Chapter 3
Views on the bill
General support for the bill
3.1
Submissions received to this inquiry and during the earlier consultation
process were generally supportive of consolidating the existing privacy and
secrecy provisions into a single legislative framework:
...we applaud the consolidation of the various secrecy and
disclosure provisions into the one subdivision...[1]
The [Australian Federal Police] AFP supports the measures
contained in the Bill that will enhance AFP operational capacity to investigate
and prosecute serious offences with the assistance of taxpayer information.[2]
In our submission dated 20 April 2009 the CDPP [Commonwealth
Director of Public Prosecutions], while indicating its support for the
consolidation of the taxation secrecy provisions into a single framework ...[3]
In principle, APF [Australian Privacy Foundation] supports
the objectives of the proposed legislation in terms of clarification and
increased consistency...[4]
The Institute [of Chartered Accountants in Australia]
continues to support the proposed consolidation of all taxation secrecy
provisions that are currently spread across a variety of taxation laws...[5]
We [PricewaterhouseCoopers] support in principle the
initiative to consolidate into a single comprehensive framework, taxation
secrecy and disclosure provisions that are currently found across numerous
taxation law acts.[6]
3.2
The proposed amendments did however attract some adverse comment. The
provisions of most interest to submitters being those concerning disclosure by
taxation officers (subdivision 355-B).
3.3
Although the amendments set out in the bill are not intended to extend
the existing disclosures, due to the inconsistent drafting styles that have
been used over time some minor changes were inevitable.[7]
Disclosure in the public interest
3.4
In his second reading speech, the Hon. Dr Craig Emerson MP explained
that proposed Division 355 would continue to protect the confidentiality of
taxpayer information by prohibiting unauthorised disclosure of that information
while broadly retaining the existing disclosure provisions. He also explained
that the introduction of the new provisions would facilitate greater disclosure
where the public benefit achieved through that disclosure outweighs taxpayer
privacy.[8]
3.5
This principle that disclosure should only occur where the public
benefit outweighs any loss to taxpayer privacy is also intended to inform
future developments in this area of Government policy.[9]
3.6
How these purposes are to be achieved is explained in draft section
355-1 (Guide to the Division) which outlines that disclosure of information will
be prohibited except in specified circumstances; these specified circumstances
being the legislated exceptions of the proposed Division.[10]
3.7
The explanatory memorandum provides further guidance to assist in
determining when the public interest of disclosure will outweigh the privacy of
the taxpayer by prescribing a non-exhaustive list of factors that may require
consideration:
- the
purpose for which the information is to be used;
- the
potential impact on the individual from the disclosure and subsequent use of
the information;
- the nature
and amount of information likely to be provided under any new provision;
- whether
the information can be obtained from other sources;
- whether
the new disclosure would represent a significant departure from existing
disclosure provisions; and
- whether
not providing the information would significantly undermine the ability of
Government to effectively deliver services or enforce laws.[11]
3.8
These factors were added to the extrinsic material (following public
consultation on the Exposure Draft)[12]
to provide further clarification to the explanatory memorandum which provides:
In terms of framing new disclosure provisions, where the purpose
for the disclosure is remote or disconnected from the reason that a taxpayer
provided the information in the first place (for example, for use in locating
people who are unlawfully in Australia), then the disclosure provisions should
generally be very precisely targeted, allowing for the disclosure of taxpayer
information only for a strictly defined purpose. On the other hand, where a
disclosure is closely aligned with or connected to the purpose for which the
Commissioner obtained the information in the first place (for example, for use
in administering a taxation law), then the disclosure provision can be framed
more broadly.[13]
3.9
The bill in its current form is silent as to who will make the
determination that a specific disclosure is required on the basis that the
public benefit of the disclosure outweighs a taxpayer's privacy. In their
submission to the inquiry, the Rule of Law Association of Australia (RoLAA)
suggested that such a decision should rest with a senior Tax Officer with at
least the classification of Assistant Commissioner.[14]
RoLAA further suggested that the officer responsible for making this decision
should be required to be independent of the particular business line area which
is seeking to disclose the information to ensure impartiality.[15]
Recommendation 1
3.10
The committee recommends that the Government consider amending the bill
to reflect that in instances where a determination as to whether the public
benefit of a proposed disclosure outweighs taxpayer privacy concerns needs to
be made, any decision is required to be made by an appropriately authorised tax
officer.
Disclosure of publicly available information
3.11
Information that is already lawfully available to the public will be
expressly excluded from the protections of the privacy and secrecy provisions
of Division 355.
3.12
In its response to the consultation paper released in 2006, the
Commonwealth Director of Public Prosecutions (CDPP) strongly supported the move
to wind back protections from publicly available information to enable
reporting of tax convictions.[16]
This view however was not universal as submissions received have generally been
critical of this aspect of the bill raising concerns that the use of the term
'publicly available information' would have a broad application thereby
weakening the protections of the Privacy Act.[17]
3.13
Following consultation on the exposure draft, the exception to
protecting publicly available information was tightened. As a result the bill
now reflects an added qualification that, in instances where personal
information has become publicly available as a result of unlawful behaviour, a
taxpayer's existing publicly available personal information is still protected
and can only be disclosed in accordance with Division 355.
3.14
The concerns held by the Office of the Privacy Commissioner were addressed
by this modification:
...the Office welcomes that the Bill incorporates...[the]...alternative
suggestion made in our Treasury submission that exceptions to disclosure will
not apply to taxpayer information made publicly available as a result of a
security breach or in breach of another law.[18]
Committee view
3.15
As a result of the amendments made to the bill following earlier
consultation and given that the framework is designed to operate consistently
within the context of the Privacy Act[19]
the committee supports the proposed amendments and is of the view that no
further modification is necessary.[20]
Certain disclosures by taxation officers
3.16
Pursuant to subdivision 355-B, taxation officers will be authorised to
disclose protected information[21]
to certain entities in specific circumstances. While subdivision 355-B will
standardise many of the existing disclosures permitted by taxation officers seeking
to clarify those that fall within the meaning of the phrase 'in the performance
of their duties as a tax officer'[22]
the bill will introduce some new disclosures that reflect situations where the
decision has been made that the public benefit associated with the disclosure
outweighs any impact on the taxpayer's privacy. These situations involve
disclosure by taxation offices:
- for the design
or amendment of a taxation law;
- to ministers or
parliamentary committees; and
- for other
government purposes such as facilitating effective administration.
3.17
As these new disclosures generated greater interest throughout the
course of the inquiry the committee has sought to ensure they receive adequate
consideration and attention.
Design or amendment of a taxation law
3.18
A number of submissions raised concerns with the proposed changes to
enable a taxation officer to disclose information to the Secretary of the
Department of the Treasury for the purpose of designing or amending a taxation
law.[23]
Although the explanatory memorandum suggests that this is a very minor change, it
has been the focus of much comment throughout its development.
...Treasury and other bodies involved in the drafting of
taxation laws should not have access to information for this purpose that is
capable of identifying any particular taxpayer. Aggregate data...should be sufficient
for the purpose...a taxpayer should not be concerned that confidential
information provided by it to the ATO, in compliance with their obligations...may
be used to draft legislation...[24]
Disclosure for the purpose of the design or amendment of a
taxation law is an extremely broad exception and any uncertainty in the
limitation or application of the disclosure law carries the risk that
protection originally intended for taxpayers is not delivered. This subsection
should be amended to provide more prescriptive guidance on any limitations to a
disclosure for the purpose of the design or amendment of a taxation law.[25]
...the explanatory material does not provide sufficient
analysis and justification as to why it would be appropriate to allow
the...exceptions...[26]
3.19
Given the concerns raised in respect of this proposed change the
Committee sought the advice of Treasury who explained that the bill had been amended
to address the key concerns, stating that:
The circumstances which cause a problem when Treasury needs
information from the Tax Office to perform its policy function are where you
have de-identified information but it relates to a particular industry in which
there are a few players or one very, very big player whose identity, looking at
the information – even though it is de-identified – can still be ascertained.
That information at present cannot be disclosed to the Treasury, which causes
some problems in terms of performing its analysis role with that information.[27]
3.20
Treasury confirmed that although the bill now allows for de-identified
information to be provided to Treasury for the purposes of designing or
amending a taxation law even though it may be possible for the identity of a
taxpayer to be determined, where such disclosure is necessary the amendments will
impose requirements on Treasury to ensure that information is not further
disclosed.[28]
Committee view
3.21
The committee considers that the need to uphold taxpayer privacy is of
paramount importance, particularly in situations where government organisations
hold comprehensive and sensitive information. As a result, the committee
endorses the protections that will be given through the requirement to remove any
contact details[29]
when providing de-identified information to Treasury for the purposes of
designing or amending a taxation law.[30]
Disclosure for the purpose of analysing and
predicting revenue flows and costing policy proposals
3.22
Another proposed disclosure somewhat similar to that of disclosing
information to Treasury for the purposes of designing or amending a taxation
law is that which will enable the Tax Office to provide information to the
Treasury for the purpose of analysing and predicting revenue flows and costing
policy proposals.[31]
Committee view
3.23
Given its similarity to the proposed disclosure of information to
Treasury for the purposes of designing or amending a taxation law, the
committee again endorses the protections that will be afforded through the
requirement to remove all contact information prior to it being disclosed.
Disclosure to ministers and committees of Parliament
3.24
As explained in Chapter 2, if passed, the bill will enable taxpayer
information to be disclosed to ministers and Parliamentary committees in
situations where:
-
the information enables a minister (in most cases the Treasurer) to
exercise a power or perform a function under a taxation law;
-
the Treasurer is responding directly to a taxpayer's request for
assistance/information;
-
the information is to be provided to the Prime Minister or Cabinet in
deciding whether or not to make ex-gratia payments; and
- when requested by a parliamentary committee, provided it is given to the
committee in camera.[32]
3.25
With the exception of disclosure to parliamentary committees, the
proposed provisions are consistent with existing permitted disclosures spread
throughout the various taxation laws.[33]
3.26
This proposed disclosure is premised on the principle that the benefits
to public interest will outweigh any impact on taxpayer privacy, as identified by
the Australian Privacy Foundation (APF), more often than not disclosure in such
circumstances will not be closely connected with the purpose for which the
Commissioner obtained the information, particularly in situations involving individual
taxpayers.[34]
3.27
Given the previous concerns raised with Treasury the committee sought to
clarify that the issues concerning disclosure to parliamentary committees had
been addressed. Confirmation was obtained that the bill as it now reads will
provide a clear framework for taxation officers to disclose information to
parliamentary committees and that provisions will be introduced that
specifically require any identifiable information to be provided in camera.[35]
3.28
These provisions do not displace or disrupt the operation of
parliamentary privilege; rather they clarify the circumstances where
information can be given to a parliamentary committee and those instances in
which identifiable information will be disclosed to parliamentary committees
will continue to be very limited.[36]
Committee view
3.29
While the committee acknowledges the concerns raised in respect of
disclosure to parliamentary committees, it is satisfied that the requirement to
provide identifiable information to a parliamentary committee in camera,
together with the operation of parliamentary privilege will ensure that
taxpayer information is adequately protected.
Serious threat to life or health
3.30
The introduction of a new provision that will enable information to be
given by a tax officer to a commonwealth or state government agency where the
disclosure would enable the agency to identify and better address a serious
threat to life or health (including public health or safety) is another example
of a disclosure that has been developed in accordance with the principle that
the public benefit of the disclosure outweigh any impact on taxpayer privacy.[37]
3.31
This new provision has been modelled on Information Privacy Principle
(IPP) 11, the difference being that unlike IPP 11, the proposed provision does
not require that the serious threat to be mitigated be 'imminent'.
3.32
Although this difference was cited in submissions to the exposure draft
as a cause of concern on the basis that it did not provide adequate guidance,[38]
the explanatory memorandum was modified and now explains that disclosure in
these circumstances must have an impact on the threat.[39]
It also requires that the tax officer consider whether there are any
alternatives to disclosure that would achieve the same result and sets out that:
...the gravity of the outcome and the likelihood of its
occurrence are factors to take into account when determining if there is a
serious threat.[40]
3.33
The Office of the Privacy Commissioner has approved of the addition of
the reference to gravity in the explanatory material but further requests that
'proximity in time' be added to paragraph 5.66.[41]
Committee view
3.34
The committee is satisfied that the changes made to the bill following
consultation on the exposure draft to include 'gravity of outcome' and 'likelihood
of occurrence' in the explanatory memorandum sufficiently aid application of
this provision. The committee takes the view that further amendment of the
explanatory memorandum is not required.
Disclosure for other government purposes
Disclosure to the Fair Work Ombudsman
3.35
Item 5 of Table 7 in proposed section 355-65 (disclosure for other
government purposes) will facilitate the sharing of compliance information
gained by the Tax Office with the Fair Work Ombudsman[42]
on the basis that 'an entity's non-compliance with taxation laws may be an
indication of their non-compliance with workplace laws.'[43]
3.36
This proposed disclosure will be limited; all it will allow for is the
Tax Office to identify non-compliance with taxation requirements which will in
turn enable the Fair Work Ombudsman to better target its compliance programme
and work.[44]
3.37
At its public hearing the committee raised the issue of the disclosure
of information to the Fair Work Ombudsman as being less connected with the
original purpose for which the information was collected.[45]
In responding Treasury acknowledged that although that is the case with this
particular proposed disclosure, as the provision is framed in restrictive
language it still aligns with principles of reform as set out in the discussion
paper released in 2006.[46]
Disclosure for law enforcement purposes
3.38
Further modification proposed by the bill in respect of disclosure for
law enforcement purposes is an amendment to the definition of 'serious
offence'. The current definition relies on whether or not an offence is
indictable. As the current definition differs according to jurisdiction, its
application results in inconsistencies. The bill will amend the definition with
the effect that a 'serious offence' will be an offence that is punishable by
more than 12 months imprisonment.[47]
The CDPP has expressed concern that there will be limitations with this
approach[48]
and recommended that the definition should instead reflect that a serious
offence 'includes offences punishable by imprisonment for a period of 12 months
or more.'[49]
3.39
Treasury countered this argument explaining that the proposed change
will accord with the Commonwealth definition of 'indictable' in the Crimes
Act 1914 thereby addressing the current inconsistencies.[50]
This change being made on the basis that the reforms of the bill are intended
to standardise the provisions rather than change the current policy settings.[51]
Adoption of the CDPP's request would have broadened the current settings.
Committee view
3.40
The committee is satisfied with the definition of serious offence that
is to be introduced on the basis that it is consistent with the principle of
the bill to consolidate and standardise existing privacy provisions rather than
introducing or extending new provisions.
Injunctive relief
3.41
Proposed subsection 355-330 in subdivision 355-E will provide the
Commissioner with the ability to seek injunctive relief[52]
in instances where there is a concern that an entity has engaged, is engaging
or is proposing to engage in any conduct that constitutes or would constitute
an offence under Division 355.
3.42
The Tax Institute of Australia identified a concern with the apparent limitations
of this proposed power stating that although the proposed provision 'purports
to replicate the injunction provisions in section 98 of the Privacy Act...it
restricts the application to the Commissioner only.'[53]
3.43
In their submission Treasury identified that the injunction provisions
that are to be included in Division 355 of the TAA 1953 relate to Commonwealth
secrecy regimes and therefore apply to government departments and organisations.
As a result the provisions will work in conjunction with those of the Privacy
Act (which relate to natural persons and on which they have been modelled) to
enable a taxpayer who is concerned that a government agency is going to
disclose their information to seek injunctive relief under that act.
Committee view
3.44
The committee is satisfied that injunctive relief will be available to
those persons to whom protected information relates (or their representative) under
the Privacy Act and therefore is satisfied that additional changes to these
particular provisions are not required.
Recommendation 2
3.45
The committee recommends that the Senate pass the bill.
Senator Annette Hurley
Chair
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