A GST fraud wave costing Treasury at least $4.6 billion has been perpetrated by thousands of greedy people falsely asserting they own & trade as a business

 

Financial Review, 14 August 2023:

An explosive wave of fraud that has shaken the Tax Office’s GST system had been building for months before accountants began to notice early last year. By then it was everywhere and no one wanted to talk about it.

“I started seeing it through the office about March of 2022, a few people came in with business files with the ATO – these really large credits going out, big, big credits, unusual credits,” a western Sydney accountant told The Australian Financial Review.

“It didn’t prick my attention. Then I saw a few more, and a few more, and a few more. It kept growing. Tax time came [from July 2022] and it was rampant, absolutely rampant.”

By then, accountants around Australia were realising that the country was in the thick of a multibillion-dollar explosion of GST fraud that had gone viral. It’s the crime wave the Tax Office didn’t see coming.

How big a crime wave? “The inside word among tax officers is $4.6 billion – that is insane,” says the accountant, who like others spoke to the Financial Review on condition of anonymity. “Everyone’s too scared to go up against the ATO.”

The Tax Office has confirmed the $4.6 billion figure, which seems likely to be an underestimate.

It was “the biggest tax revenue fraud against the community in the history of the ATO”, deputy commissioner John Ford said in a speech in May.

The fraud is a simple one that involves individuals using their MyGov account to claim refunds on GST payments that were never made.

While the fraud may be simple, piecing together this invisible crime wave raises questions about why the Tax Office took so long to catch on.

And now it’s tax time again. While the Tax Office insists it has the fraud under control, accountants in western Sydney are painting a darker picture.

“They keep changing [the scam],” an accountant says. “I saw more clients today that [the ATO] didn’t pick up. One guy got $50,000, then another $35,000, then another $25,000.

“He hasn’t had to pay it back. He got this at the end of 2022. This isn’t being picked up as fraudulent activity.

“I’ve seen two more already this morning. One has a debt of $18,000. He tried to get more but was stopped eventually by the ATO.”

A client received $130,000 from fraudulent claims in July 2022 and was not picked up until December. Another client was paid $60,000 last September. How did it get to this?

Banks had been warning the Tax Office about a rising pattern of GST fraud – and freezing suspect accounts – from late 2020. They became increasingly frustrated by the apparent lack of action by the ATO, as they were faced with the decision of what to do with the frozen accounts…..

By mid-2021 the fraud was exploding as social media – in particular TikTok – was full of explainers how to get a “loan” from the government.

In one example cited to the Financial Review a man claimed a $50,000 GST refund in August 2021, then raised another $50,000 several months later. It was only when he tried it again last May that the Tax Office caught up with him.

Read the full article here.

ACCC warns scammers targeting Australia’s largest loyalty reward programs

 

Scammers are more than just annoying people who persistently phone at inconvenient times or send begging emails from exotic locations. These days the ploys they use are often more sophisticated and mean their victims can lose money from bank accounts or find themselves with an unexpected debt within minutes of one click of a link or press of a button.

This is the most recent warning of scammer activity.....

The Guardian, 25 July 2023:

The ACCC has issued an urgent warning to customers of some of Australia’s largest loyalty reward programs, including Qantas frequent flyer, after detecting a new scam that targets valuable points.

The National Anti-Scam Centre has received 209 reports to Scamwatch in the past four months, of the scam targeting Qantas frequent flyer, Telstra and Coles loyalty programs customers.

It comes as new research from Choice shows the majority of Australians think banks should reimburse scam victims, as the consumer association joins calls for financial institutions to provide some form of compensation.

Australians lost a record amount of more than $3.1bn to scams in 2022, up from the $2bn lost in 2021, according to ACCC figures.

New data from Commbank released on Tuesday showed Australians are becoming more cautious of answering the phone because of the increase, with three in four (76%) people only picking up if they recognise the number.

With the new scam, consumers receive a text message or email stating their loyalty points are expiring. It includes a link to a fake website, which prompts customers to log in. Customers may also be prompted to provide credit card details to use loyalty points.

Scammers then steal customers’ points, their login details and personal information to use on other platforms and commit identity fraud.

Scammers then steal customers’ points, their login details and personal information to use on other platforms and commit identity fraud.

The vast majority of reports to Scamwatch received so far are in relation to Qantas frequent flyer, Telstra and Coles loyalty programs, but Australians should be aware that any loyalty program could be targeted, ACCC deputy chair Catriona Lowe said.

“The National Anti-Scam Centre has contacted the companies that have been impersonated by scammers and is working with web host providers to have the fake websites taken down, to minimise harm to the community,” Lowe said.

“We are very concerned that Australians experiencing cost-of-living pressures may be more susceptible to these scams. Scammers are deliberately panicking consumers by claiming their points are expiring soon. We urge people to immediately delete or ignore any message regarding a loyalty program that contains a link.”.....

Three golden rules when answering the phone, reading an email or scrolling a text message, according to the Australian Government National Anti-Scam Centre:

STOP – Don’t give money or personal information to anyone if unsure

Scammers will offer to help you or ask you to verify who you are. They will pretend to be from organisations you know and trust like, Services Australia, police, a bank, government or a fraud service.

THINK – Ask yourself could the message or call be fake?

Never click a link in a message. Only contact businesses or government using contact information from their official website or through their secure apps. If you’re not sure say no, hang up or delete.

PROTECT – Act quickly if something feels wrong.

Contact your bank if you notice some unusual activity or if a scammer gets your money or information. Seek help from IDCARE and report to ReportCyber and Scamwatch.

Cartoons of the Week

Cathy Wilcox

Matt Golding

To date only around $120 million in JobKeeper payments appears to have been clawed back from ineligible business and sole trader claimants

 

On 30 March 2020 the Morrison Government announced it would provide a wage subsidy to around 6 million workers who would receive a flat payment of $1,500 per fortnight through their employer, before tax.

The $130 billion JobKeeper payment was expected to help keep Australians in jobs as they tackled the significant economic impact from the COVID-19 pandemic. The payment was open to eligible businesses that receive a significant financial hit caused by the pandemic and provided the equivalent of around 70 per cent of the national median wage commencing in early May 2020 with payments backdated to 31 March.

The first indication that employers were not going to abide by the rules came in April:

By 21 May 2020 media reports began to reveal that a number of employers had been quick to rort the JobKeeper system.

In June 2020 mention began to be made of ‘pop up’ businesses receiving JobKeeper payments even though these businesses were not created until after the wage subsidy scheme was announced.

By 28 August 2020 more than 15,000 businesses have been removed from the scheme after the Australian Tax Office found them to be ineligible.

In that same month it was revealed that at least 25 companies in the ASX 300 had been paying bonuses worth $24 million to executives and millions more in dividends to shareholders after claiming JobKeeper payments.

Come January 2021 and the Australian Taxation Office is still playing catchup with fraud discovered in the wage subsidy scheme and continues in its attempt to retrieve the hundreds of millions in wage subsidy payments it believes have been paid out in fraudulent employer and sole trader claims.

ABC News, 29 January 2021:

Dodgy employers have signed up jailed criminals, people living outside Australia and even the dead to receive $1,500-a-fortnight JobKeeper payments.

These fictitious employees are among thousands of people being pursued by an Australian Taxation Office (ATO) investigation into rorts of the $130 billion wage subsidy program.

"Client is in jail" is one of the categories being scrutinised as a red flag in around 6,000 cases where employers may have created fictitious employees to take advantage of the JobKeeper scheme, hurriedly launched at the end of March last year to keep the economy afloat during the coronavirus pandemic.

Documents obtained using a freedom of information (FOI) application show that, by the end of September, the ATO was investigating 5,974 cases of "inflated employees" in applications for the wage subsidy.

"The reality is you cannot check every application," said lawyer and corporate investigator Niall Coburn.

"So certain things may have been overlooked, but that doesn't stop the Government from now being able to go back and look at the applications in more detail, and that's what seems to be the case here."

Paying the dead

By the end of September, the ATO had 5,974 cases under investigation, with almost a third found to be ineligible. The majority were ineligible because they "involve employers applying under the wrong ABN (business number)".

It noted there "have also been instances of putting spouses 'on the books'," as well as people overseas ("has a valid visa but … out of the country").

A further category of fictious employees were the dead. "Employee in their JobKeeper application that is deceased," the report observed…..

Fraud prevention efforts

In July, the ATO told ABC News 3,000 staff would be doing ongoing reviews of JobKeeper applications.

"At any particular time, we are reviewing between 2 and 3 per cent of JobKeeper applications," an ATO spokeswoman said.

"We will identify those who are intentionally defrauding the system and we will use the full force of the law [to punish them]."

More than 6,500 applications were rejected for a range of reasons, from people making genuine errors to fraudulent behaviour.

In December, the ABC revealed the Australian Taxation Office (ATO) was pursuing criminal investigations into fraud and had issued fines to program applicants who had made false or misleading statements.

BACKGROUND

ABC News, 9 December 2020:

The Australian Taxation Office has 19 active criminal investigations into fraud against the $101 billion JobKeeper scheme.

It has also issued fines to another 19 applicants to the wage subsidy program who have made false or misleading statements, and is considering penalties for another 24.

Since JobKeeper was launched in March, the ATO has clawed back $120 million in payments to applicants who made it into the system but were later found to be ineligible.

"While most businesses and employees are doing the right thing, we have identified concerning and fraudulent behaviour and claims by a small number of organisations and employees," the ATO said in a statement.

The agency declined to comment on whether the criminal investigations relate to employers or employees and would not provide details about any of the businesses involved or when the investigations began.

However, ABC Investigations understands employers and individual workers are being investigated over fraud and abuse of the scheme.

Applicants could face a prison sentence or fines if found guilty of defrauding the scheme……

The fraud investigation revelations come as the Australian National Audit Office (ANAO) considers its own probe into the scheme.

According to its website, the ANAO has flagged JobKeeper for a potential audit next year that would include an "examination of the implementation of integrity measures designed to protect the scheme against fraud and other abuse."

The ATO fraud hotline has received more than 10,000 tip-offs about fraud against JobKeeper, including claims that some employers have not been passing on the full subsidy to their employees.

ABC Investigations has also spoken to workers concerned that their employers may have artificially suppressed their revenue in order to qualify for the scheme, for example by delaying invoicing customers or removing popular items from sale in retail stores.

The ATO says it has initiated 14 of the fraud investigations using its powers under the Taxation Administration Act and has referred a further five cases to the Australian Federal Police's Serious Financial Crimes Taskforce.

Smart Company, 10 December 2021:

A marketing company has been made to repay $22,500 in JobKepeer funding, after the Australian Taxation Office received a tip-off the business was misusing the stimulus payments.

The ATO said the tip-off alleged the marketing company had incorrectly claimed JobKeeper for its employees, which came to a total of $12,000 per month.

The ATO’s investigation found two of the company’s four employees were ineligible for JobKeeper, because one was on work experience and not receiving any wages, and the other was hired after March 1, 2020.

The two remaining employees were eligible for JobKeeper, however, the ATO said their employer did not pay them the full $1,500 per fortnight in some periods.

“We determined that it was not an honest mistake and required the employer to repay $22,500,” the ATO said.

The ATO says it is closely tracking the misuse of pandemic support.

Debt laden Clive Palmer's United Australia Party currently being considered for deregistration by the Australian Electoral Commission

Australian Electoral Commission notice of 17 September 2020:

This political party appears to be on the chopping block because it now has less than 500 members.

In recent years Clive Frederick Palmer appears to have exclusively funded this political party through his companies Mineralology Pty Ltd and Palmer Coolum Resort Pty Ltd.

It currently has debts of $8,829,343 of which $8,208,389 is owed to Google Australia Pty Ltd and another $609,039 to IPG Marketing Solutions.

According to an Australian Securities and Investments Commission media release billionaire Clive Palmer is due back in court on 27 November 2020 in relation to; two counts of contravening section 184(2)(a) of the Corporations Act 2001 (Act) - dishonest use of position as a director and two counts of contravening section 408C(1)(d) of the Criminal Code Act 1899 (Qld) – fraud by dishonestly gaining a benefit or advantage in that he allegedly dishonestly obtained a benefit or advantage for Cosmo Developments Pty Ltd and/or the Palmer United Party (PUP) and others by authorising the transfer of $10,000,000 contrary to the purpose for which the funds were being held. It is alleged that he dishonestly used his position as a director of Mineralogy Pty Ltd (Mineralogy), a mining company owned by him, in obtaining that advantage.

How long have charity fraudsters been recruiting 'scammers' using Abbott-Turnbull-Morrison Government's Jobactive program?

The Guardian, 15 September 2019:

Anonymous, 32, South Australia

My strange experience with a Jobactive provider happened back in November 2015. It was a week of pure, concentrated weirdness.

The provider found me a job with a charity. They handled everything. My case manager even took the picture for the photo ID.

There was a man who handled what limited training there was by phone. The day after, I had a trial shift. I had to collect money door-to-door with no information about what the charity actually did, who ran it or what the money we were raising was for – only that it was for children in the Philippines.

The leaflets they gave us to hand out were about cancer, copied and pasted from Wikipedia, even though the charity was supposedly about education. When I spoke to people I couldn’t even answer basic questions. And people were still generous. A blind man gave me $20. It was absurd and awful.

When I asked my point of contact questions, he grew frustrated and aggressive with me. He told me to look on the website but it was just pictures of kids with vague descriptions; no programs, no initiatives. It’s been taken down since, but the mission statement was just a copy of the tax definition of a charity.

I looked up as much as I could about the company. I found the names associated with it had run similar charities that had been exposed as frauds by the ABC. These names weren’t on the website or any training materials. [This charity] didn’t have anything a normal charity had.

I didn’t know what to do, so I reported this to the ACCC and even made a police report. When I told my caseworker, they tried to make me keep doing the job. They told me they’d had their office look it up and that the charity was properly registered, but anyone can register for a business name. I read charities have a year before they’re audited.

When my questions about how the collected money was spent still weren’t answered, the case manager called my point of contact. That’s when they agreed that something wasn’t right and that I didn’t have to do it any more. They joked nervously about ending up on A Current Affair.

A few weeks later I had another appointment and my case manager casually mentioned that another client was still collecting money for [the charity]. She knew they were shonky and still nothing had been done.

Once again peak scam is here for the summer

Throughout the year there are periods where I receive scam calls up to twice a week.

Sometimes I am warned about my imminent arrest for tax evasion, sometimes I am informed that I have compensation money coming to me from a motor vehicle accident in which I was allegedly involved, but most often I am told by a fake Telstra representative that there is something wrong with my computer [substitute various alternative scenarios here] and that my Internet service will be cancelled unless I power up my PC and follow instructions.

I stopped listening to their spiel years ago and now simply hang up.

However, telephone and email scamming is now ubiquitous and peak scam is on us for another holiday season.......

ACCC ScamWatch, 11 December 2018:

Watch out for holiday season scams

Scamwatch is warning people to be careful about being caught out by holiday season scams.

“Scammers will take advantage of special days or major events like Christmas to fleece people of their money or personal information,” ACCC Deputy Chair Delia Rickard said.

Here are three common holiday season scams people should look out for:

Online shopping scams: scammers will set up fake online stores or post goods for sale in buy‑swap-sell groups or online classified sites to trick people into buying items that don’t exist. This scam has cost Australians nearly $3 million in 2018, with more than 8,700 reports.

Travel scams: scammers trick people into believing they’ve won a holiday or scored a really good deal on a travel package, like a cruise. Unfortunately the prize or the cheap accommodation are phony. In 2018, nearly $135,000 has been lost to this scam.

Parcel delivery scams: scammers may ask you to print off a label, do a survey, claim a prize, or view the status of your delivery by clicking on a link or downloading an attachment. Some scammers may even call or text with claims about an unsuccessful delivery. These scams are aimed at getting people to download malware onto their computer, or give up their personal information. People have lost about $31,000 to these scams in 2018.

“Scamwatch has also seen a massive influx of reports and money lost to tax scams. In November we received 7,500 reports of these scams and $400,000 was reported lost,” Ms Rickard said.

“This isn’t a usual holiday season scam, however a lot of people are getting calls from scammers pretending to be from the tax office or the police and threatening them with arrest over unpaid tax debts.”

“This is a scam. If you ever get a call or email containing threats like this, hang up the phone or delete the email,” Ms Rickard said.

Ms Rickard added that the key to avoiding a scammer’s con these holidays is a healthy dose of scepticism and research.

“We love snagging a great deal online for a loved one’s Christmas present and the idea of a bargain holiday is perfect for many after a long year. But don’t fall for it,” Ms Rickard said.

“Be sceptical about an online store you haven’t used before. Do some research to see if they’re legitimate and don’t be fooled by big discounts. With travel deals, call the accommodation provider directly, for example the cruise line or hotel, to check if the deal is legitimate.”

“If you see a seemingly great deal on an accommodation rental website like Airbnb, make sure you only communicate and pay through the official site to avoid getting stung by a fake listing,” Ms Rickard said.

“We’re all expecting parcels this time of year but be careful about online links and never download attachments. If you’re wondering if a delivery notice is legitimate, check the tracking number at the Australia Post or other delivery company website, or call them directly using a number you find from an online search or the phone book.”

“While with friends and family over the holidays, consider taking the opportunity to spread the warnings about these scams particularly to those loved ones who may be vulnerable.” Ms Rickard said.

Further information about holiday season scams is available at www.scamwatch.gov.au. People can also follow @scamwatch_gov (link is external) on Twitter and subscribe to Scamwatch radar alerts to get up-to-date warnings.

The Daily Examiner, 15 December 2018; p.5:

When Jenny Hall had a missed call on her phone and a message claiming to be from Centrelink in relation to an adjustment to some payments, she didn’t give a second thought in calling back.

However Ms Hall was sceptical of the man who answered the phone when she called back and when he called her a “f------ b----” after his legitimacy was questioned, her suspicions were confirmed.

“I rang back and they gave me a number to call and a claim number so I thought it sounded real,” she said.

“I rang the number and some guy answered the phone and at one point we got cut off, so I called back and the same person answered and I thought that was strange.

“He claimed they went through some records and taxes which were linked to Centrelink, which I said was strange because I get an accountant to do my taxes.

“Then he started saying that I needed to get a lawyer because I had a big tax bill. I said wait there and I asked for his name and started asking him some questions.

“I said I wanted to talk to his superior and he said that he was in charge and that’s when I knew he was lying.”

The Australian Competition and Consumer Commission’s Scamwatch website revealed reports of tax scams threatening arrest or jail over unpaid debts have jumped significantly in the past month…..

The Daily Examiner, 15 December 2018; p.13:

A Casino woman has a message for shoppers after being scammed by a market stallholder at the Jacaranda Festival Markets.

Kelly-ann Oosterbeek bought a powdered anti-inflammatory product in Grafton, and paid the $80 by Eftpos.

Mrs Oosterbeek was then told the item would be posted to her.

“If you feel like anything is slightly off with any purchase you are making, walk away,” she warned.

The “supremely weird” transaction process made Mrs Oosterbeek feel nervous.

She was concerned enough to take photos of the stall, and she asked to see the stallholder’s business credentials. She also took photos of the registration, ABN and insurance, and got a signed receipt saying the product would be posted.

“I was standing there with my hubby, four of my six kids and my daughter’s partner – I had so many witnesses,” Mrs Oosterbeek said.

But the product never came.

“I want to warn people of the Northern Rivers because the lady told me she was heading north with her market stall,” Mrs Oosterbeek said.

Trying to give the stallholder the benefit of the doubt, Mrs Oosterbeek waited a few days before contacting her to make sure the product had been posted, but she claimed Mrs Oosterbeek had been given it on the day.

“They wouldn’t budge with their claims, saying I was trying to rip them off and eventually saying my husband had taken the product and not told me,” she said.

“I wasn’t too worried – I’d done everything right as a consumer and I felt really covered – so I took the case to Fair Trading.

“Even with all of my evidence, witness statements, and a signed receipt promising postage of the item there was nothing they could do.”

Tradies can also fall victim to business email compromise scams. Australian businesses have reported losses of $2.8 million this year to these type of scams. Businesses and sole traders are urged to review how they manage their accounts.https://t.co/FHNvsDP3JM

— Scamwatch_gov_au (@Scamwatch_gov) December 12, 2018

Be aware of a fraudulent SMS that appears to be from Australia Post claiming that your address has been drawn as a lucky winner. This is a scam, don’t click on any links. https://t.co/nV8Vwf9fMh

— Scamwatch_gov_au (@Scamwatch_gov) December 9, 2018

Turnbull Government has just placed a multinational corportion with an appalling human rights record at the first contact interface with the National Disability Insurance Scheme

“It has a history of problems, failures, fatal errors and overcharging”  [Senior Appleby compliance officer quoted in The Guardian on the subject of Serco, 7 June 2017]

If the National Disability Insurance Agency (NDIA) didn't have enough internal structural problems to deal with along comes the UK-based multinational Serco Group.

A group implicated in: human rights abuses in prisons and immigration detention centres it has managed; poor to unsafe health service delivery including at Fiona Stanley Hospital in Perth, overcharging for services rendered under government contracts, fraudulent record keeping and manipulating results when there was a failure to reach targets; mishandling of radioactive waste and labour rights abuses.

The Guardian, 23 Apri 2018:

Disability rights groups, Labor and the Greens have slammed a decision to hire the multinational outsourcing giant Serco in a key role administering the national disability insurance scheme.

The National Disability Insurance Agency (NDIA) announced on Friday afternoon that Serco, a company with a chequered corporate history, would help run its contact centres under a two-year contract.

The decision would put the company at the frontline of the NDIS, interacting frequently with people with disability and service providers, many of whom are still grappling with a vast, complex and sometimes confusing scheme.

 “Sourcing our contact centre services from Serco will give ongoing flexibility, responsiveness and value for money,” the NDIA said in a statement.

But the decision has outraged disability rights campaigners, who say Serco’s poor history abroad and its lack of experience in disability should have precluded it from any role delivering the landmark scheme. 

People with Disability Australia co-chief executive, Matthew Bowden, said he was “gravely concerned” that Serco would, like other third-party providers, fail to uphold the values, objectives and principles underpinning the NDIS.

“We have no details on what expertise Serco have in providing communication services for people with disability, or why the NDIA has decided to outsource such a vital part of its services,” Bowden said.

“The NDIA needs to hire more staff and make their communication avenues with people with disability more transparent. Instead, they are offloading their responsibilities, and requirements, to deliver services to people with disability.”

Paralympian Kurt Fearnley was among those expressing concern at the decision, saying Serco would be “racking their brains on how they can bring lived experience of disabilities into their workplace”.

“The NDIS will be worthless if people with disabilities aren’t at its core!” he tweeted.

As the federal govenment burns are Turnbull and Co. just tinkering at the edges of banking and finance regulations or are they seriously committed to reform?

Way back in October 2016 the Australian Securities and Investments Commission (ASIC) began an Enforcement Review which examined the adequacy of legislation dealing with corporations, financial services, credit and insurance, with regard to serious contraventions in the financial sector, including fraud and criminal activity.

0n 18 December 2017 ASIC handed its Enforcement Review Report to the Turnbull Government.

It was probably no accident that four days earlier the same government ceased its sustained opposition to a highest level inquiry and created the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. 

With the extent of bank money laundering becoming an issue and the review report on its doorstep there was nowhere else to turn, given the average voter would not have been receptive to the argument that the big banks were historically a protected species because of their generous political donations.

In April 2018 in the midst Royal Commission revelations concerning a host of bank and financial system abuses the Turnbull Government finally released its response to the ASIC review report.

This response "agrees" with or gives "in principle agreement" to all 50 recommendations but has placed 20 recommendations on the backburner.

Knowing that ASIC’s investigative abilities has been crippled by funding/staff cuts, that entities with annual profits in the billions just seem to shrug off large corporate fines, often indemnify executives in relation to individual fines and are able to play the legal system so that executives rarely see the inside of a prison, on 20 April the Turnbull Government via the Minister for Revenue and Financial Services revealed that by legislative amendments it will implement the potential for larger individual and corporate fines and double potential maximum prison sentences:

The Turnbull Government is strengthening criminal and civil penalties for corporate misconduct and boosting the powers of the Australian Securities and Investments Commission (ASIC) to protect Australian consumers from corporate and financial misconduct.

These stronger new penalties will ensure that those who do the wrong thing will receive appropriate punishment.

These reforms represent the most significant increases to the maximum civil penalties, in some instances, in more than twenty years. They bring Australia's penalties into closer alignment with leading international jurisdictions, and ensure our penalties are a credible deterrent to unacceptable misconduct.

The Government will increase and harmonise penalties for the most serious criminal offences under the Corporations Act to a maximum of:

For individuals: (i) 10 years' imprisonment; and/or (ii) the larger of $945,000 OR three times the benefits;

For corporations: (i) the larger of $9.45 million OR (ii) three times benefits OR 10% of annual turnover.

The Government will expand the range of contraventions subject to civil penalties, and also increase the maximum civil penalty amounts that can be imposed by courts, to the maximum of:

the greater of $1.05 million (for individuals, from $200,000) and $10.5 million (for corporations, from $1 million); or

three times the benefit gained or loss avoided; or

10% of the annual turnover (for corporations).

In addition, ASIC will be able to seek additional remedies to strip wrongdoers of profits illegally obtained, or losses avoided from contraventions resulting in civil penalty proceedings.

ASIC's powers will also be significantly increased through:

expanding their ability to ban individuals from performing any role in a financial services company where they are found to be unfit, improper, or incompetent;

strengthening their power to refuse, revoke or cancel financial services and credit licences where the licensee is not fit or proper; and

boosting ASIC's tools to investigate and prosecute serious offences by harmonising their search warrant powers to provide them with greater flexibility to use seized materials, and granting ASIC access to telecommunications intercept material.

The Turnbull Government is committed to ensuring ASIC is armed with greater powers to effectively deter, prosecute, and punish those who do the wrong thing, to improve community confidence and outcomes for consumers and investors in the financial services and corporate sector.

These reforms come on top of strong Government action to reform our financial services sector to better protect Australian consumers over a number of years.

The Government has already provided $127 million in additional funding to ASIC to bolster its investigative and surveillance capabilities; implemented an industry funding model for ASIC to give it secure funding; appointed a new chairman for ASIC, Mr James Shipton, and announced a new second Deputy Commissioner with an enforcement focus, Mr Daniel Crennan QC; established a new standards setting body for financial advisers; and established a new one stop shop for consumer complaints which is free for consumers, binding on financial institutions and can order compensation where appropriate.

Today's reforms to ASIC's powers and penalties follow recommendations made by the ASIC Enforcement Review Taskforce (The Taskforce). The Taskforce was established in October 2016 to fulfil the Government's commitment to review the adequacy of ASIC's enforcement regime in response to the Murray Financial System Inquiry, and provided its report to Government in December 2017.

The Government has agreed, or agreed in principle, to all 50 of the Taskforce recommendations and will prioritise the implementation of 30 of the recommendations.

The remaining 20 recommendations relate to self-reporting of breaches, industry codes and ASIC's directions powers, which will be considered alongside the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The Government thanks all the members of the Taskforce, including the Panel of Experts, Treasury, ASIC, Attorney-General's Department, Commonwealth Director of Public Prosecutions, as well as all stakeholders who participated in the consultation of the various position papers put forward by the Taskforce.

The Government's full response to the Taskforce Report can be found on the Treasury website.