ABC Melbourne Drive – Ali Moore

E&OE

Subjects: AUSTRAC’s National Risk Assessments; Anti-money laundering and counter-terrorism financing; Anti-Semitism Envoy

ALI MOORE: Have you ever wondered just how much drug money or other dirty money is sloshing around the economy? By its very nature, it is usually hidden? But also, specifically, do you ever wonder whether it's us to outbid those of us who do the right thing when it comes to buying a home? The government, as you just heard, when we spoke to the Real Estate Institute of Australia is introducing new money laundering laws, more professionals, including estate agents are going to be responsible for reporting suspicious transactions. At the moment, I think it's only casinos, gold dealers and lawyers who have that responsibility. But this change extends it to many others. Also, of course, today, as we spoke with Zoe Daniel earlier, the Prime Minister has appointed a dedicated anti-Semitism envoy. That's another issue to put to our next guest, the Federal Attorney-General Mark Dreyfus. Welcome back to the program.

ATTORNEY-GENERAL MARK DREYFUS: Great to be with you, Ali, and good afternoon to your listeners.

MOORE: Why do we need to change the money laundering laws?

ATTORNEY-GENERAL: These reforms that we are going to do later this year are a decade overdue. Australia is one of very, very few countries that does not bring in what are called tranche two entities, which are real Estate Agents, accountants and lawyers. And if we don't do this, we are at risk of Australia being greylisted by the Financial Action Task Force, which would have pretty dire consequences for our economy.

MOORE: That's the international organisation?

ATTORNEY-GENERAL: That's the international organisation. That would raise the cost for Australia to do business. The CEO of AUSTRAC Brendan Thomas was on radio early today, saying that the cost could be as high as 2-3% of GDP. So it's a really big cost if Australia gets greylisted. The former government simply sat on its hands for a decade. We've got on with it. I've had two rounds of consultation and I'm looking forward to introducing these reforms so that Australia is not left as part of that very small group of countries that haven't acted.

MOORE: So what sort of things are you looking at being reported? I mean, what how much of this money is sloshing around the economy and what's it being used for?

ATTORNEY-GENERAL: We don't know is the short answer. You've said that there are billions of dollars being generated from illegal activities and that's absolutely right. It's been estimated that the total cost of serious and organised crime in Australia is as high as $60 billion. And, of course, it's not a victimless crime, money laundering. When criminals make money real people have been harmed by the underlying criminal activity, whether that's drug trafficking or child exploitation or terrorism financing. So we have to do something about it and it's potentially huge amounts of money are being laundered. through real estate. At the Press Club today Brendan Thomas, the CEO of AUSTRAC, who was there with me, referred to a number of cases that have been uncovered including one startling case where $30 million was paid in cash for a property.

MOORE: Now that surely would raise a red flag?

ATTORNEY-GENERAL: There is no present requirement that it be reported. It did get discovered...

MOORE: Through reporting?

ATTORNEY-GENERAL: No, not through reporting, through investigation by Australian Federal Police. So we have uncovered the use of real estate as a means of money laundering but the reason why we are moving to a regime where real estate agents and lawyers and accountants are going to be required to report suspicious transactions is so that we get a much better handle on this and investigations can be commenced.

MOORE: And when you say suspicious transactions I mean the rule has been for those entities that I mentioned, the casinos the gold dealers and the lawyers $10,000, anything above $10,000 Is that it?

ATTORNEY-GENERAL: Lawyers are not presently included. Financial institutions report. There's something like half a million reports every day to AUSTRAC from financial institutions, primarily the big banks.

MOORE: So that would be anything involving..

ATTORNEY-GENERAL: There is some variations but certainly transactions over $10,000 have to be reported.

MOORE: In cash?

ATTORNEY-GENERAL: No, all transactions are reported. Now AUSTRAC has got a long established working regime there. This is about bringing in, in addition to that financial institution reporting, reporting by lawyers and accountants and real estate agents. We've been working through consultation over the last two years to make sure that the regime that we introduced is an effective regime and there's $166 million in the Budget this year for an education campaign to work with the affected industries.

MOORE: So if I'm bidding for a house this weekend, should I be worried that maybe someone's there with a lot more money than me that might not be necessarily from...?

ATTORNEY-GENERAL: Well, let's hope that it's not that common, but I've been advised by the Australian Federal Police that real estate is quite frequently purchased by criminals at significantly inflated prices. That's the problem here. And they want to quickly convert the proceeds of crime, from cash to property assets, and that can distort the value of real estate in Australia.

MOORE: We just spoke earlier to the Real Estate Institute of Australia and I'm not sure whether you're able to hear them but they did talk about how they believe that there's a doubling up on their compliance. That they already, through the conveyancing system, they have a you know, a compliance program and this is sort of adding an extra layer that will add to the expense.

ATTORNEY-GENERAL: I listened to that interview. I don't think that the representative of the Real Estate Institute there has quite understood what's going to be required. This is not reporting of every transaction, it's reporting of suspicious transactions only. Conveyancing is a different system. And I'll stress again, we've had very deep consultation, we're going to make sure that we've got an effective system at the lowest possible cost. And we have to do it. Maintaining the status quo is not an option for Australia. We've got to get on and do this and we've got to do it quickly.

MOORE: You're also changing personal bankruptcy laws, which is I suppose an interesting change. In essence, it's a higher threshold to be declared bankrupt, as I understand it. Why now?

ATTORNEY-GENERAL: This is another project that the former government just neglected entirely. We've been talking about this now for several years, not just since the election, but for several years before that, raising the threshold for an involuntary bankruptcy from $10,000 to $20,000, with an indexing of the threshold. It's just to make sure that people don't become bankrupt for small debts. And there's some other changes I consulted through last year with experts in personal insolvency. I held a round table. What we've announced today are the changes that the Government is now proposing to make but it's not prompted by current economic circumstances. It's just long awaited reform that all governments, all good governments should be getting on with.

MOORE: Not prompted by current economic circumstances but would you agree timely, given the stresses people are under?

ATTORNEY-GENERAL: Very, very many businesses, very many Australians are finding the current economic circumstances extremely difficult. And it will be timely if we can raise the threshold from $10,000 to $20,000. So that people are not accidentally caught. Under $20,000 it ought to be possible to reach some arrangement. So it's introducing flexibility in the system.

MOORE: Do many people get caught between the 10 and 20 threshold?

ATTORNEY-GENERAL: Yes, a surprising number of people are made bankrupt for relative what I think most Australians would accept are relatively small amounts of money. We want to increase the time that a debtor can respond to a bankruptcy notice from 21 to 28 days. That might not sound like much but it just gives that extra flexibility, and a bit more time for people to reorganise their affairs, which is what we should all be interested in.

MOORE: You're listening to Federal Attorney-General Mark Dreyfus. Just a couple of texts here on the better the money laundering. And this, I suppose will go to how you finally design these changes, but if the onus is on real estate agents to report suspicious transactions, what's suspicious? That's quite difficult.

ATTORNEY-GENERAL: Can I give you a clue here, Ali, if someone turns up with a couple of suitcases full of money, that's got $30 million in it, says I'm gonna buy that property, that's probably suspicious. Now, at the margins, maybe you can argue about how suspicious something is, but it's about knowing your customer. Knowing the source of the funds, if it's possible to know. Cash is a bit of a giveaway in these times. People that are turning up with baskets of cash money, might raise some questions.

MOORE: The other thing that was announced today by the Federal Government was the fact that we now have an Anti-Semitism Envoy. The first time this country has had that Jillian Segal, Sydney lawyer, business executive, has been announced in that role. What does it say that we are at that point? And I do understand the government is also in the throes of appointing an Islamophobia Envoy as well, but what does it say that we're at that point?

ATTORNEY-GENERAL: It tells you that our government is acting on what has been the largest rise of anti-Semitism in Australia in my lifetime. It's something that's concerned all Australians but members of the community of which I'm part of, the Jewish community, have felt anti-Semitism rise appallingly since the attacks in Israel on October the seventh. And it's included abuse in the street, it's included our children not being prepared to wear their uniforms to Jewish schools, and students, Jewish students on university campuses being afraid to go to university and copping abuse and a whole range of other things which I could spend some time describing to you. The Government is determined to do something about it. We've appointed a really eminent Australian in Jillian Segal and I'm thrilled about this announcement today.

MOORE: However eminent, what will she be able to do that can't be done within current structures?

ATTORNEY-GENERAL: One of the reasons for bringing forward the announcement today is that she will now be able to go straight away as Australia's representative to a conference in Argentina at which the invoice for combating anti-Semitism - of whom there are some 31 in different countries around the world are meeting - including a very famous American Deborah Lipstadt, who is the Special Envoy for Combating Anti-Semitism with the rank of ambassador in the State Department in the US. I met with her in January this year. Jillian will be able to meet with all of them and I hope, learn from some of their experiences. Some of those envoys have been established for a couple of decades. The fact that we've got to this in Australia, it's sad, in many ways that we've had to have this response, but I'm very pleased that that our government has been able to appoint Jillian. She'll be appropriately resourced.

MOORE: So there will be money with this role?

ATTORNEY-GENERAL: Of course, and she will have staff and exactly what role she's going to be able to perform is something she's going to work through. She said that at the announcement in the interview with the Prime Minister today, but I'm very confident that she's the best possible person for this job. And I'm looking forward to her being able to make a difference. And I'm looking forward to the whole community, trying to get to a position where we talk to each other better, where we don't act in ways that are prejudiced, where we don't discriminate against each other, where we don't label so quickly. I'm looking to get to an Australia where we get along a lot better and are prepared to engage in much more reasoned debate than we have experienced over the past several months.

MOORE: I'm very conscious we only have a minute left, and it's a very big question, but I do wonder in the context of trying to have that reasoned debate do you think it is very clear what is anti-Semitism and what is not?

ATTORNEY-GENERAL: I think sometimes it's really clear. Vilification of Jews because they are Jews is absolutely clearly anti-Semitism.

MOORE: But is it sometimes not that clear?

ATTORNEY-GENERAL: Well, sometimes it's not that clear and an example would be criticism of the State of Israel, which is the Jewish state. And sometimes criticism of Israel is going to be warranted and won't have any part of, or any semblance of anti-Semitism. And other times there's criticism of Israel, which is distinctly anti-Semitism, because standards are being applied by the speaker to the State of Israel that are not applied by that person to any other country. And criteria are being applied or labels are being applied to the Jewish state which are not applied to any other country. Then it's anti-Semitism.

MOORE: Mark Dreyfus, we really appreciate you coming in many thanks.

ATTORNEY-GENERAL: Thank you very much Ali.