Whistleblower protections need ‘rethink’ with greater incentives, support

“More needs to be done to ensure consistency between the tax and corporations regimes,” IPA said in a submission to the review.

A single authority

Davison noted that the protections under the two acts are similar but not identical and said that a single whistleblowing authority should be established to reconcile these differences.

“A dedicated institution could operate as a central agency to assist with coordination and referrals, and reduce confusion, duplication and inefficiencies. An oversight agency could also improve the accountability of existing regulators,” the submission said.

“Having a central agency would funnel complaints or disclosures to the right agency and get better support and also could play an educative role about what's involved, what you can do, what you can't do and how it all works,” Davison said.

“It's a sort of a one-stop shop or that first touchpoint to guide you in the right direction, if you do have something and can also play an educational and supportive role.”

“There needs to be a rethink about how we legislate to protect whistleblowers — entities that are not covered under the corporations. That could be partnerships, could be charities, unincorporated associations: there is a whole bunch of different entities that aren't covered where if there is wrongdoing, people may be scared to speak out,” Davison said.

The body’s submission recommended that more be done for employees within entities not considered “regulated entity” under the Corporations Act, and that appropriate incentives be put in place to encourage whistleblowers to come forward.

Further, the body called for the establishment of a single whistleblowing authority, and better incentives for whistleblowers and greater well-being support for those who blow the whistle.

The body also noted its 2024 submission, in which it proposed that the Corporations Regulations adopt a definition of large multidisciplinary partnerships (LMDPs) as partnerships of over 400 partners, with a requirement that these partnerships be incorporated.

“This would enable large partnerships to be included in the definition of regulated entity for the purpose of the whistleblower regime,” the submission said.

“[This] may provide the foundation for broader reform of the Corporations Act to … extend the whistleblower regime to employees of all partnerships,” Davison said.

“There's a discouragement for them to come forward, because [there are] consequences to themselves, reputationally and financially, and from a mental and physical health perspective.”

Greater incentives needed

The submission said that the impacts on mental health were recognised in the 2024 amendment to the taxation regime, which allowed disclosures to medical practitioners and psychologists for medical or psychiatric care.

“There should be incentives for whistleblowers; any incentive, package, or offering has to be balanced and built to avoid opportunistic behaviour,” Davison said.

“For whistleblowers who do come forward. As we've seen in recent media coverage, there is significant current financial risk if you do so, and reputational risks.”

“Some financial incentive that can be capped and managed and avoid those opportunistic claims may help to offset the risks and costs that whistleblowers face.”

The submission stressed that eligibility for an incentive or reward must include the requirement that the information disclosed is credible and that the material is disclosed as soon as it becomes known. 

It said that awards under the tax regime may be appropriate when a percentage of the tax collected is included in the rewards, whereas breaches of the TASA code of conduct would be more relevant for a flat fee.

“We hope that the government listens to the review closely and inputs into it, and we see legislative change to fill those gaps or to address those shortcomings,” Davison said.