House of Representatives

Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2010

Second Reading Speech

Mr SHORTEN (Maribyrnong) (Assistant Treasurer and Minister for Financial Services and Superannuation)

I move:

That this bill be now read a second time.

This bill, the confidentiality of taxpayer information bill, was introduced to parliament on 19 November 2009, but lapsed due to the prorogation of parliament.

The bill consolidates taxation secrecy and disclosure provisions currently scattered across 18 taxation acts into a single framework.

Not only are the existing provisions spread across the taxation law, they were also enacted over time in different drafting styles, leading to an inconsistent level of protection for taxpayer information and uncertainty for the tax office, other users of taxpayer information and for taxpayers themselves.

The inconsistencies and ambiguities associated with the existing law have the potential to undermine its primary purpose - that is, to provide clear protection for taxpayer information. The taxation law has long recognised that such protection is fundamental to ensuring that taxpayers maintain their confidence in the operation of the tax system.

The new framework draws on principles in the current law. It will continue to prohibit, through criminal offence provisions, the unauthorised disclosure of taxpayer information obtained or generated in the course of administering a taxation law.

It will also broadly retain the existing disclosure provisions, which recognise the need for taxation officers to use taxpayer information in the performance of their duties and the legitimate need of other government agencies to access the information to more effectively deliver services or enforce laws.

In bringing together the existing provisions, the new framework will also standardise key definitions to overcome existing ambiguities. It will also clarify the circumstances in which identifiable taxpayer information may be provided to a minister. However, it is not the intention of the bill to broaden the circumstances in which information can be so provided and taxpayers can be confident that their personal information will remain secure.

The bill will also introduce clear rules to govern the on-disclosure of information provided to non-taxation officers. Under the existing law and the new framework, taxpayer information can be provided to non-taxation officers for certain limited purposes. The new framework will make it clear that a recipient of taxpayer information is able to use the information for the purpose for which the information was provided or a related purpose. Such an approach strikes the right balance between the protection of taxpayer privacy and facilitating the work of government.

The bill also proposes to introduce a number of new disclosure provisions where the public benefit in disclosure outweighs taxpayer privacy. Of note, the bill will facilitate greater disclosures of taxpayer information to the Australian Securities and Investments Commission (ASIC) to, amongst other things, enable a greater level of cooperation between ASIC and the tax office in addressing fraudulent phoenix activity.

The bill has been developed following thorough public consultation in early 2009 and the government would like to thank all those who provided comments on the exposure draft bill and explanatory memorandum. Many of the comments received are reflected in the bill before us today.

The bill has been considered by the Senate Economics Committee which recommended that it be passed by parliament. The Senate Privileges Committee also considered the bill and recommended that disclosures to parliament and its committees be governed by the laws of parliamentary privilege and the practice and procedures that have been developed in relation to parliamentary committee processes. These amendments have also been adopted.

This bill will reduce the volume of the taxation law and is a reflection of the government's commitment to simplify the operation of the taxation law. It will also enhance taxpayer privacy by providing greater transparency in the circumstances in which taxpayer information can be used.

Full details of this bill are contained in the explanatory memorandum.

I commend this bill to the House.