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Community Affairs References Committee
Better Management of the Social Welfare System initiative

RAVANELLO, Mr Robert, Deputy Commissioner, Debt, Australian Taxation Office

TODD, Mr Jonathan, General Counsel, Australian Taxation Office

WILLIAMS, Mr Greg, Deputy Commissioner, Smarter Data, Australian Taxation Office


CHAIR: I understand information on parliamentary privilege and the protection of witnesses and evidence has been provided, and I am sure you are pretty au fait with that. I remind witnesses that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Welcome. I would like to invite you to make an opening statement, if you wish to, and then we will ask you lots of questions.

Mr Ravanello : We are not making an opening statement.

Senator PRATT: I am interested in some of the background to the ATO's involvement in the debt recovery process in terms of Centrelink's moving from a manual system to an automated debt recovery process based on the information that you have provided to them. Are you able to take us through that?

Mr Williams : As background, the ATO has been sharing this sort of information with Centrelink for some 20-odd years or more. We did not engage directly with Centrelink around the information in regard to the ramping up of the proposal. We were aware that there was a change in the protocol under which the information was going to be sought. It moved from the previous Data-matching Program (Assistance and Tax) Act to the guidelines from the Office of the Australian Information Commissioner, which have some minor changes, but other than that we have continued to provide the information that we have provided historically. You are probably interested in the mechanics of the ATO's role in that. We get from Centrelink the identity that they provide. The ATO then matches that identity and those details across our data, and we identify only the high confidence matches. If we have a match on at least three particular fields—in most cases that is name, address and date of birth—we then package up the data relating to those individuals and transfer that across to Centrelink.

Senator PRATT: Does Centrelink provide you the tax file number, or do they not keep that on record?

Mr Williams : Historically, Centrelink provided the tax file number under the previous arrangements, because the law allowed that; under the new protocol they are not allowed to provide us with TFNs. Having said that, given that we run a degree of governance and quality assurance over the data that we provide, we do not believe that the lack of the TFN in this instance has caused any errors in the information that we have provided back to Centrelink.

Senator PRATT: What level of confidence is there in correct matching of the records?

Mr Williams : At this stage the ATO has received somewhere in the vicinity of 200 inquiries in relation to the information that we have provided to Centrelink. Those inquiries have mainly related to, 'What information did you provide?' The three sets of information that we provide are the payment summaries, the investment income information and the income tax data. Once we have provided that, pretty much in all instances those queries have resolved themselves. In two instances to date, we have identified through that process an identity mismatch, which we have then worked with Centrelink to resolve. Of all the information that we have provided—and I think there is something along the lines of 8 million records—we have been aware of two that have come our way that have said that we have incorrectly matched identities.

Senator PRATT: You have had 200 queries. Are they from people who have had debt notices issued or queries raised by Centrelink and have contacted you as individuals, or are these queries from Centrelink about the information provided?

Mr Williams : These would be queries coming from the individuals.

Senator PRATT: Has Centrelink queried any of the information provided by the Tax Office?

Mr Williams : Not that I am aware of.

Senator PRATT: So they have accepted it as a given? They are not the source of queries checking the information?

Mr Williams : Again, this is a process that we have been doing with them for 20 years, so the information that we provide has not really changed. There may have been some changes in volume at the processing end and the actual data-matching end at Centrelink, but to the best of my knowledge the advice that we have had from Centrelink is they have basically maintained the same process. What they have done is increase the volumes.

Senator PRATT: There have been two wrongly matched records, and it has taken those people themselves to come forward and demonstrate that. You cannot therefore rule out that there would be other records that are in fact a mismatch—

Mr Williams : That would be correct.

Senator PRATT: And who might have, because of that mismatch, a debt attributed to them.

Mr Williams : We obviously quality-assure the data before we transfer it across—not all of it; we a take statistically valid sample to make sure that we have it correct—but even under the things that we do, nothing is ever going to be 100 per cent perfect. As I said, to the best of our knowledge we have had two; that does not preclude that there may be others out there of which we are unaware.

Senator PRATT: Historically, though, the Department of Human Services would have been manually checking and there would be human intervention before the issuing of a debt, which would have historically picked up the cases where that data was mismatched, but what you are telling us now is that those mismatches are being picked up only by people themselves after a mismatch in their information has been brought to their attention. Is that correct?

Mr Williams : I can only comment about the ATO's processes on this side of it. What DHS are doing on their side, I cannot comment on.

Senator PRATT: Could you outline what the nature of those 200 other queries has been?

Mr Williams : The information I have is that about 90 per cent or more of the questions that they were asking related to: 'What is the nature of the information that you provided to Centrelink?' When we have advised, it was, as I said, income tax information, payment summary information and investment income information. That has resolved that query as far as we are aware.

Senator PRATT: Many people have reported their income to DHS as required, in terms of the peaks and troughs in it, but you have provided to DHS the payment summary for the year. How far back do your records go in terms of when an employer has made payments, and the peaks and troughs in someone's tax payments and, therefore, their income?

Mr Williams : All the data that we have provided is annual data. None of the data that we have provided is periodic during the course of a year.

Senator PRATT: Do you retain that periodic data?

Mr Williams : We only have annual data in that regard at the moment.

Senator PRATT: So you do not have any of that periodic data, notwithstanding the fact that employers might pay that tax on behalf of their employee monthly?

Mr Williams : The information that we provide is only annual data. In this particular instance, to Centrelink, we have provided those datasets back to 2011, but it is only still the annual data that we have.

Senator PRATT: You do not retain any other data either?

Mr Ravanello : The data that we would get in relation to payment summaries is annualised data from employees at the end of the financial year. We do not have a data source for more-regular employment data.

CHAIR: Can I be really clear, because this is really important: it is one lump sum? That is it—one figure?

Mr Ravanello : For a full financial year.

CHAIR: Yes. So, picking a figure: $36,000—that is what you give?

Mr Ravanello : Correct.

Senator DUNIAM: And that could have been earned in a six-month period, but the 12-month annualised figure is just the $36,000?

Mr Williams : Correct.

CHAIR: I just wanted to get that absolutely crystal clear.

Senator PRATT: How is that data reconciled against DHS's fortnightly data in terms of calculating the mismatch? Or do you just hand your data over, and whether there is a mismatch is up to DHS to work out?

Mr Williams : Our responsibility in this is the provision of the data. Our job in this is the matching of the identities to our data, and the provision of our data to them. Once the data transmits to them, the management of that and the data matching of that to other information that they have is a matter for DHS.

Senator PRATT: Are you getting many queries from people when they have reported their income to Centrelink originally, but the records provided by the Tax Office in relation to the name of the employer may differ? Therefore, what is happening is that it is assumed that people received two streams of income when, in fact, it was the one employer. What is the nature of inquiries that you are receiving from people in terms of resolving that problem?

Mr Williams : I am unaware of any significant inquiries of that nature coming into the ATO by any of our channels. I understand that has been mentioned outside of here. Because of the small number of these inquiries that we have received, we do not actually have all the accurate information around exactly what was discussed. Having said that, the majority of anecdotal information, as I said, relates to: 'What information did you provide?' I have no information that would suggest that we have been asked about the issue of the different names of employers.

Senator PRATT: Could you perhaps take it on notice and check what kinds of queries might be coming in in relation to that, and advise us on whether there is anything the tax office can do to assist people in resolving that issue with Centrelink. Do you have guidelines on data matching?

Mr Williams : We do.

Senator PRATT: What do they say about averaging yearly income data to estimated fortnightly income?

Mr Williams : I do not think our guidelines get down to that sort of level. They are more about the governance and management of the data. We have a specific MOU in place with Centrelink, but it does not get down to that level of granularity around matching that sort of thing, because, in this particular instance, we are not responsible for that.

Senator PRATT: Did you give any guidance to DHS about doing that?

Mr Williams : As I said, no. Because DHS have been doing this for some 20 years, albeit at a reduced volume, and we have a regular meeting with them, we did not anticipate that there would be any issues coming out of this, other than the increase in volume, and we anticipated that, if there were issues, DHS, given their 20 years experience, would be in a position to deal with that.

Senator PRATT: But they have not spent 20 years automatically generating these debts.

Mr Williams : Correct.

Senator PRATT: What they have normally done is manually check each debt, which enables them to see whether the ATO's information in fact equals the peaks and troughs in the information provided by a Centrelink customer.

Mr Williams : I do not think we can comment on the processes that DHS use to check whether that is pre or post the issue. That would be a matter for DHS.

Senator PRATT: But would you not agree that inevitably that is going to lead to a higher error rate?

Mr Ravanello : I think that is a question better asked of DHS than of us.

CHAIR: Did you know they were going to be using the automated system from last year?

Mr Williams : Other than what we obviously knew in the public arena, we had no direct conversations with them about the ramp-up.

Senator WATT: You have been providing data on Centrelink client income to Centrelink or its forerunners for about 20 years. It is a long-established process.

Mr Williams : Correct.

Senator WATT: What you are saying is that the Department of Human Services undertook a major system change in moving to this automated process. I accept that it was their decision to go down that path. They made the decision to average out income—take an annual income and convert it to a fortnightly rate—but they had no contact with the tax office at all before introducing that.

Mr Williams : 'No contact' would probably be unfair, but, as to having an explicit conversation about the change as you have articulated, the answer is: no, we did not have a purposeful conversation about that prior to the changes.

Senator PRATT: So you were not in a position to provide any advice about the kind of errors that they might expect in the use of that information?

Mr Williams : No.

Senator PRATT: Have you done any assessment yourself of the kind of errors that it would be expected to generate?

Mr Williams : Because we are not intimate with the processes that occur on the DHS side, the short answer to that is no. Having said that, we did reach out to DHS in December and have subsequently had a number of meetings with them, including a meeting in February to work through and try to address some of the issues that have been raised.

Senator WATT: What caused you to reach out to them in December?

Mr Williams : I suppose it was the volume of what was playing out. We do not think the word 'involvement', in relation to the ATO and the data matching, is technically correct. We would say that we are involved in the identity matching and the provision of data, but we are not actually involved in the data matching that occurs on the DHS side, and we are trying to maintain a level of integrity in the role of the ATO in this exercise.

Senator PRATT: Are you concerned about the discussion currently compromising the ATO's perceived integrity around these issues?

Mr Williams : The ATO is always conscious of its integrity in the marketplace.

Senator PRATT: So the answer is yes; you are concerned. Essentially, the ATO, based on the use of your data, has been complicit in the raising of false debts against people. The ATO has to raise debts against—

Senator WATT: I think that is the perception. Whether that is the—

Senator PRATT: The ATO frequently has to raise debts against people when they have tax debts. Clearly, you would take that very seriously making sure that that is based on the best information available. You would expect the Department of Human Services, in using your data, to meet the same kinds of standards, would you not?

Mr Ravanello : I do not think we were complicit. We are required to provide the data, which we have done. How DHS uses that data, matches it and converts annual to fortnightly, or whatever may or may not happen, is, really, I think better asked of DHS. I do not think we can comment on their processes.

CHAIR: So when you reached out to DHS in December, what were the issues that you were raising at that time?

Mr Williams : Some of the issues were around the communications and joining up the communications around that, because we were receiving inquiries. Obviously, we were reading the papers around some of the issues that were being raised. So we actually raised those issues—about if there was anything we could actually help with. At that particular time, and at a meeting in February, we were advised that, no, there was not any assistance required from the ATO. And the DHS, again, were basically using the same processes that they had used previously. The difference from their point of view was that they had, obviously, automated a number of those and increased the volumes.

Senator WATT: Once they finally started talking to you, did you offer any advice to them about whether it was a good or a bad idea to average out annual income in that way?

Mr Williams : No, we did not.

Senator WATT: But you had an opinion about that.

Mr Williams : Our job in this, I think, is to provide the data. We are not experts in their data. We are, obviously, not experts on issues that they are trying to do. Our view is that we are required, as Rob has said, to provide the datasets that we did. They are long-standing datasets that people know are annual data. How they then use them, that is the expertise that they bring to the table not the expertise that we bring to the table.

CHAIR: Can I just remind senators that we are not supposed to ask for matters of opinion.

Senator WATT: Sure. No, I asked whether they had an opinion; I did not ask what the opinion was.

CHAIR: Can I ask why it took so long? You raised the issue in December. You had the meeting in February. It seems to me a long period of time.

Mr Williams : We certainly had some dialogue before then. Under the MOU there is a senior governance process in place. The meeting in February, whilst it was not an official one of those, was kind of a quasi-version of that. We met with Malisa Golightly and some other key leaders within DHS, and other key leaders within the ATO. But, certainly, at an operational level between December and through January there were telephone conversations. There just was not kind of a formal meeting up until February.

Senator PRATT: Can I ask whether we can have a copy of the MOU between—well, I think we are entitled to request a copy of that MOU.

Mr Todd : Yes. There is a heads of agreement and then numerous MOUs. So we can certainly provide that.

CHAIR: Could you also provide the guidelines that your—

Mr Todd : The OAIC—information commissioner—guidelines?


Senator PRATT: And your data-matching guidelines, as well.

Mr Todd : Yes.

Senator WATT: You said that both in the meeting in December and, again, in February when you met with DHS you, essentially, asked if there was anything you could do to help, and you were told they had it in hand. This has been a bit of a consistent pattern over the morning.

Mr Williams : And they reaffirmed for us that the processes that were being used were identical in principle—I will not say in actual practice, but in principle—to what they had previously done historically. The difference was, as I said, they had, obviously, automated a lot of those processes and the volumes had increased. We got some assurances around a range of things that, no, that was not happening and that they were okay.

Senator PRATT: Surely, it is obvious that matching yearly data to fortnightly data is a problematic thing to do and that you have to have some onus on yourselves in terms of the data you provide being used in an appropriate manner.

Mr Ravanello : We are required to provide the data under the legislation of both agencies. I think the use of the data is probably, again, a question for DHS rather than us about how they are using it.

Senator PRATT: But you would have to recognise that you cannot simply match yearly data with fortnightly data.

Senator WATT: You cannot say that someone earns $50,000 a year and therefore they earn that divided by 26 to get their fortnightly rate. There are ups and downs.

Mr Ravanello : I think we accept the fact that, if someone does not have ongoing full-time consistent employment, you will get that outcome, yes.

Senator PRATT: And that therefore the peaks and troughs in someone's employment are not captured in the data that you provide.

Mr Ravanello : Correct. The data is the total for the whole year, yes.

Mr Williams : But that problem is not a new problem.

Senator DUNIAM: I was going to ask about that, if I may, just around the dataset that you provide—and you have done so for 20 years. The specific way in which the information is presented in those datasets and then communicated across to DHS, Centrelink or wherever it needs to go to, is that prescribed in the legislation? Do you have capacity to alter how you present datasets; and what information is contained in them specifically—what information is there? If you have to take that on notice, I understand.

Mr Ravanello : I do not think that level of detail is in the legislation.

Mr Todd : No, it is not in the legislation.

Senator DUNIAM: So what does the legislation call for—that you just provide it?

Mr Todd : That data within the ATO can be provided for certain purposes to certain departments.

Mr Williams : In broad terms and normally at an operational level, we would then negotiate the particular fields that they want as part of that dataset. We would then capture that and then transmit that to them.

Senator DUNIAM: Just on the point that was made before with regard to the peaks and troughs in someone's annual salary, do you have capacity to break that down—if someone has earned money for three months and then not for the next six and then they have worked another three months, do you have capacity, or you don't have capacity, to collate it in a way that would reflect that?

Mr Ravanello : The data around employment income is what we call payment summary data. It is provided annually by employers at the end of the financial year.

Senator DUNIAM: Okay—so that is what I am getting at.

Mr Ravanello : We only get a lump sum figure—

Senator DUNIAM: So that is all you have that you can in effect communicate with regard to—

Mr Ravanello : So it would be employer A and their details. I have employee B and the amount I paid them; the tax withheld. The amounts that you normally see on what is a payment summary is the information we get and it is annualised information.

Senator DUNIAM: So even if you had been requested to provide something in a more periodic fashion, it would have been impossible, given you will only have that annualised figure—right?

Mr Ravanello : Correct.

CHAIR: I understand completely what you were saying there, but the response from Centrelink was, 'We're just doing it identically in the same way,' but the key thing that changed here was the automated system. So, in the past, a human could have looked at it and said, 'Okay, well this data is for the whole year. This system has now averaged it and we'll get more detail from DHS shortly.' But, surely, the critical difference is that there would not be an assumption by a human that a payment for a year would necessarily be even payments throughout the year.

Mr Williams : I think, as I said earlier, I do not think the ATO is aware of where the human intervention occurred on the DHS side in terms of any of the data prep pre the issue of any notices. So I am not sure whether the scenarios that were articulated are what happened or whether the human intervention came at the back end of that once the notices were issued. I think that is a matter for DHS.

CHAIR: Fair enough. Senator Pratt? I might go to Senator Dodson, if that is okay, because he has not had a go yet and then I will go to Senator Kakoschke-Moore.

Senator DODSON: Were consultants used in the way in which the system was put together?

Mr Williams : I think the question was: 'Were consultants used in the way the system was put together?'

CHAIR: Is that correct, Senator Dodson?

Senator DODSON: That is correct.

Mr Williams : I cannot comment on that. Perhaps there is a statement here. The ATO's responsibility in this is in the provision of the data. We are not a partner with DHS in the way this system is run. Whether or not they use consultants, I could not comment on. Our responsibility in this starts and finishes on the identity matching, the extraction of the relevant data and then the provision of that to Centrelink. We have not co-designed the system with them. We have not built anything with them. So, from that point of view, I think it is a matter for them.

CHAIR: Senator Dodson?

Senator DODSON: No, thank you very much, Madam Chair.

Senator KAKOSCHKE-MOORE: Just going to the issue of debt recovery for a moment, I am trying to get a better picture of the way debt recovery works at various Commonwealth agencies so as to compare it with how things are going with Centrelink at the moment. We have heard that Centrelink can either pursue a debt themselves or engage independent private debt recovery agencies to pursue the debt for them. Does the ATO follow a similar model where you can either pursue the debt yourself or engage private collectors?

Mr Ravanello : Yes, we also use external collection agencies. Perhaps I should start back a step. Our focus is on people not getting into debt first. So a lot of our effort is actually tied into making people and the community aware of their debts and making sure that they understand their responsibility and can easily pay it. We recognise that sometimes they cannot. When debts become overdue, there are a range of what we call early interventions that we adopt in trying to get the taxpayer to engage with us and pay their debt. That could be an SMS.

CHAIR: From where?

Mr Ravanello : From the ATO. It could be some letters. It could be some outbound phone calls where we would seek to contact the taxpayer. And one of the other early intervention strategies that we have is referral to a collection agency.

Senator KAKOSCHKE-MOORE: That is an early intervention strategy—a referral to a collection agency?

Mr Ravanello : Yes, but it would not normally happen until after the ATO has, in your case, notified you and said: 'Look, you have an overdue debt. Can you please contact us to pay it.' It is typically not a first-up strategy, although, under some of our more analytic approaches for taxpayers who have repeat behaviour that is like that, we may refer them to a collection agency.

Senator PRATT: Sorry to interrupt. Before that level of intervention, you would have reviewed it to ensure that the debt was in fact correct?

Mr Ravanello : Every taxpayer is notified of the debt before it is due. So the first thing to remember is that a debt does not magically appear. Most of the liabilities that taxpayers have are either through self-assessment or through the ATO doing some kind of activity audit, amended return and those sorts of things. In all cases, the taxpayer would be notified of a payment that is required and the date that that payment is required.

Senator PRATT: I think DHS is doing similar but what they are not doing is checking that against even their own records that the debt is real and true, because they are basing the debt on your records, not their own.

Mr Williams : There is probably one other thing to note before it becomes a debt. We receive around 190 million pieces of transactional data. Part of what we try to do is then use that to prefill.

CHAIR: Sorry?

Mr Williams : We use the data to prefill people's tax returns so that ideally the information is already there for them so they cannot make a mistake. Of that 190 million pieces of data, at the end of the day, of all the people who lodge—of which there are, I think, 12 million, from memory—we issue about 250,000 notices where there is a mismatch in the data that people are lodging and what we subsequently get. A lot of that is driven just by the fact that people lodge earlier than the data actually comes into us to prefill. Our approach to that is to encourage people to lodge late or later in the cycle so that we have got all the information to make it easier for them. We do try to work upstream to make sure that we do not get a debt if we can help it.

Senator KAKOSCHKE-MOORE: You may need to take this on notice but I would also like to know what percentage of debts are owing to the ATO? Perhaps we can limit it to personal income tax to avoid company tax and that sort of thing. What percentage of personal income debts are referred to an external debt collecting agency in order for collection and what percentage remain with the ATO? I am just trying to get an idea about how the agencies work in their use of external agencies.

CHAIR: I presume you cannot answer that now?

Mr Ravanello : I can have a go at it at a high level.

CHAIR: That would be good.

Mr Ravanello : I would be happy to take the detail on notice. Last year, being the 2015-16 financial year, we referred 568,000 cases—that is not necessarily taxpayers, because a taxpayer might have multiple debts—to external collection agencies.

CHAIR: What is the period of time from when you first contact somebody who may have a debt to when you then refer it to a debt collector?

Mr Ravanello : The normal process would be that you would be advised of your debt and have a period, 21 to 28 days, to pay that debt. If the debt is not paid, usually after seven days—so on the eighth day—the ATO will kick in its early collection processes. The typical or normal pathway would then be that the taxpayer is sent a letter saying: you have a debt outstanding that was not paid, this is how you can pay, please contact us, and you need to realise that if you do not pay that this can escalate. That kicks in usually after eight days. When I say 'usually', sometimes we adjust the volumes based on our capacity to take inbound calls from taxpayers, so it does not religiously happen on the eighth day. After that notice there is typically a period—I am not exactly sure—probably three to four weeks, before we would take the next step in the early collection process. That could be again an outbound phone call, it could be another letter or it could be a referral to a collection agency.

Senator KAKOSCHKE-MOORE: Generally it would be a couple of months before an external agency is called in to pursue the debt?

Mr Ravanello : Typically, yes. It would not be usual that we would do it before then. I did mention earlier that through our analytics we are now targeting a little bit better so there are some people now for who, if they are regular nonpayers, we will bypass those early steps, which we know they ignore. There is a small set who may get the referral earlier than that. But for a new debt or for a normal taxpayer, they would get a letter with 21 or 28 days then probably either get a call or a referral to a collection agency, or possibly another letter in the mix as well.

Senator KAKOSCHKE-MOORE: How do you monitor the performance of these external agencies in the collection of the debt? We heard today there were concerns raised about threatening behaviour and providing misleading information like 'you might go to jail if you do not pay this'. How does the ATO monitor the performance of the debt collectors you use?

Mr Ravanello : I think the first thing to note is we do not remunerate our debt collection agencies based on what they collect. We pay a flat fee for a referral and they are required under that referral to make a number of attempts to engage the taxpayer and then either seek payment or enter into a payment arrangement. After a period—I think it is 90 days but, if that is important, I will check—we take the case back if there has not been activity.

The external collection agency staff are vetted similarly to ATO staff; they go through all the same security clearances. With regard to the QA processes: all their calls are logged and their cases are QA'ed the same as our staff cases are QA'ed, so they are treated exactly the same. We would not want external collection agencies to make threats of going to jail, and if that did happen we would get onto that agency fairly quickly and say, 'That's not the behaviour that we want under our agreement.'

CHAIR: Do you have guidelines available for the way the debt collectors operate?

Mr Ravanello : We would have agreements. I am happy to try and take that on notice and see what documents—probably not contracts, because there might be some complexity around contracts—we can get.

CHAIR: If you could, that would be great. This may be a difficult question, but what is the average size of the debt that you would refer to external debt collectors?

Mr Ravanello : I do not know if I can answer that, because I do not think I have got that figure. We usually refer debts above $300. I think that is the lowest figure that we would refer to a collection agency. I do not have an average size figure. You can imagine that in the tax system there are debts that are in the hundreds of millions. An average number is, while interesting—

CHAIR: Could you provide any breakdown on the type of debts that you would refer, or on the size of debts that you would refer? I am just trying to understand because I am going to be asking Centrelink the same question about the average size of the debts that are being referred.

Mr Ravanello : We should be able to. I do not have that information, but we should be able to—

CHAIR: Maybe the range?

Mr Ravanello : break down the range in terms of levels between this amount and that amount.

CHAIR: Thank you.

Senator WATT: Mr Williams, at the end of the questions that Senator Pratt and I were asking—just going back to this issue of annual versus 26 fortnightly payments—I think you made the point that this is not a new issue. Do you want to elaborate on that a little bit?

Mr Williams : With regard to the challenge of managing annual data back into a more regular payment system, given the 20-year history of that, I would assume that those sorts of complexities would have been something that would have been dealt with prior.

Senator WATT: Is that something—not about this particular case—that the tax office has ever worked on with DHS, or with any other department on previously?

Mr Williams : No.

Senator WATT: Because it really is a matter for that department?

Mr Williams : It is a matter for the other agency, as I said.

Senator WATT: Do you know that the DHS has had to consider this in the past?

Mr Williams : No.

Senator WATT: On a different note, you have probably also seen that the events surrounding this debacle have led to some concerns about the disclosure of protected information of individuals to the media. I am interested in what the tax office's practice is in that regard, because from time to time there are media reports where people beat up the tax office and say you have not done the right thing by them, or that you are pursuing them for things that you should not be. What is the tax office's practice about correcting that information?

Mr Todd : Obviously, the secrecy provisions mean that that information is confidential, and it is a criminal offence to breach the secrecy provisions. There is an exception that allows for information to be provided in the performance of duties, and in exceptional circumstances we have gone on the record in the media or in parliament to correct things that taxpayers have said, but only where we think what has been said would undermine public confidence in tax administration.

Senator WATT: Are there particular provisions within your legislation that allow you to do that?

Mr Todd : Yes, there is an exception for disclosures in the performance of duties.

Senator WATT: Right.

Mr Todd : So we would say for senior people like the commissioners that it is in the performance of their duties to maintain confidence in the tax administration.

Senator WATT: I think that is it for me.

CHAIR: Senator Duniam, do you have any more questions?

Senator DUNIAM: No, I have no more questions.

CHAIR: Senator Kakoschke-Moore?


CHAIR: I want to go back to the issue in December when you first contacted them. We were talking about the issues around why you contacted them, and I want to go back to the issue about the ATO's reputation. Was that one of the issues of concern you raised because of the conversation that this was a data-matching system between the DHS and the ATO?

Mr Williams : We wanted to be clear that our role in this system was as we have said, identity matching and the provision of data, rather than us being actively involved in the data matching ourselves. We think, perhaps, there was an imprecision in some of the dialogue occurring that was not helpful as far as that was concerned. We were being mentioned as being involved in that and the reality is that we are not.

CHAIR: This may be a tough question. You have said that you have been providing that information for 20 years. When you first started providing the information, it was not Human Services or even Centrelink then—quite frankly, I cannot remember what the name of the organisation was 20 years ago.

Mr Williams : DSS.


Mr Williams : Yes, I think so.

CHAIR: Yes, because I think we have come around again DSS. Maybe you need to take on notice whether there were conversations with whichever department and whatever it was called at the time about how that would operate, the guidelines you would use and how the data would be used.

Mr Williams : I am not sure we could find that to be honest given the length of history. We can certainly try, but I think the most contemporaneous versions of that would be contained in the MOU. I think if we provide the MOU, as requested, that will give you some of the guidelines. It will not get down to a level of granularity around exactly what pieces of data but it does talk about the governance and the management of the issues surrounding all of that.

Mr Todd : The governing legislation in the MOUs would usually be fairly similar going back.

CHAIR: Yes. Obviously, I am certainly concerned about the fact that there was no discussion with you prior to going to the automated system. I am interested to know whether there has previously been discussions about how the data matching process would work in the provision of the information that you provided.

Mr Williams : We can take that on notice and try to find something. I cannot give you any guarantees of what we will find if that is okay.

CHAIR: Yes, thank you, that would be much appreciated. We may have more questions once we see the MOU. One of my other questions relates to the DTO or the DTA as I understand it is now called. What involvement have you had with them recently around the ongoing development of digital technology and your systems? You mentioned briefly, as I understood it, that you had some discussions with them recently, is that correct?

Mr Ravanello : I do not think that I mentioned that.

CHAIR: I thought you mentioned that the DTO at the beginning of your comments. You spoke about guidelines from the—

Mr Williams : No, that is the Office of the Australian Information Commissioner.

CHAIR: Sorry? It was the office of?

Mr Todd : The Office of the Australian Information Commissioner.

CHAIR: Okay. There are too many acronyms.

Mr Ravanello : There may have been the acronym DMA which is the Data Matching Agency in the data matching act. I think that was at the start of the process where we talked about where we share information. Maybe the Hansard will tell us.

Mr Williams : I think the data matching protocols are on the public record as is the governance of the data use. That is publicly available. I do not think I mentioned the DTO.

CHAIR: Yes, I am sorry, it was my mishearing.

Mr Williams : As an agency we do engage with the DTA—I always get confused now. Obviously, we are all engaged in moving towards a more digital experience for people. Certainly, from an ATO point of view we are trying to make that as seamless and as painless for people as possible in terms of how to help people to get it right as opposed to how to fix it up after they have made a mistake. The DTA has a role to play in that in terms of some of the guidance that they provide in terms of the principles and design features that you should try and include in that, and we certainly engage with them. One of our people out of our technology area is currently seconded to them and is working in that space.

Mr Ravanello : If your question is: were they involved in this process, I am certainly not aware of that. My guess is that they probably were not. I think it is a level of detail; it is just one of many initiatives we have underway at the moment. We could take it on notice, but I do not think we would have engaged the DTA on this.

Mr Williams : But, as we have said, I think the actual construct of the process is a matter for DHS. The provision of the data, in a lot of ways, is a fairly simple task at our end—we are not providing a digital experience, we are not actually designing anything, there is no user interface that is built around all that—so it is not uncommon that we would not engage the DTA in that. As to whether or not the DTA were involved with Centrelink on the actual design of the system on their side, we could not comment on that.

CHAIR: Okay. Obviously, we will be asking them about that. Are there any other questions? As there are no more questions, I will thank you very much for your time today. We look forward to getting the information that you have taken on notice.

Proceedings suspended from 12 : 21 to 13 : 20