It called on the government to make some accounts exempt from the rules, such as trusts used to hold pension or super funds. This would bring it into line with the Foreign Account Tax Compliance Act with the US, it said. AMP said it was "deeply concerned" about the costs involved in handing the information over, saying the new rule would bring "extremely limited benefit to Treasury". It said the ATO already held a "great deal of information" about individuals and entities, which should be leveraged before banks were called upon. "We believe it is likely to be far more cost effective for the ATO to collect more or more detailed information through existing systems, rather than ask financial institutions to ask questions of customers," it said. Labor Treasury spokesman Chris Bowen said the opposition supported the G20's move to enhance the exchange of information between financial institutions and tax authorities to ensure companies pay their fair share of tax. While Labor noted financial institutions' concerns about a potential increase in regulatory burden, it would examine the government's legislation when it was brought forward.

"So far, this is a Treasurer and a government that talks tough on multinational tax avoidance but has delivered nought to-date," Mr Bowen said. "There are clear benefits to the Australian community from increased compliance with Australian tax law and so any concerns regarding implementation costs will need to be weighed against these." The common reporting standard on automatic exchange of information requires financial institutions to collect additional data on customers and disclose it to the Tax Office. It then sends this information on to authorities around the world in a bid to catch tax cheats. The deal was endorsed by finance ministers at the G20 meeting in Sydney in February as part of a global crackdown on tax dodging. Mark Zirnsak, a representative of the Tax Justice Network, said as well as costs, the banks had something to fear from losing customers that did not want greater scrutiny by the ATO.

"There will certainly be people who will want to avoid scrutiny and there could be fear amongst some financial institutions that those people will go elsewhere with their money if Australia participates in [the] system," he said. But he said Australia needed to be part of building a new global norm where tax cheats had nowhere to hide. "We should not be the last to join in international efforts to achieve that outcome." The banks argue additional costs would arise from having to ascertain whether customers were a tax resident of another country. Their submissions to Treasury follow the release of a discussion paper issued by the government in June.

Australia has already been criticised for dragging its feet on over the new rules. In June, global anti-corruption agency Transparency International said Australia should have been an early adopter of the rules given its role as chair of the G20. The government has agreed to outline an implementation plan for automatic exchange of information at the finance ministers' meeting in Cairns in September. Australia will lead discussions on tax evasion and profit shifting at meetings in Brisbane in November. Australia already automatically shares tax information with many of its treaty partners. These existing deals netted the government $480 million in revenue in the 2012-13 financial year.

The new global rule is expected to increase this number substantially.