Someone in the government needs to start asking some hard questions about Operation Wickenby the government’s much vaunted multi-agency tax evasion investigation which hopes to claw back $300m in lost revenue.

The government will not make any money on the project as they have committed $305 million dollars of taxpayers’ money to the five agencies involved in the investigation. But the whole thing just seems to be dragging on and after two years and three months all we have seen are three unknown Gold Coast businessmen charged with around $4m raised in amended assessments and $11m confiscated through proceeds of crime legislation.

This is way short of $300m and the proclamations of the government and the tax commissioner Michael D’Ascenzo, who have told the public there are 500 suspected tax cheats, including a Who’s Who of the Australian entertainment and sporting industries.

There are now over 250 officers working on Operation Wickenby across the five agencies. Last July the Treasurer said they had spent two sevenths of the $305m directed towards the project . I estimate that Wickenby is currently operating at an $80m loss.

Clearly the project is currently bleeding red ink and taxpayers are entitled to know what the government intends to do about the situation. At the moment the whole exercise seems to have been a big scare campaign to curtail the more than five billion dollars in money movement out of Australia to the 30-odd tax haven countries. Officials were hoping more suspects would have voluntarily come forward and confessed their sins as well as ratting on others involved. Only a few have come forward.

Some suspects, including entertainment boss Glenn Wheatley, are alleged to have been offered immunity from a custodial sentence if they sing like a canary to the ACC and DPP. There was speculation last month that Wheatley was about to be charged but nothing eventuated.

The word is that the DPP got cold feet and reneged on the deal. The reasons are not apparent at this time. These are the questions I would ask the government:

1) The original estimate of $300m revenue lost to Australia of $300m was nearly two and a half years ago. Mountains of paperwork have been seized through armed raids and put under the microscope by 250 experienced officers. Why hasn’t the figure been revised?

2) Is there any significance of the change of name from Project Wickenby to Operation Wickenby? There seems to be a shift in the operation’s scope of investigation from the use of the overseas leg to conceal and hide or to dress up things as something other than what they are, such as back-to-back loan arrangements, the use of repatriating money that is earned by an Australian resident overseas into Australia through some sort of gift or other non-taxable form. Now they appear to be talking about international tax avoidance arrangements (non fraud matters) being part of Wickenby as well. Are they cooking the books to conceal a failure of the original Wickenby?

3) The government is introducing new legislation this year to make it easier for agencies such as the ATO, AFP, ACC and ASIC to exchange information with each other. Bearing in mind that the ATO can only use certain tax haven information in their investigations, who is going to oversee there is no potential misuse of power and privacy breaches?

Peter Fray

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Peter Fray
Editor-in-chief of Crikey