New ATO powers may open access to 'intercepted' communications

The Tax Office could soon be able to access phone taps and stored communications following new advice handed down by a Parliamentary inquiry into financial crime.

The changes would see the Australian Taxation Office classified as a "criminal law-enforcement agency" under the Telecommunications (Interception and Access) Act 1979. With the change, the ATO would be granted new powers to access intercepted communications, such as phone taps, as well as stored communications content such as emails, texts and phone calls.

The powers are billed as a way to allow the ATO to pursue crimes such as major tax fraud and to protect public finances.

The recommendation comes just months after the Federal Parliament passed major changes to the TIA Act to introduce mandatory data retention to Australia. Along with requiring telcos to retain their customers' communications metadata for two years, the bill also detailed which Government agencies could access the content of communications, restricting this group to agencies such as State and Federal Police and the Crime Commission.

The Government said its bill introduced tighter safeguards for access to metadata, and assured Australians in the bill's explanatory memorandum (PDF) that access to stored communications "would be limited to agencies with a demonstrated investigative need."

However, less than 6 months after the laws were passed, there are signs that this remit could be expanded.

The Parliamentary Joint Committee on Law Enforcement inquiry into financial related crime now recommends that the ATO be reclassified as a "criminal law-enforcement agency" in the TIA Act. This change in definition would bring with it significantly expanded powers for the way the ATO gets its hands on the communications of Australians.

In its findings, the Committee pointed to a 2013 report that said the ATO was significantly limited in pursuing financial crime because it cannot use "intercepted information for its own investigations or tax assessments." The Committee said there was "a consistent level of support" for this to change.

"On balance the committee is persuaded that with appropriate safeguards, including adequate privacy and oversight arrangements, the ATO should be able to access intercepted telecommunications information for the purpose of protecting public finances from serious criminal activities such as major tax fraud," the report reads.

CNET understands that the ATO will not be able to conduct interceptions itself, but will have access to the communications intercepted by law enforcement agencies such as the police.

It's not the first time that access powers have been expanded, in what opponents have dubbed legislative "scope creep."

In May, new laws were introduced to officially establish the Australian Border Force as a government agency and, in doing so, adding the ABF to the list of enforcement agencies with access to metadata.

At the time, Greens Senator Scott Ludlam slammed the move.

"Senator Brandis made a great show of narrowing the range of agencies that would be able to access this collected material; and here we are in parliament, on the very next sitting week after that mandatory data retention bill passed, and the first example of scope creep lies on the table," he said in a speech to the Senate in May. "It gives me absolutely no pleasure to say 'we told you so', but we did."

The Australian Taxation Office did not give a public comment.