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Official government report confirms ATO has big problems

Sunday, July 22, 2018

The ATO has suffered another major hit to its reputation, this time (and again) from an official government investigation.

You may remember that following the Four Corners show ‘Mongrel Bunch of Bastards’ which exposed ATO abuse of small business people, the Minister, Kelly O’Dwyer, ordered a Treasury inquiry. Both the Small Business Ombudsman and the Inspector-General of Taxation (IGT)  were asked to participate.

The Small Business Ombudsman report (early July) said the ATO conducts “…fundamental denial of access to justice for small business.”

The Inspector-General of Taxation’s report has now been released. Normally the IGT uses cautious language, but this time the report is blunt. It is quite damning of the ATO’s treatment of small business, self-employed people.

Some of the things the IGT says about the ATO include:
  • Creates perceptions of bias in its processes.
  • Debt collection has been ‘random and ad hoc’.
  • Badly supervised junior staff who issue garnishees.
  • Compensation is just a token scheme and reform is required.
  • 86 per cent of debt actions are against self-employed people.
  • An independent review process is only available to the wealthy.
  • Community confidence and trust have been in decline.
  • The ATO’s media campaigns following Four Corners have damaged the ATO.
The full report is here. We’ve put together key extracts from the report for easier reading.

The Age and Sydney Morning Herald reporting labelled the ATO
The Australian’s headline said Tax office must beef up compo for victims.

The IGT also stated that since the Four Corners program it has received 178 complaints and the Small Business Ombudsman over 100. A total of more than 278 complaints. This is 4.5 times the number of complaints the Tax Commissioner stated in his evidence to the Senate Committee on 30th May 2018 (see second paragraph, page 7). The Commissioner said “…only 62 actual complaints have emerged since 9 April from all sources (IGT, ASBFEO and ATO).” This reinforces why we’ve said “Please Mr Tax Commissioner, get your facts straight”. It’s concerning when even Parliament cannot rely on the ATO to be factual.

At least we can say of the government and Minister O’Dwyer that they are prepared to be confronted by facts from independent sources. Whether the truth about the ATO’s behaviour leads to the sort of reforms we say are necessary is too early to tell. Here’s our reform report, An urgent but common sense agenda.


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