Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download PDFDownload PDF 

Previous Fragment    Next Fragment
Legal and Constitutional Affairs Legislation Committee
Australian Transaction Reports and Analysis Centre

Australian Transaction Reports and Analysis Centre

CHAIR: I welcome the CEO and other representatives from the Australian Transaction Reports and Analysis Centre. I understand that Senator Lambie will be putting some questions on notice.

Senator PRATT: I have a submission here from you, Mr Jevtovic; it is good to meet you this afternoon. There is an article by Jessica Irvine which references a speech you gave to the conference of Association of Certified Fraud Examiners which highlights some important issues. It was about how Australians are being increasingly targeted for serious financial crimes by organised crime groups. You said in that speech: 'We are really struggling to keep pace'. Just last week, I had a constituent in my office whose circumstances very much fit the subject of your speech. She received a phone call from someone who sold her a financial share-trading product, or convinced her to use it; she was defrauded of nearly $30,000 and she is in a very distressed state because of that. I am concerned, given the kinds of circumstances we are facing. You said we are struggling to keep pace, but the budget financial statements are forecast to be reduced by some $4 million over the forward estimates. Why was this decision was made, given the significance of your work?

Mr Jevtovic : I think, like a lot of agencies, we absorb things like the efficiency dividend, and we do that in a way which will have least impact on our operational capabilities. One of the things that it does force us to do is think smarter about the way we do our business. For example, we are very focused on creating strong partnerships with other government agencies but, more importantly, we have created an environment where we have enhanced our partnerships with industry. Yes, on the one hand we do have to deal with the realities of efficiency dividends but, on the other hand, it does make us think differently and smarter. There are immense benefits that in fact come from focusing on creating new partnerships.

Senator PRATT: So the decision was made based on the efficiency dividend. Is that the extent of the $4 million cut or are there other cuts contained in that?

Mr Jevtovic : No, it is just the maturing of other funding sources that we had—and of course the efficiency dividend.

Senator PRATT: Notwithstanding the fact that all agencies need to innovate to meet the challenge of delivering their performance targets in a financially constrained environment, does a cut like that have an impact on your work?

Mr Jevtovic : It has to because obviously we are going to have fewer funds. As I said earlier, we have to think differently about the way we deliver our business. We have to look at targeting areas within the organisation that are nonoperational and we have to make sacrifices in some of those areas, but we endeavour wherever possible to quarantine the operational capabilities of the organisation.

Senator PRATT: For someone like my constituent, who is seeking to access AUSTRAC's support and refer her case to you to see whether you are able to find the criminal syndicate that was behind swindling her, have you been able to quarantine those cuts?

Mr Jevtovic : If the matter fell within AUSTRAC's jurisdiction, remembering that we are a financial intelligence unit. There are a range of investigative bodies within the Commonwealth and, depending on the nature of the crime, any one of those agencies may or may not be the appropriate agency. But, if a member of the public were to approach us with allegations of a crime, there would be no reason we would not do everything we could to respond to that, or if it is not something we do we would ensure that we would forward it on to an appropriate agency who could.

Senator PRATT: She has already been to the Banking Ombudsman and ASIC, but I will make sure she gets in touch with you. Expenses for employee benefits are being reduced by over $1 million over the forward estimates. Why was the decision made to reduce employee benefits?

Mr Jevtovic : What we do with the efficiency dividend is take a proportionate approach across the various aspects of the organisation, and that is a proportion of savings that we are looking to find across the organisation.

Senator WONG: Your answer seems to assume that it is the unwinding of the efficiency dividend.

Mr Jevtovic : One aspect of it, Senator, yes.

Senator WONG: But the line item I think my colleague is referring to is on the budget and financial statements table. Can you tell me whether that is only the unwinding of the ED?

Mr Jevtovic : I will have the CFO address that issue.

Senator WONG: If you look at page 188—and then perhaps someone can explain to me where the additional estimates statement actually dates that, because it does not seem to be disaggregated. If we just go back to the original PBS, is that only the unwinding of the ED or is there some other underlying assumption change which is driving that recalculation?

Mr Mazzitelli : Senator, can I just clarify that you are referring to page 188 of the PBS?

Senator WONG: Correct.

Mr Mazzitelli : There are several budget measures which terminate throughout the forward estimates period.

Senator WONG: Thank you, so it is not only the ED. So why don't you tell us which ones terminate? What is driving that reduction in employee benefits?

Mr Mazzitelli : There is a budget measure referred to—the DHS strengthening of the welfare payment system—and that lapses during the forward estimates period.

Senator WONG: When does that lapse?

Mr Mazzitelli : At the end of 2018-19.

Senator WONG: So remind us what that measure was for?

Mr Jevtovic : That is funding that we received to be able to do high-level data analysis between us and DHS, obviously targeting criminals who would exploit the welfare system et cetera.

Senator WONG: That is being terminated.

Mr Jevtovic : It is being wound down but that does not mean that the relationship necessarily between us and DHS gets terminated.

Senator WONG: No, I did not ask that question; I asked if the funding was being terminated.

Mr Jevtovic : As indicated, it will be.

Senator WONG: How much was that measure? How much over X number of years, and what was the terminating date—2018-19?

Mr Jevtovic : It was 18-19 in the forward estimates.

Mr Mazzitelli : The figures in the out years, 17-18, were $2.688 million; for 18-19, the figure was $3,043,000; and the budget measure, which was a four-year budget measure, lapses at the conclusion of that period.

Senator WONG: So the government will keep going after people for Centrelink debts but they are no longer funding going after criminals who abuse the welfare system—is that how it works?

Senator PRATT: It seems that way.

Mr Jevtovic : Our role is to, using the intelligence that AUSTRAC receives through numerous reports, produce intelligence products that help other agencies focus their resources on targeting criminals who would defraud the Commonwealth. That is what we do, that is what our high-level data analytics allows us to do and that is the nature of the relationship with DHS.

Senator WONG: How many FTEs—the 2.68 which became; I will just finish this and then I will hand to my colleague—how was that broken up? Was there capital funding or simply departmental funding? How many FTEs did it fund?

Mr Jevtovic : We do not have the exact numbers. I can confirm: it is absolutely a mixture of both people and capability, including technology, but we can give that on notice.

Senator WONG: As a result of the 18-19 ending of that funding, which you have already had to budget for, have you calculated how many FTEs you will lose?

Mr Jevtovic : I cannot answer that, but—

Senator WONG: With respect, that has to be an underlying assumption in the costing? You ought to be able to tell us that.

Mr Jevtovic : It does not necessarily mean that we will lose any FTEs. What we do is, when faced with budgets that are decreasing and/or terminating, as an organisation, we reprioritise.

Senator WONG: Okay, that is good to hear, but your budgeted figure for 19-20 is $35.259 million. It is less in nominal terms than the 15-16 budget. Now, unless you had a lot of fat, which I assume you did not, it would be hard to see how you could have that kind of reduction over that period without having to cut staff.

Mr Jevtovic : Sometimes we, as you are aware, bring on people to do specific things in the organisation. I do not have the detail that I would like to have to answer your question.

Senator WONG: Could you on notice perhaps provide us with the detail as to—I think the question my colleague asked and then to add to that: what is the reduction in numbers of both employees—and would you call them contractors? Is that how you would describe them?

Mr Jevtovic : It can be—non-ongoing employers, contractors; we will have a look at that.

Senator WONG: We want to know how many fewer people will be engaged by whatever means. Where in the additional estimates statement is there the reference to the unwinding of the ED? Is there any additional AUSTRAC measure in the additional estimates statement?

Mr Mazzitelli : Do you mean the official estimates for 2016-17?

Senator WONG: Correct.

Mr Mazzitelli : That has yet to be published.

Senator WONG: No, that is right here. That is what we have got estimates for.

Mr Mazzitelli : The additional estimates?

Senator WONG: Portfolio additional estimates 2016-17, Attorney-General's portfolio.

Mr Mazzitelli : AUSTRAC did not have any specific measures in there.

Senator WONG: I think they aggregate. Maybe Attorney-General's can tell me. Where are you aggregated into in terms of the budgeted expenses in this document?

Mr Mazzitelli : I do not have that in front of me.

Senator WONG: You should have this document, because that is what the Senate is inquiring into, with respect. You do not have your additional estimates document?

Mr Mazzitelli : I will take it on notice.

Senator WONG: Thank you.

CHAIR: Thank you, gentlemen, for your attendance.