House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Social Security the Hon Graham Richardson)

OUTLINE AND FINANCIAL IMPACT STATEMENT

This Bill would give effect to data-matching measures announced in the 1990-91 Budget.

The Bill would detail the agencies involved in the approved data-matching. These agencies would be:

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the Department of Social Security;

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the Department of Veterans' Affairs;

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the Department of Community Services and Health;

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the Department of Employment, Education and Training; and

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the Australian Taxation Office.

The Bill would set out the purposes of the data-matching. These would be:

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to detect where two inconsistent payments are made to a person by the same or more than one agency; and

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to detect where inconsistent income data is held about one person by two or more agencies; and

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to detect possible tax evasion.

A person might receive two inconsistent payments, for example where he or she is paid both family allowance and AUSTUDY in respect of the same child. Under the relevant legislation one child cannot lawfully attract simultaneous payment of both of these benefits.

Where two or more agencies hold inconsistent income data on the one person this could indicate that the person is paid a benefit at an incorrect rate or that the person may be evading an income tax liability.

The Bill would define in detail the data to be transferred by the other agencies to the Department of Social Security for the data-matching program. The data would include tax file numbers, income data and family data.

The Bill would also detail the types of income support or other Commonwealth benefits, details relating to which are to be matched. Not all benefits provided by all agencies are covered by this Bill. For example, although all benefits paid by the Department of Social Security are included, for the Department of Community Services and Health only benefits paid under the first homeowners scheme are included.

The Bill would detail how data-matching is to be done. It would indicate that a matching agency within the Department of Social Security matches data supplied to it by all source agencies (including the Department of Social Security).

It would stress that data is to be transferred to and from the matching agency located in the Department of Social Security physically - not by means of on-line computer connection. This will reinforce that the data-matching program does not create a new data base consisting of personal data in the possession of the agencies.

The Bill would limit the number of data-matching cycles to 9 a year as a maximum.

The Bill would require the matching agency to complete a data-matching cycle within 24 hours of receiving the necessary data unless there is a computer malfunction or industrial action. Further it would require an agency wishing to take action on an inconsistency disclosed by the data-matching program to do so within 3 months. Any unused information from the matching agency would then have to be destroyed.

The Bill would require an agency proposing action against a person as a result of a data-matching cycle to give the person written notice that he or she has 21 days in which to show cause in writing why the action contemplated should not be taken. This would not be required if it would prejudice the conduct of an investigation or if the information from the data-matching cycle is insignificant in the decision to take action.

The Bill would impose an obligation of confidentiality on staff of all agencies dealing with information gained as a result of this data-matching exercise.

The Bill would give force to data-matching guidelines issued by the Privacy Commissioner. The agencies involved would be prohibited from doing acts contrary to the guidelines.

The guidelines contemplated in this Bill are not necessarily indicative of the form and content of the proposed general guidelines which would apply to all Commonwealth data-matching. However, when such general guidelines are enacted under the Privacy Act, to the extent that they are more protective of privacy, they might replace the guidelines for which this Bill would provide. This would ensure that there is consistency across all areas and that standards applicable in this area are not less protective of individual privacy than those which will be generally applicable.

Part 3 of the Bill would also provide for extensions to the Privacy Commissioner's general powers and his reporting powers in particular.

Estimated program savings for this measure are $65 million in 1990-91 and $290 million in 1991-92.

NOTES ON CLAUSES

DATA-MATCHING PROGRAM (ASSISSTANCE AND TAX) BILL 1990

PART 1 - PRELIMINARY

Clause 1: Short Title

This clause would provide that the Act may be cited as the Data-matching Program (Assistance and Tax) Act 1990.

Clause 2: Commencement

This clause would provide that the Act commences on the day of Royal Assent.

Clause 3: Interpretation

Clause 3 would define, subject to contrary intention, certain terms used throughout the Bill. The defined terms follow.

"Agency"

An "agency" would be the "matching agency" (defined below) or a "source agency" (defined below). The term appears in clauses 6, 8 and 14 of the Bill.

"Assistance agency"

This would be any of the:

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Department of Community Services and Health;

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Department of Employment, Education and Training;

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Department of Social Security; or

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Department of Veterans' Affairs.

"Assisted person"

This would be a person in respect of whom "personal assistance" (defined below) is, or has been, given, and includes a person who has claimed personal assistance.

"Basic data"

"Basic data" in relation to a person would cover the person's "family identity data" (defined below), "income data" (defined below) and "TFN data" (defined below). It would relate only to such data held in respect of the person's receipt of "personal assistance" (defined below) or the person's tax status.

"Child"

A "child" would be defined to include a child as defined or accepted for the purposes of any "personal assistance" (defined below) or any "tax law" (defined below). This could involve different definitions as understood across different agencies. This provision saves the agencies from having to administer their programs or having to provide data to the "matching agency" (defined below) according to the one single definition of child.

"Data-matching cycle"

This would be a cycle the steps of which are set out in clause 7.

"Data-matching program"

This would encompass the whole scheme of data-matching described in clause 6.

"Declared income"

This would be any income, or income of a particular kind, of a person for the purposes of any "personal assistance" (defined below) or "tax law" (defined below). Again different agencies would provide income details to the matching agency. It would not matter that agencies may not use a common definition of "income".

"Family identity data"

"Family identity data" is to be distinguished from "income data" and "TFN data" (both defined below). It would consist of a range of information about a person, his or her spouse, his or her parents and his or her children held by any "assistance agency" or the "tax agency" (both terms defined above). Not all items would be held by all agencies.

This is part of the data to be matched under clause 7 so as to help ascertain whether a person is receiving "personal assistance" (defined below) to which he or she may not be entitled or whether the person's "income data" (defined below) held by an "assistance agency" (defined above) or by the "tax agency" (defined below) is accurate.

"Income data"

"Income data" about a person would mean the person's "declared income" (defined above), the declared income of the person's "spouse" (defined below), the declared income of the person's parents ("parent" defined below), the person's "personal assistance" (defined below) and the person's "spouse rebate" (defined below). This data would be matched with "tax income data" (defined below) by the "matching agency" (defined below) under clause 7 to detect whether the income data held by a "source agency" (defined below) is correct. Not all persons whose records are held by a source agency would necessarily have given the agency all of these details. An agency would transmit to the matching agency only such income data as it has.

"Matching agency"

This would be the officers of the Department of Social Security who are referred to in clause 4. Clause 4 would require the Secretary to the Department of Social Security to ensure that there are officers within the Department of Social Security who would be responsible for matching of data under this Bill.

"Officer"

An "officer" in relation to a "source agency" (defined below) would be a person with duties, powers or functions in relation to an Act, matters under which are dealt with by that agency. This would extend as relevant to former employees of the agency, to consultants, contractors and voluntary workers. It is of primary relevance to the obligations of confidentiality for which clause 14 would provide.

"Parent"

This definition would allow each "source agency" (defined below) to adopt a definition of parent for the purposes of this Bill the same as that which applies in its own administration. The definitions may, therefore, differ in minor respects across agencies without there being a requirement to harmonise them.

"Person"

This definition would clarify that a "person" for the purposes of this Bill may be alive or dead.

"Personal assistance"

This would indicate and, for most assistance agencies, list the programs administered by an "assistance agency" (defined above) included in this initiative.

"Personal identity data"

This would be the data listed in the definition and would cover a person's surname, first name, second initial, current residential address, sex and date of birth.

An additional item of information provided by the Australian Electoral Office would be the date on which the person's name was registered on the Electoral Roll. As regards the Health Insurance Commission additional items of information would be:

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The date on which the person was last enrolled with the Commission;

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The date (if any) on which the person last ceased to be so enrolled; and

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Whether the person's Medicare Card has been lost, revoked or otherwise withdrawn from circulation.

"Source agency"

This would be all of:

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Department of Community Services and Health;

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Department of Employment, Education and Training;

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Department of Veterans' Affairs;

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the Australian Taxation Office; and

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Department of Social Security, but not the "matching agency" (defined above).

"Spouse"

This definition would permit each "source agency" (defined above) to continue to apply the definition of "spouse" used in its own administration when performing acts under this Bill. This would normally involve the inclusion of de facto spouses as spouses. "Marital status" would have a corresponding meaning.

"Spouse rebate"

This definition would incorporate by reference the definition of dependent spouse rebate in the "Tax Act" (defined below).

"Tax Act"

This would be the Income Tax Assessment Act 1936.

"Tax agency"

This would mean the Commissioner for Taxation.

"Tax data"

This term would apply to "tax family identity data", or "tax income data" or "tax TFN data" (definitions below).

"Tax family identity data"

This would be "family identity data" (defined above) held by the "tax agency" (defined above) for the purposes of a "tax law" (defined below).

"Tax file number"

This would have the same meaning as in Part VA of the "Tax Act" (defined above).

"Tax income data"

This would mean "income data" (defined above) of persons held by the "tax agency" (defined above) for the purposes of a "tax law" (defined below).

"Tax law"

This would mean any law of the Commonwealth relating to taxation.

"Tax TFN data"

This would be "TFN data" (defined below) held by the "tax agency" (defined above) for the purposes of a "tax law" (defined above).

"TFN data"

In relation to a person this would cover the "tax file number" (defined above) of the person, his or her spouse and his or her parent or parents. Not all source agencies would hold all of this data. A source agency would transfer only that TFN data held by it.

PART 2 - DATA-MATCHING

Clause 4: Matching agency

Clause 4 would require the Secretary to the Department of Social Security to ensure that there are officers of that Department who are responsible for the matching of data under this Bill. This would be the "matching agency".

Clause 5: Effect of other Acts

Clause 5(1) would provide for the application of any other Commonwealth law not inconsistent with this Bill.

Clause 5(2) concerns the interaction between this Bill and the Tax File Number Guidelines issued under the Privacy Act. The Tax File Number Guidelines would have to be revised if they are to permit the uses of the tax file number contemplated by the Bill. Revision of the Tax File Number Guidelines involves an unavoidable delay because of the requirements of section 17 of the Privacy Act which involve the guidelines being laid before each House of Parliament for 15 sitting days before they take effect.

Clause 5(2) would allow the data-matching program to proceed without there being an actionable breach of the current Tax File Number Guidelines.

The Privacy Commissioner has expressed an intention to issue new Tax File Number Guidelines which would accommodate those new uses of tax file numbers authorised by this Bill following its passage.

The intention would be to review the continued need for clause 5(2) once new guidelines are issued and take effect.

Clause 5(3) would give priority to this Bill so that actions taken by an officer under the Bill would be lawful even if in breach of a provision in another Act relating to recording or disclosing of information.

Clause 6: Matching of data

Clause 6(1) would provide the basic authority for data-matching in that it permits

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transfer between agencies of; and

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matching by the matching and tax agencies of; .and

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giving by the matching agency of

relevant data about persons discovered in the matching process. This would have to occur in accordance with the data-matching steps set out in clause 7 of the Bill.

Clause 6(2) would limit the number of data-matching cycles to no more than 9 in one year.

Clause 6(3) would require that one data-matching cycle must end before the next can commence.

Clause 7: Steps in data-matching cycle

Clause 7 would set out the steps in the data-matching cycle:

Step 1

The assistance agencies, Department of Community Services and Health, Department of Employment, Education and Training, Department of Social Security, and Department of Veterans' Affairs, would give the matching agency the basic data (ie a person's family identity data, income data and TFN data) about each recipient of personal assistance provided by them where relevant and requested by the matching agency.

The matching agency would check the validity of the TFN data provided under Step 1, paragraph 1, using an algorithm provided to it by the tax agency. Where the TFN data is invalid the matching agency would check that data against personal identity data provided to it by the Australian Electoral Office and Health Insurance Commission. This Australian Electoral Office data and Health Insurance Commission data would not include data about any person's health or pharmaceutical usage.

Should both checks indicate that the TFN data is invalid the matching agency would give particulars to the source agency where the TFN data originated.

Step 2

The matching agency would extract from the data given it under step 1 TFN data about persons receiving personal assistance.

This TFN data would be given to the tax agency along with any identification number for the purpose of personal assistance.

Step 3

The tax agency would use its own tax data plus data given to it by the matching agency under step 2 to assemble the following data about any holder of a tax file number:

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tax file number; and

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personal identity data; and

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taxable income within the meaning of the Tax Act; and

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any dependent spouse rebate within the meaning of the Tax Act.

The tax agency would give this data to the matching agency.

Step 4

The matching agency would carry out identity matching. It would match family identity data provided to it with data from the tax agency provided at the end of step 3. Where the identity matching indicates a discrepancy in family identity data or income data of a person, the matching agency matches that data with personal identity data provided by the Australian Electoral Office and Health Insurance Commission. Should the discrepancy not be resolved the matching agency gives any relevant source agency particulars of the discrepancy.

Step 5

The matching agency would carry out payment matching by matching family identity data given by assistance agencies in step 1. This would indicate if personal assistance is being, or has been, given, or is being claimed in respect of persons who might not be entitled to it or who do not exist.

Should it be necessary to identify a person for the purposes of payment matching the matching agency matches TFN data provided under step 1 with data provided for payment matching.

The matching agency would carry out income matching by matching income data given it by assistance agencies (other than the Department of Community Services and Health) with tax income data using any identification number for the purpose of personal assistance given to it in earlier steps. There would be no match involving tax income data at this stage if there is any doubt as to identity. The match would then be of income data of the assistance agencies only. This matching process would indicate where an agency holds incorrect income data about a person.

Step 6

The matching agency would give each source agency the relevant results of matching under the earlier steps. TFN data would not be returned by the matching agency to a source agency. These results would show one or more of possible incorrect provision of personal assistance or possible evasion of tax.

Clause 8: Data not to be sent on-line

Clause 8 would require that data not be transferred between agencies in a data-matching cycle by on-line computer connections. This is to prevent establishment of an actual or potential data bank consisting of all data held by all agencies. It would mean that transfers between the Department of Social Security and the matching agency located within it are not to be on-line.

Clause 9: Length of data-matching cycle

Clause 9 would allow only two months for completion of a data-matching cycle. Clause 9(2) would limit the time taken for step 5 in clause 7 (above) to no more than 24 hours. This could be extended if necessary because of computer malfunction or industrial action.

Clause 9(3) would allow the matching agency 7 days in which to transfer information from a data-matching cycle to the relevant source agencies.

Clause 10: Source agencies may use results of data program

Clause 10(1) would provide for the principle that a source agency might take action on the basis of information provided to it as a result of a data-match. The action could be:

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to cancel or suspend personal assistance; or

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to reject a claim for personal assistance; or

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to adjust the rate or amount of personal assistance to go to a person; or

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to recover an overpayment of personal assistance; or

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to issue an assessment, or amended assessment (in the case of the tax agency); or

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to investigate the possible commission of an offence.

Although clause 10(1)(a)(iii) speaks in terms of reduction of rate on the basis of information derived from a data-matching cycle, if such information indicated payment at too low a rate the assistance agency would be legally required to increase ongoing payments under the principles of administrative law. Arrears may also be payable depending on the laws relating to the particular type of personal assistance. Similar principles would apply where information derived from a data-matching cycle indicates that a person may be entitled to personal assistance different from the personal assistance currently provided to the person.

Clause 10(2) would require use of the particular information from a data-match within 90 days. If not used it would be destroyed. "Use" would involve the source agency deciding to carry out an investigation of the need for any of the actions listed in clause 10(1), or carrying out any of the actions itself.

A source agency would have to make a decision in respect of each individual recipient of personal assistance or in respect of each individual taxpayer. Action could not be taken "in bulk" in respect of a whole class of persons in furtherance of a general policy.

Clause 10(3)(a) would require any clause 10(1) action to be commenced within 12 months of the date on which the information is received from the matching agency.

Clause 10(3)(b) would allow a source agency to apply to its Head for an extension of the time in which action might be taken. This extension could be for no more than 12 months from the date of the request and it would be on such terms and conditions as the source agency Head thinks fit. This power of the agency Head would not be subject to delegation (clause 10(3)(c)).

Clause 10(4) would prevent a source agency from retaining information obtained in the course of action under clause 10(1) in a separate permanent register of individuals.

Clause 11: Notice of proposed action

Clause 11(1) would lay down the general requirement that where an assistance agency seeks to take action wholly or partly as the result of a data-match the source agency would have to allow an affected person 21 days in which to show cause why such action should not be taken.

Notice would be given in writing, clause 11(3) providing for the manner of its delivery, ie by post to the person's most recent address known to the agency.

As in clause 10, the action proposed could be

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cancellation, suspension or rejection of personal assistance or a claim for personal assistance; or

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a reduction in rate of amount of personal assistance; or

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recovery of an overpayment of personal assistance.

In the case of the tax agency clause 11(2) would impose an identical requirement where in similar circumstances the tax agency considers taking action to issue an assessment or amended assessment.

A clause 11 notice would not be required where its delivery could prejudice the effectiveness of an investigation into the possible commission of an offence (clause 11(4) and (5)).

Clauses 11(4) and (5) would operate only after a source agency has decided that a matching result warrants further investigation involving the possible commission of an offence. A source agency would not have resort to the exemption for which clauses 11(4) and (5) provide in anything like a majority of cases. Past experience has in fact indicated the relative infrequency of demonstrable criminal activity related to the provision of personal assistance. In this context the requirement that the effectiveness of an investigation could be prejudiced as a precondition for waiver of the notification provision is intended to act as a limiting factor in its operation.

Clause 11(6) would permit an assistance agency to recover an overpayment of personal assistance where personal assistance is given to a person during the person's 21 days show cause period and it later eventuates that the person does not show cause why action should not be taken.

Clause 12: Guidelines to protect privacy

Clause 12(1) would require the matching and source agencies to comply with the interim data-matching guidelines set out in the Schedule. These have been drafted by the Privacy Commissioner. This would be the situation until new guidelines are issued in 1991.

Clauses 12(2)-(5) would provide for the process whereby the final guidelines would be issued and enter into force. The final guidelines should issue before 30 September 1991.

Clause 13: Investigations of breaches of privacy

Clause 13(2) would empower the Privacy Commissioner (the Commissioner) to investigate any act or practice which may breach the Data-matching Program (Assistance and Tax) Act 1990 or the guidelines for which clause 12 provides.

Clause 13(3) would require the Commissioner to seek to make arrangements with an agency where the Commissioner finds that the agency is in breach of this Bill or the clause 12 guidelines.

Clause 13(4) would set out the steps to be taken by the Commissioner where no satisfactory arrangement can be reached under clause 13(3) or where the Commissioner considers a report appropriate. The Commissioner:

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must report to the Minister;

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must set out the findings and reasons for findings;

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may make recommendations to prevent a recurrence;

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may recommend payment of compensation or another remedy;

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must serve a copy of the report on the matching agency, any relevant source agency and the Minister responsible for any relevant source agency; and

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may serve a copy of the report on any person affected by the breach.

Clause 13(5) would provide for a second report to the Minister after 60 days if the Privacy Commissioner is not satisfied with action taken in consequence of the first report. The content of the second report is described in clause 13(5)(a)-(c). Any second report would be laid before each House of Parliament within 15 sitting days of its receipt by the Minister (clause 13(6)).

Clause 13(7) would equip the Commissioner with all the powers of investigation available in the Privacy Act 1988.

Clause 13(8) would ensure an individual of all his or her rights of action under the Privacy Act should there be an interference with his or her privacy in a data-matching exercise. "An interference with privacy" in this context would mean an act or practice:

(a)

by an agency which breaches an Information Privacy Principle; or

(b)

by a tax file number recipient which breaches a Tax File Number Guideline; or

(c)

which involves an unauthorised requirement or request for disclosure of a tax file number

as defined fully in section 13 of the Privacy Act 1988.

Clause 14: Interferences with privacy

Clause 14(1) would provide that a breach of Part 2 of the Bill or a breach of the guidelines in the Schedule constitutes an act or practice involving interference with the privacy of an individual for the purposes of section 13 of the Privacy Act 1988.

Clauses 14(2) and (3) would import into this Bill the remedies and dispute resolution procedures of the Privacy Act.

Clause 15: Confidentiality

Clause 15(1) would prohibit an officer of an agency from making a record of, or disclosing, information he or she has only because of his or her performance of functions or duties under this Bill.

The exceptions would be where recording or disclosure is required in the course of carrying out functions and duties under the Bill, or where a person to whom the information relates consents to recording or disclosure. This would, for example, restrain staff in the matching agency in the Department of Social Security from using data which has come to them in their matching agency role from using that data as ordinary staff of the Department of Social Security unless the data is transferred to the Department of Social Security under step 6 of clause 7. It would also restrain a source agency from using or disclosing information from a data-matching cycle prior to making a decision on action in accordance with clause 10(1) of the Bill.

A breach of clause 15(1) would involve a penalty of imprisonment for 2 years or fine of $12,000 or both.

Clause 15(2) would provide that any secrecy provision in an Act administered by a source agency applies to an officer who has information from the matching process which indicates a possible incorrect identity, provision of possibly incorrect personal assistance, the recording of incorrect income data, or possible evasion of tax. These source agency-based secrecy provisions could apply only after a source agency has made a decision on action in accordance with clause 10(1). The intention of clause 15(2) is to acknowledge that there is a point at which a decision is made that certain matching results are to pass into the normal operating environment of a source agency, and that they should then be subject to the normal use and disclosure restrictions of the agency's own legislation, together with the Information Privacy Principles of the Privacy Act and the additional requirement of notice under clause 11 of the Bill.

Clause 15(3) would stress that an agency's secrecy provision of the type referred to in clause 15(2) cannot deprive a person of a notice he or she would otherwise receive under clause 11.

In the Privacy Act 1988, Information Privacy Principle 11 of Section 14, in paragraph l(e), permits disclosure of information which would otherwise be contrary to the principles. This is to enforce the criminal law or for the protection of the public revenue. Clause 15 would leave no room for disclosure in such situations unless an agency's secrecy provision explicitly permits it and the source agency has decided to take action in accordance with clause 10(1) of the Bill.

Clause 15(4) would clarify that the Commissioner of Taxation is an officer of the tax agency.

Clause 16: Cessation of operation of Parts 1 and 2

Clause 16 would provide for the cessation of Parts 1 and 2, unless they are repealed earlier, at the expiration of 2 years after the date of commencement of this Bill.

This would allow for a stocktake of the success or otherwise of the operation of this legislation.

PART 3 - AMENDMENTS OF THE PRIVACY ACT 1988

Clause 17: Principal Act

Clause 17 would provide that in this Part "Principal Act" means the Privacy Act 1988.

Clause 18: Interferences with privacy

Clause 18 would amend section 13 of the Principal Act. Section 13 details the acts or practices which may constitute an interference with the privacy of an individual.

To the existing list clause 18 would add new paragraph 13(ba) to cover a breach of Part 2 of this Bill or the guidelines for which clause 12 of this Bill would provide.

This provision would be complementary to clause 14 of the Bill.

Clause 19: Functions of Commissioner in relation to interferences with privacy

Section 27 of the Principal Act lists the Privacy Commissioner's functions in relation to interferences with privacy.

Paragraph 27(1)(b) at present permits the Privacy Commissioner, on request by a Minister, to examine a proposed enactment that would require or authorise acts or practices of an agency that might, but for the enactment, be interferences with the privacy of individuals.

Clause l9(a) would replace paragraph 27(1)(b) of the Principal Act with new paragraph 27(1)(b) which would extend the Privacy Commissioner's powers as follows:

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He or she could examine a proposed enactment with or without a Ministerial request; and

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It would permit an examination in the circumstances of the present paragraph 27(1)(b) and also where the proposed enactment might have any adverse effects on the privacy of individuals with a view to minimising these adverse effects.

Paragraph 27(1)(k) of the Principal Act permits the Privacy Commissioner, on request by a Minister or agency, to examine a proposal for data-matching or data-linkage that might involve an interference with the privacy of individuals.

Clause 19(b) would repeal paragraph 27(1)(k) and substitute a new paragraph. This would extend the Privacy Commissioner's powers as follows:

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He or she could examine a proposal with or without a Ministerial or agency request; and

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It would permit an examination in the circumstances of the present paragraph and where the proposal might otherwise have any adverse effects on the privacy of individuals.

Paragraph 27(1)(e) permits the Privacy Commissioner to prepare and publish guidelines for the avoidance of agency acts or practices that could involve interferences with the privacy of individuals.

Clause l9(c) would expand paragraph 27(1)(e) by permitting the publication of guidelines in an additional situation. This would be where agency acts or practices may otherwise have any adverse effects on the privacy of individuals.

Clause l9(d) would provide for additional functions in new paragraphs 27(1)(p)-(r).

New paragraph 27(1)(p) would permit the Privacy Commissioner to issue guidelines under this Bill. This would complement clause 12 of the Bill.

New paragraph 27(1)(q) would permit the Privacy Commissioner to monitor and report on the adequacy of equipment and user safeguards.

New paragraph 27(1)(r) would permit or, where requested by the Minister, compel the Privacy Commissioner to make a report and recommendations to the Minister on any matter concerning the need for, or desirability of legislative or administrative action in the interests of the privacy of individuals.

Clause 20: Report following examination of proposed enactment

Section 31 of the Principal Act provides for the Commissioner's report to the Minister when he examines a proposed enactment and considers that it would require or authorise agency acts or practices that would be interferences with the privacy of individuals.

At present a report is only to the Minister.

Clause 20 would provide for

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A possible second report by the Privacy Commissioner if he or she thinks it in the public interest; and

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Tabling of any second report in each House as soon as practicable and no later than 15 sitting days after the Minister receives the report.

Clause 21: Report following monitoring of certain activities

Section 32 of the Principal Act permits the Privacy Commissioner to report to the Minister after any of a list of monitoring activities.

Clause 21(a) would amend section 32 by adding paragraphs 27(1)(h) and (r) to the list of functions on which the Privacy Commissioner might report.

Paragraph 27(1)(h) permits the Privacy Commissioner to conduct audits of records of personal information maintained by agencies to check whether records are maintained according to the Information Privacy Principles.

Paragraph 27(1)(r) would be added by clause l9(d) of this Bill, discussed earlier.

Clause 21(2) clause 21(3) would provide for changes in the reporting procedures of the Privacy Commissioner identical to those in clause 20 of this Bill, discussed earlier.

SCHEDULE

DATA-MATCHING GUIDELINES

Introduction

Clause 12 requires the matching and source agencies to comply in the immediate term with the guidelines set out in the Schedule.

The object of the guidelines is to ensure that the use of the privacy-intrusive technique of data-matching is based on clear and publicly known standards, and that individuals are protected by appropriate safeguards in the design and implementation of the data-matching program.

To that end, the guidelines require the preparation of a written protocol setting out such matters as the agencies involved; legal authority for data transfers; objectives; procedures; technical controls and safeguards for individuals, as well as a cost/benefit justification. This information is filed with the Privacy Commissioner and is publicly available except where its disclosure would be contrary to public interest by, for example, prejudicing the integrity of legitimate investigative methods. Agencies would have to comply with the protocol and take steps to bring its existence to the attention of clients.

The guidelines provide for monitoring of technical standards for data-matching programs by the Privacy Commissioner and for safeguards for individuals affected by the outcomes of data-matching. The Privacy Commissioner will include in the annual report an assessment of the data-matching program's compliance with the Bill's provisions, the scheduled guidelines and the Privacy Act 1988.

Guideline 1 deals with the scope of operation of the guidelines. They would apply only to data-matching carried out under the Data-matching Program (Assistance and Tax) Act 1990 (the Act).

Definitions

Guideline 2 provides that definitions contained in the Act apply. Where a term is not defined in the Act but is defined in the Privacy Act that definition applies. Finally certain terms not defined in either of these Acts are the subject of definition for the purposes of these guidelines. These are "program", "discrepancy" and "action".

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"Program" would refer to the data-matching program as defined in the Act.

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"Discrepancy" would mean a result of a program warranting further administrative action.

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"Action" would mean the range of administrative actions which may be taken as a result of the data-matching.

Guideline 3 requires the "matching agency" (see section 4 of the Act) to prepare a program protocol on or before 31 March 1991. This would be prepared in consultation with the source agencies.

The protocol will refer to the matters set out in paragraph 3 and would ordinarily be filed with the Privacy Commisioner and be available for public inspection. The program protocol will provide one of the two benchmarks for the Privacy Commissioner in assessing whether the program is being conducted properly. The other benchmark will be the the technical standards report.

Technical standards in relation to data quality, integrity and security

Guideline 4 requires the matching agency to establish detailed technical standards to govern the conduct of the program. A list of matters to be dealt with in the standards is set out.

Guideline 4.2 requires preparation of a draft technical standards report on or before 31 March 1991. A final report shall be available on or before 30 June 1991 following further discussion between the matching and source agencies in the light of initial experience with the program. The Privacy Commissioner will have the power to vary the contents of the report.

The technical standards report will also be used as a basis for assessing compliance by the Privacy Commissioner.

Agencies will have to comply with the report.

Safeguards for individuals affected by the results of programs

Guidelines 5-7 lay down a series of requirements designed to minimise the possibility of unfairness to individuals in the use of the results of data-matching programs.

(1)

Fairness

Guideline 5 sets out requirements for ensuring the accuracy of results likely to affect individuals following data-matching.

(2)

Record controls : no discrepancy

Guideline 6.1 provides for destruction of data which at the end of the program has not indicated any discrepancy.

(3)

Discrepancy

Guideline 6.2 details what happens to information which indicates a possible dispreading. It would set time limits for follow-up action and for destruction in the event of a decision to take no action. Guideline 6.3 would provide time limits for completion of action taken on a discrepancy.

(4)

No new data bank

Guideline 7 prohibits the collection together of information to create a new, separate, permanent register of information about individuals whose information is subject to the program.

Guideline 7.2 allows the creation of a new, non-permanent register by a source agency following a decision to undertake further inquiries.

Reports and monitoring by the Privacy Commissioner

Guideline 8 gives the Privacy Commissioner responsibility for monitoring compliance with the guidelines and giving advice to the relevant agencies concerning their responsibilities.

Guideline 9 requires agencies to report periodically or on request to the Privacy Commissioner on a number of matters involving conduct of data-matching programs. These would include:

•

actual costs and benefits of the program;

•

relevant non-financial factors;

•

operational difficulties and how overcome; and

•

extent of internal audit and similar techniques.

Guideline 10 requires the Privacy Commissioner to address in the annual report the extent of the program's compliance with the Act, the guidelines and the Privacy Act. The Privacy Commissioner could exercise powers of audit and investigation permitted under the Privacy Act. Under guideline 10.1 agencies would report data-matching activities in their annual entry in the Personal Information Digest.

Guideline 11 emphasises that agencies involved in the matching program are also subject to the provisions of the Privacy Act, including the Information Privacy Principles (IPPs), except where the Act makes more specific provision. Agencies, for example, remain subject to the IPPs 1-3 dealing with the collection of personal information and to the IPPs 7-9 dealing with data quality. But IPPs 10 and 11 do not apply since the Act deals specifically with the extent of use and disclosure of information within the matching program.

Guideline 12 requires the matching and each source agency to table a comprehensive report covering five main areas in each House of Parliament 6 months after the commencement of the first data-matching cycle.

This can lead to monetary compensation if the complaint is sustained.

Clause 13(4)(d)(i) also permits the Commissioner to recommend payment of financial compensation under this Bill.

In respect of action taken to interfere with a person's personal assistance or to issue an (amended) assessment as a result of a data-matching cycle the person has access to all normal appeal mechanisms available to clients of a source agency.

Clause 14 automatically makes a breach of the Bill's data-matching provisions or of the guidelines an interference with the privacy of an individual for the purposes of section 13 of the Privacy Act 1988. This individual will have access to comprehensive remedies under the Privacy Act.