Serious Fraud Office faces cutback

ANDREA VANCE
Last updated 13:38 08/12/2013

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A 25 per cent funding cut means the Serious Fraud Office will take on fewer cases, MPs were told this week.

Funding to the agency is forecast to decline by 24.7 per cent from $10.180 million in 2013/14 to $7.670m in 2014/15.

Parliament's law and order select committee heard that the number of complaints received has more than doubled from around 200 to 435. But chief executive Julie Read told MPs the agency will have to prioritise the work it does, taking on two out of six low-level cases as a deterrent.

"I think it is fair to say that the way we prioritise cases probably changed at the beginning of the Global Financial Crisis overall...I've anticipated that foundation will continue but we may have to adopt some additional tactics depending on the nature of the cases,'' she said.

The committee heard the agency is starting to see more corruption and bribery complaints often at the lower level, than bigger finance company cases.

In the year ending June 2013, 30 new investigations were launched.

On election in 2008, the National Government scrapped Labour's plans to merge the SFO into the Organised Financial Crime Agency (OFCANZ) and boosted funding to deal with cases stemming from the GFC. Labour MP Jacinda Ardern says the Government has now ''cut that back''.

"That essentially means that the Serious Fraud office is going to have to pick and choose the cases that it is able to pursue and they have been very black and white about that."

Two budget bids by the agency were also rejected, Ardern said. One of them was a pitch in December 2012 for an "intelligence hub", with police, to prevent and detect fraud around the Canterbury rebuild. Instead the agency hosted a seminar and are monitoring complaints. Potential fraud from the earthquake recovery has been estimated at $1-2 billion.

Ardern said Labour still believes that bringing the SFO into an organised crime agency is the right approach. "The area is getting more complex. We also recognise the huge cost to the economy as a whole."

SFO Minister Anne Tolley said the SFO is carrying out an expenditure review and no final decisions have been made on its budget.

"What we are seeing is funding coming back to baseline levels, following the financial boost given by the Government to help SFO tackle finance companies. And I think they have done a tremendous job," she said.

"Let's not forget that Labour wanted to disband the SFO completely, but we value its specialist expertise in addressing white collar crime. I would expect it to continue to carry out appropriate and thorough investigations whenever necessary."

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Tolley said that in Christchurch other methods were developed to prevent and deal with fraud. "As always, we need effective solutions alongside good results and value for taxpayers."

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- Fairfax Media

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