Money trail leads to huge seizure

Luxury cars, including Rolls  Royces, a Lamnborghini and an Aston Martin have been seized in a police and Tax Office crackdown on crime and tax evasion.

Altogether, assets worth some $40 million were seized by Federal police, as part of Operation Wickenby.

The Federal Justice Minister, Jason Clare and Assistant Treasurer David Bradbury, congratulated the police on their success.

They said the seized assets are believed to be the proceeds of crime generated through an elaborate tax evasion and money laundering scheme.

“ The Commonwealth Criminal Assets Confiscation Taskforce today executed six warrants in NSW and Queensland and charged a 67 year-old man with conspiring to dishonestly cause a loss to the Australian Taxation Office (ATO) and conspiring to deal in the proceeds of crime to the value of $63 million,” the two ministers said in a joint statement.

The assets also included a Mercedes Benz car, a BMW and yachts.

The two ministers said: “today’s seizure was the result of a seven month joint operation – Operation Beaufighter – between the Australian Federal Police and the ATO.”

“Organised crime is driven by money.

“Take away their money and assets and it reduces the incentive to commit crimes,” Mr Clare said.

“The Criminal Assets Confiscation Taskforce was set up in January last year to target the profits criminals make.

“Just like with Al Capone – you can catch criminals by following the money.”

“ This is the first time the Australian Federal Police has conducted litigation to restrain assets on behalf of the Taskforce since the legislation came into effect in January this year giving the AFP powers to commence and conduct proceeds of crime litigation,” the two ministers said.

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On line share traders beware:the scammers are out

On line share traders beware.

Scammers are about – and the watchdog is barking.

The Australian Securities and Investments Commission is making a big noise, to warn of the dangers..

In a statement released today, ASIC said clients of online stockbroking firms should urgently review their account security.

Why?

Well, the Commission says that “during regular surveillance” it has “become aware of several stockbroking account intrusions involving unauthorised access and trading.”

ASIC is urging on line traders to take urgent action.

Specifically, it says that “as soon as possible” traders should:-
*…ensure their computer virus software is up-to-date;

*…change their passwords and

*…check their transaction history.
It says traders should take these steps regularly.

“If you become aware of any unauthorised trading on your account, you should contact your stockbroker immediately,” ASIC says.

This will help to ensure that any further unauthorised activity can be prevented.

ASIC says it already is working with online stockbroking firms to help those whose clients who have been hit.

It says it is also also “working with other authorities” to identify and catch the scammers.

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China:the risks ahead

“China is very important to Australia,” I said, making conversation with a Chinese businessman sitting next to me, on a long train trip, recently.

“And Australia is very important to China,” he replied.

Given the huge difference, in the size of our respective economies, that remark surprised me.

It shouldn’t have.

On reflection I realised that China needs our iron ore and coal, to boost its economy, just as we need its business.

Our conversation soon turned to other things.

 As our train passed through Glenrowan, I told my new friend the story of Ned Kelly, who was killed there. 

The Chinese gentleman was fascinated.

He said he couldn’t wait to get to Melbourne, to Google Australia’s most famous outlaw.

Despite this friendly exchange, Treasury sees possible trouble ahead, in the now critically important relationship between Australia and China.

As regular readers will know it referred – very circumspectly – in a recent report, which has not received anything like the attention it deserves.

That report said:“The economic centre of gravity is shifting with the re-emergence of Asia and the integration of one third of the world’s population into global markets

It warns that this economic shift has profound implications for international geopolitical relationships

“In particular, Australia will operate in a global and regional environment where leading powers have very different political systems and operating assumptions.”

“Moreover, Australia is operating in the historically unique environment where its primary economic and security relationships do not coincide,” the report warns.

Put more bluntly, the Treasury is warning that Australia could find itself trapped between its security needs, which depend on the US alliance and trade, which now rests, very much, on our biggest customer , China.

Especially, as will no doubt have noticed, this dilemma became, that much more urgent, over the weekend.

That happened when the US President Barrack Obama, in the words of The Sydney Morning Herald “unveiled a strategy for a leaner US military focussed on countering China’s rising power, while signalling a shift away from large ground wars.”

This shift will involve basing at least 2,500 US troops in Australia.

While this is not a US push to contain China, there is a very real risk that the Chinese government will see it that way.

China might also perceive Australian involvement in such a containment strategy.

This emerging dilemma will, at the very least, require careful diplomacy, of the highest order, on the part of the Australian government.

There is absolutely no room for mistakes, of any kind, in this delicate situation.

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Australia’s interests “shifting” Report

A new report identifies Asia as the emerging centre of gravity for the Australian economy.

The report, based on a Strategic  Review of the Treasury, also identifies four key themes as central to its external environment.

These were: -

- globalisation, the development of emerging market economies, and changes in global economic and political influence;

-  the domestic economic policy agenda: growth, productivity and stability;

-  the broader domestic policy agenda: demographic change and sustainability; and

-  advances in technology and communication, and higher expectations of government.

The report says the international economic and political outlook over the medium term will be characterised by a volatile international economic environment and the increasing economic and political importance of emerging economies.

“The economic centre of gravity is shifting with the re?emergence of Asia and the integration of one third of the world’s population into global markets,” it adds.

It says this economic shift has profound implications for international geopolitical relationships

These would be “driven by a more multipolar distribution of influence,” the report says.

“As a medium sized, open economy located in the Asian region, the changing global economic and political environment will bring significant policy opportunities and challenges for Australia,” it adds.

“In particular, Australia will operate in a global and regional environment where leading powers have very different political systems and operating assumptions.”

There would be few current signs of convergence, and differing views on the provision of public goals,  such as economic stability and environmental protection.

“Moreover, Australia is operating in the historically unique environment where its primary economic and security relationships do not coincide,” the report warns.

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Privacy breach attacked

The Federal government wants no repeat of the Vodaphone scandal.

So it is calling finance industry leaders to Canberra this week, to discuss new laws to protect customer privacy.

News reports say the private details of millions of Vodaphone customers have been available to unauthorised people, through a company website.

These include home addresses, driving licences and credit card details,

One expert described this as “a major breach” of the company’s privacy obligations to its customers, and said it exposes them to criminal activity.”

A Federal Minister, Brendan O’Connor, whose responsibilities include Home Affairs, Justice and Privacy, avoided direct reference to Vodaphone in a statement on privacy obligations that he has just issued .

But he was blunt.

“Under the Privacy Act, financial institutions are required to protect consumers’ private information, including details they use to assess a customers’ eligibility for banking products,” Mr O’Connor said.

And he vowed that the present laws would be tightened.

“A binding Code of Conduct will be an integral part of the new credit reporting regime, helping to provide better protection for consumers and better guidance for business,” Mr O’Connor said.

“The Code will encompass more specific rules around access to clients’ personal information, data accuracy and complaint handling than is currently possible to include in legislation,” he added.

Mr O’Connor said Thursday’s  meeting would “contribute to the development of the industry-led Code.

It would  provide an open forum for interested parties to discuss any issues that worry them.

“The round table meeting will take place at Parliament House, Canberra on Thursday, 10 February 2011, Mr O’Connor said.

“Credit reporting agencies that collect, store and disclose consumer information, finance companies, and consumer and privacy advocates are invited to attend.”

The Government is already preparing draft legislation to implement its response to the Australian Law Reform Commission report

And draft provisions relating to comprehensive credit reporting would soon be finalised and referred to the Senate Finance & Public Administration Committee for inquiry and report.

“This meeting will provide a valuable opportunity for stakeholders to express their views on the credit reporting matters and to make significant progress toward an industry-agreed Credit Reporting Code of Conduct,” Mr O’Connor said.

But he added:”Any Code of Conduct developed by industry will need to be approved by the Australian Information Commissioner before taking effect.”

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Tony Abbott’s straw men

Tony Abbott’s campaign speech was brilliantly written and very persuasive.

Does it stand analysis, though?

What, exactly, does Mr Abbott mean, for example, when he says in the fifth paragraph of his speech,  “we want to help you through your struggles.”

That’s comforting.  But will: “all my trials Lord, soon be over?”

Probably not.

Mr Abbott has been very successful, in this campaign, in setting up shibboleths, or  terrifying straw men, that seem to pose great dangers to the nation.

Debt. Government spending. Great big new taxes.  People smugglers. These are his prime suspects.

Each is worth a cool, close look.

Oddly, perhaps, the Reserve Bank Governor, Glenn Stevens – a man who should know – isn’t at all worried about government debt.

He  insists that Australia has absolutely no foreign debt problems.

That view is backed by Treasury figures, showing that Australia’s foreign debt, measured against the country’s output, or gross national product, will peak at 6 per cent. That is very low, by current international standards.

So what about government spending?  This did rise, after the global financial crisis.  The government responded with substantial stimulus packages, to avert recession. That worked, but there were problems, most notably with the home insulation program, as some reckless installers used aluminium foil coated batts in ceiling spaces, causing house fires.

Great big new taxes? The government got itself into trouble, when it tried to impose a super profits tax on the mining industry, arguing that big miners, with large profits, should pay something for the resources they are extracting.  Mr Abbott placed less emphasis, though, in his speech on the quite substantial lift in the company tax rate he is proposing, for bigger companies, to fund his paid parental leave scheme.  Labor is already calling this ” the Coles and Woolies tax,”  predicting that it will lead to higher grocery prices. It has a point.

People smugglers?  Even at the current rate of boat people arrivals, it would take those wicked people smugglers 20 years, to  assemble a decent crowd at an AFL stadium. Is this really a danger to the nation?

Some people, including Tony Shepherd, the chairman of infrastructure company Transfield Services think not.

Speaking at a recent conference, on plans both major parties now have to restrict immigration and stop the flow of boat people, Mr Shepherd said:”This is a terrible debate.

”I’m amazed that Australia is even having it.

”A few thousand boat people coming out, they’ve got the gumption to go out in a leaky boat, cross the Timor Sea and come here – I would have thought that was a fair qualification.”

Now there’s a robust view.

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Financial freedom:the enticing dream

Financial freedom.

A dream we all share.

Very saleable, too.

Indeed, it is one of the main hooks the banks use to encourage us to use their services.

So it should be no surprise to find that Australia’s bank chiefs, themselves, value this dream, very highly.

Naturally, that includes those at the very top.

The Productivity Commission noted, earlier this week, that Australia’s top 20 CEO’s must struggle by, on an average salary of just $10 million a year.

Australia’s top bankers would certainly be in this very select group.

Tom Wolfe called their counterparts, in the United States, the Masters of the Universe, in his  highly prescient 1987 novel, The Bonfire of the Vanities.  Twenty two years later, they became the very people whose reckless greed came close to wrecking the global financial system, with catastrophic results.

Australia’s bankers, certainly, have been more restrained.  They stopped writing the word “Yes” on their walls, many years ago.

But their ideas of their own worth are similar.

That led them yesterday, to issue a statement praising the Productivity Commission, for rejecting the idea of caps, on their salaries and those of  other top executives, in this country.

David Bell, chief executive of the Australian Bankers’ Association, said:”The community is fortunate  to have an economic research organisation that can produce quality work in a very difficult public policy environment.”

We couldn’t agree more.  Indeed, we are constantly amazed by the wisdom of those who agree with us.

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The US must borrow to survive:What about Australia?

Australia will – probably – not have to borrow, to sustain its economy through the present global crisis.

That, of course, is not yet certain.

But, with a crisis package worth $10.4 billion – against what, originally, was to be a $22 billion surplus, there appears to be a strong chance that borrowing won’t be needed.

The United States, where the crisis began, has not been so lucky.

It will have to go, once again, to foreign lenders, to see it through the present trouble.

Especially as the chairman of the US Federal Reserve, Ben Bernanke, is now advising Congress that heavy government spending – on top of the $US700 billion bail out package -will be needed to keep America out of a deep recession.
And that will be expensive.

Interest rates are low, at present.

However, we can expect that they will rise, as the global economy recovers.

Just where, though, does Australia really stand, in all this?

The truth is that not even the Rudd government itself knows that, at present.

The best estimate will come next month, when the Federal Treasury publishes its regular Mid Year Economic and Financial  Outlook document.

Treasury economists are currently using a lot of electricity, working late into the night on  that paper.

But, even when it is published, the MYEFO, as it is affectionately known, will contain a lot of guess work.

Downturns do terrible damage to Federal budgets.

They cut tax receipts.

They increase spending, on items like unemployment benefits.

And the longer they last, the more damage they do.

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