A Senate hearing has heard how illegal financial gains from overseas are being pumped into the Australian property market, driving up house prices across the country.
“Australia has become the destination of choice for illicit financial flows … which too often end up in the property market,” Serena Lillywhite, the CEO of Transparency International Australia, told a Senate inquiry on Tuesday.
“It can reasonably be argued that it is driving up property prices in Australia and locking Australians out of owning their own home.”
She said that international criminals have been using family members or other third parties with no criminal record to buy property in their names in Australia.
Money laundering into Australia’s property market comes from countries as far afield as Sudan, China, Malaysia, Papua New Guinea, and Russia, according to Lillywhite.
“It also shows that money laundering is linked to a variety of people, Sudanese generals, Malaysian bankers, PNGs political elite, and Chinese High Rollers through casinos and property.”
The inquiry heard an analysis by Australia’s financial watchdog, the Australian Transaction Reporting and Analysis Centre (AUSTRAC), identified $1 billion (US$735 million) of suspicious property transactions from Chinese investors.
The Australian property market has boomed in the past year with housing prices soaring 20.3 percent over 12 months, with the Australian housing market now valued at $9.9 trillion (US$6.6 trillion)
“This puts housing values around 28.2 percent higher than the estimated value of superannuation, the ASX (Australian Security Exchange), and commercial real estate combined,” CoreLogic head of research Eliza Owen said.
The average house price in Australia reached $719,209 (US$525,000) in September, while the average unit sat at $586,993 (US$429,000).
Crown Casino Melbourne Found To Have Facilitate Money Transfers
Lilywhite also highlighted the findings of the Victoria Royal Commission investigation into the Crown Casino’s operations in Melbourne which found that Crown helped Chinese customers transfer up to $160 million (US$117 million) from Chinese accounts to the Crown Towers Hotel for’ services’ between 2012 and 2016, breaching local laws and allowing money laundering to take place, according to a statement by Transparency International Australia on Nov. 9.
She raised the concern that if Crown Casino retained its licence, despite the adverse findings of the royal commission, it would continue to facilitate criminal transfers.
“How much evidence of money laundering in Australia will it take before the law is changed and enforcement ramped up?” she asked.
The CEO also said that Australia’s weak anti-money laundering regime and deficiencies in company registration make money laundering possible.
She called for strengthening the financial watchdog, expanding its scope, and closing legal loopholes that allow criminals to launder money in Australia.
“You can do dirty things cheaply in Australia,” she said. “A $2 company, and off you go, no one will know what’s going on.”