Parliamentary Joint Committee on the Australian Security Intelligence Organisation

Review of the Australian Security Intelligence Organization Legislation Amendment Bill 1999
Submissions

Submission No. 4 - Taxation Institute of Australia

23 April 1999

Mr Grant Harrison
Committee Secretary
Parliamentary Joint Committee on the
Australian Security Intelligence Organisation
Parliament House
Canberra ACT 2600

Dear Mr Harrison

AUSTRALIAN SECURITY INTELLIGENCE ORGANISATION LEGISLATION AMENDMENT BILL 1999

I refer to your letter dated 15 April 1999 concerning the above mentioned Bill and your invitation to make a submission in respect thereof by 23 April 1999. The Taxation Institute of Australia (the TIA) welcomes this opportunity to make comments on this Bill.

However, given the tight time frame for response, the TIA is not in a position to make a detailed submission on all the provisions in this Bill which impact on the Taxation Administration Act 1953, the Income Tax Assessment Acts and other associated Acts administered by the Commissioner of Taxation. Therefore, set out below are:

1. A statement on the TIA's background; and
2. The TIA's position on major points of comment and concern identified in this Bill.

TIA's BACKGROUND

The TIA is an opinion leader on taxation matters and is the only professional body in Australia which has taxation as its sole focus.

In the past, our views have been specifically sought by the Parliament, the Australian Taxation Office, Treasury, and other Government Departments and Agencies when considering new legislation which impacts on the tax regime or the administration of existing tax laws.

The TIA is a national body of over 10,000 members, constituted by professionals and practitioners with an interest in taxation in all its various forms. Members are drawn from tax agents, lawyers, accountants, members of the judiciary, and from within the ranks of the Public Service of Commonwealth, States and Territories.

TIA'S POSITION ON THE BILL

Given the nature of the TIA as an organisation, our comments are largely confined to the impact of this Bill on the tax regime. More specifically, we address our comments to Schedule 6 (Taxation Administration Act 1953) of the Bill.

The Institute has always supported initiatives which ensure that the Commonwealth and the States are properly protected against tax related offences, or against other criminal activities which involve the use and/or abuse of our taxation laws.

However, the Institute is concerned about the breadth of the proposed access by the Australian Security Intelligence Organisation (ASIO) to taxpayer information currently held and administered by the Australian Taxation Office (the ATO).

• For the reasons outlined below, it is submitted that:

• the scope of the proposed amendments to the Taxation Administration Act 1953 are inappropriate;
• ASIO should only be granted access to information gathered and administered by the ATO on the same terms and conditions as which apply to the National Crime Authority and the Federal Police under the Taxation Administration Act 1953; and
• access should not be granted to ASIO unless it is clearly restricted to cases where ASIO is investigating a particular or anticipated serious crime.

1. The scope of proposed Subsection 3EA(1) of the Taxation Administration Act 1953 is too broad.
2. Subsection 3EA(1) provides that:

"Despite any taxation secrecy provision, the Commissioner may disclose tax information to an authorised ASIO officer if the Commissioner is satisfied that the information is relevant to the performance of ASIO's functions under subsection 17(1) of the Australian Security Intelligence Organisation Act 1979".

3. Subsection 17(1) of the Australian Security Intelligence Organisation Act 1979 effectively permits an ASIO officer to engage in general information gathering exercises, e.g., subparagraph 17(1)(a) states:

"The functions of the Organisation are:

(a) to obtain, correlate and evaluate intelligence relevant to security"

4. In respect of the operation of subsection 17(1) as aforementioned and Subsection 3EA(1), it is submitted that:

1. it is inappropriate for the Commissioner to determine whether or not he is satisfied that someone (e.g., an ASIO officer) is performing duties under the provisions of an Act (e.g., the Australian Security Intelligence Organisation Act 1979) which the Commissioner does not have responsibility to administer;
2. the general confidentiality and secrecy of taxation information are at risk because the terms of subsection 17(1) are so broad that it is difficult to envisage circumstances in which the Commissioner would be capable of arriving at a decision to withhold information requested by an ASIO officer;
3. the Commissioner should only have specific power to release information to ASIO, or any other agency, in accordance with criteria which are relevant to the Commissioner's powers to administer the tax laws; and
4. given the nature of the secrecy provisions in section 16 of the Income Tax Assessment Act 1936, and the ATO's own policy and strongest interest in maintaining confidentiality of matters disclosed to it by taxpayers and other parties, the Commissioner should only have power to decide that any requests for information by ASIO in the first instance for access to information administered by the ATO are justified on grounds that ASIO is investigating a particular suspected or anticipated serious crime or security breach for which the access to tax information is relevant and necessary.

1. Although Subsection 3EA(2) prohibits an ASIO officer from communicating or divulging the information to another person, or to make a record of the tax information, this prohibition is subject in Subparagraphs 3EA(3)(a) and (3)(b) which allows subsection 17(1) of the Australian Security Intelligence Organisation Act 1979 to override the protection in Subsection 3EA(2).
2. For reasons expressed above about the scope of application of Subsection 3EA(1), it is submitted that Subparagraphs 3EA(3)(a) and (3)(b) are too broad unless restricted to circumstances where the ASIO is investigating a particular suspected or anticipated serious crime or security breach for which the access to tax information is relevant and necessary.
3. Inherent in the above submissions is a concern that it is not at all apparent how ASIO access to information administered by the Commissioner furthers the implementation of subsection 17(1) of the Australian Security Intelligence Organisation Act 1979.
4. Confidentiality and secrecy over the information gathered by the Commissioner is absolutely integral to the integrity of the taxation regime. These factors are instrumental in ensuring that taxpayers make full and true disclosure and comply with the taxation laws.
5. The proposed amendments to the Taxation Administration Act 1953 under this Bill undermine this foundation of the taxation regime. The TIA is strongly of the view that confidentiality and secrecy over the information gathered by the Commissioner must be maintained, except where public policy may override this principle in cases of a particular suspected or anticipated serious crime or security breach.

CONCLUSION

The key problem with the proposed amendments under this Bill is that, for ASIO, the collection of information is an end in itself (as evidenced in the terms of subsection 17(1) of Australian Security Intelligence Organisation Act 1979).

This is an inappropriate yardstick to apply when dealing with information gathered and administered by the Commissioner because it transverses, without justification, the well established confidentiality and secrecy provisions protection this information. This protection should only be lowered were ASIO can clearly satisfy the Commissioner that the information requested is relevant for a particular suspected or anticipated serious crime or security breach.

Yours Sincerely

Gordon Cooper

President

A copy of this submission is also available from the Committee Secretariat.