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Australian Government Department of Immigration and Multicultural

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Australian Government
Department of Immigration and Multicultural Affairs
5 October 2006
Mr Paul McCullough
General Manager
Tax System Review Division
The Treasury
Langton Crescent
PARKES ACT 2600
Dear Mr McCullough
REVIEW OF TAXATION SECRECY AND DISCLOSURE PROVISIONS
Thank you for the opportunity to comment on the discussion paper of the Review of Taxation
Secrecy and Disclosure Provisions (the discussion paper), which proposes to introduce a new
secrecy framework and standardise the tax secrecy and disclosure laws.
I note that the Department of Immigration and Multicultural Affairs (the department) has
previously provided comments on a draft of the discussion paper on two occasions. On 18 July
2005, Vincent McMahon, Executive Coordinator at the department, sent comments on a draft
of the discussion paper to the Australian Taxation Office (the ATO). The Treasury then wrote
to the Secretary of the department, Mr Andrew Metcalfe, on 9 September 2005 inviting
comment on a further draft of the discussion paper. A response signed by Bob Correll, Acting
Secretary of the department, was sent to Mr Mike Callaghan, Executive Director of the
Revenue Group, Tax System Review Division at Treasury on 25 October 2005.
The issues identified by Mr McMahon and Mr Correll continue to be relevant to the current
discussion paper. While supportive of the Treasury's plans to simplify and standardise the
various tax law secrecy provisions within a new framework, the department believes that the
current level of information disclosure between the ATO and the department already strikes
the necessary balance between personal privacy and the government's objectives in relation to
migration. We would therefore like to ensure that this exchange is maintained. In addition,
the department believes that further access to certain information held by the ATO is justified
within the proposed framework.
people our business
6 Chan Street Belconnen ACT 2617
PO Box 25 BELCONNEN ACT 2616 • Telephone (02) 6264 1111 • Facsimile (02) 6264 4466 • Website: www.immi.gov.au
The department's response to the questions for consultation are set out at ATTACHMENT A,
and additional comments addressing issues that are more specifically relevant to the
department are at ATTACHMENT B.
If you have any questions or wish to discuss any aspect of the department's submission,
please contact Stephanie Lynch, Senior Legal Officer, Legal Policy Section, on (02) 6264
2902.
Yours sincerely
(signed)
Robyn Bicket
Chief Lawyer
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Australian Government
Department of Immigration and Multicultural Affairs
ATTACHMENT A
RESPONSE TO QUESTIONS FOR CONSULTATION
1. Should the tax secrecy and disclosure provisions be built around a primary principle
of protecting taxpayers 'privacy?
Protecting taxpayers' privacy should be one of the primary principles, but this privacy needs
to be balanced with the government's needs to efficiently and effectively fulfil policy and
legislative objectives.
2. Is there benefit in the idea that the various tax secrecy and disclosure provisions
should be standardised with the assistance of an information disclosure framework and
placed in the Taxation Administration Act 1953?
Yes. Standardisation within one piece of legislation with the assistance of a workable
disclosure framework would help clarify the legislative requirements for secrecy and
disclosure of taxation information.
3. What is the optimal balance between the protection of taxpayer information held by
the Tax Office and the needfor disclosure to address government's information
requirements in delivering entitlements and meeting law enforcement and integrity
provisions?
It is difficult to generalise about what the optimal balance between taxpayer privacy and the
need to address government objectives is for every circumstance. The department is of the
understanding that the proposed framework within which standardisation of the tax secrecy
and disclosure provisions will be based aims to achieve that balance with reference to four
different categories of disclosure on a scale of 'remoteness' of use from reasons originally
collected. The department submits that this may not necessarily achieve the desired balance
(see the department's Additional Comments at ATTACHMENT B). For example, although
disclosing information for the purposes of investigating or prosecuting identity fraud under
the Migration Act 1958 (the Migration Act) and the Citizenship Act 1948 (the Citizenship
Act) maybe at the more 'remote' end of the disclosure spectrum, preventing identity fraud is
nevertheless an extremely important government objective.
4. Should a person who is given protected information under secrecy and disclosure
provisions also be subject to strict secrecy requirements?
Yes, unless there is legislation allowing further disclosure of that information.
people our business
6 Chan Street Belconnen ACT 2617
PO Box 25 BELCONNEN ACT 2616 • Telephone (02) 6264 1111 * Facsimile (02) 6225 6970 • Website: www.immi.gov.au
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5. Should penalties for all offences in respect of unauthorised disclosures be
standardised, or are there circumstances in which the penalties for breach of the tax
secrecy and disclosure provisions should vary according to the type of tax involved?
Nil response - this is not a matter on which the department is able to provide comment.
6. Do you agree that the further the use of the information is from the reason it was
collected, the greater the level ofjustification should be for the information to be
disclosed?
As discussed above in response to question three, this approach may not necessarily be the
best approach for achieving effective and efficient fulfilment of government objectives.
7. Is there benefit in including a consent provision in the tax law to allow a taxpayer to
request the Tax Office to provide their confidential information to a third party?
Although the issue of consent for disclosure to third parties is generally covered by the
Privacy Act 1988 (the Privacy Act), for the sake of completeness, it may be worthwhile
including a consent provision in the tax secrecy and disclosure legislation. However, to avoid
confusion, it may be beneficial that these provisions closely mirror the language used in the
Privacy Act.
8. Should the Tax Office be able to disclose taxpayer information to law enforcement
and intelligence agencies for the investigation and prosecution of non-tax related
crimes?
Yes. In addition, the ATO should also be able to disclose relevant information to other
agencies, such as the department, who are not 'law enforcement and intelligence agencies' as
such, but nevertheless perform important enforcement and intelligence functions (see
Additional Comments at ATTACHMENT B)
9. Should the Commissioner of Taxation, as an employer, have access to Tax Office
information about his employees and others providing services to the Tax Office?
Nil response - this is not a matter on which the department is able to provide comment.
10. Should the Tax Office be able to disclose taxpayer information to a third party who
is owed a duty by the taxpayer?
Yes. As the example provided in paragraph 5.4 of the discussion paper illustrates, such
disclosure would allow the ATO to provide information to an employee where the employer
is failing to meet their legislative obligations to the employee. This may be useful in the
migration context in relation to temporary business visas. However, the department would
wish to be consulted about such disclosure and would prefer that it take place in a broader
scheme of information exchange between the ATO and the department (see Additional
Comments at ATTACHMENT B).
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Australian Government
Department of Immigration and Multicultural Affairs
ATTACHMENT B
REVIEW OF TAXATION SECRECY AND DISCLOSURE PROVISIONS
CONSULATATION ON DISCUSSION PAPER
ADDITIONAL COMMENTS
The Department of Immigration and Multicultural Affairs (the department) appreciates the
need to strike a balance between protecting personal information and the need to meet the
information requirements necessary for effective administration of government. The
department agrees that clarification of taxation secrecy and disclosure provisions will help
in achieving that balance. While generally satisfied with the framework proposed in the
discussion paper of the Review of Taxation Secrecy and Disclosure Provisions (the
discussion paper), the department believes that the current level of information exchange
between the Australian Taxation Office (ATO) and the department already strikes the
necessary balance between personal privacy and the government's objectives in relation to
migration and would like to ensure that this exchange is maintained. In addition, the
department believes that further access to certain information held by the ATO is justified
within the proposed framework.
Objectives of the Migration Act 1958 and the Australian Citizenship Act 1948
The Migration Act 1958
2. The object of the Migration Act 1958 (the Migration Act) is to regulate the entry and
presence of non-citizens in Australia. The authority to enter and remain in Australia is
often conditional on the non-citizen complying with certain visa conditions. A non-
citizen who does not comply with those conditions may have their authority to stay in
Australia cancelled. The Migration Act provides that non-citizens without authority to
remain in Australia must be detained and removed as soon as practicable.
3. The effective administration of the Migration Act depends on being able to obtain
information about the whereabouts of non-citizens who have no authority to be in
Australia, or whose permission to be in Australia may be cancelled. Significant
resources are expended locating non-citizens who do not have authority to stay in
Australia or who may have their authority cancelled for breaching visas conditions.
people our business
6 Chan Street Belconnen ACT 2617
PO Box 25 BELCONNEN ACT 2616 • Telephone (02) 6264 1111 * Facsimile (02) 6264 4466 • Website: www.immi.gov.au
Australian Citizenship Act 1948
4. The Australian Citizenship Act 1948 (the Citizenship Act) deals with the grant,
conferral and loss of Australian citizenship. The Citizenship Act recognises that
Australian citizenship represents formal membership of the Australian community and
involves reciprocal rights and obligations. Persons granted Australian citizenship
enjoy these rights and undertake to accept these obligations by pledging loyalty to
Australia and its people, sharing their democratic beliefs, respecting their rights and
liberties, and by upholding and obeying the laws of Australia. A person who applies
for grant of Australian citizenship must satisfy criteria related to identity and
residence.
Current exemptions for disclosure
5. Access to information held by the ATO is vital in assisting the department to achieve
effective enforcement of the migration law. Section 18 of the Migration Act enables
an "officer" to require a third party to provide information/documents about the
identity or whereabouts of an unlawful non-citizen. As you are aware, the ATO is able
to release certain information to the department under section 16 of the Income Tax
Assessment Act 1936 (Income Tax Act). Paragraph 16(4)(hd) of the Income Tax Act
states that the Commissioner, or Second Commissioner or a Deputy Commissioner
may communicate information to the Secretary of the department "...for the purpose
of assisting in locating persons who are unlawfully in Australia. " The information
currently provided by the ATO mostly relates to residential and employment addresses
of the unlawful non-citizen.
6. The discussion paper states (at page 17) that the disclosure to the department in these
circumstances is at "the remote end of the spectrum" on the information disclosure
framework, requiring a very specific description of the reasons for disclosure. The
department submits that such disclosure is nevertheless justified and the proposed
framework should continue to allow for such disclosure.
Extending the current exemptions for disclosure
7. The Government has previously supported maintenance of the existing exemption in
the Income Tax Act, and has also expressed support for a proposed amendment to
extend the exemption in two circumstances. First, to authorise access and disclosure of
information to the department for the purposes of research relating to migration, and
secondly, to extend the authority to require and disclose information for the purposes
of locating non-citizens who are lawfully in Australia but who may be working in
breach of their visa conditions.
8. The proposal to exchange data for the purposes of research relating to migration
involves the ATO matching data against movement records disclosed by the
department, and the ATO providing, in exchange, generalised desensitised data with
no identifying connection to individuals in the movement records. Under the
proposed framework, the tax secrecy provisions need not protect non-identifying data
and it appears that the ATO could disclose such data to the department without
requiring legislative authority to do so. However, proposed amendments to the
Migration Act and the Income Tax Act provide a legislative basis for this disclosure
by the ATO. The Migration Legislation (Information Management) Bill 2006 seeks
to amend the Migration Act and the Income Tax Act to enable disclosure of
information between the department and the ATO for research purposes relating
migration.
9. The Migration Legislation (Information Management) Bill 2006 will also seek to
amend section 18 of the Migration Act and section 16 of the Income Tax Act to
authorise disclosure of information for the purposes of locating people who are
lawfully in Australia but working in breach of their visa conditions. These
amendments seek to extend the information provided to the department by the ATO,
in line with the Government's 1999 decision. It would be appreciated if these
proposed amendments are taken into account when making changes to the tax secrecy
and disclosure provisions.	.
Further opportunities for information exchange
10. To ensure effective administration of portfolio legislation, the department would also
benefit from obtaining further information from the ATO in the three main
circumstances discussed below.
11. In order to achieve this under the proposed framework, the department would seek to
be a 'specifically listed' government department to which an officer may disclose
protected information for the purposes of the Migration and Citizenship legislation. If
the department were specifically listed, the department would then need to discuss
with the ATO whether, in the interests of standardising and simplifying the tax secrecy
laws under the proposed framework, the specific exception to the prohibition on
disclosure currently set out in paragraphl6(4)(hd) of the Income Tax Act would still
be required.
Assisting in investigating offences under the Migration Act and the Citizenship Act
12. The law enforcement exception contained in section 3E of the Taxation
Administration Act 1953 is not relevant to the department because the department does
not fall within the definition of Taw enforcement agency'.
13. Although the department is not a law enforcement agency it does deal with a range of
serious non- tax related criminal investigations and prosecutions. Administration of
the Migration and Citizenship Acts includes investigating persons who may be
citizens or permanent residents who are acting criminally. As part of this the
department is targeting organised and systematic fraud and non-compliance. This
often involves labour organisers and migration agents who operate in the informal and
cash economy and have a direct impact on the revenue base through their illegal
activities. These activities may also involve criminal exploitation of legal and illegal
workers, something which is of considerable concern to Government.
14. It is also unclear whether Information Privacy Principle 11.1(e) under the Privacy Act
1988 fully covers disclosure of information to the department for the purposes of
investigating offences under the Migration Act and the Citizenship Act, such as
migration, citizenship and identity fraud. The department acknowledges that the ATO
has been helpful in providing information where it can, but clarification of the
circumstances allowing disclosure of information to the department for the purposes
of investigating offences under migration law is needed.
Assisting identification ofpersons suspected of being unlawful non-citizens
15. Limitations on the department's ability to access information held by other
government departments can hinder identification of persons who have been detained,
or may be detained, under reasonable suspicion of being an unlawful non-citizen. The
ability to cross-check information about a person with ATO records could be of
enormous benefit in these circumstances. Such disclosure is not presently possible
because the disclosure provision at paragraph 16(4)(hd) of the Tax Act. That
provision only allows disclosure to the department in order to facilitate "locating
persons who are unlawfully in Australia" rather than identifying those persons after
they have been located.
Assist in investigating possible breaches of sponsorship conditions for temporary business
visas
16. Under existing legislation, the department is unable to obtain information from the
' ATO about the 'good standing' of employers who seek to employ a temporary
business visa applicant. An employer who seeks to sponsor a temporary business visa
applicant must agree to certain undertakings before the sponsorship is approved. One
of the requirements is that the employer pay a Minimum Salary Level (MSL) to the
visa holder. Information exchange between the department and the ATO would
greatly assist in monitoring an employer's compliance with their obligations and
streamline the process of checking whether MSL is being paid to a visa holder.
Additionally, where the department as referred a case to the ATO for investigation, it
would allow the ATO to provide information about the outcome of that investigation
to the department for further assessment and action.
Identity and residence verification for citizenship
17. One of the requirements for grant of a certificate of Australian citizenship is that the
person is a permanent resident who has been present in Australia as a permanent
resident for a period of, or for periods amounting in the aggregate to, not less than one
year during the period of two years immediately before applying for citizenship, or for
a period of, or for periods amounting in the aggregate to, not less than two years
during the period of five years immediately before applying for citizenship (see
section 13 of the Citizenship Act). Information held by the ATO would be helpful in
verifying these residence requirements before grant of a citizenship certificate.
Information held by the ATO would also be of assistance in verifying the identity of a
person applying for citizenship.
Implementation issues
18. The department also wishes to be involved in discussions in relation to the practical
implementation of new tax secrecy and disclosure provisions. Data exchange between
the department and the ATO should have a clear governance mandate and comply
with legislative and policy frameworks. As you will be aware, the Australian
Government Information Management Office has developed the Information
Interoperability Framework, which provides practical guidance for achieving the
successful transfer of information across agency boundaries. From a data management
perspective it would be invaluable to take this opportunity to further address the need
for a whole of Government approach to metadata standards to enable agencies to have
a more effective understanding of data that might prove useful in their business
requirements.

								
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