considering inquiries in regard to a “competitive neutrality complaint”, for the more routine inquiries likely to be undertaken by the Productivity Commission, such as a review of an industry or facility, these penalties seem totally excessive and unnecessary. It would most likely affect business and community leaders' willingness to make submissions and attend public hearings of the Productivity Commission. We would recommend that the conditions where penalties are to be applied be more narrowly defined in the Bill. The current negative reputation of the Industry Commission is a good example of how relevant parties can decline to participate – penalties as proposed would be totally counter productive. [22]

Parliamentary discussion of such a penalty regime

1.20 As noted above, Senate debate on the penalty provisions in the Bill focused on the appropriateness of the penalty of imprisonment in the circumstances envisaged by the Bill. The Senate has previously discussed the appropriateness of such penalties on at least three other occasions in recent times.

Census and Statistics Amendment Bill 1981

1.21 In May 1981, the Senate debated the Census and Statistics Amendment Bill 1981. A provision of that Bill proposed to increase the penalty for knowingly supplying false information when filling out a census form from an existing $100 to $1000 or 6 months imprisonment. The Explanatory Memorandum to the Bill noted a specific intention to strengthen the secrecy provision in the Act. In passing, it also made reference to “the upgrading of all penalties to reflect current values”.

1.22 Senator Mason moved an amendment to this provision seeking to delete the words “or imprisonment for 6 months”. In moving this amendment, he stated that:

    The Australian Democrats' view is that the sanction of a $1000 fine, which is provided for in the Schedule, is enough. It increases the previous fine of $100. We believe that penal sanction is improper and out of line with the state of penal law and other aspects of law in Australia, especially criminal law. [23]

1.23 Opposition members expressed support for this amendment. For example, Senator Cavanagh posed the question: `What is a suitable penalty for an offence of this gravity?

    Much of the legislation we support imposes penalties of $1000 or imprisonment for 6 months, or both. We must consider whether this is a very harsh penalty to be imposed on a person who has committed an offence by knowingly giving incorrect information on a census form – that suggests that it is done deliberately – to mislead the Australian Statistician … While I think every effort should be made to ensure that the information given on census forms is honest and truthful, I think the penalty provided for in the legislation is a little hard on anyone who even knowingly makes a false statement … [24]

1.24 While Senator Mason's amendment was defeated in May 1981, on the proposed introduction of a private member's Bill to again put the matter before the Senate it was ultimately accepted by the Government and included in the Census and Statistics Amendment Bill (No 2) 1981. As a result, the Census and Statistics Act now makes no provision for a penalty of imprisonment.

Student Assistance Legislation Amendment Bill 1987

1.25 During the second reading speech on the Student Assistance Legislation Amendment Bill 1987, the Minister noted that the Bill would insert section 31H into the Student Assistance Act 1973. This would increase the penalty in the Act for failing to provide information or knowingly providing false information from $100 to $2000 and/or 12 months imprisonment. The reason given for increasing the penalty was that $100 had “little deterrent value for people who might consider attempting to obtain money fraudulently”. [25]

1.26 Senator Macklin unsuccessfully moved amendments which sought to alter this penalty. However, his object was not so much to suggest that imprisonment was an inappropriate penalty, but rather to substitute a shorter period of imprisonment. This was to be determined according to a formula under which the amount of the fine ($2000) would be divided by an amount of average weekly earnings (eg $500) to give an equivalent period of imprisonment (eg four weeks). [26]

Social Security Legislation Amendment Bill (No 2) 1994

1.27 The Social Security Legislation Amendment Bill (No 2) 1994 inserted Part 2.9 into the Social Security Act 1991. This Part created a new disability wage supplement and, among other things, required recipients to provide information as to changes in their circumstances. The penalty provisions proposed in the Bill mirrored the existing penalty provisions for all other pensions and benefits throughout the Act.

1.28 Senator Chamarette unsuccessfully moved amendments which sought to remove imprisonment from the proposed penalties. [27] It appears that these amendments were proposed because of a suggestion that the courts were more frequently choosing imprisonment (rather than a fine) as the appropriate penalty in cases of disadvantaged people, especially women. A fine (rather than imprisonment) seemed to be chosen as a more appropriate penalty for other white collar crimes (eg, in a number of cases of tax evasion).

General observations

1.29 It can therefore be seen that the appropriateness of specifying a penalty of imprisonment for some offences has been a matter for discussion on a number of occasions in recent years. Chapter 2 examines the prevalence of such a penalty in other Commonwealth legislation.

Footnotes

[1] Senate, Hansard, 13 February 1997, p 654 (Senator the Hon I Campbell).

[2] These arrangements seek to ensure that significant government business activities do not enjoy net competitive advantages over their competitors by virtue of their public sector ownership.

[3] Attorney-General's Department and Australian Institute of Criminology, Joint Submission to the Senate Scrutiny of Bills Committee, November 1997, (“Joint Submission”), p 2.

[4] Industry Commission Act 1989, s 6.

[5] Industry Commission Act 1989, s 8.

[6] Industry Commission Act 1989, ss 10, 11.

[7] Industries Assistance Commission Act 1973, s 21.

[8] Industries Assistance Commission Act 1973, s 23(1).

[9] Industries Assistance Commission Act 1973, s 23(5).

[10] Industries Assistance Commission Act 1973, s 23(4).

[11] By virtue of Crimes Act 1914 s 4D.

[12] By virtue of Crimes Act 1914 s 4B(2).

[13] By virtue of Crimes Act 1914 s 4B(3).

[14] Joint Submission, p 2.

[15] Joint Submission, pp 2 and 10-11.

[16] House of Representatives, Hansard, 6 July 1921, pp 9718-9.

[17] Joint Submission, p 4.

[18] House of Representatives, Hansard, 2 November 1989, p 2427.

[19] Transcript of Evidence, p 6 (Mr C Meaney).

[20] Joint Submission, pp 4-5.

[21] ACTU, Submission No 1 to the Economics Legislation Committee (dated 20/2/97), p 6.

[22] ACM, Submission No 6 to the Economics Legislation Committee (dated 21/2/97), p 2.

[23] Senate, Hansard, 13 May 1981, p 1914.

[24] Senate, Hansard, 13 May 1981, p 1915.

[25] Senate, Hansard, 25 February 1988, p 688 (Senator the Hon M Tate).

[26] Senate, Hansard, 10 May 1988, p 2269.

[27] Senate, Hansard, 30 June 1994, pp 2404-16.