The text of the OIC is here.
The reason for the OIC is to ensure that people claiming emergency support actually need it, and that government money is not being spent on people who don’t need assistance. The intention seems to be for government agencies, such as the Ministry of Social Development, to use the information to the extent necessary for earthquake recovery purposes.
But the wording of the OIC seems to be a bit broader than that. I suspect this may be a result of rushed drafting, rather than a grand conspiracy.
The OIC provides that agencies can only use the information disclosed by the IRD for the purposes for which it was disclosed. But it seems arguable under the wording of the OIC (at least in my mind) that the Commissioner of IRD could furnish information ostensibly for earthquake recovery purposes, while at the same time authorising a department to use the information for some additional purpose.* As long as a purpose of the disclosure was earthquake-related, the Commissioner could conceivably allow the information to be used for another purpose.
Clause 6 of the OIC, which sets out what an agency can do with information disclosed, prohibits an agency from communicating to any person information furnished, “except for any purpose for which, and to the extent to which, the Commissioner authorises that disclosure”. There is nothing in clause 6 that limits that IRD authorisation to earthquake-related purposes only.
Nor is there any prohibition on internal use or dissemination of the information within an agency. Just communication to others. (I am assuming here that “communicate that information to any person” means communicate to persons outside the agency, because employees of the agency are in effect the agents of the agency and are the instruments by which the agency acts, but I could be wrong on this too!).
Interestingly, the explanatory note to the OIC states: “The order authorises the Commissioner of Inland Revenue to disclose information held by the Inland Revenue Department about a person to certain government agencies to the extent that this is necessary to enable the government agency to provide assistance to, or fulfil any obligation in relation to, that person as a result of the Canterbury earthquake on 4 September 2010 and its aftershocks.”
But that’s not what the actual text of the OIC says.
This shows why the original legislation governing this OIC, the Canterbury Earthquake Response and Recovery Act 2010 (CERRA) should not have been passed. What appears to be a badly drafted and rushed OIC appears to allow the IRD to furnish information to agencies for purposes other than earthquake recovery. Someone might try to argue that any use of such information for an improper purpose would be against the intent of the CERRA, but that’s irrelevant. There’s no right to appeal the decision of Gerry Brownlee to have an OIC passed under the CERRA. So on what basis would any action of an agency authorised by the IRD be ultra vires?
I am not for a moment suggesting that there will be any actual misuse of taxpayer information. But why pass laws that allow for a wider use of information than what is intended?
* It could also be that I don’t know my way intimately around taxation legislation, which is about as easy to follow as a James Joyce novel if you’re not a tax specialist. So I could be barking up the wrong tree and have this completely wrong. If so then I’m sure the hundreds and hundreds of tax experts who read my blog every day will put me right.
Here’s another intriguing possibility. I’ve heard and read that there is some question about whether the 22 February earthquake was an aftershock or a “new” event. The majority scientific consensus appears to be that it was indeed an aftershock, albeit a much more devastating quake than the original 4 September one. I also understand the issue as to whether the quake was an aftershock or a “new” event has some potential implications for insurers and the liability they may have.
Supposing for a moment that, following a stoush involving insurers, a court determines that the 22 February quake was not an aftershock but a "new" event. The CERRA grants the government powers to pass OICs in relation to the “Canterbury earthquake”, which in turn is defined as “the earthquake that occurred on 4 September 2010 in Canterbury, and includes all of its aftershocks”.
In such event, would any OIC passed into law to deal with the 22 February earthquake suddenly be ultra vires? What would happen in this case? Would officers and agencies who thought they had immunity for their actions under various OICs suddenly be exposed to liability?