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Monday, 26 May 1997
Page: 4073

(Question No. 1460)


Mr Laurie Ferguson asked the Attorney-General and Minister for Justice, upon notice, on 5 March 1997:

(1) Has the Australian Federal Police (AFP) indicated to the Australian Transaction Reports and Analysis Centre (AUSTRAC) that it does not wish to receive information relating to suspicious bank dealings involving Department of Social Security (DSS) benefit recipients because a lack of resources dictates that investigative action is not practical.

(2) How many references each year did AUSTRAC give to the AFP prior to this request.

(3) Has his Department discussed with DSS the utility of the AUSTRAC advice in relation to social security fraud.


Mr Williams —The answer to the honourable member's question is as follows:

1. I am advised that the arrangements for dissemination by the Australian Transaction Reports and Analysis Centre (AUSTRAC) to the Australian Federal Police (AFP) of reports of suspicious transactions have recently been reviewed.

I am advised that before July 1996 AUSTRAC referred all reports of suspicious transactions of potential interest to the AFP, including reports relating to possible fraud offences by recipients of social security benefits. Those latter reports were also provided to the Australian Taxation Office.

Since July 1996 revised procedures apply. I am advised that instead of cases being identified by AUSTRAC as of potential interest to the AFP, the AFP has two dedicated officers in each of the AFP's Regions. Those officers are able to peruse all reports of suspicious transactions relating to alleged criminality and request that those matters which are within their jurisdiction, of specific interest to the AFP and within the AFP's investigative priorities be formally referred to their Region by AUSTRAC.

A request is made by those officers to the Director of AUSTRAC for dissemination of reports which those AFP officers identify as of particular operational interest.

I am advised that AFP officers rarely request AUSTRAC to refer reports of suspicious transactions concerning possible fraud offences by recipients of social security benefits. The AFP advises that while it would like to be able to investigate more of those matters, investigation resources are limited and the AFP must prioritise demands on its resources and determine the relative value of investigating particular reports of suspicious transactions in the context of other referrals and tasks it had been given.

I am also advised that AUSTRAC continues to refer reports which suggest possible fraud offences by recipients of social security benefits to the Australian Taxation Office.

In late 1996 the AFP's Southern Region, covering Victoria and Tasmania, requested AUSTRAC to refer to it automatically all reports of suspicious transactions indicating possible fraud offences by recipients of social security benefits in Victoria and Tasmania. At the end of January, following a review of that arrangement, AUSTRAC was asked to cease referring those reports of suspicious transactions automatically to the Southern Region. That decision was taken because investigative action could not be taken in relation to the possible offences disclosed in the reports because of the AFP's competing priorities.

2. I am advised that the following numbers of reports of suspicious transactions relating to possible fraud by recipients of social security benefits were provided to the AFP in the stated years:

1990—824; 1991—l()32; 1992—788; 1993—225; 1994—459; 1995—427; 1996—339.

I am also advised that despite the revised procedures introduced in July 1996, AUSTRAC has continued to refer to the AFP selected reports of suspicious transactions relating to possible fraud offences by recipients of social security benefits.

Between 1 July 1996 and 17 March 1997 304 reports relating to possible fraud offences by recipients of social security benefits have been referred to the AFP. Four of those reports had also been specifically requested by the AFP after initial perusal of the reports.

3. The question of access to AUSTRAC data by the Department of Social Security was examined by the Senate Standing Committee on Legal and Constitutional Affairs in its November 1993 Report, Checking the Cash. The Committee recommended that the Department of Social Security not be given access to the information.

I am advised that officers of the Attorney-General's Department and the Department of Social Security discussed the matter of whether or not information obtained under the Financial Transaction Reports Act 1988 could be passed to the Department of Social Security. The issue of an administrative scheme whereby information from AUSTRAC indicating possible fraud offences by recipients of social security benefits could be released by the AFP to the Department of Social Security was considered and found not to be legally open.

Information obtained under the Financial Transaction Reports Act 1988 is sensitive and its collection is privacy intrusive. The information is intended for use only in major criminal investigations. For those reasons it is considered inappropriate for the Department of Social Security to be given access to such information for the purpose of investigating possibly minor fraud by recipients of social security benefits