Australia Corruption Report

Australia’s judiciary bears low risks of corruption for companies. Bribes and irregular payments in return for favorable court decisions are very uncommon (GCR 2015-2016). Companies report strong confidence in the independence of the judiciary (GCR 2017-2018). Businesses are moderately satisfied with the efficiency of the legal framework pertaining to settling disputes, yet are not satisfied with it’s efficiency when it comes to challenging regulations (GCR 2017-2018). The judiciary operates independently and principles of equal treatment, procedural fairness, and judicial precedent are followed (ICS 2017). The executive branch respects the independence of the judiciary and generally accepts its decisions rather than attempting to circumvent them (SGI 2017). Australia has well established legal and court systems for litigation and arbitration and is a pioneer in the development and provision of non-court dispute resolution mechanisms (ICS 2017).

Enforcing a contract in Australia takes less time than in other OECD high income countries (DB 2018).

The risk of encountering corruption within the Australian police service is low. Surveyed business executives place high trust in the Australian police services and report few business costs of violence and crime (GCR 2017-2018). Only five percent of Australians perceive the police as corrupt (GCB 2017). The government has effective mechanisms in place to prevent and detect corruption in the police, and there are no reports of impunity (HRR 2017).

A report found that police in the state of Victoria engaged in drug trafficking and drug use in conjunction with known traffickers; allegations against eight officers have been substantiated (The Guardian, Dec. 2016).

There is a low risk of encountering corruption when acquiring public services in Australia. Companies report that irregular payments and bribes are very uncommon when obtaining public services (GCR 2015-2016). Roughly a sixth of Australians perceive local government officials as corrupt (GCB 2017). About a fifth of surveyed companies report having encountered bribery in the last five years (Deloitte 2017). One in twenty Australian civil servants indicated in a survey that they had seen a colleague acting in a corrupt manner (APSC 2018).

Domestic and foreign companies operating in Australia enjoy great flexibility in the licensing process due to a strong rule of law that protects companies against corruption risks (ICS 2017). Australian accounting, legal, and regulatory procedures are transparent and consistent with international standards (ICS 2017). Starting a business takes fewer steps and less time than in other OECD high income countries (DB 2018). Dealing with construction permits is less time-consuming than in other OECD high income countries (DB 2018).

Businesses are very unlikely to encounter corruption when dealing with Australia’s Land authorities, but there are significant risks of money-laundering activity in the real estate sector. Property rights are protected by a strong rule of law (ICS 2017), and companies express strong confidence in the government’s ability to protect property rights (GCR 2017-2018). Transparency International identified significant deficiencies in Australia’s rules and regulations to prevent money laundering in real estate transactions; for example, real estate agents and accountants are not covered by anti-money laundering laws and are thus, for example, not required to follow the law’s due diligence requirements (TI 2017a).

Registering property takes only five days, which is much less than the OECD average of nearly 22 days (DB 2018).

There is a very low risk for companies operating in Australia to make undocumented extra payments or bribes in connection with tax payments (GCR 2015-2016). Only five percent of Australians perceive tax officials as corrupt (GCB 2017). Australia has tightened its anti-tax avoidance legislation, mainly affecting multinational corporations that operate in multiple tax jurisdictions (ICS 2017). Companies spend significantly less time on paying taxes than the average among OECD high-income countries (DB 2018).

Adam Cranston, the son of Australia’s deputy tax commissioner, Michael Cranston, has been arrested over involvement in an alleged tax fraud scheme worth AUD 165 million (ABC News, May 2017). The deputy tax commissioner is not believed to have had knowledge of the conspiracy, but he is facing a charge of abusing his position as a public official (ABC News, May 2017). His trial date has been set for early 2019 (Financial Review, Mar. 2018).

There is a low risk of corruption in Australian public procurement, but some fraud risks exist. Australia’s public procurement system is generally transparent and well regulated, restricting opportunities for corrupt practices in the sector (ICS 2017). Businesses do not report that bribery during procurement processes is a problem (GCR 2015-2016), yet one-third of Australian companies report to have experienced procurement fraud in the past two years (pwc 2016). Businesses indicate that diversion of public funds is very uncommon and favoritism in the decisions of government officials is fairly uncommon (GCR 2017-2018). There are concerns about some tenders not being conducted in a transparent manner, particularly when “commercial-in-confidence” is cited as the reason for non-disclosure of contracts with firms in the private sector; leading to the possibility that friends of particular constituents are being favored (SGI 2017).

AusTender provides centralized publication of Australian Government business opportunities, annual procurement plans, multi-use lists and awarded contracts. Businesses in Australia are recommended to use a specialised due diligence public procurement tool to assess potential risks.