Money Australia – July 2017

A

s Orwellian as it may appear, the Aus-

tralian Tax Office has the means to

detect when you appear to be living

well beyond your means. Those found

to have undisclosed income could end

up being fined and, in worst-case scenarios, jailed.

The ability of the ATO and other government agen-

cies, together with private companies, to “overlay and

analyse” data from any number of sources is far from

new. After all, this is what the financial intelligence

agency AUSTRAC was set up to do in 1989.

Since then, however, AUSTRAC’s ability to electron-

ically track and match various sources of public data

(ATO, Centrelink, child support, Medicare, and the

Department of Immigration) with private data – such

as motor registries, private credit agencies, banks, your

employer and even online marketplaces – has become

highly sophisticated.

Like it or not, the ATO no longer regards anything,

beyond legal and/or accountant privilege, as private.

Sophisticated electronic data-matching, together with

a heightened approach to collecting tax, especially with

Sophisticated

data

matching

allows the

tax office

to identify

people who

fail to

disclose all

their income

No place to

STORY

MARK STORY

MY MONEYDATA-MATCHING

federal budgets deep in deficit, are a wake-up call to

those who are tempted to fly under the radar.

The ATO has said that “compliance activities” such

as data-matching have already helped it to collect more

than $9 billion from Australian taxpayers.

High-risk targets

However, despite the growing sophistication of data-match-

ing, mistakes can be made – and they tend to be whoppers.

For example, Centrelink attracted a lot of negative

attention to data-matching for taking an aggressive and

robotic approach to a recent debt recovery program.

Flaws in the methodology it used to data-match over

230,000 welfare recipients’ ATO data with their self-re-

ported income have wrongly identified thousands

(around 20%) of people as owing money to Centrelink.

Lacking any human checks, Centrelink incorrectly

calculated a recipient’s income by basing it on their

annual salary rather than taking a cumulative 26-week

snapshot of what they were paid.

Despite the bad wrap Centrelink incurred over its

heavy-handed approach, Mark Chapman, tax commu-