Key Highlights

  • The ATO has confirmed it is "scoping the potential sharing of taxpayer data with major Australian banks", as lenders push for a direct way to check whether borrowers' income.
  • the ATO confirmed on Thursday 8 October that it is scoping data sharing with the major banks. "work was underway on measures funded under the 2026-2027 federal budget".
  • As reported, the idea would let banks check data held by the ATO to verify parts of a loan application, by extending the Consumer Data Right (CDR).
  • Commentators have stressed how early the work is.

The ATO has confirmed it is "scoping the potential sharing of taxpayer data with major Australian banks", as lenders push for a direct way to check whether borrowers' income claims are genuine. According to The Mandarin, the aim is to counter loan fraud made easier by artificial intelligence. It is not a decision. No start date has been announced, and current law stops the ATO from giving taxpayer information to a bank, even if the taxpayer consents.

What the ATO has confirmed

the ATO confirmed on Thursday 8 October that it is scoping data sharing with the major banks. "work was underway on measures funded under the 2026-2027 federal budget".

As reported, the idea would let banks check data held by the ATO to verify parts of a loan application, by extending the Consumer Data Right (CDR). The CDR already lets consumers direct businesses such as banks and energy retailers to share their data with accredited third parties.

Commentators have stressed how early the work is. On 10 October, accounting firm Sterlinx Global called it "work in progress", with design and safeguards still being worked through. It said the idea does not create a new requirement to share tax records with banks.

Why the banks want access

The major banks pushed for access at hearings of the joint select committee on artificial intelligence in the week of 5 October, The Mandarin reported.

Australian Banking Association chief executive Simon Birmingham has put the case bluntly. "The single best defence against fake income documents is real income data and the ATO has it," he told a Senate productivity committee hearing earlier this year. He also warned, according to AAP, that "artificial intelligence is making fake payslips and doctored statements frighteningly easy to produce".

Regulators have found evidence of the problem. According to The Nightly, AUSTRAC's Operation Claw found suspected mortgage fraud across 10 major banks, possibly worth hundreds of millions of dollars and mostly in Sydney. "The scale of this activity should be a wake-up call for every lender," AUSTRAC chief executive Brendan Thomas said.

The law that stands in the way

The biggest hurdle is legal. As The Nightly and AAP have reported, the Taxation Administration Act 1953 currently bars the ATO from disclosing taxpayer information to a bank, even with the taxpayer's consent. Any scheme would almost certainly need that law changed, and Parliament would have to pass the change.

In its interim report, the Senate select committee on productivity recommended letting banks use ATO data to verify income and looking at amendments to the Act that blocks disclosure, in August. The committee noted that the ATO "supports the use of data it holds to assist where appropriate".

the May 2026 Budget set aside $62 million over two years to explore extending the CDR to tax records. The ATO has not publicly tied a specific amount to the work on bank data.