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.