OPINION: Last article I discussed the changes made to the rules on gifting for eligibility to the residential care subsidy.
This article looks at an information sharing arrangement put in place between Inland Revenue and the Department of Internal Affairs (DIA) that could also do with a little more public transparency.
The arrangement, which applied from Thursday, is given legal effect by the Privacy (Information Sharing Agreement between Inland Revenue and Internal Affairs) Order 2013. This is essentially a regulation made under the Privacy Act, and as a regulation it receives much less public scrutiny than a Bill that goes through Parliament. Indeed, once the Government department concerned has ministerial and Cabinet sign off, the regulation then only needs the Governor General's signature to become law.
This information sharing arrangement permits the supply of adult passport information to Inland Revenue for the purpose of locating overseas-based student loan borrowers who are in default of their repayment obligations, and child support liable parents living overseas who are behind in their child support payments or for which they have not kept to their contact obligations.
The personal information that can be provided to Inland Revenue under the agreement is a person's first names, surname, date of birth, passport number, personal, work and mobile telephone numbers, home address, passport delivery address, and email address.
Quite a comprehensive array of contact information, and as we are now required to update our New Zealand passports every five years, it is likely to be more up to date than was previously the case.
The order giving effect to the agreement sets out what Inland Revenue can do with the information. It permits Inland Revenue to use the information to identify people who are student loan or child support defaulters and to match the information supplied with its own records.
The order then details the actions that Inland Revenue can be expected to take as a consequence of receiving this passport information.
Those consequences will come as no surprise to readers. They permit Inland Revenue to use the information to recover overdue student loan and child support debts, whether in full or by instalment arrangement, and includes legal action to recover the debts.
Information sharing arrangements with Inland Revenue are becoming increasing popular as a means of enforcing compliance with, not only Inland Revenue's statutes, but those of other regulatory enforcement agencies. While the sharing of information among Government agencies makes sense, the longer term policy implications of these arrangements will be interesting to observe.
The concern raised in my last article about the transparency of law making applies here as well. Whichever side of the line you take on information sharing arrangements, again, no matter how well-intentioned a law change may be, all too often those affected by the law change are the last to know.
* Craig Macalister is tax principal at accounting firm Crowe Horwath. He can be contacted on 03 211 3355.
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