Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit, I present the committee's report No. 426 entitled Ninth biennial hearing with the Commissioner of Taxation.

Ordered that the report be made a parliamentary paper.

by leave—On 23 September 2011 the Joint Committee of Public Accounts and Audit held its ninth biannual hearing with the Commissioner for Taxation. The hearing provides the committee with the opportunity to directly review and scrutinise the activities of the Australian Taxation Office. It also allows the committee to work with the tax office to ensure a stable, certain, and efficient taxation system of the highest quality for all Australians.

To enable the committee to gain a broader and deeper view of the operations of the tax office, the latest hearing was conducted with an expanded format and additional participants. Participants included the ATO's external scrutiny bodies—the Taxation Ombudsman; the Inspector-General of Taxation; and the Auditor-General. In addition, the Tax Institute and the Association of Taxation and Management Accountants provided a voice to the professional bodies during the hearing.

This new format provided the committee with a broad range of expert input and perspectives which added exceptional value to the process. Having used this new expanded format, I can attest that overall Australia's tax system is robust, well-managed and meets the highest standards. I believe it provides a trusted foundation for Australia's people, business and governments. However, there is always room for improvement.

The committee therefore made the following six recommendations in the report tabled today: firstly, that key service standards performance information, such as the ATO's traffic light benchmark reporting system, be made more prominent on the ATO's website to increase transparency and accountability; and secondly, the committee found that ATO notifications to government of tax policy or legislative problems currently remain confidential.

The committee has called for a change towards a more transparent approach, recommending that such submissions should be made public after 12 months, along with a response from government. I believe this will allow the government adequate time to consider and rectify any substantial policy or legislative problems before they become widely known and, at the same time, will place appropriate pressure on the government to act on these notifications from the ATO and that the committee did feel that the public conversation was an important driver of accountability through the process.

Thirdly, the committee found that reviews conducted by the Inspector-General of Taxation are not necessarily made public as soon as they could be. Therefore, the report's third recommendation is that these reviews should be made public after a reasonable period of time. The committee's fourth recommendation is directed at the ATO's external scrutineers asking them to investigate and report on opportunities for more strategic planning and improved information sharing as they undertake their reviews. This recommendation is focused on further improving the already high quality of scrutiny these bodies provide.

Finally, recommendations 5 and 6 call upon the ATO to provide detailed additional information to the committee in its next submission on a range of important areas and that all future submissions continue to be provided at least one month prior to the committee hearings. Amongst other issues, the committee has requested that the ATO provide updates on what lessons they have learnt from public and business complaints; initiatives towards simplifying communication and the use of plain language; simplification of lodgement processes for medium, small and micro businesses; work done on estimating the tax gap and its possible impacts; progress to implement any recommendations by external scrutiny bodies; and processes for speedy release of superannuation funds in crisis situations.

The committee expects that the information provided in the ATO's next submission will demonstrate that concrete actions have been taken throughout the year to improve the ATO's administration and effectiveness. Given the constructive approach taken by the ATO during the past six months and at the recent hearing, the committee has full confidence that the ATO will work towards this goal also.

The committee has further decided to hold future hearings with the tax commissioner annually rather than biannually with the next hearing likely to be held in September 2012. This new time frame acknowledges the expanded scope of the hearings and that the ATO would benefit from having a longer time frame to implement improvements and evaluate outcomes following on from the committee's tabled reports and recommendations.

Overall, I and the committee believe all participants worked through issues collaboratively and constructively during the hearing. I look forward to this continuing and further cultivating a productive relationship with the ATO and other witnesses.

In closing, I wish to thank all those who participated and assisted the committee with its work, in particular the Commissioner of Taxation, the Ombudsman, the Auditor-General and the Inspector-General of Taxation. I would also like to thank the representatives of the Tax Institute and the Association of Taxation and Management Accountants. I once again thank the secretariat of the Joint Committee of Public Accounts and Audit for their work and, at this time of year, wish them a very Merry Christmas. I commend the report to the House.