Looking the other way as drug trade booms

AFTER a decade in which border security has been a priority, it is incredible that customs officers are alleged to be key players in illicit drug imports. A six-month Age investigation has found Sydney Airport officers - up to 15 of them - are implicated in corruption or serious misconduct relating to drug trafficking, bribery, leaking sensitive information and possibly the illegal importation of weapons. The people we rely on for border security stand accused of breaching it.

The officers, who allegedly collude with corrupt baggage handlers, are linked to the alleged importation of staggering amounts of drugs. A covert joint-agency anti-corruption taskforce has identified a core group of a dozen customs officers allegedly involved in the trade.

Well-placed sources have revealed alleged activities that suggest airport security is profoundly compromised: drug-filled luggage is knowingly waved through unsearched; drug money is allowed to be smuggled out of Australia to fund more imports; customs databases are accessed to check for search requests; closed-circuit TV black spots are exploited or cameras are turned away from scenes of illicit activity. Officers with known crime links still work in the customs service.

The justice system will deal with these matters, but it is up to government to fix long-standing problems at the heart of gross security breaches. For a decade, policing agencies, parliamentary committees and inquiries have warned of organised crime's infiltration of the nation's airports and docks. In 2005, the Wheeler inquiry, triggered by news that dozens of Sydney Airport workers had serious criminal records or criminal links, found airport security was ''often inadequate and dysfunctional''. The Howard government committed $200 million to upgrade security at our busiest airports, but the focus was very much on counter-terrorism measures.

In 2006, former National Crime Authority chairman John Broome deplored the shift of law-enforcement resources away from organised crime. ''Drug trafficking in Australia still causes far more damage to far more Australians than all the terrorist acts that have been contemplated - let alone carried out - in Australia in the past 10 years,'' he said. By 2009, the Australian Crime Commission identified grave flaws with the system of security identity cards and the mandatory screening of airport and waterfront workers. Thousands who obtained a security clearance had criminal records.

''The concerns raised by the ACC inquiry demand a response, including a reassessment of the level of resourcing government assigns to confronting organised crime,'' The Age said.

Later in 2009, we revealed a crime syndicate had used unrestricted airport security passes to import cocaine since at least 2006. Again, The Age called for the closure of ''the gaping holes that still exist in the nation's aviation security''.

Illustrating the size of these holes, in 2008 then crime commission chief Alastair Milroy revealed his agency had tracked up to $12 billion in drug money flowing offshore every year.

The Gillard government rejected a joint parliamentary committee recommendation in June last year to give oversight of airport, wharf and freight staff to the Australian Commission for Law Enforcement Integrity, despite being warned about the organised crime threat. Promises to bolster systems of integrity have since been made, but The Age cannot forget the long record of government complacency about organised crime's infiltration of airport and waterfront security.

A commission of inquiry, which could be conducted by ACLEI or a judge, is required to establish the extent of corruption and of responsibility for this state of affairs.

Only then are we likely to get government to devote more attention and resources to an aspect of border security that has been neglected in favour of the populist priorities of terrorism and asylum seekers.

Unmasking the non-bank lendersAS SHARES in the Commonwealth Bank hover close to record levels, lifting the country's biggest provider of home loans towards a market valuation of $100 billion, it is worth considering how the banking industry in this country has changed since the dark days of financial calamity in 2008 and 2009. Those were rollercoaster years of investor anxiety as the unsound lending practices of some of the world's biggest financial institutions were laid bare, toppling some and forcing others into mergers with stronger partners.

Some Australian banks spied investment opportunities amid all the uncertainty and, as they mopped up smaller lenders, the local industry began a period of significant consolidation. Bank investors may be winners but what about the consumers?

In 2008, Westpac bought RAMS Home Loans and St George Bank (including Bank of Melbourne). CBA paid $2.1 billion for Bankwest in October 2008, just two months after it bought 33 per cent of mortgage provider Aussie Home Loans. And in December 2008 Aussie Home Loans bought its rival, Wizard Home Loans. It is worth noting that CBA's share price has more than doubled since mid-2009. Now CBA has agreed to lift its stake in Aussie Home Loans to 80 per cent, and it has an option to move to 100 per cent later. The deal, which requires clearance from the competition regulator, already has raised some concerns about the real level of competition in the local market.

Bankmecu is one rival calling for greater transparency for consumers. It wants bank-owned mortgage providers that operate under non-bank brand names to disclose their ultimate ownership in all advertising - a move Bankmecu must hope will help it win customers disaffected by CBA, Westpac, National Australia Bank and ANZ.

A vigorously competitive financial industry, prudently managed and firmly regulated, is vital to Australia's interests. A lender that can rely on the financial backing of a strong bank is to be welcomed, but genuine industry competition only flourishes if these lenders operate at arm's length from parent banks.

The major banks' repeated reluctance to pass on Reserve Bank interest rate changes in full, coupled with the inevitable delays in implementing such changes, only enhances scepticism about banks' integrity and industry competition. If smaller lenders become mere puppets of parent banks, offering the same rates and fees on loans, then consumers will be worse off and so will this economy.