Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017

Bills Digest No. 64, 2017-18

PDF version [325KB]

Claire Petrie
Law and Bills Digest Section

11 January 2018

Contents

2014 independent review
Tax file number data
Publication of sanction details
Productivity Commission report
2017 reform of the skilled migration programme

Committee consideration

Legal and Constitutional Affairs Committee
Senate Standing Committee for the Scrutiny of Bills

Policy position of non-government parties/independents

Position of major interest groups

Financial implications

Statement of Compatibility with Human Rights

Parliamentary Joint Committee on Human Rights

Key issues and provisions

Part 1—public disclosure of sanctions
Existing law
Proposed amendments
Impact and concerns
Part 2—merits review
Existing law
Proposed amendments
Impact and concerns
Part 3—tax file number data
Existing law
Proposed amendments
Impact and concerns
Part 4—references to Regulatory Powers Act

Date introduced: 16 August 2017
House: House of Representatives
Portfolio: Immigration and Border Protection
Commencement: On Proclamation or six months after Royal Assent, whichever occurs first.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at January 2018.

Purpose of the Bill

The purpose of the Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017 (the Bill) is to amend the Migration Act 1958 to:

authorise the publication of details regarding sponsor sanctions, with retrospective application from 18 March 2015
enable the Department of Home Affairs[1] (Department) to collect tax file number data for prescribed purposes in relation to prescribed visas
clarify the rights to merits review for certain skilled visas and
fix incorrect references to the Regulatory Powers (Standard Provisions) Act 2014 (Regulatory Powers Act).

The Bill also amends the Income Tax Assessment Act 1936 and Taxation Administration Act 1953 to authorise the collection, sharing and use of tax file number data for the purposes of the Migration Act.

Background

In his second reading speech, Assistant Minister for Immigration and Border Protection[2] Alex Hawke stated that the measures in the Bill ‘will protect Australian and overseas workers, by strengthening the integrity of Australia’s temporary and permanent sponsored skilled work visas’.[3]

The integrity of the temporary skilled migration program has been a matter of ongoing concern. In particular, the Temporary Work (Skilled) (subclass 457) visa has been the subject of debate and scrutiny amidst concerns about the extent to which the program addresses genuine skill shortages within the Australian workforce, and reports of the exploitation of overseas workers.[4]

2014 independent review

In February 2014, the Abbott Government announced that it had commissioned a review into the 457 visa program. The review, conducted by an independent panel led by John Azarias, was tasked with examining how to maintain the integrity of the program without placing unnecessary administrative burdens on businesses.[5]

The report of the review, Robust New Foundations: a Streamlined, Transparent and Responsive System for the 457 Programme, was published in September 2014, and made 22 recommendations targeted at streamlining the program, providing greater flexibility and transparency, and strengthening sponsor monitoring and sanctions.[6] The Government provided its response to the report on 18 March 2015, and supported, or supported in principle, all but two of the recommendations.[7]

The current Bill seeks to implement two recommendations of the review relating to the collection of tax file numbers and the publication of sponsor sanctions.

Tax file number data

The Robust New Foundations report recommended that greater priority be given to the monitoring of sponsors, including through strengthening inter-agency cooperation. While noting that the Immigration Department had already entered into a Memorandum of Understanding with the Fair Work Ombudsman (FWO), who is responsible for monitoring certain sponsor obligations, the report recommended that more be done in this area.[8] In particular, it recommended greater collaboration between the Department and the Australian Tax Office (ATO), including information exchange between agencies, inter-agency workshops and a more integrated relationship to support integrity across immigration and tax systems, and suggested:

... further benefit could be achieved through information sharing and data matching with the ATO to identify sponsors at risk of non-compliance with their sponsorship obligations based on data discrepancies relating to visa holder salaries. Such collaboration could involve, but may not be limited to, matching records based on the visa holder’s tax file number obtained from sponsors. The ATO has indicated that this would require legislative change. This is strongly supported by the panel.[9]

The report recommended a change to 457 visa conditions to place a positive obligation on 457 visa holders to provide their tax file number (TFN) to the Department, arguing ‘this represents a simple change that will shift the burden on 457 visa holders while sending a clear message to both the employee and the employer.’[10]

Publication of sanction details

The report found that the Department had adequate compliance measures in place to effectively penalise sponsors who do not meet their obligations under the sponsorship program, or who have provided false or misleading information, but that due to resourcing constraints the tools were not being implemented as effectively as they could be. It pointed to the low number of civil penalty prosecutions, and absence of any enforceable undertakings in place, to suggest that more resources be directed to litigating appropriate cases.[11]

Additionally, the report recommended that the Department publicly release more information on sanctioned sponsors, including ‘naming and shaming’ sponsors found to be grossly in breach of their obligations. It suggested that doing so would have a greater deterrent effect than the aggregate data already being provided in the Department’s annual report and other ad-hoc reports, and argued:

... the motivation for compliance will be enhanced if the department discloses the outcomes of its compliance activities. This will also address the need for transparency in the sanctions imposed on sponsors and thereby confidence in the scheme's integrity.[12]

Specifically, the report recommended the Department consider disclosing greater information on sanctions action including:

publicising the results of all civil penalties imposed by a court including communicating this to all sponsors by email;
publication on the department’s website of any enforceable undertakings accepted by the department and communicating this to all sponsors by email; and
publication on the department’s website of sanction data in relation to issue of infringement notices as well as barring and cancelling sponsors with details limited to industry type, location and nature of sponsorship obligation breached.[13]

Productivity Commission report

In its 2016 inquiry report on Migrant Intake into Australia, the Productivity Commission also highlighted the broader benefits of the Immigration Department and the ATO using TFNs in data-matching programs. It noted that to some extent the ATO already uses TFN data in relation to temporary migrants:

About 70 per cent of temporary immigrants with work rights apply for a Tax File Number (TFN) via the ATO’s Individual Auto Registration system. When these clients apply for a TFN through this system, their details are matched with the DIBP’s records to confirm their identity. As part of the matching process, the DIBP will provide the ATO with a DIBP ‘Personal Identification’ Number for that taxpayer. This matching process has been in place for over 10 years.

Where applicants apply for a TFN using other methods (such as through Australia Post) they are not captured by this data matching process. This ‘leakage’ of coverage (and that arising from when applicants apply for an Australian Business Number in lieu of a TFN) is, however, relatively minor and does not pose a threat to the value of the data collected under this matching process.[14]

The Commission recommended that the ATO, Immigration Department and the Australian Bureau of Statistics compile and make available a database matching TFNs and temporary immigrant visas, and that the Government provide funding for this purpose. It suggested that data collected through this matching process be made available in general aggregated form for the purpose of research and informing government policy.[15]

2017 reform of the skilled migration programme

On 18 April 2017, the Government announced significant reforms of employer sponsored skilled migration visas, with key changes including:

the abolition of the 457 visa from March 2018
the introduction of a new Temporary Skills Shortage Visa in place of the 457 visa—this will have Short-Term and Medium-Term streams, with stricter eligibility criteria than the 457 visa including:
- mandatory labour market testing and
- a requirement of two years’ work experience relevant to the particular occupation
transitional amendments to the 457 visa prior to its abolition, including:
- significant changes to the occupation lists (with the creation of new occupations lists)
- compulsory criminal history checks and the
- removal of exemptions to English language requirements.[16]

Changes were also announced to eligibility criteria for employer sponsored permanent skilled visas, including tightened age and English language requirements and a new requirement for applicants to have at least three years’ work experience.[17]

As part of these reforms, the Department announced that, by 31 December 2017, it would commence the collection of TFNs for temporary and permanent employer sponsored migrants, with data to be matched with ATO records to ensure that visa holders are not being paid less than their nominated salary.[18] It also announced that before 31 December 2017 it would:

... commence the publication of details relating to sponsors sanctioned for failing to meet their obligations under the Migration Regulation 1994 and related legislation.[19]

This measure was announced only in relation to temporary sponsored skilled visas.

As the current Bill was not passed prior to 31 December 2017, the TFN measures have not yet commenced.

Committee consideration

Legal and Constitutional Affairs Committee

The Bill was referred to the Senate Standing Committee on Legal and Constitutional Affairs for inquiry and report. The Committee issued its report on the Bill on 17 October 2017, concluding that the Bill ‘has achieved the right balance between protecting workers and protecting the rights and privacy of sponsors’.[20] Although expressing its general aversion to retrospective provisions, and recommending changes be made to the wording of the merits review amendments under Part 2 of Schedule 1, the Committee recommended, on balance, that the Bill be passed.[21]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills reported on the Bill on 6 September 2017.[22] The Committee raised particular concerns about the proposed power to publish details of sanctions taken in relation to sponsors, including:

the types of information to be published will be prescribed in delegated legislation rather than the Act itself
the provision expressly excludes the natural justice hearing rule and protects the Minister from civil liability in publishing information as prescribed and
the amendment has retrospective application.[23]

The Minister provided a response to the Committee on 21 September 2017, which the Committee responded to on 18 October 2017.[24] The Committee’s concerns, and the Minister’s response, are discussed in further detail in the ‘Key issues and provisions’ section below.

Policy position of non-government parties/independents

The Australian Labor Party and other non-government parties and independents have not commented on the Bill at the time of writing.

Position of major interest groups

In its submission to the Senate inquiry, the Law Council of Australia expressed its general support for strengthening the integrity of the skilled migration program. However, it identified some aspects of the Bill which required amendment or clarification ‘to ensure due process and fairness’, including the retrospective application of amendments allowing the publication of sanction information, the changes to the merits review rights, and the provisions allowing the Department to collect and use TFN information.[25] The Law Council’s concerns are discussed in further detail in the ‘Key issues and provisions’ section below.

Other interest groups have not commented on the Bill at the time of writing. In its submission to the Senate inquiry, the Department reported that it had consulted broadly on its reforms to the employer sponsored skilled migration program, which incorporate the changes proposed in Parts 1 and 3 of Schedule 1 of the Bill (in relation to sponsor sanctions and TFN collection). It stated that while stakeholders had raised concerns about some aspects of the broader program of reforms, ‘the Department is not aware of concerns being raised regarding the measures in this Bill’.[26]

In relation to the publication of sponsor details, the 2014 Robust New Foundations report indicated general support from stakeholders regarding greater publication of sanction information, though noted that there was some differentiation as to the level of detail they believed should be provided. It reported that some stakeholders had expressed concern about the potential harm that ‘naming and shaming’ could cause to the reputation of businesses.[27]

Financial implications

The Explanatory Memorandum states that the Bill will have low financial impact.[28]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[29]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights reported on the Bill on 5 September 2017. It noted that two measures in the Bill—the public disclosure of sponsor sanctions and the disclosure of tax file numbers—engage and limit the right to privacy, and queried whether these limitations are proportionate to achieving the stated objective of the measures.[30] However, after receiving clarification from the Minister in relation to these issues, the Committee concluded that both measures appeared to be compatible with the right to privacy.[31]

Further discussion by the Committee is contained in the ‘Key issues and provisions’ section below.

Key issues and provisions

Part 1—public disclosure of sanctions

Existing law

Part 1 of Schedule 1 proposes amendments to the Migration Act to enable the Minister to publish information about sanctions imposed on a sponsor. Section 140H provides that a person who is or was an approved sponsor must satisfy the sponsorship obligations prescribed by the regulations. Division 2.19 of the Migration Regulations 1994 sets out such obligations, which include:

cooperating with an inspector appointed and exercising powers under the Migration Act[32]
ensuring the terms and conditions of employment provided to the sponsored person are no less favourable than those provided to an Australian citizen or permanent resident to perform equivalent work in the same workplace at the same location[33]
keeping records[34] and where required, providing records and information to the Minister or Department[35]
securing an offer of a reasonable standard of accommodation[36] and
ensuring the sponsored person works or participated in the nominated occupation, program or activity.[37]

The Act provides for a number of enforcement measures which may be taken against sponsors who fail to satisfy an applicable sponsorship obligation. Under existing section 140K, the Minister may:

bar the sponsor from doing certain things
cancel the person’s approval as a sponsor
apply for a civil penalty order or
accept an enforceable undertaking under the Regulatory Powers Act.[38]

A sponsor may be issued with an infringement notice in place of a civil penalty order, or be required to pay a security under section 269 of the Migration Act.[39] In the case of a former sponsor, the Minister may also bar the person from making future applications for approval.[40]

Proposed amendments

Item 1 of the Bill inserts proposed subsections 140K(4) to (7), which provide for the publishing of information about sanctions imposed on sponsors. Proposed subsection 140K(4) requires that where action is taken against a sponsor (or former sponsor) who fails to satisfy an applicable sponsorship obligation, the Minister must publish the information prescribed by the Regulations in relation to the sanction—this includes personal information. This obligation is subject to proposed subsection 140K(7), which states that the Regulations may prescribe circumstances in which the Minister is not required to publish information.

In publishing sanction information, the Minister is not required to observe any requirements of the natural justice hearing rule—this means, for example, that the Minister is not required to provide the sponsor with an opportunity to be heard as to whether the information should be published.[41] Additionally, no civil liability arises from action taken by the Minister in good faith in publishing information under proposed subsection 140K(4).[42]

The Statement of Compatibility provides that the type of information which will be published is analogous to that currently published by the Office of the Migration Agents Registration Authority in relation to disciplinary decisions taken against migration agents, and by the FWO in relation to litigation outcomes, enforceable undertakings and compliance partnerships. Specifically, this will involve the publication of business names, Australian Business Numbers (ABNs), and specific details of the adverse compliance outcome.[43] In responding to concerns raised by the Parliamentary Joint Committee on Human Rights, the Minister has also stated that the sanction information will remain in the public domain for a period proportionate to the seriousness of the breach, to be prescribed in policy, taking into account the publication periods for sanctions by other regulators.[44]

Retrospective application

Item 3 is an application provision which states that the proposed amendments to section 140K will apply retrospectively, to actions taken under this section on or after 18 March 2015. This means the Department will be able to publish the details of any sanctions imposed since 18 March 2015. The Explanatory Memorandum provides that this reflects the date of the Government’s response to the Robust New Foundations report.[45]

Impact and concerns

The proposed amendments to section 140K have attracted particular concern from stakeholders. One point of concern is that the types of information to be published will be specified in Regulations rather than the Migration Act itself. The Scrutiny of Bills Committee noted that although the Statement of Compatibility states that the information published will be limited to business names, ABNs and the legal requirements which have been breached, there is nothing in the primary legislation which will limit the type of information that may be published in this way.[46] The Law Council stated that as the proposed Regulations have not been released:

... it is difficult to form a full picture of how the proposed publication of sanctions regime will operate and therefore to comment on whether it is appropriate.[47]

Nonetheless, the Law Council expressed concern with a number of features of the amendments, including the express exclusion of natural justice obligations and the Minister’s immunity from civil liability. It suggested that the Bill be amended to prevent sanction information from being published until after any merits or judicial review options (in relation to the disciplinary action) have been taken.[48] It also argued that no justification had been given for the Minister’s immunity, noting that if the sanction information is published before a sponsor has exhausted their options for review, and the sanction decision is ultimately overturned, the sponsor will be left without an effective remedy.[49]

The Scrutiny of Bills Committee similarly suggested that the Bill be amended to either: remove proposed subsection 140K(5) in its entirely; allow for a hearing in cases where the Minister may have discretion as to whether to publish;[50] or require:

... that publication [of sanction information] be delayed until after the time limit for an application for review has expired, after a final determination of a review application, and after a decision in relation to an application for a court order under section 140K has been determined ...[51]

It noted that the natural justice hearing role ‘is a fundamental common law principle and if it is to be abrogated this should be thoroughly justified’.[52] The Committee further requested advice from the Minister as to the appropriateness of providing the Minister with civil immunity where good faith is shown, noting that the courts have taken the position that bad faith can only be shown in very limited circumstances.[53]

In response to the Scrutiny of Bills Committee’s concerns, the Minister advised that as the measure was intended to deter businesses from breaching their obligations and allow Australians and overseas workers to inform themselves about breaches, it would be necessary to publish all or a high percentage of breaches. He claimed that not publishing sanction information until the time limit for review had expired would significantly weaken the impact of the measure, leaving workers uninformed of employers found to have breached their obligations.[54] He further provided that the Department would notify sanctioned sponsors that the decision was to be published, and that where sponsors advised the Department they were seeking review, this would be included in the published information.[55] The Committee welcomed the intention to publish information of a review being sought, but noted that it may be appropriate for the Bill to expressly require this, as well as the removal or variation of sanction information where a sponsor’s appeal is successful.[56]

Both the Scrutiny of Bills Committee and Law Council raised concerns about the retrospective application of the amendments from the date the Government accepted the relevant recommendation of the Robust New Foundations report. The Law Council argued that:

... the Government merely supporting a recommendation is not analogous to the announcement of an intention to legislate. As the Scrutiny of Bills Committee has observed, ‘tying the commencement of legislative provisions to the timing of ministerial announcements tends to undermine the principle that the law is made by Parliament, not by the executive’. Further, many recommendations supported by government are never implemented.

Therefore, announcement of support for a recommendation cannot give rise to an expectation that legislation to implement the recommendation will follow. Accordingly, the Law Council considers the Government’s justification for the retrospective effect of the proposed laws is insufficient.[57]

Family sponsors

The Migration Amendment (Family Violence and Other Measures) Bill 2016, which at the time of writing was before the Senate, proposes amending the Migration Act to introduce a sponsorship framework for the sponsored family visa program.[58] This includes a number of amendments to provisions of the Act providing for the enforcement of sponsor obligations. In particular, the Family Violence and Other Measures Bill proposes amending section 140K so that it captures both work and family sponsors.[59]

If the Family Violence and Other Measures Bill is passed, then the current Bill’s proposed changes to section 140K may cover both family and work sponsors. This could require the Minister to publish details of sanctions imposed on family sponsors (for example, the partner or child of a visa holder). However, Regulations made under proposed subsection 140K(7) could effectively exclude sponsors of certain visa types, such as all family visas, from the publication requirement.

The Explanatory Memorandum and the Department’s submission to the Senate Inquiry are silent on the issue of family sponsors being captured by the proposed changes.

Part 2—merits review

Existing law

Section 338 of the Migration Act sets out the types of decisions which are reviewable decisions for the purposes of Part 5 of the Act (referred to as Part 5-reviewable decisions). These decisions can be reviewed by the Migration and Refugee Division of the Administrative Appeals Tribunal (AAT), in accordance with the rules and procedures set out in Part 5.

Existing paragraph 338(2)(d) specifies that a Part 5-reviewable decision includes a decision to refuse to grant a non-citizen a visa (visa refusal decision) where a criterion for the grant of the visa is that the non-citizen is sponsored by an approved sponsor, the visa is a temporary visa of a prescribed kind,[60] and at the time of making the application for review of the visa refusal decision:

the non-citizen is sponsored by an approved sponsor or
an application for review of a decision not to approve the sponsor has been made and is still pending.

Proposed amendments

Item 4 of the Bill repeals this paragraph and substitutes proposed paragraph 338(2)(d). This provides that a decision will be a Part 5-reviewable decision if it is a visa refusal decision, relating to a temporary visa of a prescribed kind, where at the time the visa refusal decision is made, either:

the non-citizen is identified in an approved nomination that has not ceased under the Regulations
a review of a decision under section 140E of the Migration Act not to approve the sponsor of the non-citizen is pending
a review of a decision under section 140GB of the Migration Act not to approve the nomination of the non-citizen is pending or
the non-citizen is sponsored by an approved sponsor, unless it is a criterion for the grant of the visa that the non-citizen be identified in an approved nomination that has not ceased under the Regulations.

Rationale for the amendments

The amendments are aimed at clarifying the circumstances in which a person can apply to the AAT for review of a visa refusal decision. As noted by the Explanatory Memorandum, the purpose of existing paragraph 338(2)(d) was to prevent abuse of the merits review process by refused visa applicants who have no sponsor—and who therefore cannot meet the criteria for grant of the visa.[61] However, the provision has not been amended in line with changes to the sponsorship regime in the Migration Act, and this has created uncertainty as to its operation.

In particular, the existing provision does not reflect amendments made to the Migration Act in 2008, which created separate processes for approving a sponsor (under section 140E) and approving a sponsor’s nomination of an applicant (under section 140GB).[62] The requirement that a non-citizen be sponsored by an approved sponsor is no longer part of the criteria for the grant of visas such as the 457 visa, which instead requires that the visa applicant be identified in a nomination under section 140GB.[63]

To some extent, these changes have been addressed by a combination of judicial interpretation and amendments to the Migration Regulations, which have had the effect of ensuring a person is ‘sponsored by an approved sponsor’ when they are identified in a nomination under section 140GB.[64] The reference in existing subparagraph 338(2)(d)(ii) to a ‘decision not to approve the sponsor’ has been interpreted by the courts to capture both a decision not to approve a sponsor under section 140E and a decision not to approve a nomination under section 140GB.[65]

The Explanatory Memorandum points to judicial interpretation of the existing provision as a reason for the amendments proposed in the current Bill, stating:

... a number of court decisions handed down over recent years have interpreted current paragraph 338(2)(d) in an attempt to try and adapt it to these new arrangements. This has led to confusion and uncertainty for both clients and the Department, which this item seeks to address.[66]

In particular, it cites the 2015 case of Kandel v Minister for Immigration and Border Protection,[67] in which the Federal Circuit Court interpreted the words ‘sponsored by an approved sponsor’ to include situations where the non-citizen has been identified in a nomination that has yet to be decided at all, at the time of the application for merits review.[68] The Explanatory Memorandum states that this interpretation is inconsistent with the policy intention of paragraph 338(2)(d), as it:

... encourages the sponsor to keep lodging repeat applications for approval of a nomination, rather than seeking review of a nomination refusal. It has also resulted in a confusing situation where an applicant has no entitlement to seek merits review of a decision to review their visa at the time the visa decision is made, but may subsequently obtain review rights (for example, because a repeat nomination application is lodged).[69]

Impact and concerns

The extent to which the changes in proposed paragraph 338(2)(d) depart from the way the existing provision has been applied and interpreted by the courts is not completely clear. Under the proposed provision, an applicant will not have the right to seek merits review of a visa refusal decision (of a prescribed visa) where an application for approval of the sponsor or nomination has not yet been decided. This appears to address the issue raised by the Explanatory Memorandum in relation to the Kandel decision.

Other circumstances in which an applicant will not have the right to review a visa refusal decision include where the prospective sponsor is refused under section 140E, or the nomination application is refused under section 140GB, and the sponsor (or prospective sponsor) does not seek review of the decision. However, this appears in line with judicial interpretation of existing paragraph 338(2)(d).[70]

Additionally, the right to merits review will be determined by the circumstances existing at the time the visa refusal decision is made, rather than at the time an application for merits review is lodged with the Tribunal.

The Law Council has raised concerns about the amendments, arguing that proposed paragraph 338(2)(d) ‘has real potential to unjustly deprive visa applicants from merits review’.[71] It identifies a number of scenarios in which a visa applicant may be prevented from seeking merits review, including where the visa refusal decision is slow, causing an approved nomination to have lapsed in the meantime, or where the visa application is refused before the nomination and sponsorship applications have been approved.[72]

More broadly, the Law Council has argued that the amendment as currently drafted is likely to create confusion for visa applicants and their sponsors:

The new version of section 338(2)(d) is complicated and confusing. It has been difficult for the Law Council, including its migration law experts, to discern what the new provisions mean. Self-represented visa applicants, their employers, and migration agents who are not lawyers, are likely to have even more difficulty understanding and applying the proposed legislation.[73]

In its inquiry report, the Legal and Constitutional Affairs Committee noted the Law Council’s concerns and concluded that there may be scope to further consider the drafting of proposed paragraph 338(2)(d) ‘so that it is clear while also meeting its policy intent’.[74]

Part 3—tax file number data

Part 3 amends three Acts to enable the collection, recording, use and disclosure of TFN data relating to visa applicants and visa holders.

Existing law

The collection, use and disclosure of TFNs is currently regulated by a combination of taxation laws and the Privacy Act 1988.

The Income Tax Assessment Act 1936 (ITAA) establishes and regulates the TFN system, providing for the issuing and quoting of TFNs.[75] The Taxation Administration Act 1953 (TAA) creates certain offences in relation to tax file numbers. Section 8WA provides that a person must not require or request another person to quote the other person’s TFN. Section 8WB states that it is an offence to record, use or divulge another person’s TFN. There are a number of exceptions to both offences, including where the relevant act is performed pursuant to an obligation imposed by a taxation law or law of the Commonwealth of a kind referred to under the ITAA.

Additionally, the Privacy (Tax File Number) Rule 2015 (TFN Rule) is a legally binding instrument made under section 17 of the Privacy Act. It provides that TFN recipients must only request, collect, use and disclose TFN information for a purpose authorised by a taxation law, personal assistance law or superannuation law.[76] It also states that an individual is not legally obliged to quote their TFN, though there may be financial consequences for a person who chooses not to do so.[77] A breach of the TFN Rule constitutes an interference with privacy under the Privacy Act.[78]

Although there are currently data-matching arrangements in place between the Immigration Department and the ATO, the Department does not currently have the power to collect or use TFN information.[79]

Proposed amendments

The Bill proposes amendments to the ITAA and TAA to facilitate the collection, use and disclosure of TFNs under the Migration Act.

Section 202 of the ITAA sets out the objects of Part VA of that Act in relation to the establishment of the TFN system. Item 6 inserts proposed paragraph 202(t) which includes the object of facilitating the administration of the Migration Act.

Item 9 amends the offence provisions under the TAA to insert references to proposed paragraph 202(t) of the ITAA. This means that it will not be an offence under the TAA to require or request, or record, use or divulge another person’s TFN where this is done pursuant to (or to the extent required or permitted by) requirements of the Migration Act.

The proposed amendment to the ITAA by item 6 will ensure that the collection and use of TFN information which has the object of facilitating the administration of the Migration Act will constitute a ‘purpose authorised by a taxation law’ for the purposes of the TFN Rule.

Migration Act amendments

Item 8 inserts proposed section 506B into the Migration Act. This provides that the Secretary may request the tax file number (TFN) of an applicant for, or holder (including a former holder) of a visa of a kind prescribed by the Regulations, from either:

the applicant or visa holder
the approved sponsor of the applicant or visa holder
the former approved sponsor of the applicant or visa holder
a person who has nominated the applicant or visa holder in an approved nomination (whether or not the nomination has ceased under the Regulations).[80]

Consistent with the TFN Rule, the amendments do not create an obligation for a person to provide TFN information to the Department.

Proposed subsection 506B(3) provides that a person to whom the request is made, who is lawfully in possession of the TFN, may disclose it in accordance with the request. Under proposed subsection 506B(4), the Secretary may provide the TFN to the Commissioner of Taxation for verification purposes. The Commissioner has the power to give the Secretary a written notice stating that the TFN is correct, or where satisfied that it is not correct, providing the correct TFN (if the person possesses one).[81] The Commissioner also has a broader power to provide a person’s TFN to the Secretary.[82]

Proposed subsection 506B(7) states that a TFN provided under this section may be used, recorded or disclosed by an officer for any purposes prescribed by the Regulations.

Impact and concerns

The Department has stated that the amendments will enable it to use TFNs to better identify sponsors who breach their obligations, and visa holders who do not comply with their visa conditions.[83] In its submission to the Senate Inquiry it noted:

Data matching using TFNs minimises the risk of misidentifying a visa holder when investigating a sponsor for compliance with their obligations. Data obtained from the ATO will assist the Department to undertake:

more streamlined, targeted and effective compliance activity to identify skilled visa sponsors who breach their obligations, including by underpaying visa holders, and to identify visa holders working for more than one employer in breach of their visa conditions.

Research and trend analysis, which will provide an additional evidence base for the Department in developing skilled visa policy.[84

The Department has stated it will obtain most TFNs directly from the ATO, and where this is not possible, may request them from an applicant, visa holder or sponsor.[85]

Concerns have been raised about certain aspects of the amendments. In relation to proposed subsection 506B(7) of the Migration Act, the Scrutiny of Bills Committee queried whether it is necessary and appropriate to leave to delegated legislation the purposes for which TFNs may be used, recorded or disclosed.[86] Although the Minister’s response stressed that the Government ‘considers it appropriate to set out the technical details, regarding the purposes for which tax file numbers will be used, in the regulations’, the Committee queried whether the purpose for which a TFN could be used was a ‘technical detail’.[87]

The Parliamentary Joint Committee on Human Rights raised concerns that the measure may be overly broad with respect to its stated objectives of ensuring that the Department’s compliance policies are targeted and effective, and therefore may not be a proportionate limit on the right to privacy.[88] For example, it stated that proposed section 506B permits the Secretary to request the TFN from any class of visa applicant, holder or former visa holder (if the visa type is prescribed in the Regulations). It also noted that the Department has not provided information as to how it will make clear to individuals that there is no legal obligation to quote their TFN, in accordance with the TFN Rule.[89]

In his response to the Committee, the Minister stated that it is intended that the regulations will allow TFN sharing in relation to a narrow list of subclasses, limited to temporary and permanent skilled visas. He further noted that the implementation of TFN sharing will include a comprehensive communications package to ensure affected persons are aware of their rights.[90] On the basis of this information the Committee concluded that the measure appeared to be compatible with the right to privacy, noting that if the Bill is passed, the human rights compatibility of the regulations specifying the classes of visa holders to be covered by the amendments will be considered once the regulation is received.[91]

Part 4—references to Regulatory Powers Act

Part 4 makes technical amendments to section 140K of the Migration Act to fix four incorrect references to provisions of the Regulatory Powers Act. The corrected references enable the Minister to accept and enforce undertakings by sponsors. The Statement of Compatibility states:

Whilst the provisions to enter into an enforceable undertaking, and to apply for orders where an enforceable undertaking is breached already exist in the Migration Act, they have not been used as the references to the Regulatory Powers Act are incorrect. The amendment corrects these references and gives effect to the original intent of legislation.[92]

Identical amendments are contained in the Family Violence and Other Measures Bill.[93]

[1]. The Department of Immigration and Border Protection (DIBP) became a part of the Department of Home Affairs on 20 December 2017.

[2]. Mr Hawke is now the Assistant Minister for Home Affairs.

[3]. A Hawke, ‘Second reading speech: Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017’, House of Representatives, Debates, 16 August 2017, p. 8610.

[4]. For discussion about some of the key concerns raised with the 457 visa, see: H Spinks, The Temporary Work (Skilled) (subclass 457) visa: a quick guide, Research paper series, 2016–17, Parliamentary Library, Canberra, 26 July 2016, pp. 3–4; J Howe, ‘The real issues with the 457 visa aren’t being addressed’, The Conversation, 17 November 2016; Productivity Commission (PC), Migrant intake into Australia, Inquiry report, 77, PC, Canberra, 13 April 2016, pp. 390–400; Senate Education and Employment References Committee, A national disgrace: the exploitation of temporary work visa holders, The Senate, Canberra, 17 March 2016; A Constantin and C Wright, ‘Evidence of employers misusing 457 visas shows need for reform’, The Conversation, 8 May 2015; H Sherrell, ‘Temporary migration: the pressure points’, Inside Story, 9 May 2014.

[5]. M Cash (Assistant Minister for Immigration and Border Protection), Independent review of 457 visa programme, media release, 25 February 2014.

[6]. J Azarias, J Lambert, P McDonald and K Malyon, Robust new foundations: a streamlined, transparent and responsive system for the 457 programme : an independent review into the integrity in the Subclass 457 programme, report prepared for the Department of Immigration and Border Protection (DIBP), DIBP, Canberra, September 2014.

[7]. Australian Government, ‘Government response to the Independent Review into the integrity of the subclass 457 programme’, Department of Home Affairs website.

[8]. Azarias et al, Robust new foundations: a streamlined, transparent and responsive system for the 457 programme, op. cit., pp. 90–1.

[9]. Ibid., p. 92.

[10]. Ibid., pp. 92–3.

[11]. Ibid., pp. 96–8.

[12]. Ibid., pp. 98–9.

[13]. Ibid., pp. 99–100.

[14]. PC, Migrant intake into Australia, op. cit., p. 376.

[15]. Ibid., Recommendation 11.3, p. 46.

[16]. DIBP, Reforms to Australia’s temporary employer sponsored skilled migration programme—abolition and replacement of the 457 visa, fact sheet one, 31 May 2017.

[17]. DIBP, Reforms to Australia’s permanent skilled migration programme, fact sheet two, 1 July 2017.

[18]. DIBP, Reforms to Australia’s temporary employer sponsored skilled migration programme, fact sheet one, op. cit., p. 2; DIBP, Reforms to Australia’s permanent skilled migration programme, fact sheet two, op. cit., p. 2.

[19]. DIBP, Reforms to Australia’s temporary employer sponsored skilled migration programme, fact sheet one, op. cit., p. 2.

[20]. Senate Standing Committee on Legal and Constitutional Affairs, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017 [Provisions], The Senate, 17 October 2017, p. 10.

[21]. Ibid., p. 11.

[22]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 10, The Senate, 6 September 2017, pp. 20–4.

[23]. Ibid.

[24]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 12, The Senate, 18 October 2017, pp. 121–33.

[25]. Law Council of Australia, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into the Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017 [Provisions], 20 September 2017, p. 5.

[26]. DIBP, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into the Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017 [Provisions], September 2017, p. 4.

[27]. Azarias et al, Robust new foundations: a streamlined, transparent and responsive system for the 457 programme, op. cit., p. 98.

[28]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, p. 2.

[29]. The Statement of Compatibility with Human Rights can be found at pages 11–18 of the Explanatory Memorandum to the Bill.

[30]. Parliamentary Joint Committee on Human Rights, Ninth report of the 45th Parliament, 5 September 2017, pp. 28–33.

[31]. Parliamentary Joint Committee on Human Rights, Eleventh report of the 45th Parliament, 17 October 2017, pp. 117–25.

[32]. Migration Regulations 1994, regulation 2.78.

[33]. Ibid., regulation 2.79.

[34]. Ibid., regulation 2.82.

[35]. Ibid., regulations 2.83 and 2.84.

[36]. Ibid., regulation 2.85.

[37]. Ibid., regulation 2.86.

[38]. Migration Act, subsection 140K(1).

[39]. Ibid., paragraphs 140K(1)(b) and (c).

[40]. Ibid., subparagraph 140K(2)(a)(i).

[41]. Proposed subsection 140K(5). For more information about procedural fairness obligations, see Australian Law Reform Commission (ALRC), ‘Procedural fairness: the duty and its content’, in Traditional rights and freedoms—encroachments by Commonwealth laws, ALRC report 129, chapter 14.

[42]. Proposed subsection 140K(6).

[43]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, op. cit., p. 16.

[44]. Parliamentary Joint Committee on Human Rights, Eleventh report of the 45th Parliament, op. cit., p. 121.

[45]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, op. cit., p. 5.

[46]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 10, op. cit., p. 21.

[47]. Law Council of Australia, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 6.

[48]. Ibid., pp. 6–7.

[49]. Ibid., p. 7.

[50]. That is, where Regulations made under proposed subsection 140K(7) provide that the Minister is not required to publish the information.

[51]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 10, op. cit., p. 22.

[52]. Ibid., p. 21.

[53]. Ibid., pp. 22–3.

[54]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 12, op. cit., pp. 125–6.

[55]. Ibid.

[56]. Ibid., p. 127.

[57]. Law Council of Australia, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 8.

[58]. Parliament of Australia, ‘Migration Amendment (Family Violence and Other Measures) Bill 2016 homepage’, Australian Parliament website; E Karlsen and M Coombs, Migration Amendment (Family Violence and Other Measures) Bill 2016, Bills digest, 21, 2016–17, Parliamentary Library, Canberra, 2016.

[59]. Migration Amendment (Family Violence and Other Measures) Bill 2016, items 42, 45, and 49.

[60]. Subsection 4.02(1A) of the Migration Regulations sets out the visas currently prescribed for the purposes of paragraph 338(2)(d) of the Migration Act. Of these, only two are currently open to new applications: the Subclass 407 (Training) visa and the 457 visa.

[61]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, op. cit., p. 5.

[62]. Migration Legislation Amendment (Worker Protection) Act 2008 (Cth).

[63]. Migration Regulations, Schedule 2, clause 457.223.

[64]. Migration Regulations, subsection 4.02(1AA); Ahmad v Minister for Immigration and Border Protection (2015) 237 FCR 365, [2015] FCAFC 182.

[65]. Ahmad v Minister for Immigration and Border Protection (2015) 237 FCR 365, [2015] FCAFC 182.

[66]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, op. cit., p. 5.

[67]. Kandel v Minister for Immigration & Anor [2015] FCCA 2013.

[68]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, op. cit., p. 6.

[69]. Ibid.

[70]. This scenario was recently considered by the Full Court of the Federal Court of Australia in Dyankov v Minister for Immigration and Border Protection [2017] FCAFC 81. The Federal Court decided that the AAT did not have jurisdiction to review a visa refusal decision where the approved sponsor’s nomination under section 140GB was rejected and the sponsor did not seek review of the decision. The Court held that in such circumstances, a visa applicant was not ‘sponsored by an approved sponsor’ for the purposes of subparagraph 338(2)(d)(i).

[71]. Law Council of Australia, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 10.

[72]. Ibid., pp. 10–11.

[73]. Ibid., p. 10.

[74]. Senate Standing Committee on Legal and Constitutional Affairs, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017 [Provisions], op. cit., p. 11.

[75]. Income Tax Assessment Act 1936 (ITAA), Part VA.

[76]. Privacy (Tax File Number) Rule 2015, clauses 8, 10.

[77]. Ibid., subclause 7(3).

[78]. Privacy Act 1988 (Cth), section 18; Office of the Australian Information Commissioner (OAIC), ‘Tax file numbers’, OAIC website.

[79]. ATO, ‘DIBP visa holders data matching program’, ATO website, last modified 3 August 2015: ‘the DIBP visa holders data matching program has been developed to assist the ATO to effectively detect, and deal with compliance risks within the visa holding population. Data from DIBP will be used in ATO risk detection models to select populations for administrative action relating to tax return integrity, income tax and goods and services tax non-compliance and fraud.’

[80]. Item 7 inserts a definition of tax file number into subsection 5(1) of the Migration Act which states that it has the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

[81]. Proposed subsection 506B(5).

[82]. Proposed subsection 506B(6).

[83]. DIBP, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 8.

[84]. Ibid., p. 7.

[85]. Ibid., pp. 7–8.

[86]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 10, op. cit., p. 24.

[87]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 12, op. cit., p. 132.

[88]. Parliamentary Joint Committee on Human Rights, Ninth report of the 45th Parliament, op. cit., pp. 31–3.

[89]. Ibid., p. 32.

[90]. Parliamentary Joint Committee on Human Rights, Eleventh report of the 45th Parliament, op. cit., p. 124.

[91]. Ibid., p. 125.

[92]. Explanatory Memorandum, Migration and Other Legislation Amendment (Enhanced Integrity) Bill 2017, op. cit., p. 13.

[93]. Migration Amendment (Family Violence and Other Measures) Bill 2016, items 43, 44, 46 and 47.

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