Catallaxy Files

Vince McMahon, former head of border security with the Department of Immigration and Citizenship, has an article in the Weekend Australian talking about compensation for state wrongs. One of the issues he spends a great deal of time on is the Cornelia Rau affair.

The sad saga of Cornelia Rau is an example of a large payout made without recourse to the courts. She was paid $2.6m by the Rudd government in 2008, or about $8000 a day for the time she was in detention. The per-diem compensation for the time she was unlawfully detained could be many times that amount, perhaps even up to $50,000 a day. That period has never been, and cannot now be, established because of the private settlement.
To understand the Rau case it is necessary to first consider the operation of two sections of the Migration Act. Section 189 (1) provides that if an officer knows or reasonably suspects a person to be an unlawful non-citizen the officer must detain that person. Section 196 (1) provided that an unlawful non-citizen detained under section 189 (1) must be kept in immigration detention until removed from Australia, deported or granted a visa.
Rau claimed to have arrived recently from Germany and used identities that could not be matched with migration databases. She was one of more than 7000 people then in detention and one of about 20,000 people detained annually although most were quickly released with bridging visas once their identities were established. The Immigration Department followed through her changing stories and sought the assistance of the German government which, not surprisingly, also could not establish her identity even though she was a German, not Australian, citizen. One key problem in the handling of the case within the Immigration Department was not the failure to investigate, because there was a lot of that, but the repetitiveness of the investigations once dead-ends were reached.
The Palmer Inquiry in 2005 found that on the evidence then reasonably available, the immigration compliance officer had a proper and lawful basis for forming a “reasonable suspicion”: in other words former Australian Federal Police chief Mick Palmer believed she was lawfully taken into detention.
Palmer also had to bare his soul by admitting that “on the basis of its investigations and analysis, the inquiry cannot point to any thing that, had it been done in the circumstances, would immediately have led to Anna’s [Cornelia's] identity being discovered”.
So in the absence of this matter ever having been determined by the courts, it is interesting to consider how her detention turned unlawful and from when. Palmer was very critical as to why the “reasonable suspicion” was not reviewed and accused management of not understanding the law. This assessment was correct but disingenuous because such legal advice was only available after the release of Rau.
The longstanding legal interpretation, which was well known in the legal community and had been repeatedly explained at Senate estimates hearings, was that once a person was detained under section 189 because of reasonable suspicion, further action was governed by s196. This required the department to remove, release or issue a visa and this effectively involved identification. The internal legal advice referred to in the Palmer report came as a shock to senior management.

To be fair to McMahon, he may have had a strict word limit and he is trying to make a broader point than simply explain or justify the Rau affair. There are, however, a number of troubling aspects to this version of events.

The biggest issue as I see it is the presumption that civil servants do not make errors. There is no need to reconsider the decision to detain an individual. Even more extraordinary is the notion that civil servants can have ‘reasonable suspicions’ without having to justify themselves. This reminds me of the Apartheid era state of emergency regulations. A police officer could detain any individual (indefinitely) if they had a ‘resaonable suspicion’ that this person was an enemy of state or a danger to public safety and so on. Many people were detained on this basis and the police simply said they had reasonable suspicions. Eventually a judge asked an arresting officer to outline the basis for his reasonable suspicions and on the basis of the garbled response ordered the release of a detainee.

McMahon refers to the Palmer Report. I haven’t read the whole thing but the bits and pieces I have read are very worrying (see pages 21 through 28). Palmer suggests that many immigration officers had little legal understanding of what ‘reasonable suspicion’ meant. Furthermore Palmer points to the view that the department thought that the operation of the act (s. 189) was not reviewable.

The fact that a person’s liberty had been taken seemed to be accepted simply as a ‘matter of fact’ and a result of the person’s own doing and circumstances brought about by their actions. These attitudes seem to be promoted by a culture in which detention of suspected unlawful non-citizens is the paramount consideration.

McMahon makes the claim (emphasis added)

Palmer … accused management of not understanding the law. This assessment was correct but disingenuous because such legal advice was only available after the release of Rau.

It is hard to know if this statement is correct. Palmer does refer to government documentation and internal guidelines but these appear to be undated. Palmer, however, also refers to court decisions that predate the Rau affair. It seems (to me) that the behaviour of the department was inconsistent with those decisions. This is not the first time that government agencies and departments have ignored court decisions – the ATO was criticised last year for this very thing.

It seems to me that the department of immigration had an understanding that they could operate a system of detention without trial and have no review process in place to ensure that stuff-ups couldn’t or wouldn’t occur. The Palmer report indicates that many departmental officers had sincerely held views. That may even be true; yet we shouldn’t have to rely on sincerity – we should rely on a system of government that minimises government intervention, that minimises detention of individuals on suspicion of offences, that has a presumption of innocence and not guilt.

There is a very interesting blogger in New Zealand who set up a site for the critical discussion of Ayn Rand and Objectivism. He also links to Catallaxy and the Rathouse, being an admirer of Critical Rationalism.

Advertising is his game and he took out an award a few years ago with a spoof on advertising.

In case you want to do business with Barnes and Catmur. Don’t miss the “aimless game”.

People often ask me about earmarked taxes, suggesting that they are a very good idea. In principle they could be a good idea, because they specify exactly how much tax would be raised to finance a particular activity. In practice, however, this is not the case, especially so in Australia. The problem we face in Australia is section 81 of the Federal constitution.

All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.

This means that no government can credibly commit to raise an earmarked tax and spend the money only on that earmarked activity.

Consider, for example, the Medicare Levy – the cost of Medicare is far in excess of the revenue raised by the levy. In other words, Medicare is an unfunded budget item – it is subsidised by general revenue. Someone recently suggested to me that the government introduce the requirement that the Medicare Levy actually be increased (on an expost annual basis) to raise the revenue necessary to fund it. I like this idea because it would undermine some of the fiscal illusion that surrounds Medicare. People should be entitled to know exactly how much the medicare system is costing them and have that cost reflected on their group certificate.

Another area where fiscal illusion occurs is in the fuel levy. The Brisbane Times reports this morning that the bulk of the fuel levy is not spent on roads. But with section 81 of the Constitution in place, why would we expect anything different? (emphasis added)

Motorists pay $15 billion a year in fuel taxes but the Federal Government steers only a quarter of that money back into road funding.

Critics of the funding program say the Government is not releasing enough of the cash collected from fuel excise to improve the national highway system. Most of the excise vanishes into consolidated revenue.
…
A spokesman for Mr Swan said the Government was delivering record levels of investment on roads, doubling investment to $26 billion over a six-year period – more than $4.3 billion a year from 2008 to 2014.

The revenue does not ‘vanish into consolidated revenue’ the money is collected under false pretences.* This highlights the need for greater transparency in government and also the need for a fiscal constitution.

* Update: From the WSJ

“If the [Securities and Exchange Commission] had jurisdiction over the White House, we might have all had time for a course in remedial economics at Allenwood Penitentiary,” former Reagan budget director David Stockman recalled in his memoir.