Robertson Grant: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In CommitteeText is incorporated into the Bound VolumeRobertson Grant: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In Committee[Sitting date: 24 May 2016. Volume:714;Page:11152. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): You were spoilt for choice. Thank you Mr Chair. I actually do want to pick up the very point that Fletcher Tabuteau was discussing and that is the question of co-location and perhaps go back to the beginning because I think there is some confusion here around the question of a deliberate breach of secrecy by a staff member and an inadvertent breach. Currently the Act applies only where someone knowingly acts in contravention of section 81 of the Tax Administration Act which is about disclosing information that they should not. Should a breach occur there is a legal process to determine as Mr Tabuteau said whether the breach was unintended or made knowingly and then appropriate sanctions apply.When we were discussing this in the select committee the position we reached was that an employee could be judged to have knowingly contravened section 81 where the breach was inadvertent but it occurred where there was a real risk inherent in the co-located environment. As it says in our report: “For example an IRD employee might be aware of the risk that a co-located employee could overhear information but not be able to avoid that possibility.” So we acknowledge that but obviously we have an obligation to ensure that that information is held in appropriate secrecy. So that was the discussion we were having: do we need a threat of a sanction to emphasise the point that this is a really important area of confidentiality and there is an increased risk with co-located departments?At one point we almost discussed whether we needed the clause at all because actually at the moment the obligations on Inland Revenue Department (IRD) staff are quite clear; they know what they are and they sign an enhanced secrecy agreement above and beyond what almost any other public servant would do. But the co-location issue means that there is now a set of increased risks around those employees. We did on balance decide to include the concept of taking reasonable care in that co-located environment. Quite clearly for the IRD employees who have already signed their secrecy agreements they are going to be taking care but this is a clause that at least acknowledges in some form or other that reasonable care would be required. Again to quote the most excellent report of the committee: “Being compelled to take reasonable care would motivate employees to proactively manage the risk associated with a co-located environment. It would also provide an additional safeguard against reckless and negligent behaviour.”I do not want people to gain the impression that we think that the IRD staff are going around engaging in reckless and negligent behaviour but that the risk of inadvertently giving information out needs to be considered. I do think it would be useful for the Minister whom I believe may take a call to just address the way in which the IRD is going to go about taking this into account. This applies to the wider Public Service in my view as well—that although we are all looking for efficiencies that come from public sector agencies being co-located we know in the regions of New Zealand there used to be large Public Service agencies in—I do not know a city like Wanganui until the Government tore them out and took them back to Palmerston North—places like Wanganui where Public Service agencies come together as a matter of efficiency and ease for the public to use them where there is a lot of information flowing around. We have been encouraging through legislation—including in this legislation in fact—public sector departments to share information where relevant.So we have got on one hand a level of encouragement but on the other the risk that the information particularly around tax could inadvertently be shared. I know that those who are listening in on this might be saying: “Well why is this such a controversial issue?”. It is because it is about sensitive taxpayer information. We know that every time there is a privacy breach—every time someone leaves a briefcase on Lambton Quay—this causes upset. Well here we are with people day in day out needing to talk about taxpayer information but working now in an environment where people who do not have the same secrecy provisions in their contracts will be.So we are really just looking for an assurance from the Minister that it is understood what has happened here. The select committee grappled with it and we came up with what we thought was a decent solution which was to include a higher duty of care but not try to effectively criminalise people just going about their daily jobs. So I hope the Minister understands what the committee has tried to do here. We certainly support the co-location of departments but when it is the IRD we do absolutely want to make sure that New Zealand taxpayers’ privacy is protected. Given that you have not rung the bell Mr Chair although you are just about to do that—