Can the government beat the real estate industry in its money laundering crackdown?

When it comes to global rankings, there aren't too many fields where we've been vying for top honours for near on two decades.

In the pantheon of money laundering and terrorism finance, however, we rank right up there with the best.

We stand alongside the US, Haiti, China and Madagascar as among the very few nations that do not include real estate agents, lawyers and accountants in laws to battle money laundering.

As a result, Australian real estate has become a prime target for global money laundering, particularly out of China.

According to the global body responsible for lifting global money laundering detection standards, the Financial Action Task Force, Australia has left the door open to global money laundering in several key areas.

As a founding member of the Task Force in 1989, we've found ourselves in the embarrassing position of being one of just a handful on nations that don't comply with the measures.

That may be about to change. 

Attorney-General Mark Dreyfus has outlined a renewed push to bring Australia into line with most of the developed world at an address at the National Press Club.

It's been a long time coming. 

The changes were drafted back in 2007 but never made it into law following a concerted lobbying campaign on behalf of real estate agents, lawyers and accountants.

Along the way there have been reviews and promises from Canberra, all to no avail.

How bad is the problem?

Since then, housing prices have more than doubled, and in some cities trebled. 

How much of that is a result of a flood of cash being washed by local crime syndicates or global forces is impossible to determine.

But the reticence to adopt the Tranche II laws combined with our generous tax incentives for property investors and failure to tax highly lucrative gains on owner occupiers has turned Australian real estate into fertile ground for those seeking to transform ill-gotten gains into legitimate income.

The amount of cash requiring laundering is extraordinary. 

AUSTRAC chief Brendan Thomas said criminals still prefer traditional avenues such as cash, banks, luxury goods, real estate and casinos to legitimise their wealth.

"We know, through the good work of our colleagues in the Australian Criminal Intelligence Commission, that the value of the domestic Australian drug market is worth at least $12.4 billion per year," he told the National Press Club in a joint address with Mr Dreyfuss.

"This money then needs to be laundered through the Australian economy, every single year."

According to Mr Dreyfuss, the Australian Federal Police confiscated more than $352 million worth of assets last year, more than double that of the previous year.

"Real estate accounted for 65 per cent of those assets," he said.

While catching and prosecuting criminals was important, the attorney-general noted that it was not enough.

"It's a far better outcome for us all if we can protect everyone in our community and prevent those crimes from occurring in the first place," he said.

It's not just local syndicates taking advantage of the lax rules.

Mr Dreyfuss said the AFP seized more than 3,000 hectares of Tasmanian farmland purchased by Chinese nationals using the proceeds of crime while a local accountant provided advice on how best to skirt bank triggers and alerts on funds entering the country.

But the professional bodies that represent those groups already are gearing up for a major fight to again attempt to thwart the implementation of new rules.

The global task force singled out Australia's failure to extend the anti-money laundering and counter terrorism financing regime to so-called Tranche II entities – lawyers, accountants and real estate agents.

The legal profession argues that such laws may contravene client confidentiality clauses.

But after 16 years of resisting international pressure to ramp up detection and prevention, all three groups finally may be forced to capitulate.