Australia is doing little to counter a growing reputation as ‘the Cayman Islands of the South Pacific’ with billions of dollars from foreign corruption flowing into the country.
Professor Sharman, who researches corruption and money laundering at the School of Government and International Relations, estimated that over a billion dollars of foreign corruption proceeds flow into Australia each year, a figure which he says is increasing.
By comparison, a total of $4 million has been recovered by Australian authorities and returned to countries of origins across the years.
“If we’re giving hundreds of millions of dollars a year in aid to Papua New Guinea in order to help that country’s development, it’s rather ironic if corrupt politicians from that country are taking money out of the PNG budget and putting it in Cairns or Brisbane or Sydney,” Professor Sharman said.
China, South East Asia and the South Pacific have been identified as the main sources of corrupt funds entering Australia.
“It tends to make for some tense relations when the Chinese Government says we’d like that money back and the Australian government sits on its hands and does nothing.”
Hisforthcoming book, titled The Despot’s Guide to Wealth Management, compares Australia’s lack of activity with initiatives in Switzerland, United States and the UK to stem the inward flow of corrupt money.
“It’s no longer okay for one country to host money stolen by the leader of another country,” he said, referring to the introduction of a new global rule in 2005 forbidding this kind of behaviour.
“But while the other three countries are trying to fix a difficult problem, the Australian Government prefers to ignore the situation and adopt a resolute head-in-the-sand attitude and a deliberate policy of inaction.”
- SEE ALSO: Integrity 2016
Professor Sharman believes a change of attitude may only come about in the event of a scandal like the Iraqi oil-for-food controversy that hit the Australian Wheat Board in 2005 or the allegations of bribery and corruption that besieged companies controlled by the RBA shortly afterwards.
“It’s politically easier to ignore the situation than to try and fix it. But it’s not good for Australia to end up a haven for the proceeds of foreign crime.”
He said Australia has been described as the ‘Cayman Islands of the South Pacific’ by a near neighbour.
“Corrupt leaders have a strange relationship with the rule of law in that they don’t like the rule of law when they’re stealing the money but they do like the rule of law when it comes to protecting the money they’ve stolen. They want to go to a country that is subject to the rule of law and with a stable economy.
“Also, it’s just easy to get your money into Australia without many questions being asked, definitely if you invest it in the property sector.”