David Smith (Bean, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Attorney-General. What money-laundering and terrorism-financing risks does Australia face, and how are these risks made worse by the mess left by the former government?

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank the member for Bean for his question. When we came to government over a year ago we had significant work to do to clean up the mess left by those opposite. One of those messes which has extremely serious consequences for Australia's national security, for the criminal justice system and for the stability of our financial system, is the failure to progress money-laundering reform. Despite knowing for years that reform to Australia's anti-money-laundering and counterterrorism financing regime was needed to respond to the changing threat environment and evolving international standards, the former government failed to lift a finger to undertake this necessary reform. This means that Australia's financial system has been left vulnerable to criminal exploitation, and it has weakened the overall integrity of Australia's anti-money-laundering and counterterrorism financing regime.

Money laundering funds transnational and serious organised crime. Money laundering funds child exploitation. And money laundering funds terrorism. The failure by the opposition to act to toughen Australia's laws when they were in government has had the most serious of consequences. It's estimated that serious and organised crime costs the Australian community up to $60 billion each financial year. Money laundering affects the safety and wellbeing of Australian communities and exploits and distorts legitimate markets and economic activity.

As the rest of the international community has strengthened their regulation of these sectors, Australia has fallen further behind. Since 2015 Australia has failed to comply with 16 out of 40 Financial Action Task Force standards, which include extending the anti-money-laundering and counterterrorism financing regime to tranche 2 entities. This includes lawyers, accountants, trust and company service providers, real estate agents, and dealers in precious metals and stones. As a result, Australia now risks being greylisted by the Financial Action Task Force, which could result in significant harm to our economy and threaten our links with international finance.

But we are acting to fix this. Last month the Albanese government commenced formal consultation on important and overdue reforms to Australia's anti-money-laundering and counterterrorism financing regime. The Albanese government is committed to protecting the integrity of this regime and the Australian financial system and ensuring that we are meeting international standards. Unlike the former government—

Milton Dick (Speaker) Share this | Link to this | Hansard source

The member for Page is on a warning.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

we won't tolerate exploitation of the Australian financial system by criminals and terrorists.