Thank you very much for coming today, I’m the Minister for Revenue and Financial Services and today I’m joined by my colleague, the Minister for Justice, I’m also joined by the Commissioner of Taxation, and also the Commissioner of the Australian Federal Police. We also have with us today the CEO of the Australian Criminal and Intelligence Commission, and the CEO of AUSTRAC.
Australia and the Coalition Government have been very clear that hiding assets and not disclosing income offshore will not be tolerated. Those who evade their tax obligations will quickly realise that there is no place to hide. We will track down those people who are tax avoiders and tax criminals and we will make sure that we protect the Australian tax base for the benefit of all Australian taxpayers.
As you would be aware earlier this year there was a leak of significant information which has come to be known as the Panama Papers. Working with our international partners, the Serious Financial Crimes Taskforce led by the Australian Taxation Office and the Australian Federal Police has conducted a Week of Action in response to issues of tax evasion and crime identified in the Panama Papers. The Serious Financial Crimes Taskforce has pursued 15 unannounced access visits which has involved more than 100 ATO officials. Additionally more than 100 Australian tax payers have been contacted and have been told that they will be the subject of compliance action. And this doesn’t mean that there won‘t be further criminal activities and investigations and prosecutions, but this is the first step.
A number of these Australian taxpayers involve high wealth individuals. They also involve professional facilitators which includes those people who are accountants and lawyers. The information has revealed significant taxation evasion arrangements that promoters have put in place for their clients. Some are very, very complex and have multiple layers of offshore entities, fake shareholders, and other methods to disguise the ultimate owners of these accounts and of these funds.
Where offshore structures have been used to evade tax, avoid corporate responsibility, disguise and hide unexplained wealth, facilitate criminal activity and launder the proceeds of crime, the Australian Taxation Office will work with international law enforcement partners to share intelligence, investigate, and ultimately raise tax assessments against those individuals and ensure that they are prosecuted.
This Week of Action is the result of much collaboration with domestic and international agencies and it has led to the identification of more than 1,000 Australian taxpayers. About to commend the great work that has been done by the Australian Tax Commissioner Chris Jordan, who has spear headed the international collaboration and has called meetings with international partners and more than 30 other countries through the OECD’s Joint International Taskforce on shared intelligence and collaboration. This particular joint meeting has led to this shared intelligence and we know that other member countries will now be pursuing their own domestic responses in the same sort of way that we have announced today.
The reach of Serious Financial Crime is a web that is multi-layered and it is persuasive, and in order to combat this we need to have serious agencies that can conduct these sorts of investigations and activities. Just over a year ago, the Minister and I announced the formation of the Serious Financial Crimes Taskforce which is a multi-agency taskforce that deals with just this type of behaviour. It is there to track down those who choose to break the law.
The Serious Financial Crimes Taskforce has already conducted around 300 audits; it has already raised liabilities in excess of $130 million, and has led to four people receiving custodial sentences to date following prosecution, and there is currently in place more than 19 joint operations in progress.
The Panama Papers does provide a unique opportunity to look at understanding these arrangements that have been put in place by promoters of particular products and to identify other Mossack type operators. But the work doesn’t end here, the Serious Financial Crimes Taskforce agencies are receiving a steady stream of information from variety of sources and the Government will continue to share that intelligence with other international organisations.
Thank you very much Kelly. It’s good to be here with you, the Commissioners of the Australian Federal Police and the Australian Taxation Office, the CEO of the ACIC and the CEO of AUSTRAC.
This Week of Action that the Minister has just been talking about has seen co-ordinated and complementary overt activities undertaken by our law enforcement community – specifically the Australian Federal Police, the ACIC and AUSTRAC.
Three search warrants have been executed in Queensland – one by the Australian Federal Police and one by the Australian Criminal Intelligence Commission. The AFP has seized documents, electronic material and 170 kilograms of silver bullion bars and coins valued at approximately $150,000 at a property in Camp Mountain, Queensland.
As the Minister was saying, the Taskforce brings together our law enforcement and regulatory agencies to identify and combat serious financial crime. Its purpose is to prevent people from promoting and participating in the abusive use of overseas jurisdictions for tax avoidance and evasion, and to prosecute the perpetrators of serious fraud that undermines the financial sector and jeopardises our financial security.
Through the Taskforce, the agencies in my portfolio, the AFP, AUSTRAC and ACIC, have each played a very significant role in the Australian response to the Panama Papers, by collecting, collating and analysing financial intelligence. I thank them all for their ongoing efforts. The agencies have provided an immediate co-ordinated response by developing an intelligence picture of Australian-linked promoters, intermediaries and participants utilising Mossack Fonseca’s offshore services and structures for the purposes of avoiding tax.
The AFP continues to play a central role within these investigations and they anticipate that there will be further criminal investigations as a broader intelligence picture of the information is released and built upon.
The Australian Criminal Intelligence Commission is using its coercive powers to gather intelligence and has already identified an eight per cent match within its existing criminal holdings to date. The ACIC has shared 32 intelligence products with partners specifically relating to the Panama Papers which helps us build greater understanding of emerging issues.
AUSTRAC is identifying suspicious cross-border movement of funds between Australia and other countries, and identifying professional facilitators of tax evasion such as accountants or lawyers who create offshore structures and vehicles to conceal and move illicit wealth. AUSTRAC has identified $2.5 billion in funds that have been linked to the over 1000 Australian entities identified in the Panama Papers, over the last ten years. While of course this does not mean that that total quantum of money is illegitimate, it does give an understanding of the size of the task that the Taskforce is dealing with. As part of this week of action, AUSTRAC has issued 10 notices requiring banks to provide further information associated with accounts.
This week of action is just the start of the activity in relation to information exposed by the leak of the Panama Papers. And it’s very important that everybody understands that we take a zero tolerance approach to corruption here in Australia, and Australia remains one of the most corruption-free countries in the world. We are determined to make sure that remains the case and that’s why we have brought together this Taskforce which involves all of our law enforcement community, combining with our financial regulators to hunt down people who might be doing the wrong thing. To hunt down people that are concealing illicit wealth, and to make sure that we have every chance of bringing them to justice. We are talking about organised criminal activity here and that is why all the resources of the Australian law enforcement community are being brought to bear within this Taskforce.
Indeed, I might call on the Australian Taxation Commissioner to also say a few words.
CHRIS JORDAN (ATO COMMISSIONER)
Thank you Minister. I wanted to emphasise that in Australia we are lucky to be able to have the Serious Financial Crimes Taskforce so that the ATO can share information and work closely with the law enforcement agencies AUSTRAC and ASIC and whilst the Panama Papers has received a lot of publicity, we are also working closely together on 10 other data sets that have either come directly to us, or as a trusted partner through other countries sharing information with us. And it is important for people to understand that it’s not simply a matter of being caught out, maybe paying your tax, some penalties, but you can go to jail. Under Project Wickenby which concluded on the 30th June last year, 47 people were prosecuted and went to jail. Since the Serious Financial Crimes Taskforce commenced in July last year, four people have received custodial sentences. So this is a very serious matter that we are fully engaged in, working closely with out law enforcement colleagues to ensure that people who are committing tax fraud and other serious criminal activities will be held to account.
Thank you. Are there any questions?
Can I just ask how the process plays out from here and how the investigation will continue? I’m not sure who the best person to answer this is.
I might get the ATO Commissioner to talk about it.
Yes, we have focused in the first instance on facilitators so accountants, lawyers, advisers, people don’t dream these things up and put themselves into incredibly complex webs of companies with all sorts of nominee directors, trusts and – to hide the true ownership. So we are focusing on the facilitators to get that leveraged effect. So in the first instance there has been six accountants, 60 clients associated with those and we will be methodically working through the remainder. Now you have heard that figure of 1,000 people been mentioned and just being mentioned in the documents does not mean they’ve necessarily done anything wrong. There are acceptable, normal commercial and business reasons that have some of these sorts of structures. So we have to go through carefully to eliminate those that have legitimate reasons for having those structures. Some did come forward under project ‘do it’ that we ran last year. As a one off exercise to say to people we will find you, it is only a matter of time. Because business as usual for us – we have over 100 information exchange agreements with other countries. Over the last four years we’ve raised $1 billion in extra tax just from those information exchange agreements – which are quiet separate to any of these particular data leaks. So we’re going for the leverage for facilitators in the first instance and then working our way through the higher profile, wealthier, larger sums in the first instance.
You mentioned compliance action can you talk through the investigations?
ANDREW COLVIN (AFP COMMISSIONER)
Thank you. I think there’s a few things we should say. The advantage of the Serious Financial Crimes Taskforce is that it brings together agencies that can put in play a range of civil, criminal and regulatory functions as well. That's the beauty of the taskforce that the Commissioner has already spoken about. We’ll make assessments as we go through about what is the most appropriate means. You’ve already heard the Commissioner say that there have been significant civil assessments raised and there’s already been in the last 12 months a number of people prosecuted as well as regulatory action by agencies such as AUSTRAC. I think we need to keep in mind here that the professional facilitation networks that are behind a large amount of these schemes and scams are organised crime and we need to treat them as organised crime. So as matters are uncovered that are criminal in nature then I think what we’ve already shown through the work of the taskforce in the last 12 months but also not forgetting the work of Project Wickenby over the previous 4 years is that where we can there is a resolve to prosecute people.
To some other issues of the day, if we can.
If there are no other questions on these matters then we’re happy to go to other questions.
Questions on political donations if I could. If overseas political donations give foreign influence on our political process then why not simply ban them?
Well certainly I think that there is a very, very large focus on this particular issue because of the actions of Sam Dastyari. Sam Dastyari is a fellow who has lectured the Australian people on what is right and what is wrong and when he has been put under the microscope he has found to be a hypocrite. Sam Dastyari needs to come out of hiding, he needs to do the right thing and he needs to resign. And if he won’t do that then Bill Shorten, as Leader of the Opposition, needs to sack him.
But do you think political donations improve the system and should they stay at all?
Well I think this is a discussion that we will no doubt have around political donations but I think we shouldn’t shy away from what has actually raised this issue in the first instance and that is the behaviour of Sam Dastyari. A man who has held himself out to be the person who is the arbiter of what is right and what is wrong. And this is someone who has now gone into hiding, he needs to come out of hiding. He needs to do the right thing and he should resign. He should resign because he has accepted payments for overdue bills and they are payments from foreign government entities.
He has implied that his views on the South China Sea may have been misrepresented. Has the Coalition been too quick to condemn him?
Sam Dastyari has given no explanation of these arrangements. He’s given no explanation of the legal fees that have been paid by foreign entities, he has given no explanation of these overdue bills that have been paid by foreign entities and he’s given no explanation as to why he holds a position different to that of his party on something as sensitive as the South China Sea. Now one could say it looks on the face of it like cash for comment. He needs to come out and explain his behaviour. He needs to come out of witness protection and he needs to front up and explain exactly what has happened, exactly what he has done and exactly who has paid him.
How appropriate is it to criticise Sam Dastyari when you are calling him a hypocrite when the Liberal party has also received donations from the same group?
Well the subject of the allegations that have been made in relation to Sam Dastyari have been about payments of overdue bills, payments of legal fees, these are not comparable issues. There are very clear disclosure requirements that are associated with donations that are made to political parties. Now we can have a discussion about whether they are as strong as they need to be and I am sure that over the coming weeks and months ahead that there will be a discussion about political donations. But the real issue here is the issue that Sam Dastyari has created which is through his own behaviour and through his acceptance of foreign entities actually paying his bills.
On the discussions of political donations what exactly is your position on that?
On political donations – sorry, foreign donations rather.
My understanding is that the current law allows for those donations to be made, I don’t have a particular personal view. It is not the personal view of the Minister for Revenue and Financial Services to come up with particular views on this. This is obviously going to be a matter for the Special Minister of State.
I think the important point to make is this is an enormous smoke screen for what has actually been going on. There is an absolute world of difference between a political party taking a donation as part of running their legitimate operation, and somebody taking personal donations – the two things are not comparable whatsoever. The Labor party is throwing this up as a smoke screen today but we shouldn’t fall for it. There is a legitimate conversation to be had around it but doesn’t in any way make Sam Dastyari less complicit for what he has done which is taking personal donations. They are a very different matter.
Isn’t the solution though to ban foreign donations?
But again you are confusing the two issues. A political party taking a donation from a foreign entity is very different from a politician taking personal payments from that entity - two very different issues.
Can I ask on another issue about George Brandis he has lost his federal court case to release his diary. Should he simply release the documents and that be the end of it?
Well that court case has just been handed down as we were walking into the press conference so we haven’t seen that judgement but it is very important that politicians are able to operate in an environment where parts of their diary can be kept internally within the office. I am sure that Senator Brandis will be saying something more about this at a later stage.
One for Kelly O’Dwyer if I could. The Liberal Party has endorsed a ten year plan to lift its proportion of female MPs to 50 per cent. Do you think this timetable is realistic given you went backwards in terms of female representation at the last election?
I certainly think it is realistic and I think it is very important that our party embraces all people who want to put their hand up and stand for our party and that includes women. We have a vast talent within our Liberal party of great women who can serve in the very highest offices if they are given the opportunity. So I welcome the commitment that has been made. I look forward to playing my part in supporting women who are putting their hand up. I have already played my part in doing that to date and I look forward to there being even more women not only serving on the front bench but also serving in the party as parliamentarians.