26 Apr 2016
Costs of organised crime too big to ignore
By David Connery
The next federal budget can't only be about tax reform.
That's because Australia is experiencing two alarming crime and law enforcement trends. These are going in opposite directions: and they do not favour a more effective national response to organised crime.
Criminals might hide in the cracks between Commonwealth and state laws.
The Australian Crime Commission said that organised crime costs Australia around $36 billion each year.
To put that in perspective, defeating organised crime would return about enough to the economy every year to pay for the National Disability Insurance Scheme, a Royal Adelaide Hospital and two 'Gonski' packages for schools.
Their new estimate replaces older estimates of around $10 billion (2008) and $10-15 billion (2011).
That means organised crime is costing Australia more every year, but the Commonwealth government's spending on law enforcement is going the other way.
Last year, the Commonwealth allocated about $1.2 billion for operating costs to the Australian Federal Police, the Australian Crime Commission and the Australian Transactions and Reports Centre (AUSTRAC).
That's down by about 18 per cent since 2009-10.
The Government has made some positive announcements recently, increasing funding to counter cybercrime and providing more funding for the market regulator, ASIC.
But some of that is only replacing money that's been cut recently, or is small in comparison to the need.
And despite that additional spending, the gap between the impact of crime and law enforcement agency resources is set to grow over the next four years.
Further cuts are planned, as the Commonwealth Government's outlay on these agencies is set to fall from this year's amount by over 13 per cent to around $1.06 billion by 2017-18.
The AFP and Crime Commission both expect to have smaller workforces in 2018 than today.
That means fewer police, detectives and intelligence analysts will be available to identify, investigate and bring organised criminals to justice.
The falling budget also makes it harder for these agencies to invest in the technologies, especially those needed to counter fraud and child sexual exploitation or take advantage of advances in areas like biometrics and structuring unstructured data.
These trends are not in the Australian public's interests.
So what might be done? The first step is to halt the corrosive "efficiency dividend" that's applied to law enforcement agencies in each Budget.
Automatically assuming agencies can become more efficient every year makes no sense when the problems they are dealing with are growing larger and more complex.
That money should be re-invested in the law enforcement agencies so they can do more to halt organised crime.
Achieving a national approach to dealing with unexplained wealth is the next step.
The unexplained wealth law approved by the Commonwealth Parliament last year robs criminals of the money they need to hire protection – including lawyers, accountants and muscle.
And since the money is being reinvested in crime reduction and law enforcement task forces, law enforcement agencies can bid for additional resources to fund new technology or projects.
Implementing this law has been tricky. Some state governments won't pass their authority to the Commonwealth for seizing money where people cannot account for its source.
That means criminals might hide in the cracks between Commonwealth and state laws.
That's certainly not in the public's interest, but governments can fix it if they want to.
Both these changes would only deliver incremental improvements though.
We need a full-scale rethink of what the Australian people are willing to do to counter serious and organised crime.
A re-think should be informed by an understanding of the amount of money that the nation loses to serious crime each year.
Organised fraud alone costs the economy $6.3 billion a year, according to the Crime Commission. A large part of that total is made up of lost tax revenue and benefits paid to fraudsters.
We also know that better intelligence and enforcement can stop losses. AUSTRAC, for example, helped the Australian government recoup around $2 billion in the past five years. They've made it harder for organised crime to launder funds through Australia's financial sector, too.
This year is important because the Turnbull government will soon announce its first budget. And all parties will be prepare new election promises and platforms.
Will either opportunity be used to enhance the level of Commonwealth effort against organised crime in Australia? Or will we just see further cuts that actually work against our national interest?
David Connery is an analyst with the Australian Strategic Policy Institute.
Published in: The Canberra Times - 22 April 2016