Treasury mulls ATO portal access for advisers

Access to the Australian Taxation Office’s (ATO) Online Services for Agents portal has long been on the advice profession’s wish list, arguing that it would improve efficiency and reduce the administrative costs that are passed on to clients.

Indeed, it formed part of the Financial Advice Association Australia’s (FAAA) pre-budget submission in May last year, however there has been little acknowledgement from the government on the issue.

There may be a glimmer of hope for advisers seeking access, with Treasury releasing a consultation paper, Review of Tax Regulator Secrecy Exceptions, that has sought feedback on whether the ATO should be permitted to disclose certain ATO-held information with registered financial advisers where they are providing financial (tax) advice to their clients.

“Currently, only registered tax agents and BAS agents can access ATO-held information (such as taxable income, super balance, contributions, and other tax components) on behalf of a client. Financial advisers do not have access to the ATO’s Online Services for Agents (also known as the ATO Online Portal),” the consultation paper said.

“Financial advisers rely on clients providing this information to them through less secure channels (for example, a client may access information in their myGov account, download it and email it to their adviser).

“Financial advisers are responsible for the accuracy of information provided by their clients. Streamlining financial advisers’ access to ATO-held client information provides the opportunity to utilise more complete, accurate and timely data which may reduce the cost of advice by lessening the administrative burden.”

Beyond this, Treasury has conceded that there are additional benefits around accessing superannuation information, given the total superannuation balance and transfer balance cap affect what contribution and pension rules apply for an individual.

“Financial advisers need to have accurate information so that they can ensure clients comply with these legislative requirements,” it said.

However, the paper raised a number of issues related to cyber security, implementation costs, unintended or pressured access, and whether timeliness of data would be assured.

“The size and sophistication of financial advice businesses – and their ability to manage cyber security risks and large amounts of sensitive information – varies widely. While there are some large firms, many financial advice businesses are small businesses who may lack the expertise and resourcing to provide a high level of data protection,” it argued.

“Giving financial advisers access to client information increases financial crime risks, which not only affects the retirement savings of members, but can disrupt business operations for an extended period.”

In order to reduce these risks, Treasury said financial advisers need to meet “baseline security standards” to handle sensitive information.

“This is necessary to avoid leaving clients and financial advisers vulnerable to cyber-based attacks and data breaches, but is likely to require businesses to invest material amounts,” it added.

“While financial advisers already handle sensitive client information, providing a channel for advisers to access ATO-held data (including in a digital form) without any security uplift increases cyber security risks.”

According to Treasury, providing financial advisers access to the ATO portal would require the development of a new platform that would give limited client specific superannuation information once a client has authorised access for their financial adviser.

“This would be a significant cost to taxpayers for granting access to a relatively small cohort of financial advisers,” it said.

Additionally, the paper noted there is still some time lag in reportable superannuation details held by the ATO due to tax reporting timeframes.

“This means clients may still need to provide advisers with up-to-date information from their superannuation fund. This therefore would reduce the benefits for financial advisers accessing ATO-held information,” Treasury said.

It also highlighted concerns around client consent for access to the portal and ensuring access can be “easily turned off at the discretion of the taxpayer” without any financial or economic detriment.

“Without such protections, taxpayers may be pressured to provide this system access to gain access to finance, which may then reduce incentives for voluntary compliance with the tax laws because of potential external implications of tax data being available to other parties,” the paper said.

Submissions to the consultation are open until 28 February 2025, with Treasury also holding virtual roundtable discussions during the consultation period.