Fraud costs Aussie govt $600m a year

Fraud has cost the Commonwealth as much as $600 million a year, with less than a quarter ($139 million) recovered, according to a new report.
Written by Darren Pauli, Contributor on

Fraud has cost the Commonwealth as much as $600 million a year, with less than a quarter ($139 million) recovered, according to a new report.

Paper money

Paper money extreme macro image, by Kevin Dooley, CC2.0

These losses occurred over the 2008/09 financial year, when there were 800,000 fraud incidents, according to the Australian Institute of Criminology. The report has been released publicly for the first time amid a Freedom of Information request. The institute is required to report each year on fraud against the Australian Government.

Minister for Home Affairs Brendan O'Connor said fraud has become more complex due to the government's push into online services.

"Technology is making life easier for tens of thousands of Australians and increases the efficiency of government programs," O'Conner said. "However, it can also create opportunities for cyber criminals, at home and abroad."

O'Connor today launched a Commonwealth Fraud Control Information online portal that will allow agencies and the public to find fraud control tips and guidelines. He also announced changes to simplify the Commonwealth Fraud Control Guidelines that help agencies report on and prevent fraud.

The $600 million in losses came despite high agency compliance with mandatory bi-annual fraud risk assessments, according to a survey of 150 agencies. Ninety-one per cent had complied with the requirement and 64 per cent had run the assessment during the year in which the survey was run.

It cited a lack of "systematic research undertaken into the nature and extent of the losses that governments have sustained through fraud".

Those government agencies that do log fraud data almost never make that information public, and any known information is almost solely thanks to brief summaries in annual reports or news articles.

"Many governments would prefer that their fraud experiences never be made public to avoid criticism for not having appropriate preventive measures in place," the report stated.

During the reporting period, the Australian Federal Police accepted 368 referrals amounting to $70 million, and binned 47. In the year prior, it accepted 396 cases which totalled $146 million.

NSW had the highest amount of referrals to the Commonwealth Director of Public Prosecutions at 1670, while Queensland scored the most convictions at 1120.

The institute defined fraud as "dishonestly obtaining a benefit by deception or other means" including:

  • theft;
  • obtaining property, a financial advantage or any other means by deception;
  • causing a loss, or avoiding or creating a liability by deception;
  • providing false or misleading information to the Australian Government, or failing to provide information where there is an obligation to do so;
  • bribery, corruption or abuse of office;
  • unlawful use of Australian Government computers, vehicles, telephones and other property or services;
  • relevant bankruptcy offences; and
  • any offences of a like nature to those above.
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