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Australians trying to penetrate the property market face the additional hurdle of competing against shadowy foreign investors, according to corporate transparency experts and the federal opposition.
the main points:
- There have been calls for public registration of the company’s ultimate owners since around 2016
- The federal government says it is working to update corporate record keeping in Australia but has not adhered to such a record
- Labor has not committed to enforcing such a record if it wins the next election
Nearly 12 million leaked documents – known as Pandora’s Papers – She highlighted how Australia’s complex offshore business structures are used to covert corporate ownership.
“It’s really affecting ordinary Australians,” Serena Lilly White, chief executive of Transparency International Australia, told ABC.
“You need to provide more proof of identity to get a library card or receive a package at the post office than you need to register a business in Australia.”
One of the transactions detailed in the Bandura Papers, obtained by the International Consortium of Investigative Journalists (ICIJ), is The Hilton in Sydney sold in 2015 for $442 million.
There are at least six tiers of companies, trusts and trusts registered in Singapore, the British Virgin Islands and the Cayman Islands among the businesses listed as buying the hotel and the eventual owner, billionaire Chinese steel magnate Du Shuanghua.
Du told a Chinese court in 2010 that he had paid bribes to executives of mining giant Rio Tinto. However, he was never prosecuted.
The Pandora Papers also illustrate the purchase of tracts of farmland in northern Tasmania by two Australian companies, originally with money from a Canadian businessman.
The luxury apartments in Sydney were purchased by a company registered in Samoa, which is owned by a trust linked to Sri Lankan entrepreneur Thirukumar Nadsan. He faces accusations of embezzlement of state funds, which he denies.
Although these are multi-million dollar purchases – and beyond the reach of the average Australian – Ms Lilly White argued that they were indicative of a broader problem in the Australian regulatory framework.
The general principle, she said, was the same: Australians were not aware of who they were competing with when trying to buy a property, because of the way these practices were allowed.
“Real estate agents, accountants and lawyers are not required to report a suspicious transaction like what banks need to do,” she said.
“It really distorts the market.”
Calls for registration to improve transparency
Since around 2016, there have been calls for the registration of beneficial ownership, to force the details of the company’s ultimate owners into public view.
Australia committed to join other countries in developing such a registry ahead of the UK Anti-Money Laundering Summit.
In 2017, then-Assistant Chancellor of the Exchequer Kelly O’Dwyer announced consultations on how to improve transparency in Australia, before the issue appeared to fall off the political agenda.
Two years later, the Federal Treasury informed Green Party Senator Peter Wesch Wilson that the government had not committed to “enforce a record.”
In a statement prepared ahead of Monday’s release of the Pandora Papers, current Treasurer Josh Frydenberg said work is underway to update Australian corporate record keeping, which would allow such a registry to be established in the future.
This vague statement did not include a clear time frame for the record’s launch.
Mr Frydenberg’s office said it had nothing to add, despite the full details of the finances contained in the now-published Pandora papers.
The federal opposition argued that the Bandura papers demonstrated the need for “more transparency” in Australian companies and tax systems.
“These discoveries came about because of too much transparency, we need to look at what other steps can be taken [to make sure that we can shine a light on these dodgy practices]Shadow Treasurer Jim Chalmers said.
“Every time someone rich, powerful and influential gets away with these kinds of practices, ordinary workers have to pay more.
“That’s why we need to do what we can to try to eradicate it. This starts with transparency.”
Chalmers will not require Labor to implement a record if it wins the next election, but said he will have more details on the opposition’s platform before the election.
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