The limitations of legislation, in Australia and overseas, have become more apparent in the wake of the the Panama Papers, Swiss Leaks and Lux Leaks. All were based on revelations of wrongdoing from individual whistleblowers, not tax authorities.

In the May budget the Turnbull government, under public pressure to take a tougher stance against tax dodging, announced it would introduce whistleblower protection for people who disclose information about tax misconduct to the Australian Taxation Office.

The Corporations Act already has some protection for those who make disclosures to corporate watchdog ASIC, but it is limited and does not apply to tax misconduct information given to the ATO.

"Whistleblowers will have their identity protected and will be protected from victimisation and civil and criminal action for disclosing information to the ATO," the headline government announcement said, without offering detail about how such a scheme would work.

Those who speak out face threats

Transparency International says despite their critical role in uncovering corruption and other malpractice, "too often people who speak up in the public interest face threats, intimidation and lawsuits".

'John Doe' - the anonymous source who handed German newspaper Süddeutsche Zeitung (and in turn the International Consortium of Investigative Journalists) internal data belonging to the Panamanian law firm Mossack Fonseca in a manifesto released earlier this year called for whistleblowers to be given immunity from government retribution.

"Until governments codify legal protections for whistleblowers into law, enforcement agencies will simply have to depend on their own resources or on-going global media coverage for documents," he wrote.

Bradley Birkenfeld, who was awarded $US104 million in September 2012 for information that lead to US authorities chasing down Swiss bank UBS and other banks facilitating tax evasion, has previously expressed similar sentiments.

Birkenfeld, who himself served prison time for his crimes, said: "If whistleblowers are afraid to bring information to the authorities for fear of prosecution, they will stay silent, bank secrecy will continue, and illegal offshore tax havens will operate free of scrutiny, taking money out of taxpayers' pockets, and making the super-rich even wealthier."

Antoine Deltour is now on trial for "stealing" and leaking documents about how Luxembourg granted secret "sweetheart" tax deals to multinationals including Apple and IKEA (the French journalist Edouard Perrin, who Deltour leaked to is also on trial), but at his trial he said it was a "necessary evil".

Beefing up the Corporations Act

Closer to home there's also been discussion about how to beef up the Corporations Act to improve protection for whistleblowers.

Jeff Morris who exposed the Commonwealth Financial Planning Limited scandal reported by Fairfax Media, told a recent Senate hearing that Australia needed a scheme, similar to the United States, where whistleblowers who disclose corporate misconduct get rewarded.

He says when he took the allegations against CBA to ASIC in 2010, he was told in as many words, 'Thanks for sacrificing yourself.' "[He was] just being frank' about the limitations of the whistleblower protections," Morris said. "The whistleblower protections basically, as he said, [are] not worth much."

The Senate Economics References Committee has released a paper calling for greater protection for local whistleblowers, including protection for those who come forward anonymously. The government has noted its suggestions, but as yet, has not made any changes.

A.J. Brown, Griffith University's leader for Public Integrity & Anti-Corruption in the Centre for Governance and Public Policy, who has worked with regulators including ASIC on how to improve protection for whistleblower, says that the level currently offered under the Corporations Act is inadequate.

He welcomes the budget announcement, but hopes it is not just a "thought bubble" that results in no useful policy. "The question the government should be asking is; 'is there a way of doing this that encourages people to cover all types of information, not just tax misconduct," he says.

Rewarding whistleblowers

He also wants financial rewards for whistleblowers who give information that leads to prosecutions. In the United States, under the Internal Revenue Code, a whistleblower can receive 15 per cent to 30 per cent of the amount collected by the IRS.

Maurice Blackburn lawyer Josh Bornstein says a reward system would increase the chance of people coming forward. "If we are to improve corporate culture, whistleblowers should be rewarded and seen to be rewarded," he says.

Tax Justice Network spokesman Mark Zirnsak says since 2008 the IRS recovered $4 billion through whistleblowers exposing tax evasion. "Whistleblower protection and reward should also apply to other forms of corporate wrongdoing, such as bribery, fraud and embezzlement," he says.

But not everyone is supportive of a reward system. Herbert Smith Freehills partner Andrew Eastwood says rewards leave a "real risk that you may in fact be rewarding people who were in some way involved in the misconduct". But he does support greater protection for whistleblowers under the Corporations Act.

Chartered Accountant's tax leader Michael Croker also warns "whistleblowers will not always have clean hands and immunity, or reduced sentences, become an issue in such cases". Nevertheless, he says there's elements of the US model, including specialist IRS teams that deal with whistleblowers, Australia may be able to adopt.

Professor A.J Brown says the government has a real opportunity to revamp legislation to give genuine protection to whistleblowers. "If it's not done properly, it ends up being window-dressing. That's what we need to avoid."​