CBA's $700m civil penalty could fund national security

Image via Commonwealth of Australia, Department of Defence.

Treasurer Scott Morrison has hinted that Australia’s defence and national security sectors will be the ultimate winners from the Commonwealth Bank’s $700 million fine for breaches of anti-money laundering and counter-terrorism financing laws.

In a press conference in Sydney, Treasurer Morrison said a range of measures in this year's federal budget may be funded from the fine, which is the largest in Australian corporate history, for breaches of anti-money laundering and counter-terrorism financing laws that resulted in millions of dollars flowing through to drug importers.

"That payment should be received in recognising next financial year and, as you know, we have some very significant measures in the budget which relate to keeping Australians safe," Morrison explained.

"Whether it is the hardening of Australian airports or a range of other issues that we announce in the budget, the increased presence of the Border Force and AFP at Australian airports. There are a range of matters that we have committed to in the national security space."

The 2018 budget defence and national security measures included funding for the Home Affairs 'mega-department', $36.4 billion in 2018-19 for defence funding and $50 million seed funding for a new Australian Space Agency. The largest Defence budget measure this year is the F-35 Lightning II Joint Strike Fighters, with $1.82 billion forecast spending this year, up from $1.1 billion last year.

$418 million will be spent in 2018-19 on the Future Submarines, up from $319 million in 2017-18. A total of $52 million will be spent on the Future Frigates project this year, with funding going towards setting up project offices in Adelaide and overseas, and beginning arrangements for design and engineering works at Osborne shipyard.

The budget papers show $280 million will be spent on the two new Navy replenishment ships, now under construction by Spanish shipbuilder Navantia in its yard in Ferrol, Spain. As promised, construction will start this year on the first of 12 new offshore patrol vessels, with the budget allocating $274 million of the $3.6 billion project cost towards initial work.

CBA will pay the $700 million fine plus legal costs after Australia's federal financial intelligence agency, AUSTRAC, last year accused the major bank of serious and systematic failures to report suspicious deposits, transfers and accounts.

CBA admitted to the late filing of 53,506 reports of transactions of $10,000 or more through its "intelligent deposit machines".

Some of the funds will also go towards paying for the royal commission.

"Add to that, the work that we have done and paying for the royal commission itself. So, that is a bill that still has to be paid," the Treasurer said. "There is no shortage of bills that have to be paid at a Commonwealth level and this will go into consolidated revenue and any other measures that the government undertakes in these areas would be subject to the normal new policy proposal process."

 

 

CBA's $700m civil penalty could fund national security
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