Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

I have some questions for the Minister of Home Affairs in relation to the government's failure to appropriately regulate anti-money laundering and counterterrorism financing. Since 2013, the coalition has repeatedly missed deadlines in its own anti-money-laundering and counterterrorism-financing reform timetable. One example of many is its failure to implement tranche 2 regulation, which would regulate solicitors, lawyers, real estate agents and accountants. This was picked up in a Financial Action Task Force review of Australia's AML/CTF regime in 2015 and in the third enhanced follow-up report and technical compliance re-rating by that same organisation in 2018. This government promised action on that front years ago and it hasn't been delivered. This has created large and growing risks to Australia's national security. While other countries have strengthened their defences against the proceeds of criminal and corrupt business practices, this government has left the door open for illicit capital to flood into Australia.

The government also has failed to enforce AML/CTF laws. Australians were scandalised by the New South Wales Independent Liquor and Gaming Authority inquiry, which showed that there had been massive, systemic breaches of AML/CTF legislation within casinos for an extended period of time. The risks to Australia and to the integrity of our AML/CTF laws are enormous. Where was the Morrison government? Its own regulator gave casino junket operations its tick of approval only three years ago. Instead, the Bergin inquiry found that the Morrison government had failed to properly regulate casino junkets or to prevent money laundering from becoming endemic in some casinos.

Firstly, why did it take a state based inquiry to reveal that there had been massive, systemic breaches of AML/CTF legislation within casinos for a long period of time, concentrated particularly within junket operations. Secondly, if this government has been doing its job, why have so many state based inquiries and royal commissions been established to investigate money laundering and other criminality in casinos? Thirdly, much like Australia's biosecurity, isn't this just another example of state governments doing the Morrison government's job for it. The Morrison government failed to get to grips with money-laundering risks in casinos, undermining Australia's national security and the integrity of our financial system while giving a break to organised crime groups.

There are also issues surrounding the resourcing of our regulator. Given that AUSTRAC has been so slow to get to grips with the problems endemic within the casino sector and that it took years to respond to issues within banks such as Westpac, why won't the government properly equip the regulator to do its job? With AUSTRAC struggling to regulate even the relatively few designated entities within its current orbit, such as banks and casinos, how can Australians be confident that this government would properly resource the regulator to meet its obligations under the tranche 2 regulation, which it has promised and failed to deliver for so long, but which we must expect will be delivered at some point.

Australia's existing AML/CTF laws were supposed to be just the first step in a much longer sequence of reforms to ensure that dodgy cash couldn't flow into Australia. But since 2013 this government has repeatedly missed deadlines in its own AML/CTF reform timetable. As I indicated, the real estate sector, in particular, has been repeatedly identified as an acute vulnerability in Australia's AML regime, with billions in illicit capital flowing unchecked into Australian housing. As I've already indicated, the Financial Action Task Force has on multiple occasions pointed to this as an area of noncompliance with best practice in our regulatory regime. Not only the FATF but also the IMF, the OECD and other independent international reviewers and regulators have identified systemic weaknesses and gaps in Australia's AML/CTF regime. This is not some technocratic nicety; this is the pointy end of organised crime both within Australia and across international boundaries and of how organised crime makes use of the illicit proceeds of that crime.

The primary source of Australia's continued noncompliance is the failure of this government to enact tranche 2 laws, although the government, as I've noted, is also failing to prevent money laundering in many other areas which it does regulate. Importantly, our key allies and trading partners—New Zealand, Singapore, the United Kingdom, Canada and many others—have already implemented tranche 2 and strengthened their existing AML defences. Australia is risking becoming the weak link in the chain. This government is leaving Australia and Australian businesses vulnerable and is jeopardising our national security. So my final question is: why hasn't this government moved forward with tranche 2 legislation as it has promised it would do across multiple years on multiple occasions?

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