The Budget signals a further expansion of the ATO’s already extensive information-gathering powers, with the Government progressing targeted exceptions to tax secrecy and enhancements to information powers to support integrity, compliance and effective administration of the tax system. This sits alongside significant investment in compliance infrastructure more broadly, including Medicare fraud prevention ($745.1 million), securing the Digital ID system underpinning ATO services ($357.4 million), and further funding for the Counter Fraud Strategy. Notably, the ATO will also be given new powers to pause and waive the recovery of tax debts from taxpayers who are victims of fraud by tax intermediaries, and to recover those debts from the intermediaries directly.
Protecting the tax system against fraud
- The Government will provide $86.3 million over four years from 1 July 2026 and $9.7 million per year ongoing from 2030–31 to deliver Phase 2 of the Counter Fraud Strategy to modernise the prevention and detection of fraud in the tax and super systems.
- This proposal will enhance the ATO’s ability to detect and prevent fraud in real time, provide additional fraud protections for individuals and expand live monitoring of fraudulent account access to tax agents, business and for high‑risk superannuation changes.
- The Government will also strengthen the ATO’s ability to combat fraud by tax agents and other intermediaries. The ATO will be given powers to pause the recovery of tax debts of taxpayers who are victims of fraud by tax intermediaries, and waive those debts in appropriate circumstances, and to recover the debts from the tax intermediaries.
- Existing garnishee powers will also be expanded to include jointly held assets in circumstances where such arrangements are being used to frustrate recovery actions.
- The Government will also progress further targeted exceptions to tax secrecy and enhancements to tax regulators’ information‑gathering powers to support integrity, compliance and effective administration of the tax system.
- The ATO will undertake additional targeted compliance activities over the two years from 2026–27 to further address fraud in the system, including in relation to the Research and Development Tax Incentive.
- This measure is estimated to increase receipts by $217.8 million and increase payments by $72.9 million over the five years from 2025–26. The ATO will partially meet the cost of this measure from within existing resources.
Child support tax compliance
- The Government will provide $182.6 million over four years from 2026–27 to close loopholes enabling weaponisation, financial abuse, and non‑compliance in the child support scheme to make it safer and more effective for children and parents.
- Funding includes $22.0 million over four years from 2026–27 (and $0.6 million per year ongoing) to improve the accuracy of child support assessments by strengthening tax lodgement enforcement, extending Single Touch Payroll data sharing arrangements, and improving Australia's international child support arrangements.
Strengthening Medicare integrity
- The Government will provide $745.1 million over four years from 2026–27 to strengthen the integrity and functionality of critical Medicare systems and infrastructure to ensure health services in Australia are delivered efficiently and effectively.
- These measures will enable the Government to achieve savings of $674.1 million over four years from 2026–27 (and $230.8 million per year ongoing) by reducing fraud and non‑compliance in the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme.
Business registers stabilisation
- The Government will provide $198.1 million over two years from 2026–27 to boost productivity through streamlining regulatory systems and secure access to data.
- Funding includes $136.1 million over two years from 2026–27 to complete the second tranche of stabilisation and uplift of Australia’s business registers, including synchronising director information with the Australian Charities and Not‑for Profits Commission’s Charities Register, linking Director IDs to the Companies Register, uplifting Australian Business Number (ABN) authentication and completing the transition of ABN and superannuation lookup functions to the Australian Taxation Office.
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