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Tuesday, 22 March 2011
Page: 2817


Ms GAMBARO (6:52 PM) —I rise to speak on the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Financial Transaction Reports Act 1988 and the Privacy Act 1988. The purpose of this bill before us, the Combating the Financing of People Smuggling and Other Measures Bill 2011, is to tighten regulation over the remittance sector in Australia. It is a significant action by government to intrude or trespass upon the legitimate business activity of individuals and bona fide business firms. The Australian public are rightly sceptical about such possible intrusions, and it is always preferable for a government to be organised enough to avoid this particular situation. But the Gillard government is anything but organised, and we have just heard in the contribution by the member for Berowra about the disarray that has been occurring particularly with illegal boat arrivals.

The further intrusion into the freedom of remittance sector operations should not be taken lightly, but with a government that is not functioning well on any level it seems that such an intrusion is necessary. However, the coalition holds a very strong view that national security and the fight against terrorism must prevail. As such, the coalition supports in principle the Combating the Financing of People-Smuggling and Other Measures Bill 2011. The bill’s purpose is to reduce the risk of money transfers by remittance dealers being used to fund people-smuggling ventures and other serious crimes. There is one thing for sure: people smuggling and the proceeds of people smuggling are on the increase. We have had 10,000 arrivals in more than 200 boats, and the numbers are increasing. There are people offshore that are making genuine claims. A couple of weeks ago I returned from the Thai-Burma border where 170,000 people have been in camps for periods of up to 20 years and they are making genuine claims through the UNHCR. However, we have an increase in the amount of people smuggling that is going on and a system at the moment that is in complete disarray.

The bill’s purpose is to reduce the risk of money transfer by remittance dealers being used to fund people-smuggling ventures and other serious crimes. It has obviously been put in place, as the previous member said, because this is on the increase. The bill’s intention is to introduce a more comprehensive regulatory regime for the remittance sector, and whilst there has been a long-held international concern about the exploitation of the world’s financial system for criminal purposes such as money laundering, the surge in people-smuggling activities and their links with sophisticated crime networks have led to further regulation of formal and alternative financial sector activities—such as the banking and remittance sector—aimed at preventing the financing of people-smuggling and terrorist activities.

There is obviously and unfortunately a very genuine need to combat the increased activity of people smuggling—a situation that has reached absolutely unacceptable levels in recent times. The aim of this bill is to ensure that those who pose an unacceptable risk of people smuggling, money laundering or terrorism financing will not be allowed to provide remittance services in the community. The bill seeks to reduce the risk that remittance dealers will be involved in financing people smuggling, money laundering or financing terrorism.

Some notable examples of money laundering occur in various ways. One of the newer and much more sophisticated methods is laundering money through bank accounts of unsuspecting third parties. This is known as cuckoo smurfing. Using this system requires a very complex structure; initially a very innocent customer who may be in Australia or overseas, a criminal alternative remitter located overseas, an Australian criminal seeking to transfer funds overseas, an organiser or coordinator in Australia and associates of this organiser who make the third-party deposits into the Australian customer’s account. Crime gangs and groups also launder proceeds of crime by business revenue manipulation, in which illicit funds are funnelled through a firm’s otherwise legitimate accounts.

This web of activity needs detailed and comprehensive surveillance and investigation. The expense involved in such an investigation is considerable, and money-monitoring agency AUSTRAC believes that such related crime in Australia generates up to $6 billion a year—an unbelievable amount, and obviously an amount that is increasing, otherwise this government would not have the need to bring in such legislation as is before us today.

This is all the more reason for the Gillard government to ensure that the people-smuggling activity is minimised, and that that is done as soon as possible. It is only when there is a confident and successful sense of national security that concentrated efforts to end criminal and dangerous activity will prevail. This government needs to get the basics right, and it is clearly not doing that. It has failed in so many ways: it has failed to stem the tide of people smuggling that we have seen—it is only increasing—and it now needs to put in measures in order to combat the people-smuggling financial remittance. The government really needs to get its basics right; clearly, it needs to improve our national security, and the failure that it has had all along in protecting its borders.