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Monday, 30 May 2011
Page: 5035


Mr MITCHELL (McEwen) (16:03): I rise in support of the government's Australian Transaction Reports and Analysis Centre Supervisory Recovery Bill, the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery (Collection) Bill and the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery (Consequential Amendments) Bill. These bills are a legislative package that will ensure that AUSTRAC cost recovery is implemented effectively. The levy bill will establish a legislative structure that will allow AUSTRAC to reclaim the costs of its regulatory functions from the businesses that it regulates and, in turn, is part of the Gillard government's ongoing commitment to protect Australians from the social and economic impacts of organised crime.

I am pleased to speak on these bills as it gives me the opportunity to talk about the importance of AUSTRAC in protecting our financial system and how, in turn, it combats organised crime, money laundering, financing of terrorism, including people smuggling, and tax evasion. AUSTRAC is a significant body in Australia. It is a vital agency—an anti-money-laundering and counterterrorism financing regulator and specialist intelligence unit which works with Australian industries and businesses to provide information about potential criminal activity to our law enforcement agencies. It is at the forefront of the fight against transnational organised crime.

AUSTRAC's strategic directions statement as outlined in the 2011-12 budget states:

In its regulatory role, AUSTRAC oversees compliance with reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Financial Transactions Reports Act 1988 for approximately 18,000 businesses across diverse industry sectors that include financial services providers, the gambling industry and other specified 'regulated entities'. As Australia’s financial intelligence unit, AUSTRAC collects and analyses financial information provided by regulated entities to assist Australian law enforcement, national security, social justice and revenue agencies and certain international counterparts in the investigation and prosecution of serious criminal activity, including terrorism financing, organised crime and tax evasion.

In 2011-12, AUSTRAC will continue to improve and supplement its systems to enhance all aspects of its dealings with its diverse regulated population. AUSTRAC will also review the way in which it provides guidance to regulated entities on their obligations.

As Australia’s financial intelligence unit, AUSTRAC disseminates financial intelligence to Commonwealth, state and territory partner agencies and international counterparts. In 2011-12, AUSTRAC will continue to strengthen its support to whole-of-government initiatives and priorities focused on combating organised crime, tax evasion and threats to Australia’s security. As part of this commitment, AUSTRAC will also continue to provide critical financial intelligence support to national investigations and taskforces.

AUSTRAC also plays a key role in identifying the methods and techniques used by criminals and this in turn is pivotal in catching and combating fraud and other serious crimes. AUSTRAC then outlines these techniques in its reports and tracks emerging techniques like card skimming, early release super schemes, Ponzi schemes, boiler room scams, and internet, lottery and sweepstake scams. AUSTRAC continues to uphold the integrity of Australia's financial system and assists to safeguard and protect Australians from serious organised crime.

This package of bills enables AUSTRAC to collect the levy and deal with the related administrative matters such as invoicing, late payment penalties and review mechanisms. It makes it a requirement for reporting entities to enrol with AUSTRAC. Currently reporting entities are encouraged to enrol with AUSTRAC. Only enrolled entities can lodge reports with AUSTRAC electronically. Over 18,000 entities have enrolled with AUSTRAC to date.

Organised crime is a growing challenge that the Gillard government is committed to fight and deter, and the passage of this legislation will go to strengthening our stance against organised crime in Australia. The impacts of organised crime are far-reaching and have severe consequences for our economy and society, as it is estimated to cost the community $15 million per year. Therefore, monitoring money flows—which is, in essence, the lifeblood of organised crime—is critical.

The Parliamentary Joint Committee on the Australian Crime Commission conducted an inquiry into the future impact of serious and organised crime on Australian society back in 2007. The inquiry found that technological developments like the internet have increased opportunities which enable organised crime groups to pursue new types of crime—things like electronic piracy, counterfeiting and forgery, credit card fraud, money laundering and denial-of-service attacks. The committee's inquiry into the legislative arrangements to outlaw serious and organised crime groups stated that the impact of organised crime in Australia is significant. The Australian Crime Commission found that in 2008 organised crime's financial impact on Australia was roughly $10 billion. These impacts include: loss of legitimate business revenue, loss of tax revenue, expenditure fighting organised crime through law enforcement and regulatory means, and expenditure managing social harms caused through criminal activity.

Last year, AUSTRAC's annual report highlighted the importance of financial intelligence in combating serious crimes. The report illustrated the significant role AUSTRAC had played in assisting the detection and persecution of a wide range of offences such as money laundering, fraud and the importation of drugs. In 2009-10 AUSTRAC received over 21 million financial transaction reports from businesses in the financial, money remittance, bullion and gambling sectors. This included almost 50,000 reports motivated by suspicious matters. The report highlighted the increase in organised crime with a record number of reports received during that year. Last year, AUSTRAC played a vital role in investigating a major money-laundering case which resulted in the imprisonment of a Sydney woman who pleaded guilty to laundering over $1.9 million through her money transfer business over a 2½ month period from November 2007 to January 2008. It was reported that the woman had divided the money into amounts of less than $10,000, which was then transferred to beneficiaries in Vietnam using a series of false names. The woman will serve at least 3½ years before being eligible for parole. This case and the sentencing will deter others who are thinking about breaking Australia's laws.

In the 2009-10 financial year AUSTRAC information contributed to more than 3,700 cases conducted by the Australian Federal Police and other partner agencies; more than 1,800 cases conducted by the Australian Taxation Office, resulting in recovery of evaded taxes in excess of $272 million; and more than 1,200 cases involving Centrelink, leading to a total of more than $7 million in savings per year.

It has been reported that last year organised criminals were ripping more than $15 billion a year out of the Australian economy. As I mentioned earlier, there has been an increase in organised crime with the use of new and emerging technologies and the internet, giving these criminals additional avenues. Therefore it is not surprising that there has been a 50 per cent jump in organised crime since 2008, and we are working to combat this. This government are committed to tackling organised crime. We have spent $14.5 million on a Criminal Intelligence Fusion Centre to provide new capabilities to prevent and detect organised crime. The fusion centre provides in-depth criminal intelligence and analysis and boosts the capability of law enforcement agencies to identify high-risk cash flows, patterns of crime and the individuals, businesses and corporations that may be involved in criminal enterprises in Australia and abroad.

AUSTRAC is an important agency upholding the integrity of Australia's financial system by making businesses resilient to money laundering, tracking and discovering the techniques used by serious organised criminals. I therefore support the measures in these bills to allow AUSTRAC to recover the cost of its supervisory activities from businesses which it regulates under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.