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Thursday, 13 September 2018
Page: 6339


Senator WHISH-WILSON (Tasmania) (13:19): I was just going through a time line of inaction on money laundering or the black economy through real estate. I just wanted to make a point that similar deadlines for action have been set by various governments in this country previously—in 2008, in 2010, in 2012 and in 2014—and all of them have come and gone. There were another six times when the issues that I'm raising here in the Senate have not been acted on by this government. I think I've set out a very comprehensive time line of numerous committees, numerous reports, numerous inquiries and numerous times the parliament's actually looked at this issue but hasn't acted on it.

We have a gaping hole in our laws around money laundering. If this parliament is serious about giving law enforcement more powers to crack down on the black economy then we must deal with money laundering through real estate. Gaping holes in this country's laws have allowed money laundering through real estate to reach epidemic proportions. The ANZ's head of financial crime, Guy Boyd, said last year that Australian real estate is:

… obviously an attractive destination for capital, both legitimate and illegitimate.

I wouldn’t know if it I would call it a haven but certainly it is a place of choice for illegitimate money.

There’s been probably a lack of political will and that’s probably been driven by some very vocal opposition from those industry sectors.

In other words, it's what we see in here every day: rent seekers and vested interests lobbying to get what they want. I would propose to senators in this chamber and others who are listening that if one of the big four banks is saying that we as a country have got a money laundering problem then we've probably got a money laundering problem. I think they would know better than most. And if one of the big four banks is saying that lobbyists are stopping these laws from being introduced then that's probably true, too, because they would know a thing or two about lobbying.

Let's talk about international concerns. Not only are Australia's lax laws a source of local concern, but there's global concern about Australia's inaction on money laundering through real estate. I'd also like to note here in my contribution to this second reading debate that the Financial Action Task Force's 2015 report stated:

Australia is seen as an attractive destination for foreign proceeds, particularly corruption-related proceeds flowing into real estate.

A 2017 OECD report recommended that Australia address the risk that the real estate sector could be used to launder the proceeds of foreign bribery. Further, Transparency International's 2017 report identified Australia, Canada, the UK and the USA as the top four spots globally for laundering money through real estate and said that, on the indications that they used, Australia was likely the worst, failing to address 10 out of 10 identified legal loopholes.

Then there's money logging and the Adelaide Hilton. The Bruno Manser Fund is a Swiss based anticorruption organisation that I have met with. The fund and its executive director, Lukas Straumann, the author of Money Logging, have detailed the horrendous destruction of Borneo's rainforests, the displacement of its Indigenous people and the involvement of the so-called Asia timber mafia in this illegal logging. This is a well-known story globally. Central to this story is the governor of Sarawak, Mr Taib Mahmud, and the ownership of the Adelaide Hilton by Taib's family. Under Taib's governorship nearly 90 per cent of Sarawak's native rainforests have been logged. Despite Taib's modest income as a politician, his family has interests in more than 400 companies in 25 countries around the world, including the Adelaide Hilton, which it acquired in the 1990s and through which it seems it has been able to continue to launder money. But, because we have a gaping hole in our anti-money-laundering laws here in this country, we don't know for sure, and AUSTRAC can't pursue this issue.

Nor can it look into the billions more of dirty money that have likely gone into Australian real estate in more recent times. Last year Fairfax reported that Australian real estate agent giant Raine & Horne's offshore arm was involved in a global corruption scandal involving the sale of prime Melbourne property. The scandal centres around the vastly inflated valuation of a 280-room city apartment building, UniLodge, which mostly houses overseas students, on Swanston Street near Melbourne university. Raine & Horne International's Kuala Lumpur office valued the property at $43 million, despite the fact that the building's seller, Australian businessman Lionel Harber, had simultaneously valued it at $23.5 million.

Another big issue is China. There is plenty of evidence to suggest that a large part of the recent spike in Chinese investment in Australian real estate and in many other parts of the world is money laundering. This is what has been suggested by the French based Financial Action Task Force. But we wouldn't really know, because Australian authorities have no authority to go chasing this.

I reiterate to the Senate chamber: this is a problem that we've known about for 12 years. I've outlined a substantial time line of references to this specific issue by a number of governments, a number of committees, a number of task forces and a number of inquiries over a period of time. When are we going to deal with it? While we support the bill today—as I said earlier, everything we can do, in a holistic fashion, to crack down on this will be a positive—money laundering through real estate is a very serious problem that the government should act upon. I ask the Senate to support the Greens second reading amendment that I have moved. It should have been circulated. Let's get on with tackling the heart of the issue.