AML / CFT: Australia's new tax to pay for AUSTRAC
Australia's plan to require the financial services industry to pay the costs of AUSTRAC, the FIU, is running into opposition. The new tax (which in New Speak is called a "levy" is more than a registration fee: it is to fund the running costs of a government agency.
The argument is being fought on two fronts: first that the industry spend a substantial amount on compliance and risk management systems that deliver nothing to the bottom line and are the costs of what amounts to privatising the gathering of intelligence relating to crime or suspected crime.
The second, less valid argument, is that the costs will be distributed according to the size of the business.
The larger institutions say that they should not pay more just because they are big. That argument is wrong: the "ability to pay" question must be taken into account with any tax.
Those supporting the Bill containing the provisions say that it is because large institutions cost more to police than small ones. That argument has two sides, both of which are right: first in cash terms, it costs more to police a bank than a one-man band. But on the other hand, the one-man band is more likely to fail in his compliance obligations (or at least that is what regulators in all professions say, often without much evidence to back themselves up).
About a third of the AUD30 million annual levy will come from banks with the rest spread across other reporting institutions.
Actually, the levy is AUD29.6 million - perhaps rounding it up would have made it seem a lot more, like shops who charge 19.99 instead of 20.
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