With the 2023 tax return deadline nearing, more Australians than ever are seeking out generative AI to help inform their financial decisions. The rapid development in AI tools’ accessibility, affordability, and convenience is contributing to this trend. These tools run 24 hours a day and many offer both free and low-cost options. Taxpayer alert from the Australian Taxation Office (ATO) As the deployment of AI expands, they caution against the dangers of relying on AI to provide assistance with tax matters.
In our recent Smart Budget survey, over half of consumers said they primarily use AI tools to help them budget. Moreover, 45% look to AI for advice on saving or investing. Surprisingly, 31% of respondents actually use AI to help them file their taxes. Despite its popularity, AI has not established itself as a trusted source of financial advice, rating only 25% in trustworthiness compared to 59% for financial advisers and 44% for government sources.
The ATO highlights that though AI has the potential to make complex financial jargon less intimidating, the technology poses real dangers. Robert Thomson from the ATO stated, “We would just issue some caution if people are using AI to help get tax advice because there can be risks associated with it, and we know some of the AI platforms are giving incorrect advice.” He went on to describe how AI can generate answers with great certainty even when they are completely wrong.
“AI can sound really confident in its answer even when it’s wrong, and AI content is only as good as the platforms or content it’s taking from.” – Robert Thomson
Thousands of eligible Australians are missing out on maximising their tax claims. Thomson encourages them to confirm anything that AI generates with reliable sources. “Whether you’re using AI or not, you are responsible for the information that goes into your tax return,” he cautioned. It provides more than 40 industry-specific guidelines on its website. This guidance specifies what claims are allowable depending on the type of work, providing an important benefit to taxpayers.
Even with those risks built in, a staggering one-third of the general public is willing to use AI to receive financial advice. In fact, a high 36% of respondents said they would try AI tools to manage their money. Yet, 1 in 4 of those respondents said they wouldn’t trust AI to advise you. This skepticism underscores how important it is for consumers to be aware of their biometric data.
Thomson emphasized the importance of safeguarding sensitive data: “If you’re going to give up any of your private information, like your myGov information or tax file number, what we’d say is you need to stop, think and protect.” He encourages individuals to consider whether they trust the platforms they engage with and their ability to keep personal information secure.
Kate Browne, an AI financial wizard, highlighted creative ways AI can be beneficial. Actually, one of the reasons I think people told us they’ve been using AI to receive financial advice is to simplify jargon and complex language, so I think in that regard, that’s pretty encouraging. Among the greatest obstacles to taking informed action on large financial commitments is the confusion surrounding them. AI directly removes – obliterates – that barrier, she said.
Browne acknowledged the practicality of AI: “AI is free or low-cost, a time saver, available 24-7, so it’s very easy to see the appeal.” This convenience is one of the main drivers for its increasing uptake among Australians. Specifically, it makes it easier for them to manage the daunting details of tax prep.
