IN LETTERS TO THE SMH EDITOR … Commentators air their opinions about what seems to be a never ending SPIN cycle to justify the unjustifiable growth in a Finite World!
MONEY LAUNDERING IN AUSTRALIAN REAL ESTATE … Government ought implement and enforce the Second Tranche of the AML Laws and this predicament would start to resolve overnight!
‘Australia a Place of Choice for Money Laundering due to lack of Regulation’
LABOR had a policy prior to the May 2019 Election … the Morrison Government having exempted the Real Estate Gatekeepers in October 2018 from the Second Tranche of the AML Legislation
‘Labor to Target Lawyers, Accountants, Real Estate Agents’
Politicians and developers have built a house of cards
December 4, 2019
BLAMING BABY BOOMERS AND PLANNERS FOR SYDNEY HIGH HOUSE PRICES …
Blaming Baby Boomers and planners for high house prices in Sydney is both biased and simplistic (“Not OK, Boomer, to kill housing dream“, December 3).
The Ritz Carlton proposal at Prymont is an example of what’s wrong with planning in NSW.
*It ignores the bidding war that is often played out in established suburbs between young locals and cashed up foreign investors.
It does not consider the value adding benefits provided by Baby Boomers who often share their homes with adult offspring and provide no-cost child minding for precious grandchildren.
Meanwhile – at Sydney’s raw suburb edge – land speculators and developers sterilise otherwise productive agricultural land for decades, then release it when the price is right for them.
By the way, planners don’t hinder this process.
As an illustration, between Campbelltown and Appin they have approved new developments before water supply pipes, sewerage and schools are even planned.
No wonder potential home buyers take the more liveable option and stay as tenants, often with their Baby Boomer mums and dads.
– Sharyn Cullis, Oatley
URBAN TASKFORCE CJ’s ATTACK: NSW PLANNING SYSTEM …
Chris Johnson’s attack on the NSW planning system is one-sided. Often when the planning process is finished and the developer gets an approval for a development, a process of modification applications begins which continues until the approval that was really wanted in the first place is achieved.
This undermines good planning. The beneficiaries of this process are certainly not “future generations”.
– Sue Whyte, Catherine Hill Bay
RBA BLAMES INEFFICIENT PLANNING AND ZONING FOR ADDING $450K TO A HOME …
The Reserve Bank has blamed inefficient planning and zoning laws for adding about $450,000 to the cost of an average Sydney home.
We should blame the politicians who refuse to rezone land around railway stations for higher density development, rather than the planners who enforce land zoning.
We should also blame the politicians who insist on building more infrastructure in well serviced corridors like that between Sydney and Parramatta, rather than expanding rail coverage in the metropolitan area and building fast rail to surrounding regions.
– Peter Egan, Artarmon
CJ TALKS UP UGLY HOUSING GROWTH …
Chris Johnson unsurprisingly proclaims that all those supporting continued development and growth in this city are the real and only planners who can ensure the building blocks for a quality and affordable future.
I have glimpsed a bit of Johnson’s quality future as I witness his advocated growth in places such as Macquarie Park, Epping, Carlingford, Rhodes and so many other suburban precincts. It is a bleak and ugly one.
– James Laukka, Epping
HYPOCRISY OF EXEMPTING REAL ESTATE GATEKEEPERS FROM AML LAWS …
The federal government breaches its international obligations by failing to extend anti-money laundering laws to funds going through trust accounts of real estate agents, lawyers and accountants (“How money launderers distort property prices“, December 3).
EXTRACT: Money laundering crooks are being given too much freedom
‘Westpac is in hot water for not complying with the first round of these measures, which included the requirement that banks and casinos report suspicious activity to regulators.
The second round was meant to capture other avenues of money laundering including real estate agents, lawyers and accountants. There have been lots of promises over the years that reforms were on the way, but this second round has never materialised. Worryingly, the government has recently indicated we should not expect any meaningful action.
This is despite Australia signing up to these reforms 13 years ago. This is despite the Liberal and Labor Parties claiming to support their implementation.
The failure to extend reporting obligations to real estate agents, lawyers and accountants has left a large hole in our anti-money laundering regime and places us as an international outlier among our peers, including Britain and New Zealand.
There is no obligation for real estate agents to report any suspicious activity.
During the last review of our compliance by the Financial Action Taskforce in 2015, Australia fully complied with only 26 of its 40 obligations. Our next review will be next year and unless the government changes course we will once again be ranked well below our peers.
This is good news for Australians profiting from doing business with crooks keen to clean their money and fund their drugs trade, child exploitation rings and terrorist activities. But it represents a massive failure of Australia’s international obligations.
There is also an economic cost to Australia from money laundering. It distorts markets and increases the cost of doing business.
Markets become distorted because money launderers are spending illegal cash, which isn’t worth as much to them as legal cash is to you and me. To clean their money, they are happy to lose a bit of it along the way.
The money launderers are willing to pay more for an asset than it is worth, or charge less for a service than is profitable. This is the price of cleaning money they can reinvest in their illegal activities. It creates an uneven playing field, where the money launderers win and legitimate businesses lose.
Particular concerns exist about the effect this is having on the perennial Australian barbecue stopper, the housing market.
While home owners are enjoying the pre-Christmas lift in house prices, there is a real question about how much of this is driven by money laundering. AUSTRAC identified that in 2015-16 there was $1 billion of suspect funds flowing from China alone into our housing market. And yet there is no obligation for real estate agents to report any suspicious activity, meaning the real figure could be much higher.
Because our housing market is being used to launder funds it creates a market where people are prepared to pay more for houses than they are worth – housing boom anyone?
The government’s continuing failure to introduce the reforms, even in the face of international criticism and countless reviews calling for change, is a story we have seen repeatedly in Australian public policy.
There are strong vested interests – lawyers, real estate agents and accountants – who unsurprisingly have questioned the need for additional regulation. None of us like paperwork and the changes would involve compliance costs and risks – just ask Westpac.
But all reforms come with opponents – we elect governments to act in the national interest, not in the vested interest.
Adding to the inertia is the government’s broader narrative around reducing red tape, which does not fit with a stronger anti-money laundering narrative. But then again, one must presume that neither does making Australia a destination for child abusers, drug traffickers and terrorists looking to clean their money.
In Westpac’s case, it was serious governance failings that led to the situation where they unwittingly facilitated child abuse. Westpac’s non-compliance was not intentional.
The government does not have the same defence.
As the government weighs up the costs of action versus non-action, it should reflect on how it will explain to the Australian people its failure to act despite the warnings, despite its previous commitments and despite mounting evidence of Australia being used to launder funds.
The Prime Minister was right to hold the chief executive and board of Westpac to account. But he should expect the same level of accountability if he continues to allow Australia to be a facilitator for international crime and corruption. The time for judgment is over, the time for action is now.’
Angela Jackson is an economist at Equity Economics
Brian Hartzer has accepted his fate over Westpac’s failures, but what will the government do about the wider problem?CREDIT:LOUIE DOUVIS
This loophole that should have been closed years ago and has a distorting effect on property prices.
I hope they apply the same blowtorch to themselves as they have applied to Westpac.
– Penny Hackett, Willoughby
CALL FOR A RESET OF MONETARY POLICY …
It is now quite apparent that the continual reduction in the cash rate by the RBA has caused unintended consequences (“RBA feels pressure over home price rise“, December 3).
A big fall in job advertisements and building approvals points to further softness in the jobs market even as house prices surge.CREDIT:CRAIG ABRAHAM
The Sydney property market reaction is only the beginning. Consumers have become extremely cautious, business investment has stalled.
There has to be a reset of monetary policy. Any further reduction of interest rates by the RBA will surely be the catalyst for a severe lengthy recession in Australia, if this has not already begun.
– Bruce Clydsdale, Bathurst