As it happened: PwC tax scandal fallout continues; Crown Resorts set to pay $450m fine over counter-terrorism, anti-money laundering failings

Thanks for joining us today. Here are some of our main headlines.

• NSW Attorney-General Michael Daley has resisted calls from MPs to free Kathleen Folbigg immediately from prison after the state’s top prosecutor conceded new evidence had created reasonable doubt about her convictions over the deaths of her children.
• ACT top prosecutor Shane Drumgold won’t return to give evidence to the inquiry into the handling of the Lehrmann case.
• The Federal Court has today heard the Australian Tax Office is set to return $1 million in taxes paid by fraudster Melissa Caddick. Caddick’s parents, Barbara and Ted Grimley, are set to receive $950,000, which represents most of the money their daughter stole from them.

• The United States issued a remarkable warning that it may need to stop working with some Australian military units because of concerns their members had been involved in war crimes in Afghanistan, the nation’s top military officer has revealed.

• The Voice referendum bill has cleared its first hurdle, passing the House of Representatives unamended 121 to 25. Indigenous Australians Minister Linda Burney said it would make a practical difference for First Nations people in the country.
• The Reserve Bank governor Philip Lowe told a Senate estimates hearing the PwC partners involved in the tax scandal should be named.
• There are conflicting signs on the inflation front with new figures showing a spike in April, which was largely driven by a tax change that occurred a year ago.
• Australia’s greenhouse emissions have recorded another modest reduction, down 0.4 per cent in the December quarter compared with the same period last year, according to the latest government data released on Wednesday.
• Newly anointed West Australian premier Roger Cook has vowed to continue his predecessor’s legacy of unity and stability while fronting the press for the first time since securing the support of his Labor colleagues to be the party’s new leader.

• In Victoria, a state Liberal MP Ryan Smith has quit politics and triggered a byelection in the electorate north-east of Melbourne. He says the “growing negative tone of politics” played a part in his decision.

• In NSW, a man has faced court for allegedly abusing Indigenous broadcaster Stan Grant.

• A Ukrainian drone sparked a fire at an oil refinery in southern Russia and shelling hit a Russian town close to the border for the third time in a week, damaging buildings and vehicles and injuring four people, Russian officials said.

ACT top prosecutor Shane Drumgold won’t return to give evidence to the inquiry into the handling of the Lehrmann case.

Hearings for the public probe resume tomorrow, with Bruce Lehrmann’s original lawyer John Korn, and the ACT’s Victim’s of Crime Commissioner Heidi Yates to give evidence until Friday.

Shane Drumgold (centre) is giving evidence in the into the aborted trial of Bruce Lehrmann (left), who had been accused of raping Brittany Higgins (right).Credit: Stephen Kiprillis

Bruce Lehrmann pleaded not guilty to raping his former colleague Brittany Higgins in the parliamentary office of their then-boss, former Coalition Minister Linda Reynolds, in March 2019.

The trial was aborted in October 2022 due to juror misconduct, and a retrial was abandoned in December due to Higgins’ mental health. Lehrmann has always maintained his innocence.

The ACT government announced the inquiry in December following a public breakdown in the relationship between the Drumgold and the police.

Drumgold, who is on leave from his position until June 13, gave evidence over five days at the beginning of the inquiry. Until today, there was uncertainty as to whether he would return to give further evidence.

Commonwealth public servants are flagging industrial action after rejecting a 10.5 per cent pay increase over three years, just over half of what they are calling for.

The Community and Public Sector Union says its 15,000 members, who represent about a tenth of the public service, overwhelmingly voted down the first-round offer announced by the government a fortnight ago.

“Given the decade long attack on APS employees’ wages and conditions and the skyrocketing cost of living, it is abundantly clear that APS employees are looking for something better,” CPSU national secretary Melissa Donnelly said.

CPSU secretary Melissa DonnellyCredit: Louie Douvis

The Australian Public Service Commission yesterday announced it was reducing the salary discrepancies for the same pay classifications across Commonwealth agencies.

The CPSU wants public servants to receive a 20 per cent pay rise over three years, as well as unlimited work-from-home rights, as part of their bargaining claim.

The union has already lodged an application with the Fair Work Commission for Services Australia employees to vote on whether to take industrial action. Donnelly said that decision hadn’t been taken lightly.
This decision has not been taken lightly.

“This is a strategic decision that puts our members in a position where they can increase pressure on the APSC and the federal government to deliver better outcomes in bargaining if necessary,” she said.

NSW Attorney-General Michael Daley has resisted calls from MPs to free Kathleen Folbigg immediately from prison after the state’s top prosecutor conceded new evidence had created reasonable doubt about her convictions over the deaths of her children.

Upper house Greens MP Sue Higginson told parliament on Wednesday that a landmark inquiry into Folbigg’s convictions over the deaths of her four young children had heard a “mountain of evidence”, not presented at her 2003 trial, that her children might have died of natural causes.

Lindy and Michael Chamberlain, inset, and Kathleen Folbigg, who was convicted in 2003 of the murder of three of her children and the manslaughter of her firstborn son.

“This is about acting in the face of the gravest injustice,” Higginson said.

“Kathleen is a woman like Lindy Chamberlain who has been failed by the criminal justice system.”

But NSW Treasurer Daniel Mookhey, representing Daley and the Minns government in the upper house, said it would not be prudent for Daley to make a decision before the inquiry’s findings and there were “significant evidentiary complexities” in the case.

“The government, however, acknowledges that there is urgency,” Mookhey said.

The NSW Director of Public Prosecutions, Sally Dowling, SC, and a team of counsel assisting the inquiry into Folbigg’s convictions agreed last month it was open to the head of the inquiry, former NSW chief justice Tom Bathurst, KC, to find there is reasonable doubt about her convictions.

The inquiry has concluded hearings and Bathurst is working on his final report to the governor.

Daley has the power, independent of the inquiry, to recommend that the governor grant Folbigg either a pardon, paving the way for her unconditional release from prison, or conditional release on parole pending the inquiry’s final report.

Lindy Chamberlain, who had been jailed for the murder of her daughter Azaria in 1982, was released in 1986 after Azaria’s matinee jacket – a key piece of evidence – was found at Uluru.

This was before a royal commission into her conviction concluded that a judge hearing the same evidence as was before the royal commission “would have been obliged to direct the jury to acquit” Lindy and her then-husband Michael, who had been convicted as an accessory.

The Chamberlains were pardoned in 1987 and their convictions quashed in 1988.

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The Australian Tax Office is set to return $1 million in taxes paid by fraudster Melissa Caddick, the Federal Court has heard.

For years Caddick paid taxes on the $23.5 million she stole from investors to create the appearance she was operating a legitimate business.

Justice Brigitte Markovic also heard that Caddick’s parents, Barbara and Ted Grimley, are set to receive $950,000, which represents most of the money their daughter stole from them.

Melissa CaddickCredit: Sydney Morning Herald

Barrister Vanessa Whittaker, SC, representing the receivers of Caddick’s estate, said that the payment to the parents was something all stakeholders, including the other out-of-pocket investors, were not objecting to.

The majority of investors, represented by Investor A, had wanted all Caddick’s victims to be treated equally. The payment of $950,000 to the Grimleys represents a 95 per cent return for the couple, while the other investors are set to receive around 36 cents in the dollar.

“They don’t object to the way forward, they don’t positively consent,” said Whittaker of the decision by investors to not oppose the payment.

The court has previously heard that the other investors were reluctant to accept the Grimleys’ proposal but at Wednesday’s hearing, it was indicated that they did not want to spend more money in legal fees fighting the elderly couple.

Those legal fees, along with the complicated unravelling of Caddick’s affairs, have already drained $2 million from the asset pool which is currently worth around $7 million gathered from the sale of Caddick’s Dover Heights house, jewellery, luxury cars and other possessions.

The money to be returned by the tax office will go into the pool of funds to be distributed to investors.

The agreement is expected to be ratified by the court as early as next week.

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Kyiv: A Ukrainian drone sparked a fire at an oil refinery in southern Russia and shelling hit a Russian town close to the border for the third time in a week, damaging buildings and vehicles and injuring four people, Russian officials said.

A day after Russia accused Ukraine of sending drones to attack buildings in Moscow, Ukrainian artillery struck the Russian town of Shebekino about 7 kilometres north of the border with Ukraine’s Kharkiv region on Wednesday, regional Governor Vyacheslav Gladkov said on Telegram.

Police officers guard an area where a Ukrainian drone damaged an apartment building in Moscow on Tuesday.Credit: AP

Two people were hospitalised, and the shelling smashed windows and damaged roofs of an eight-storey apartment building, four homes, a school and other places, he said.

The governor of Russia’s southern Krasnodar region said a drone was the likely cause of a fire that broke out at the Afipsky oil refinery.

The fire was soon put out and there were no casualties, Governor Veniamin Kondratyev said on Telegram. The Afipsky refinery is not far from the Black Sea port of Novorossiisk, near another refinery that has been attacked several times this month. Reuters was not able to independently verify the reports.

There was no immediate information on who launched the drone, but Moscow has accused Kyiv of increased attacks inside Russia in recent weeks, while Russia has repeatedly pounded Ukrainian cities with drones and missiles.

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On the day the Voice referendum bill cleared its first hurdle in the House of Representatives, Sydney Film Festival has become the latest cultural organisation to support the Yes campaign.

A week out from the opening night of the 70th instalment of one of the city’s great cultural events, it joined Bangarra Dance Theatre, which came out in support of the Voice in April.

Artistic director of Bangarra Frances Rings with dancers Amberlilly Gordon, Rikki Mason, Courtney Radford and Bradley Smith.Credit: Brook Mitchell

“Sydney Film Festival has for decades striven to amplify the voices of Aboriginal and Torres Strait Islander peoples, through the stories we share, the audiences we welcome and the manner in which we work and operate,” the festival said in a statement.

“We believe in the power of dialogue, the strength of diverse opinions from lived experience and in the importance of equality and reconciliation. The Indigenous Voice to parliament represents an opportunity to acknowledge, respect and learn from the wisdom of the First Nations Peoples, enriching our nation’s story and its future.“

The festival said it saw the Voice as “an opportunity for the nation to progress further along the path of reconciliation” and encouraged “thoughtful consideration and informed decision-making as we move towards the referendum”.

It opens with Indigenous director Warwick Thornton’s The New Boy, a drama that has Cate Blanchett as a renegade nun who takes in an Indigenous boy, played by first-time actor Aswan Reid, at a remote monastery.

The United States issued a remarkable warning that it may need to stop working with some Australian military units because of concerns their members had been involved in war crimes in Afghanistan, the nation’s top military officer has revealed.

Australian Defence Force Chief Angus Campbell further stunned senators on Wednesday by saying he did not inform the then defence minister about the warning, issued following the release of the Brereton Report in November 2020.

Chief of the Defence Force General Angus Campbell Credit: Alex Ellinghausen

Campbell said he had received a letter in March 2021 from the US defence attache in Canberra warning that the Brereton report could trigger a law that prevents the US military working with units linked to “gross violations of human rights”.

The restriction could potentially have applied to either the Special Operations Command or the Special Air Service regiment, he said. Campbell said one individual had been reassigned to avoid triggering the so-called “Leahy law”.

The Brereton report found “credible” evidence of allegations that 25 Australian soldiers had murdered 39 Afghan civilians, and pointed to a disturbing “warrior culture” that had developed within elements of the SAS.

Campbell said he believed it would be “reasonable” for a casual reader of the report to think it placed the SAS’s co-operation with the US military into doubt.

Under questioning from Senator Jacqui Lambie, who served for almost a decade in the army, Campbell said he did not believe he raised the letter with the defence minister at the time.

“It’s a pretty big matter,” Lambie said, expressing amazement that Campbell would not have informed the defence minister. Linda Reynolds was defence minister until the end of March 2021, when she was succeeded by Peter Dutton.

Asked whether the current defence minister Richard Marles knew about the warning, Campbell said: “No, he does not know what I am telling you here, Senator.”

Australia’s greenhouse emissions have recorded another modest reduction, down 0.4 per cent in the December quarter compared with the same period last year, according to the latest government data released on Wednesday.

Annual greenhouse emissions totalled 463.9 million tonnes in calendar year 2022, and the 0.4 per cent fall during the December quarter represents a reduction of 2 million tonnes.

Emissions actually rose by 0.1 per cent in the September 2022 quarter, as the economy bounced back from the COVID-19 pandemic.

Minister for Climate Change and Energy Chris BowenCredit: Alex Ellinghausen

Climate Change and Energy Minister Chris Bowen said while the federal government has a suite of emissions reduction policies in place, the latest figures show “we have much more to do”.

“The Albanese government is implementing ambitious but achievable policies to decrease emissions while creating jobs and strengthening the economy,” Bowen said.

In the December quarter emissions from electricity were down 3.5 per, driven by record levels of rooftop solar generation. But Transport emissions rose 4.9 per cent as the economy continues to bounce back from COVID and agriculture emissions grew 2.6 per cent as livestock numbers recover from drought.

Australia has a legally binding goal to cut emissions 43 per cent compared to 2005 levels by the end of this decade. It has cut emissions 21 per cent to date.

The Tax Practitioners Board is making further inquiries into the PwC tax scandal after deregistering a former PwC partner in December.

Since then, more details of the scandal have emerged after the board tabled 144 pages of documents showing more than 50 PwC staff and partners had been included in emails discussing confidential government tax plans.

In senate estimates Greens senator Barbara Pocock asked why the Tax Practitioners Board decided not to suspend PwC’s registration as a tax practitioner.

Tax Practitioners Board Chair Peter de Cure during a Senate estimates hearing at Parliament House on Wednesday.Credit: Alex Ellinghausen

TBP chair Peter de Cure said the board believed the sanctions it imposed at the time were appropriate.“We currently have ongoing consideration of the matter surrounding this issue, and we are making some further inquiries, but we don’t have any current plan to suspend PwC,” he said. “We are currently making further inquiries, and it’s a very formal process.

“Collins’ registration as a tax practitioner was cancelled, and he was banned for reapplying for registration for two years, after the board found he had shared confidential government briefings on multinational tax reform with PwC partners and clients to help them sidestep the laws.”

Pocock asked why Collins was banned for applying for two years, rather than the maximum of five years.“When we considered the appropriate sanction for him, he had on a range of matters he had admitted his conduct he had demonstrated remorse for his conduct. And he had advised us that he would cease to practice as a tax agent,” de Cure said.

If Collins wanted to reapply, he would have to satisfy the board he was a “fit and property person” at the time of that application, and de Cure said he believed it was unlikely Collins would reapply to be a tax agent.