Swindlers costing Aust govt $775m

Australian Home Affairs and Justice Minister Brendan O'Connor. Photo / Getty Images

Australia has moved to clamp down on fraud costing the federal Government almost A$600 million ($775 million) a year.

Swindlers have tried to cheat disaster relief payments, welfare benefits and new programmes, while public servants have stolen from their departments, misused credit cards, and disclosed confidential information.

"Fraud is a really low act," said Home Affairs and Justice Minister Brendan O'Connor.

"There are vulnerable people who genuinely need our help, and fraudsters play on our nation's generosity for their own criminal purposes.

"Perhaps most disappointingly, in recent times criminals have attempted to exploit Government relief payments designed to assist communities to recover from natural disasters.

"It's awful to think that some people seek to make a profit from measures aimed at relieving human misery, but it does happen and we need to do all we can to stop it."

The scale of federal losses was revealed in a report by the Australian Institute of Criminology, which said strict new fraud control and risk management measures were needed.

The report said the need was shown by waste and fraud in the scandal-plagued A$2.8 billion home insulation programme, and green loans and school building programmes launched as part of the economic stimulus package to combat the global financial crisis.

Fraud reported in the institute's survey of 149 federal departments and agencies equated to about 18c of every A$100 invested by the Commonwealth.

Only about A$140 million - less than one-quarter - of the stolen money was recovered.

The report said federal fraud of A$598 million in 2008-09 compared with private sector losses of A$977 million ($1.2 billion) reported in a 2008 Bureau of Statistics survey, and A$301 million ($388 million) reported between 2006 and 2008 in a KPMG survey of Australian and New Zealand businesses.

With the number of dedicated anti-fraud officers rising 38 per cent to almost 830 in 2008-09, the report said the number of fraud cases fell by about 10 per cent over the previous year.

But about 800,000 cases were still uncovered.

"Even though there were fewer incidents and losses, it's still a lot of money and there's always more we can do to boost our vigilance against Commonwealth fraud," O'Connor said.

He said moves by individual agencies would be supported by new federal measures, including a new online fraud control information centre, and streamlined guidelines detailing agency obligations.

"Fraud is completely unacceptable and that's why we're doing all we can to stop it," O'Connor said.