Our reference: D2018/014949

Deputy Commissioner
Smarter Data
Australian Taxation Office

By email: [Redacted]

Request for exemption from Guidelines on Data Matching in Australian Government Administration

Dear [Redacted]

I refer to correspondence dated 4 July 2018, which the OAIC first received via email on 10 October 2018, regarding the Australian Taxation Office’s Rental Bond 1985-86 to 2019-20 financial years data matching program protocol. I apologise for the regrettable delay in our response to this matter.

I understand that this program proposes to match data collected from state and territory rental bond authorities with information included in tax returns, ATO records, and other data held by the ATO. This is to identify individuals who own property producing income and who may not be meeting their registration, reporting, lodgement and/or payment obligations.

The ATO is seeking an exemption from the data destruction timeframes contained in Guideline 7 of the Guidelines on Data Matching in Australian Government Administration 2014 (the Guidelines). Specifically, the ATO is seeking to retain data for a period of five years from when all data files are verified for each financial year, on the basis that this is required for the protection of public revenue.

Consideration of issues under Guideline 10

Under Guideline 10, in seeking an exemption an agency must:

  • advise the Commissioner in writing of the details of the proposed data matching program
  • in that advice, specify how the proposed data matching program would be inconsistent with the guidelines
  • explain the public interest grounds that justify the inconsistency.

In my view, the ATO’s correspondence satisfies these requirements. This includes explaining the public interest grounds for the exemption in the program protocol, such as that:

  • there are income tax reporting obligations for taxpayers owning property producing income but also, when the property is subsequently sold it impacts CGT assessment
  • income tax return lodgement time periods can extend to 24 months after the end of the applicable financial year when part of tax agent lodgement programs
  • the data is used in multiple risk models, including models that establish retrospective profiles over a number of years. Destroying the data in accordance with the Guidelines will reduce the effectiveness of these models
  • destruction of the data would inhibit the ATO’s ability to identify taxpayers who may be subject to administrative action and therefore result in loss of public revenue.

I agree with the ATO’s statement that retaining data for a longer period does increase the risks to individuals’ privacy. However, the range of safeguards outlined in your correspondence appear to appropriately manage and minimise this increased risk. These safeguards include:

  • storing data on secure computer systems where access is strictly controlled, and full audit logs maintained
  • adherence to privacy and secrecy legislation that prohibits the improper access to, or disclosure of, protected information.

Exemption approval

I have considered the information provided by the ATO and agree that compliance with the data destruction requirements would significantly reduce the effectiveness of the ATO’s data matching program. I am satisfied that the public interest grounds outlined by the ATO justify departing from the guidelines. Complying with Guideline 7 would inhibit the ATO’s ability to protect public revenue through identifying tax compliance risks in relation to income producing real property.

I approve the ATO’s request to retain information collected during the data matching program for a period longer than 90 days. I have agreed to this exemption on the understanding that the information will not be retained beyond five years from when all data files are verified for each financial year, unless a further exemption is approved.

The exemption is only applicable to the data collected for the Rental Bond 1985-86 to 2019-20 financial years data matching program protocol.

Publication on the OAIC website

Under Guideline 10.6, it is the OAIC’s normal practice to make exemption requests publicly available. The ATO has advised it does not request that this advice be kept confidential and, as such, the OAIC will make it publicly available on the OAIC website.

Yours sincerely,

Angelene Falk
Australian Information Commissioner
Privacy Commissioner

28 February 2019

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