Which government agencies are misusing your personal information? Freelance journalist John Power reports.
Complaints to the privacy watchdog alleging the misuse of personal information by government agencies have soared 50% amid a flurry of privacy-related controversies including the robo-debt debacle and the AFP’s illegal access of a journalist’s phone records, data obtained exclusively by Crikey reveals.
The Office of the Australian Information Commissioner (OAIC) received 123 complaints against state bodies over the use or disclosure of personal information in the first 11 months of this financial year, compared to 82 for all of 2014-15, data released under freedom of information shows.
By far the largest number of complaints, 38, were directed at the Department of Human Services, the agency under fire in recent months for imposing thousands of false Centrelink debt notices based on faulty data-matching — although the department also accounted for the most complaints in 2015-16 (43) and 2014-15 (38).
The Australian Taxation Office had the second-most complaints, with 12, followed by the Department of Immigration and Border Protection with 11.
The Australian Bureau of Statistics, Department of Defence, National Disability Insurance Agency, Administrative Appeals Tribunal, AFP and Comcare each had four to seven complaints against them. Twenty-three other bodies, including the Department of the Prime Minister and Cabinet and the Fair Work Commission, were hit with three or fewer claims each.
The figures refer to alleged privacy breaches that may or may not be ultimately upheld by the OAIC, which is dealing with a backlog of more than 2000 privacy cases awaiting a determination for a year or longer.
So far this year, the commissioner’s office has made just one determination under principle six of the Privacy Act 1988, which refers to use or disclosure of personal data.
The sharp rise in complaints comes at a time of heightened scrutiny of privacy issues in Australia, and as the government argues for greater access to sensitive personal information.
Earlier this month, following a series of Islamic terror attacks in the UK, Prime Minister Malcolm Turnbull flagged plans to force tech companies to decode encrypted electronic communications, telling Parliament the “privacy of a terrorist can never be more important than public safety”.
In April, the AFP admitted to accessing an unnamed journalist’s metadata without a warrant, breaching safeguards included in contentious data-retention laws passed by the Abbot government in 2015.
Last year’s census, meanwhile, drew heavy criticism from privacy advocates after the ABS announced it would hold onto names and addresses it collected instead of destroying the information as it had in the past.
David Vaile, chair of the Australian Privacy Foundation, told Crikey that the rising number of complaints was “not surprising” given the blase attitude of successive governments. He noted that the previous Office of the Privacy Commissioner was subsumed into the current broadly defined agency and that Australia was one of the few developed countries without an established tort of privacy.
“I think that awareness has brought to people’s attention that they can no longer reasonably trust anyone who says, ‘trust us, we can keep your information secure and we will keep it secure,” Vaile said.
The new figures probably underestimated the extent of the privacy breaches out there, Vaile added.
“I think it is quite concerning, I think it’s probably the tip of the iceberg because of the underfunding and the attacks on the regulator’s office and the attempts to bury them in another entity and the establishment,” he said.
The name of Sydney television journalist Steve Barrett has cropped up in connection with the alleged $165 million Australian Tax Office tax scam.
Twenty-five years ago, when “The Bar Rat” was working as a crime reporter for one of the commercial networks, his behaviour was the subject of a classic Media Watch gotcha. After the police had shot a demented old schizophrenic on a suburban street, the media descended on the poor man’s house on their usual frantic quest for pictures of the victim and an interview with his widow. Two TV crews were already in the lounge room looking at a family photo album when Barrett arrived. One of the cameramen already in the room sensed trouble and quietly began filming from his lap.
The footage didn’t capture Barrett announcing himself as being from a media organisation, and he told the widow that photos of her husband were required “for police identification purposes”, then reached down and took the pictures he wanted from the album.
The footage of this clear breach of professional ethics found its way to Media Watch and formed the basis of a segment that would, for any other journalist, most probably have ended their careers. Media Watch then followed up their expose by referring the material they’d obtained to the journalists’ union, the Media, Entertainment and Arts Alliance (MEAA), for consideration by its judiciary committee.
Nothing happened. First, the MEAA said that they didn’t need to review Barrett’s behaviour because no complaint had been made to them (this was hardly surprising, as the widow had no English). Media Watch made their own formal complaint on her behalf, but again nothing happened. The MEAA now claimed they couldn’t assemble the required number of Barrett’s colleagues to form a judiciary committee panel. After yet more pressure from Media Watch — and more than a year after the incident — the committee finally met.
The result? Barrett was cleared of any wrongdoing, despite the footage showing at least two breaches of the Journalists’ Code of Ethics. The MEAA then issued a summary of their findings, which concentrated on their own allegation that Media Watch had misrepresented the incident and had unfairly criticised Barrett through the use of “selective editing”.
May 15, 2017
Tax Office tries to fight FOI by arguing it’s an OHS risk. Information Commissioner says ‘shaddup’, basically.
The Australian Taxation Office has been told it should process an freedom of information request hosted on transparency website Right to Know.
The Australian Taxation Office’s bizarre claim that it couldn’t process freedom of information requests because of workplace health and safety concerns has been rejected by the Information Commissioner.
In mid-2016, the ATO announced to the transparency website Right to Know — a service that allows people to file FOI requests to Australian government agencies publicly — that it would no longer process FOI requests from the website.
This was, they claimed, because of a series of incidents over the previous few months where the ATO had to request the removal of documents or ATO staff names from requests (Right to Know complied with all but one of these). The ATO has been telling people to file their FOI requests directly with the agency rather than using the website.
The ATO’s general counsel Jonathan Todd informed the Office of the Australian Information Commissioner (OAIC) in July last year that the agency had decided to ignore all requests from Right to Know on “workplace health and safety” grounds, alleging that there was one matter on the Right to Know site that had caused “harm to the health and welfare of ATO officers in the form of stress, anxiety and public damage to professional reputation”.
One of the administrators of Right to Know, Ben Fairless, sought to overturn this ban by seeking a ruling from the OAIC on one of his own requests, and last week the Information Commissioner Timothy Pilgrim found that the ATO’s excuse was not good enough. He said that requests made via the Right to Know website were valid requests under the Freedom of Information Act and recommended that the requests now be processed.
Fairless welcomed the ruling in a blog post on the OpenAustralia Foundation website, stating that Australia is fortunate to have the OAIC — otherwise Fairless would have to take such an appeal to the Administrative Appeals Tribunal, which would have cost him hundreds of dollars on the application alone, let alone the legal costs incurred fighting the case. He did, however, express concern at the time it took for the OAIC to resolve the case — something facing many people seeking reviews of FOI requests, largely due to the low funding the agency gets.
In last year’s budget, the government abandoned its plans to shut down the OAIC, throwing it a funding lifeline to the tune of $34.1 million over four years.
The next hurdle will be ensuring that the ATO actually does what the OAIC has recommended, and processes the FOI request. The OAIC’s powers are relatively weak in being able to force the ATO to comply with the request. Pilgrim said in his letter that if he is not satisfied by the ATO’s response, then he can issue an “implementation notice” to implement his recommendation, but if the ATO then ignores that implementation notice, the OAIC’s next course of action is to write a report to the minister responsible for the ATO, and a copy of that report would be required to be tabled in Parliament.
There is no sign that the ATO intends to comply with the order at this stage. A spokesperson for the agency told Crikey in a statement that it was “considering its position”:
“The ATO takes its obligations to comply with FOI and workplace health and safety legislation very seriously.”
The ATO said people could still file FOI requests directly to the ATO, and anonymous applications can still be made via email or via the paper form.
Mar 28, 2017
The ATO was so concerned about rumours Attorney-General George Brandis would stop the agency intervening in the Bell case, it sought legal advice against him.
The Australian Taxation Office prepared for the possibility that Attorney-General George Brandis could prevent them from intervening in the long-running Bell Group court case.
It has been alleged that Brandis reached an agreement with the then-WA attorney-general Michael Mischin in late 2015 over the government’s involvement in the dispute over the wind-up of the Bell Group companies. According to the allegations, Brandis instructed then-solicitor-general Justin Gleeson not to pursue a particular legal argument for the case with the ATO, which is seeking to reclaim $300 million owed to the government by Bell Group.
The ATO ultimately intervened in the case, arguing that the wind-up legislation passed in Western Australia “has either forgotten the existence of the Tax Legislation, or decided to proceed blithely in disregard of its existence”. The High Court found the Bell Act legislation to be invalid.
Labor is pursuing Brandis over his involvement in the case, and in a Senate committee hearing on the matter on Monday night, the ATO revealed that Brandis did not issue a direction preventing the ATO from intervening in the case, in the weeks before the ATO sought leave to intervene in the Bell case. Despite this, the rumour mill was in full operation through the Australian Public Service, insinuating that the Attorney-General may have been contemplating issuing such a direction.
“We had no knowledge of any proposed Attorney-General direction but we did hear … bureaucratic whispers that led to speculation on our part that maybe such a direction was being considered,” ATO Second Commissioner Andrew Mills told the committee.
“We were concerned whether or not that would, whether or not were such a direction being considered, of which as I say we had no direct knowledge — it was merely rumours flying around. We should really be in a position to know how to respond in that situation and so we began to see whether it was possible to obtain advice.”
These “bureaucratic whispers” originated from Treasury and the Australian Government Solicitor’s office, officials confirmed in early March — just days before the ATO filed its leave to appeal in the Bell case. Not wanting to pre-empt the Attorney-General’s decision, but wanting to make sure the ATO was “armed” if that was the case, the ATO sought permission to get advice from the Solicitor-General on what they could do if Brandis issued a direction preventing the ATO’s intervention in the case. The request was passed onto the office of the Solicitor-General by the Attorney-General’s Department, but the ATO withdrew the request on the day it filed leave to appeal.
The day before leave was filed, Mills said he had a conversation with Brandis and Financial Services Minister Kelly O’Dwyer where Brandis, unprompted, voluntarily told Mills he had no plans to issue a direction.
“I can only assume from that … he may have heard that we sought permission from the Attorney-General’s Department and allayed concerns on that,” Mills said.
In a statement on Tuesday, Shadow Attorney-General Mark Dreyfus said the ATO’s decision to seek legal advice was serious.
“A government department that has been forced to seek independent legal advice on the potential actions of a rogue Attorney-General. It is deeply concerning that the ATO, upon hearing the so-called ‘bureaucratic whispers’ about a potential direction, took them seriously enough to go straight to the Attorney-General’s Department for advice without even seeking to confirm them first.”
May 2, 2016
An ATO employee has been using a work computer to whitewash the Wikipedia page of a South Korean cult, whose leader is in prison for multiple counts of rape. Freelance journalist John Power reports.
An Australian Tax Office computer has been used to whitewash information online about a South Korean cult that has recruited Aussie women as “spiritual brides” for its leader, a convicted rapist.
Crikey can reveal an ATO employee has used her work computer to make favourable edits to the Wikipedia page of Providence, also known by the names Jesus Morning Star (JMS) and Christian Gospel Mission.
Under a pseudonym, a lawyer with the ATO has gone to considerable lengths to beautify the Christian sect’s Wikipedia page since August last year. Crikey has chosen not to name the ATO lawyer involved.
The effort has included scrubbing references to Jeong Myeong-seok’s sexual assaults and an incident in which cult members broke into and trashed a newspaper office in South Korea in retaliation for negative press, as well as mentions of the term “cult”. Jeong was charged with rape in 2001 and was captured in Hong Kong in 2003 but vanished while out on bail. He resurfaced in 2007 and was found guilty of rape in 2008. An appeals court added four years to the original six-year sentence in 2009.
The ATO lawyer also changed the Wikipedia page to challenge the integrity of Jeong’s conviction and South Korea’s justice system and insert glowing passages about the founder’s character and art, describing his poetry as conveying “the freedom within God’s truth and love”. Several times the lawyer revealed she was editing the Wikipedia page from an ATO IP address, and she edited the page at all times of day and night, including during the week.
Crikey can further reveal that the same lawyer tried to have material about Providence removed from the website jmscult.com, run by Peter Daley, claiming it had breached copyright by using images and videos of the sect.
The lawyer did not claim an ATO affiliation in the letter, instead referring to herself as an “authorized representative of Christian Gospel Mission”.
When contacted by Crikey, the ATO employee initially denied responsibility, but then admitted to both editing the page and sending the letter.
But she said her personal beliefs had nothing to do with the ATO and that most of the Wikipedia editing had been done outside of work. She also said she had done most editing in her “down time”, though Crikey can confirm the IP address associated with some of the edits to the Wikipedia page is an ATO computer.
The lawyer also denied Providence was a cult or even controversial, claiming it had been persecuted and that Jeong’s conviction was faulty.
“Just because he was convicted for an offence doesn’t mean the organisation is bad,” she said.
A former Providence member, who previously described being left suicidal by her time in the sect, told Crikey she lived with the lawyer and several other members at a house in Canberra in 2012. According to the ex-member, the lawyer at the ATO would talk openly about promoting the cult at work.
The ex-follower, who asked to remain anonymous for fear of reprisals, said the Canberra crew moved to Melbourne following an expose on Providence by SBS’ The Feed in 2014.
The program found Providence had encouraged young female members to see Jeong as the messiah and their lover, and several women had visited the 71-year-old in prison in South Korea. Providence failed to respond to most allegations against it, but it has insisted it is a legitimate Christian church.
Daley, who recently beat defamation charges pursued by several cult members in South Korea, said Providence had tried to silence information about its inner workings for years.
“With the leader due for release next year and with growing awareness, the group is involved in an international effort to whitewash the internet and stifle free speech in order to aid their recruitment efforts and their indoctrination program,” he told Crikey.
“Criminal complaints against me and other outspoken critics are the most obvious attempts to silence critics, but behind that are the issuing of dozens of false copyright claims directed at YouTube videos, emails threatening further legal action — one sent to my work email, which isn’t so easy to come by — and the efforts to whitewash Wikipedia are all part of a wider organised effort.”
Following a tip-off by Daley, the ATO’s Fraud Prevention and Internal Investigations Unit looked into the lawyer but declined to take any action. It did not provide a reason for its decision in correspondence with Daley.
Crikey has lodged a freedom of information request with the ATO to see the results of the internal inquiry into the lawyer and the rationale for taking no action.
Several attempts to contact the head of the unit, Brett Irwin, were unsuccessful. An employee at the unit, however, said that information about its investigations could not be released over the phone due to the Privacy Act.
Dec 17, 2015
Transfield Services, the controversial company running many of Australia's offshore immigration detention centres, had no tax payable in Australia in 2013-14, on its revenue of $2.8 billion and taxable income of $16 million.
The list of over 1500 large corporate taxpayers has been published by the Australian Taxation Office, for the first time revealing how much tax some of the biggest companies operating in Australia pay.
Under changes in tax transparency legislation passed by the former Labor government, the ATO is required to publish the name, income, taxable income, and tax payable for every public and foreign-owned corporation with income over $100 million.
The resulting list published on data.gov.au for the 2013-14 financial year contains over 1500 companies comprising 985 foreign-owned companies and 554 Australian-owned companies.
One of the most surprising results on the list is that Transfield Services, the controversial company running many of Australia’s offshore immigration detention centres, had no tax payable in Australia in 2013-14, on its revenue of $2.8 billion and taxable income of $16 million. The company’s annual report reveals its net profit for the year was $67 million.
News Australia Holdings, the owner of News’ paper publishing and printing company, had $2.8 billion in revenues but paid no tax in the 2013-2014 financial year. Fairfax Media had $1.6 billion in revenues and paid $16 million on $69.7 million of taxable income.
The results reveal:
- Wesfarmers tops the list at $67.4 billion in revenue, with a taxable income of $3.7 billion, and tax payable at $1 billion;
- Woolworths is second at $49.6 billion in revenue, taxable income of $3.1 billion, and tax payable at $910 million; and
- Telstra pays more tax than Woolworths and Wesfarmers at $1.7 billion, despite revenues of $26 billion. Taxable income was $5.9 billion.
The global tech companies, a favourite of politicians to target for tax minimisation in Australia were also included:
- Apple had revenue of $6.1 billion, taxable income of $247 million, and tax payable of $74.1 million;
- Google’s revenue was $357 million, with a taxable income of $90.8 million, and tax payable of $9.2 million; and
- Microsoft’s revenue was $547 million, with a taxable income of $103.8 million, and tax payable of $31.1 million.
Which company had the most tax payable? BHP Billiton at $3.9 billion, followed by Rio Tinto at $3 billion, and the Commonwealth Bank at $2.8 billion.
Philip Morris, the tobacco giant, had revenue of $3.2 billion, with a taxable income of $746 million, and tax payable of $223 million.
Some of the biggest revenues reported in the year with no tax payable included:
- Chevron with revenue of $3 billion;
- CITEC Resources with revenue of $5 billion;
- Downer EDI with revenue of $6.5 billion;
- Energy Australia with $8.8 billion in revenue;
- ExxonMobil with $9.6 billion in revenue;
- GHP with $11.7 billion in revenue;
- Lend Lease with $7.6 billion in revenue; and
- Qantas with $14.9 billion in revenue.
The Commissioner of Taxation, Chris Jordan, has been at pains to point out that companies not paying tax in one financial year does not mean they are avoiding tax, with more than 20% of ASX-listed companies making an accounting loss in any given year, including Qantas, which reported a $2.84 billion loss in the 2013-2014 financial year:
“No tax paid does not necessarily mean tax avoidance. Any companies with unusual financial or taxation numbers are closely investigated by the ATO. Over half of these 1500 companies have been subject to ATO review or audit over the past three years, with the ATO’s risk and intelligence systems working all the time to ensure that we can all have confidence in the tax system.”
Nevertheless, Jordan says that the ATO will be continuing to challenge the way foreign-owned entities structure their companies to ensure very little tax is paid on profits generated in Australia, and says the publication of the data today will mean companies will now have to consider the reputational issues associated with having tax data available to the public.
Early next year the ATO releases similar information for Australian-owned private companies with revenues of over $200 million, under legislation passed by the government with the support of the Greens earlier this month. Labor was pushing for the threshold to be set at $100 million, and has complained that the deal done with the Greens to pass the legislation in the last sitting week of this year will exclude close to 600 Australian companies that have revenues of over $100 million but below $200 million from reporting.
Dec 3, 2015
Freelance journalist Alan Austin combs through ATO documents to ferret out tax dodgers.
It is glaringly obvious taxes collected in Australia are billions below budget forecasts, well short of what is needed to match spending and vastly inadequate to fulfil promises to repay the debt. This is clear from the debt blow-out of 43.3% since the last election, the flags going up on GST hikes and expert opinion.
So who is shirking? And who in Canberra is pretending not to notice? The Senate inquiry turned up a few clues. It found that Chevron Australia paid a tax fee of just $248 on $1.7 billion in profit one year. Senator Sam Dastyari reckons Chevron could be up for $3 billion in back taxes if court actions succeed.
It would be good to see who paid what last financial year — the first full year of the Coalition’s fiscal management — compared with earlier years. Has tax paid by the various classes of taxpayer — wage and salary earners, small enterprises, big business, partnerships, multinationals, trusts and super funds — gone up or down? The Australian Taxation Office (ATO)’s annual report is disappointingly light on helpful detail. But we can glean a few more clues.
Total tax revenue the ATO collected in 2014-15 increased $15.2 billion to $337.3 billion, a rise of 4.7%. The greatest increase came from income tax on “total individuals”, up a whopping $14.3 billion from $163.6 billion to $177.9 billion. That’s a rise of 8.7%. The goods and services tax generated an extra 6.3% or $3.2 billion, up to $54.6 billion. So consumers are paying their share.
But the report doesn’t reveal whether the increased tax grab from individuals came from low-income wage earners or from millionaire investors or professional partnerships. Is the 8.7% hike in income tax attributable to higher wages and salaries? Clearly not. ABS data shows wages and salaries rose just 1.85% over the period (file 56760017, column AK). This suggests the rate at which taxpayers are taxed on their earnings has been ramped up considerably.
Company tax collected actually fell this year by $359 million, or -0.53%. This is consistent with ABS figures showing companies overall reported lower profits in 2014-15, down by 9.5%.
Intriguing figures appear regarding the fringe benefits tax (FBT) collected. Despite business profits suffering badly over the year — the worst annual decline in the 22 years for which data is available — expenditure on perks that incur FBT continued apace. The rise in 2014-15 in FBT was $270 million, for a total of $4.35 billion. That’s a healthy increase of 6.6%, compared with 4.0% the year before and 5.1% in 2012-13.
How can that be? Could companies be under-reporting profits, perhaps? Could the ATO be less vigilant than before? Commissioner of Taxation Chris Jordan assures us he “met the commitment to government of reducing our staffing levels by more than 3000 (since 1 July 2013) with little or no negative impact on revenue or services”.
Nevertheless the chapter on dispute settlement, page 62, shows almost 400 disputes were “settled” without any audit. No checks. Let ‘em pay what they want.
The outcomes of disputes involving “large businesses” shows a huge variance from the $5.608 billion the ATO sought to collect initially and what it settled for — $2.934 billion. That $2.674 billion difference is a huge chunk out of the year’s total shortfall. It is more than double the $1.189 billion for the previous year, and nearly treble the $997 million in 2012-13.
Damningly, the variance over the year as a whole between total collections ($336.8 billion) and the budgeted take ($346.3 billion) is a staggering $9.5 billion. Almost half of this, $4.7 billion, was the shortfall in company tax.
Exactly who is getting away with the loot remains unclear. This is because we cannot see quantum of tax collected by all categories of individual taxpayers, or by all company categories. This used to be available.
One desirable outcome of the current Senate inquiry would be to secure more information. That would help identify the freeloaders — and those who shield them.
Nov 17, 2015
How many agencies can access your metadata without a warrant? Look, AGD would tell us, but it's just so much damn work and they'd rather not.
The Attorney-General’s Department doesn’t want you to know which agencies have requested access to metadata without a warrant since the data retention regime came into effect in October.
As part of the tranche of national security legislation that forced all telecommunications companies in Australia to retain call records, assigned IP addresses, email information, call locations, SMS records and other data for two years for warrantless access by law enforcement, the government dramatically shortened the list of agencies that could access telecommunications metadata.
Under the previous regime, where agencies could ask for the data but telcos weren’t required to keep it, just about any federal or state government or local government agency could access metadata without a warrant, and they did. The RSPCA, a taxi regulator, local councils and other agencies accessed call records and other stored customer data.
After the legislation came into effect in October this year — although most Australian telecommunications companies, including Telstra, will not be fully compliant until April 2017 — the number of agencies that could access the data decreased to just 22 agencies. Those that missed out need to apply to the Attorney-General in order to be added to the list of agencies.
Since the passage of the legislation in April, Australian Border Force has been added to the list of agencies, and the Australian Taxation Office, and the Victorian Racing Integrity Commissioner are lining up at Brandis’ door to be added to the list.
The Attorney-General’s Department would not confirm to media how many agencies had asked to be added, but a freedom of information request filed by privacy advocate Geordie Guy sought to force the government to reveal exactly who had asked to be added under the legislation.
In a response received yesterday, the Attorney-General’s Department informed Guy it intended to refuse the request on practical grounds. The FOI Act empowers government agencies to refuse requests that would “substantially and unreasonably divert resources”.
According to the response, there were 288 documents found, with up to 2661 pages in total for the agency to go through, for up to 450 hours of decision-making time. The response does give a hint as to how many agencies might have requested to be added, however. The department suggests it would need to consult with 45 third parties, i.e. people outside of the department, who are mentioned or included in the documentation. This suggests that up to 45 agencies could have asked for access to metadata.
Guy is narrowing his request to simply ask for just a list of agencies that have requested access. We will know more, soon enough.
A parliamentary joint committee has recommended that the Australian Taxation Office be granted powers to access stored telecommunications data without a warrant, just months after Parliament passed legislation stripping it of that power.
One of the major sticking points during the debate over the government’s legislation forcing telecommunications companies to keep so-called “metadata” from its customers for two years was that this data could be accessed by a wide variety of Commonwealth, state, and local government agencies without a warrant.
There were a number of reports of Blacktown Council using metadata to track illegal dumping, and the RSPCA in Victoria was a major user of metadata.
The compromise, Attorney-General George Brandis announced when mandating that telcos would have to keep the data for two years, would be that most of these agencies would no longer have access to the data.
“We recognise that the right to privacy and the principle of freedom of the press are fundamental to our democracy. For these reasons, the Bill contains new and strengthened safeguards. These include the provision of new oversight powers to the Commonwealth Ombudsman; a reduction in the number of agencies accessing metadata from over 80 to 21; and specific protections for journalists and their sources,” Brandis said when the legislation passed.
In the legislation passed in March, the government sought to limit access to the data to 21 agencies, including the Australian Federal Police, ASIO, state police agencies, the ACCC, ASIC, and state corruption agencies. However, less than two months later the government added Border Force to the list with another piece of national security legislation.
Now the Australian Taxation Office could be next. In a report tabled yesterday by the Joint Parliamentary Committee of Law Enforcement on financial-related crime, the committee recommended adding the ATO to the list of agencies:
“On balance the committee is persuaded that with appropriate safeguards, including adequate privacy and oversight arrangements, the ATO should be able to access intercepted telecommunications information for the purpose of protecting public finances from serious criminal activities such as major tax fraud. In the committee’s view, the multiple prosecutions and recovery of billions of dollars in tax liabilities resulting from Project Wickenby, clearly establishes the demonstrated need for the ATO to become a criminal law-enforcement agency under the TIA Act,” the committee stated.
“For these reasons the committee remains supportive of inclusion of the ATO as a criminal law-enforcement agency as per the recommendation in its report into unexplained wealth arrangements in Australia.”
The reason why the ATO was excluded from the original list, while ASIC — which infamously accidentally blocked thousands of websites because staff didn’t realise what an IP address does — remains a mystery. The law enforcement committee offered no reasoning as to why the ATO was originally exempt. It noted there was “consistent support” for the ATO to have access to stored telecommunications data.
Unlike the original plan put forward by the government, Parliament will need to pass legislation to add the ATO to the list. Under the original proposal, all that would have been required was approval by the attorney-general of the day. The Greens warned at the time that agencies would quickly be lining up at Brandis’ door seeking to be added to the list.
The government has not yet responded to the recommendations made in the report.
Jul 28, 2015
Some 55 millionaires paid no tax at all in 2012-13, and they claimed an average of $700 in benefits. Economist and freelance journalist Jason Murphy says that doesn't necessarily mean they are rorters, but the chances are pretty good ...
The viral fact of recent days is that 55 Australians who earned more than $1 million in income in 2012-13 paid no tax.
That true and shocking snippet is being aired in support of a policy proposal for a “Buffett tax“, which the ALP national conference adopted for consideration as part of the party’s policy platform on the weekend. Named for US billionaire Warren Buffett, it would ensure the rich pay a minimum percentage of their income in tax, perhaps 30% or 35%.
In Australia, most people with a million dollars in income are actually decent, running a factory or a stock-broking firm, and paying their workers while also paying their taxes.
But like a crowd at the footy or a Saturday night in the city, a few idiots ruin things for everyone. Turns out, there’s a 1% in the 1%.
Those 55 millionaires (0.6% of millionaires) paid no tax. Fortunately the vast majority of millionaires are far better behaved.
The categories at the bottom of this chart show the size of millionaires’ incomes after deductions. That big line on the right is the 9155 people with an income over $1 million who paid tax on more than $1 million in income. That’s 93% of millionaires.
They are paying an average of $958,000 in tax each, or 43% of their total income in tax. That seems fair. They get great benefit from government services and should contribute according to their capacity.
But what about those 55 zero-tax millionaires — the little blue sliver on the left of the graph — are they all vile tax shirkers?
It’s not totally clear from the data. They could just be unlucky investors who used up all their total income in investing expenses. For some of them, this is likely genuinely the case.
But there are clues suggesting some of them are tax haters — the kind who drop Ayn Rand quotes in conversation and have Ludwig von Mises tattoos that remains unseen until they shed their Charvet shirts.
Their cost of managing tax affairs are startlingly high on average. The millionaires who paid zero tax spent 70 times more on tax accounting than millionaires who paid the most tax.
The effect of this is very visible in their average tax rates.
This chart shows that 93% of millionaires pay 43% tax on average, a further 6% (with taxable income just under $1 million) pay around 35%, and the rest pay a lot less.
Also, some of the 55 non-taxpayers might be quite eager to take the government for everything they can. The data show people with $1 million in income but no taxable income after deductions claimed on average almost $700 in government payments.
This could be explained in another way, perhaps. If you earn $1 million but have $2 million in expenses in the first six months of the year, go broke, and spend the rest of the year on the dole, that would also explain the benefit claims. Or you could go from Austudy to making millions all in the same year.
It’s a tantalising snippet but not proof positive of rorting.
It is worth mentioning that these same millionaires are generous in other ways. Even the ones who paid no tax because they got their taxable income down below $6000 managed to give away $200,000 to charity. (Donations are tax deductions, of course.)
So the case for a Buffett tax is about managing the behaviour of the small proportion of millionaires who seem to be engaging in very vigorous tax minimisation.
These 55 people are — according to ATO data — not necessarily the highest-earning millionaires, but not the lowest-earning either. (NB. This only counts income the ATO knows about.)
If those 55 people paid the same rate as the high-tax millionaires — 43% — it’d raise about $55 million, an important tweak, although not enough to solve our fiscal woes.
The Australia Institute has argued for a more aggressive Buffett tax, applying a flat 35% rate to income earners over $300,000, and has modelling that shows it would raise $2.5 billion a year.
Such a policy would be very tough to get through and can be seen as an ambit claim to start negotiations. It would clamp down on tax deductions so hard that it might prevent charitable donations, for example.
But a Buffett tax of some kind is now a distinct political possibility in Australia. That’s good news for the social compact and good news for the budget.
A further upside would be in raising confidence in the tax system. The rest of us declare our income and pay our taxes while feeling like many others don’t. That hurts.
If we know everyone is paying, tax time gets a little easier and tax feels less unfair. A Buffett rule could change attitudes to tax nationwide.