STEPHEN JONES:
Great to be here, thank you everyone. I'm here with Deputy Commissioner John Ford, who is the head of the Serious Financial Crimes Task Force in the Australian Tax Office, and we're giving you an update on progress with Operation Protego. Now, Operation Protego, as many of you may know which if you have been following this issue, is the action that the Albanese government is taking with the ATO and the Serious Crimes Financial Crime Task Force to crack down on fraud against the taxpayer and the Australian people using social media platforms which are promoting scams and financial crimes and frauds against the Australian taxpayer. The GST frauds aimed at creating false accounts, false invoices, false business activity statements and it's costing the Australian taxpayer big time ‑ big time. So today, I can inform you that we have that the Serious Crimes Task Force has issued 10 warrants across 3 states. This shows that we are serious about chasing down the individuals involved. The tax office advises me that somewhere in the vicinity of $1.7 billion ‑ $1.7 billion ‑ has been lost to revenue as a result of this fraud. To put that in context, at the forthcoming budget, we'll be introducing a package to provide $1.5 billion worth of energy relief to households and small businesses. So at $1.7 billion, I just want to make the point this is not a victimless crime. This is money that is not available to provide relief to households for energy. It's not available for Medicare or education or Defence Force spending. This is not a victimless crime, this is a serious fraud and we are coming after the people involved. Twenty‑thousand letters have been sent out by the Task Force to individuals who we know have been involved. This is their chance to stick their hands up, come forward and enter into an arrangement with the tax office because if they don't, serious consequences will follow. People have already gone to jail. People have already gone to jail. So the government is serious about this. Serious about it, because every dollar that is lost to revenue through serious crimes and fraud like this, is a dollar that is not available for the government to support households, to support businesses, to provide healthcare support through Medicare, education or to support our defence forces in the field. I'll hand over to the Deputy Commissioner to make some additional comments. Happy to take questions after that.
JOHN FORD:
Thank you, Minister. As the Minister said, my name is John Ford. I am a Deputy Commissioner with the Australian Tax Office and I'm also the chief of the Serious Financial Crime Task Force. Today, we are warning the community about the continued promotion of fraudulent schemes on social media through platforms such as TikTok, Facebook and Instagram. The Serious Financial Crime Task Force has the capability and the powers across our partner agencies to identify the individuals behind these posts. And as the Minister said this week, we took action against 11 of those individuals who have been promoting this fraud in the community. For the community, the ATO does not offer loans. So when these social media posts suggest you can get a free loan, this is not true, you should check your facts. Again, if you are not in business, you do not need to lodge a BAS with the Australian Taxation Office. If you are not in business and you do lodge a tax, you are committing fraud. We take these attempts at fraud seriously. We are actively monitoring intelligence both across the social media platforms, but also through community information and information we get through our law enforcement partners, as well as institutions such as banks. As I said before, to make it clear, we have the capacity, through the Serious Financial Crime Task Force, to identify those who are promoting this fraud and we will take action, including criminal sanctions. And, as the Minister says, 2 people are already in jail. For those who may be tempted of big gains, my message to you is, we have sophisticated risk models. We are stopping these frauds in the majority of instances before they get into the hands of fraudsters. In fact, we have stopped $2.5 billion in attempted fraud. It's not a matter of if you will get caught, it is a matter of when you will get caught. To date, across our law enforcement agency partners, we have executed a total of 117 warrants. We have 87 arrests and, as the Minister says, 3 convictions, 2 of whom, those individuals are now sitting in jail. We are taking compliance action against 53,000 individual clients who have been involved in this fraudulent activity. For those engaged, if they do not take the opportunity to come forward, they will face firmer action from the Australian Taxation Office. As the Minister's mentioned this week, we are writing to 20,000 of those individuals and we are putting them on notice they have not engaged with them, with us. We know who they are and we we are forewarning to them. If they do not engage, we will take firm action. Finally, the message that I would like to leave you with is the ATO will find you and when we do, we will take appropriate action to address your criminal behaviour.
JONES:
Thanks very much. So the message is clear. We know who you are, we know where you are. This is your opportunity to stick your hands up and come forward. We can enter into an arrangement, but if you have been involved in a serious fraud, the full force of the Australian law will be visited upon you. And let this be a message to anyone else who's seen these messages on a social media platform. Don't be dumb. You'll get caught and the full force of the law will be visited upon you and this could ruin the rest of your life. Just don't do it. You're ripping off your fellow Australians. Happy to take questions.
JOURNALIST:
Mr Jones, how do these frauds work. Because for someone who is perhaps not entirely familiar with those sort of posts on Instagram or TikTok or otherwise, what should people be looking out for and how does the fraud work at the back of the house? What's the ATO trying to block here?
JONES:
The ATO knows if somebody set up an ABN and then lodged a Business Activity Statement, it's pretty easy to work out whether that's a legitimate Business Activity Statement. There's lots of analytics that the ATO can do to work out whether this is a legitimate business or not. So if you're seeing somebody on TikTok or Instagram or Facebook or any of the other platforms saying, "Hey, here's a method to get some free money or a free loan," all you've got to do is set up an ABN. All you've got to do is lodge a Business Activity Statement. All you've got to do is make these GST claims. Don't be dumb, you're going to get caught.
JOURNALIST:
It sounds like pie in the sky stuff, doesn't it?
JONES:
If something is too good to be true, guess what, it is.
JOURNALIST:
Has the ATO been working with the social media platforms to try and either prevent these kinds of fraud from ending up online or working with them to try and detect individuals?
JONES:
I'll invite the Deputy Commissioner to make some further comments on this, but we're working with the social media platforms across a whole range of areas. You know that the Albanese government is serious about cracking down on economic fraud and scams. Social media platforms have got a key role to play. At the moment, what we're doing is approaching them when we see a scam in the field or a fraud in the field, we'd like to do more. But I would invite the Deputy Commissioner to say something about this.
FORD:
Thank you, Minister. So the answer is we are constantly monitoring a range of intelligence sources, including the social media platforms. Where we identify fraudulent promotion of these schemes, we are in contact with the social media platforms and they are responsive in removing the posts. The important message, though, is this is not anonymous activity. When people are promoting this fraud on behind their keyboard, we can identify you and we will take action through our Serious Financial Crime Task Force to bring bring the full force of law including criminal sanctions and convictions to bear.
JOURNALIST:
We've got to bear the $1.7 billion. Is there one particular fraud or scheme or one particular big fish to a majority of that, or is it a mix of various different schemes?
FORD:
So this is 53,000 individuals. In terms of the sophistication of the fraud, it is not as sophisticated as we see with some of our fraud, which results in larger numbers. Generally it's smaller numbers, but at a larger scale. And that is what we're concerned about here. Fraud has always happened. The difference is the promotion via social media is bringing in Australians who generally wouldn't commit fraud and enticing them for a financial gain that they're not entitled to.
JOURNALIST:
Minister, a very quick question from South Australia. Coober Pedy and Tailem Bend are losing their last bank over the next couple of weeks. Locals are understandably concerned. Should the government be doing more to stop these financial institutions leaving small towns?
JONES:
The government doesn't have the power to direct banks about where they can and can't locate a branch. But we do say to all of the banks, we want to ensure that every, every Australian has access to banking services. I note that there is a Senate Inquiry that's been established and I note that two banks have voluntarily halted any banking closure programmes, the Commonwealth Bank and Westpac. I welcome the fact that they've done that. We've seen hundreds and hundreds and hundreds of bank closures around the country, in fact, not just in regional Australia and suburbs as well. We know that Australians are changing the way that they do their banking. More and more people are doing it online or through a phone app. But there are still Australians that need access to banking services and, critically, for small business, access to cash handling services. And this is something that is very much on the government's agenda.
JOURNALIST:
With the thousands of individuals who have already been sent compliance notices. Is the tax office confident that it can negotiate with them, to actually get all the thousands of them?
JONES:
There's 20,000 individuals who have ‑ who will receive a letter this week. That tells you something, we know who you are and where you live, so you should not be in doubt that the Australian Government, through the Australian Tax Office and the Serious Financial Crimes Task Force, is serious about this. $1.7 billion is a lot of money. And that's money that has been stolen, deliberately stolen from the Australian people and money that can be used, and should be used for Medicare, for education, for Defence Force, for providing energy relief to households and small businesses. Doing this, you are stealing from the Australian people. So the 20,000 people involved, you would be far better off coming forward, responding to that letter and entering into an arrangement with the tax office. Far better off doing that. Easier for you and easier for the tax office and far better for everyone.
JOURNALIST:
And with the loophole that enables that was to occur in the first place, has it been closed, and if not, when?
JONES:
Let's be very clear. This is not some fancy tax accountant who's found a loophole in the law. This is somebody using the law which is available to every legitimate business out there to have an ABN, to lodge a business statement and to get their GST refund. Perfectly legitimate. Every business ‑ legitimate business in Australia is doing this. This is people who are deliberately defrauding the tax office and the Australian people by pretending to have a business, by pretending to have transactions and then pretending to have a legitimate GST claim. That's not an accident, that's a deliberate fraud. Let's not mince words. It's a crime.