Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | Hansard source

The Morrison government are big on the rhetoric when it comes to talking about keeping Australians safe and acting to combat terrorism, but they're not big on taking action when it comes to updating Australia's laws to ensure that we have the most stringent and strongest anti-money-laundering and counterterrorism financing rules and regulations. Although this Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 does implement the second phase of reforms arising from the recommendations of the report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act and its associated rules and regulations, it doesn't go far enough. It will also address some of the deficiencies identified by the Financial Action Task Force in its mutual evaluation report on Australia's anti-money-laundering and counterterrorism financing regime in 2015.

We don't oppose this legislation. We believe it is a step in the right direction, but it simply doesn't go far enough because it ignores some of the recommendations of those reviews that I just mentioned. We on this side do call on the Morrison government to take anti-money-laundering and counterterrorism financing seriously because we have seen instances in Australia over recent times of people getting away with quite horrific, large-scale cases of alleged money laundering.

AUSTRAC announced it was launching an investigation into allegations of money laundering associated with high rollers at Crown casinos. It comes on the back of the Independent Liquor and Gaming Authority in New South Wales recently concluding an investigation into anti-money-laundering practices at Crown casino, where many of the directors admitted in evidence that the practices that they had in place were sloppy at best. We've seen instances in the banking sector, with CBA and a record corporate fine for hundreds of thousands of instances of money laundering, and more recently Westpac. The risk of money laundering and terrorism financing remains significant. Money laundering and terrorism financing are not problems just for Australia; they are global problems which threaten Australia's national security and the integrity of Australia's financial system.

The Morrison government has dropped the ball on this crucial national security issue, while other jurisdictions have moved ahead of Australia, with much stronger AML/CTF protections, meaning that there's a growing risk to Australia from this government's failures to implement either the FTAF or the statutory review recommendations. There's a risk that Australia becomes a honey pot for these activities because of the slow nature of our reaction to some of these reports. This government's even been slow to start on bringing Australia's AML/CTF laws up to scratch. It has also failed to properly enforce existing laws, with no action taken against Westpac until it breached the law 23 million times. It highlights why Labor was completely justified in calling for numerous years for a royal commission to be established into banking and financial services, which was opposed 26 times in this place and the other place by the government. The last thing any country wants is to become a soft touch for money launderers and terrorism financers. That's why Australia's anti-money-laundering and counterterrorism financing framework must continue to evolve, otherwise Australia will become a weak link in the global financial system and a soft touch for organised criminals around the world seeking to launder the proceeds of crime.

Since 2013 the coalition has repeatedly missed deadlines in its own anti-money-laundering and counterterrorism financing reform timetable. While we welcome the efforts by the government to belatedly strengthen our anti-money-laundering and counterterrorism financing laws, the latest legislation comes more than four years after the then Minister for Justice tabled the report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated rules and regulations, which first called for these changes in March 2016. That's four years ago. Still, more than four years later, the legislation fails to implement many of those 2016 recommendations.

The world's AML/CTF watchdog, the Financial Action Task Force, has expressed serious concerns about Australia's regulatory framework and this government's failure to implement the reforms according to its own timetable. The Financial Action Taskforce 2015 mutual evaluation report made it clear that Australia is:

… an attractive destination for foreign proceeds—

of crime—

particularly corruption-related proceeds flowing into real estate …

That's the view of the international body entrusted with the role of keeping a check on these illicit activities throughout the world. It's their view that Australia is an attractive destination because of this government's tardiness in implementing many of the recommendation reforms.

The failure to extend reporting obligations to real estate agents, to lawyers and accountants has left a huge hole in our anti-money-laundering defences and it means Australia is out of step with the likes of Great Britain and New Zealand, which have already taken action in their property sectors to curb money laundering. Reportable transactions in Australia which intersect with the regulated sector, banks and other financial institutions, provide authorities with some visibility of potential money laundering through real estate, and yet real estate agents and other professionals linked to the property market are still not subject to the provisions of the AML/CTF regime. For example, there's no obligation for real estate agents to report any suspicious activities associated with money laundering. AUSTRAC identified in 2015-16 that there was $1 billion of suspect funds flowing from China alone into our housing market, yet the government fails to act on that recommendation to close that loophole.

If the housing market is being used to launder funds, it creates a market where people are prepared to pay more for houses than they're worth, putting upward pressure on prices and creating more issues of housing affordability. The one issue that we know has been a serious one for this country, particularly for younger generations of Australians, has been the heat in the housing market. If there is evidence that people are artificially inflating prices to launder money, that's simply unacceptable and it's something that the government needs to act on. While other countries have strengthened their defences against the proceeds of criminal and corrupt businesses in this particular industry, in real estate, the government's left the door open for illicit capital to flood into Australia. Serious and sustained breaches of the FATF standards and obligations can result in jurisdictions being greylisted or blacklisted, increasing the cost of doing international business and restricting access to international finance. This is an issue that the government needs to take seriously. It's not a by-issue of being strong on terrorism. It's not a secondary issue of being strong on terrorism. Financing for money laundering and for terrorism acts is a serious issues. They're how the acts begin. They're how the acts are financed, and the Morrison government must take anti-money-laundering and counterterrorism laws seriously. It must take seriously the recommendations of both of those reviews which ask the government to look at closing those loopholes, particularly around the real estate and legal professions, so that we don't have this honey pot in Australia anymore. Getting these crucial laws right is too important to get wrong.

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