Treasury to crackdown on breaches of sensitive government information

Treasury secretary Steven Kennedy is preparing a crackdown on the big four accounting firms and other major businesses, making companies more liable for breaches of sensitive information.

Treasury Secretary Dr Steven Kennedy. Picture: NCA NewsWire/Gary Ramage

Treasury secretary Steven Kennedy is preparing a crackdown on the big four accounting firms and other major businesses, including making companies more liable for breaches of sensitive information accessed in confidential government briefings.

Dr Kennedy, Australian Taxation Office commissioner Chris Jordan and Board of Taxation chair Rosheen Garnon have told Jim Chalmers they are putting in place a suite of measures to stop tax agents and others using sensitive information for commercial benefit.

The sweeping overhaul was triggered after the Tax Practitioners Board in January terminated the registration of former PwC tax agent Peter-John Collins after he shared confidential tax policy information with colleagues obtained via Treasury consultations.

In response to the TPB decision, the Treasurer ordered a review into strengthening safe­guards and in February introduced legislation into parliament to fast-track stronger penalties and protections.

Writing to Dr Chalmers in February, Dr Kennedy said Treasury’s focus wasn’t isolated to taxation but “whole-of-department” matters linked with consultation across a range of policy issues.

Dr Kennedy said Treasury was considering using “deeds of confidentiality with organisations (as opposed to individuals) more frequently” to ensure private sector firms had systems in place that prevented “rogue actors from misusing information”.

Other enforcement measures being considered include using “personalised identifying watermarks on confidential documents” and putting rules in place ensuring firms “fully understand the seriousness and potential con­sequences of not complying with confidential consultation processes”.

Treasury is also working with the ATO on enforcement measures, in addition to TPB sanctions, which would penalise tax advisory firms that failed to “put in place ­appropriate government arrangements to curb misconduct”.

“This could include the addition of new conditions to the Statement of Tax record, which entities must hold to tender for commonwealth government procurements valued at over $4m,” Dr Kennedy wrote.

In his letter to Dr Chalmers, Mr Jordan said the ATO was putting in place a new central register of confidential consultations, setting clearer expectations around conflict of interest declarations and increasing engagement with the big four consulting firms.

“The ATO has reviewed its processes relating to conflicts of interest and confidentiality with respect to the ‘big four’ and we have identified some opportunities to make them stronger,” Mr Jordan wrote. “We will continue to engage with the big four to understand their conflict management protocols, noting that PwC has already made improvements to their processes because of action by the Tax Practitioners Board.”

Australian Taxation Office commissioner Chris Jordan. Picture: AAP Image/Lukas Coch

Board of Taxation chair Rosheen Garnon. Picture: David Moit/The Australian

Ms Garnon said in addition to existing safeguards, the Board of Taxation was in the process of implementing stronger measures to manage conflicts of interests and protect the confidentiality of sensitive information shared with stakeholders.

“(The board is) developing and maintaining a central conflict of interest register covering board members, secretariat members and working group members,” Ms Garnon told Dr Chalmers.

At the beginning of every future consultation meeting, the board will remind “private sector working group members of their obligations to declare any conflicts of interest and protect the con­fidentiality of information and recording that this has taken place in the minutes of the meeting”.

Dr Chalmers in February said the government’s reforms would strengthen defences against confidentiality breaches, which “completely undermine our efforts to bring people together to tackle the big ­issues facing Australians”.

Assistant Treasurer Stephen Jones said “we want to consult with the tax profession about improving the system (but) we can’t do it if they use that information for commercial benefit”.

“We’ve put the industry on ­notice; there can’t be a repeat of the Peter Collins scandal,” Mr Jones said.