Anthony Albanese’s demand for JobKeeper information an assault on thousands of family firms

Leader of the Opposition Anthony Albanese and his colleagues claim that the information sought relates to public funding received by an employer, not an employer’s business or taxation information. Picture: NCA Newswire/Gary Ramage

ALP leader Anthony Albanese is demanding via his Senate representatives that the actions of some 10,000 family-owned businesses, which took up their JobKeeper entitlement in accordance with the rules set by parliament, be disclosed.

The matter is so serious that the Commissioner of Taxation is indirectly warning the Opposition Leader that his Senate colleagues are breaching the confidentiality of information supplied to the tax office and therefore threatening the nation’s revenue base. The warning, without precedent in the 121-year history of parliament, comes in a letter directed to the President of the Senate.

While the Albanese action mirrors the 2018 franking credits blunder, it is clearly much more serious. Under the ALP franking credits proposals, most wealthy people were not impacted. Similarly, under the tax privacy breach, large listed companies will not be impacted because the law already requires government payments to be disclosed.

Rather, the ALP’s Senate demand represents a carefully ­planned assault on about 10,000 larger family-owned enterprises. The demands for the release of ATO confidential material is not just confined to JobKeeper payments but includes the number of employees in each enterprise.

The combination of JobKeeper payments and employee numbers will enable unions to discover the most likely family enterprises to attack – information they have never had before. And for cybercriminals it is a hit list.

The ALP wants to know how much of the JobKeeper entitlement has been returned.

Suddenly the local pub, newsagent/post office, car dealer/repairer, real estate agent, larger plumbers and electricians plus countless other enterprises with turnover over $10m are being smeared by the implication that they received money improperly. It will be horrible for local communities.

Moreover, large areas of the small and medium-sized business sector are organised networks and they don’t always have large numbers of employees. Treasurer Josh Frydenberg realised the networks needed to be preserved.

By demanding both JobKeeper and employment data the ALP is establishing a launching pad to attack the network structures of SMEs that unions dislike. Many ALP federal politicians understand the importance of the family business sector to the economy and have worked hard and successfully to establish credibility in this area. They will be shattered by the Albanese/Senate attack.

The action actually started on August 4 when the Senate required that the Commissioner of Taxation release the JobKeeper receipts and employment data.

Commissioner Chris Jordan, in writing to the President of the Senate, recognised the Senate’s right to demand such information. The Senate has not done this previously because both major parties recognised that once the Senate sets such a precedent by exercising its powers no tax information is confidential.

The next step might be asking that those who take up the depreciation or research entitlements be revealed. Fringe benefits recipients and those benefiting from negative gearing are clear future targets once this precedent has been established.

It might even be possible for the Senate to discover those who took early superannuation payments. Once taxpayers believe there is no security in the information they provide to the ATO, confidence will be destroyed or at least endangered.

Albanese and his colleagues claim that the information sought relates to public funding received by an employer, not an employer’s business or taxation information. That sort of gobbledygook is similar to the way the franking credits “retirement tax” was presented in 2018.

As readers will know, I have been very critical of the administration of the Tax Act but there is no doubt that former KPMG partner and current Commissioner Chris Jordan knows the Act.

Jordan has had the courage to tell the Senate that the information required is taxpayer information and its release is contrary to the policy of confidentiality. In a chilling warning to the Senate, Jordan says: “Taxpayer protected information held by the commissioner includes highly confidential and sensitive personal and commercial information that is obtained by the commissioner solely for the purposes of taxation administration, either voluntarily from taxpayers or required by law.

“Taxpayers must have confidence that such information will only be used for taxation administration by the commissioner and will otherwise remain confidential.

“This applies across the range of taxpayers, including individuals, companies, trusts and partnerships and Australian residents and non-residents (in respect of whom sovereign risk concerns may arise), and in the case of business taxpayers, regardless of whether they are classified as small, medium or large.

“Taxation confidentiality ensures effective administration of the taxation system by encouraging taxpayers to disclose information voluntarily in a system that is dependent on self-assessment for efficient operation.

“In the absence of taxpayer confidentiality, the effective administration of the taxation system would be undermined by taxpayer reluctance to disclose information voluntarily.

“Where taxpayers are required to produce information, taxpayers expect information remain confidential and only be used for taxation administration purposes.”

In a desperate attempt to preserve the system, and in the hope that Albanese would realise the danger he is creating, Frydenberg triggered a neutralising motion in the Senate.

He was buying time.

The commissioner in a separate letter told the Senate that he would delay providing the confidential JobKeeper data until the Senate voted on that motion. But he recognises the authority of the Senate to demand such information.

Just as Bill Shorten was warned of the unfairness of his franking credit plan but chose not to change it, Albanese faces a remarkably similar decision.

Footnotes: When New Zealand announced its JobKeeper program, it said the amounts paid would be released. No such announcement was made in Australia.

Crossbencher Rex Patrick has been the front runner in the Senate demand. Patrick has done some good work in the Senate but, in my view, on this occasion he has made a mistake and fallen into an ALP /union trap.

I am on the board of a number if non-profit organisations that took up their JobKeeper entitlement and were very grateful.