Accounting Bodies Criticize Treasury Proposal for Loose Information-Sharing Rules

Three accounting bodies, CPA Australia, the Institute of Public Accountants, and Chartered Accountants Australia and New Zealand, have raised concerns about a Treasury proposal that they believe could harm innocent individuals’ reputations. The proposal involves broadening secrecy exemptions to allow agencies to share information with other authorities based on “reasonable suspicions.”

In a submission to Treasury, the accounting bodies expressed worries about the loose threshold proposed by the government. Belinda Zohrab-McConnell, a leader in CPA Australia, stated that the threshold for sharing information with other agencies is too low and could potentially damage the reputations of individuals who have done nothing wrong.

The concerns stem from the potential sharing of information held by the Australian Taxation Office and the Tax Practitioners Board with other agencies. The accounting bodies argue that smaller agencies may not have the same level of data security and confidentiality standards as the ATO, leading to a higher risk of data leaks and unfair reputational damage.

The push for increased information-sharing between agencies comes after a public announcement over two years ago regarding a confidentiality breach by PwC Australia and its former partner, Peter Collins. As a result, the Department of Finance has barred PwC Australia from government contracting until at least the middle of this year, pending an assessment of the firm’s ethical soundness.

The debate over the Treasury proposal highlights the delicate balance between protecting the integrity of regulatory frameworks and safeguarding the reputations of individuals. As the government aims to overhaul regulations impacting tax agents, the concerns raised by the accounting bodies underscore the importance of striking the right balance to prevent potential harm to innocent individuals.