Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Tax and Revenue, I present the committee's report entitled 2014 Annual report of the Australian Taxation Office: First report, together with minutes of proceedings. It is my pleasure to speak to the report, which details activities of the committee as well as the discharge of its duties in scrutinising the ATO. As the committee enters its second year overseeing the ATO, I am pleased to inform the House that the ATO's enthusiasm and drive to improve its services has continued. The ATO has made good progress toward achieving its goal of reinvention to becoming a leading contemporary tax administration. I note the ATO's clearly articulated strategic direction and its commitment to link its corporate goals and priorities to meaningful performance indicators. A clear strategic direction, together with robust performance measurement and reporting are key elements of an efficient and transparent tax administration.

My colleagues on the committee and I commend the ATO on the steps it has taken and continues to take to reinvent the client experience. Particularly encouraging is the ATO ' s incorporating modern technology into its systems to improve both the accuracy of tax information and the taxpayer experience.

Our taxation system relies on the Australian people ' s trust that the system is fair and equitable. Noncompliance, such as demonstrated by those operating in the cash economy, robs Australia of much needed revenue and disadvantages honest and hard-working Australians who are seeking to do the right thing. More must be done to tackle this noncompliance issue. The cash economy, despite being small when compared with those in other nations, remains an endemic issue that is present in a large number of industries.

The committee is concerned with the unfair advantage the cash economy grants noncompliant businesses. It also affects the community ' s perceptions and confidence in the tax system. The committee is further concerned that there is a community perception that the tax economy is growing. As such, the committee supports the ATO ' s pursuit of comprehensive tax gap estimations.

The tax gap is the difference between the amount of tax legally payable if all taxpayers are compliant and the amount of tax actually collected. Reliable tax gap estimation will assist the ATO in identifying and addressing problematic areas of the taxation system. It will also enable the ATO to better provide advice to government, parliament and the community.

The ATO ' s progress with tax gap measurement is promising. At the committee ' s first biennial hearing with the ATO in March 2014, the committee was told that the ATO was consulting with international experts regarding the feasibility of tax gap estimations. At the second hearing in October 2014, the ATO announced an implementation of a phased approach to tax gap assessment guided by a definitive timetable. At this hearing, the ATO provided the committee with refreshed estimates for the goods and services tax and the luxury car tax gap. It also outlined its plans for tax gap estimations in a variety of areas in 2015 and 2016. My colleagues on the committee and I look forward to discussing the ATO's progress and results at the next hearing.

The committee plans to next meet with the ATO, its scrutineers, and peak tax bodies in late 2015. The committee has requested that the ATO's submission provide information on its progress in a number of areas, including:

In conclusion, I thank committee members and, in particular, my deputy chair, the member for Rankin, who is going to speak shortly, for their deliberation on these significant matters. I also thank the departmental representatives and stakeholders who appeared at the public hearing for assisting this committee in its important role of scrutinising the Australian taxation system. I would also like to take this opportunity to thank the secretariat headed by David Monk and Susan Cardell and the rest of the team for their terrific support of this committee. I commend the report to the House.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I am pleased to report to the House and respond to the House Standing Committee on Tax and Revenue Report titled: 2014 annual report of the Australian Taxation Office: first report on behalf of my colleagues the members for Hotham, Gellibrand and Griffith. I also acknowledge the chair, who is here and who just spoke, the member for Forde, and the former chair, the member for Bennelong, who also joins us in the House.

When it comes to the implementation of Australia's economic and fiscal policies, we focus a lot on the challenges before us, which is appropriate, but too often we ignore the tremendous advantages we have. One of the advantages we have when it comes to fiscal policy, and particularly revenue policy, is an absolutely first-class tax office, the Australian Taxation Office, led by some remarkably capable people. It is a professional outfit. It is extraordinarily well led by Chris Jordan, the Commissioner of Taxation, and also all of the other senior executives and staff who make up the ATO. I want to begin by thanking them for being so generous with their time with the committee so that we could really get through some of the issues covered in their annual report. I also want to thank the witnesses, people like the Inspector-General of Taxation, Chartered Accountants Australia and New Zealand and also the Council of Small Business Australia. I think the Council of Small Business led by Peter Strong is a remarkable institution in our country. I thank all of the witnesses for the time that they spent with the committee. I also want to thank the staff of the committee and, as I said before, the chair, the member for Forde.

In this place we quite often have very big, very vast differences on tax policy, particularly when it comes to things like superannuation, multinational tax or consumption tax. There are a whole range of issues where my side of the House would disagree vehemently with that side of the House, but I think it is important to note that when it comes to our regard for the ATO and when it comes to some of the issues covered in this annual report and in our inquiry into the annual report, there is a great deal of bipartisanship. That is partly reflected by the way that the member for Forde and, before him, the member for Bennelong go about chairing the meetings in a bipartisan way. Also, a lot of the issues covered are not partisan issues; they are issues that go to making our tax office as efficient and effective as possible as it goes about fairly collecting the tax that Australia needs to fund the public services in this country.

We did not issue a dissenting report. There are probably a couple of areas where we might not have an identical view but we did not dissent from the report. It does remain to be seen whether some of the fairly substantial resourcing cutbacks in the ATO will have an impact on compliance. I am aware of the evidence that was given, but time will tell whether there will be a compliance cost to some of the fairly drastic staff cutbacks in the ATO. We also have some differences around the policy development function, particularly when it comes to multinational tax, as I said.

There are some really important bipartisan issues in this report around the relationship between clients and the ATO, administration of the ATO, compliance strategies and crowdfunding—all kinds of issues that are very important in making the tax system one that people can interact with more easily and one that, as I said, collects more efficiently the right amount of tax in our community.

Like the member for Forde, I do want to acknowledge that the tax commissioner and his team have already taken some fairly substantial steps towards improving the ATO's performance and its performance indicators. We have some suggestions around measuring fairness and perceptions of fairness, but overall the commissioner, Chris Jordan, has done a terrific job. I think that this is one of the more inspired appointments of the former Labor government. He was appointed during the Rudd-Gillard years and he is just doing a tremendous job for Australia. I want to mark that in this place.

As I said, we might disagree on a lot of matters of tax policy but we agree not just in this report but more broadly, that the tax office is doing a terrific job. The feedback from our community is as always—you get some people who would prefer a better experience with the ATO and others who are very positive about their interaction. But, overall, I think that they should be commended for the work they have done. I look forward to working with the member for Forde and my other colleagues on the tax committee, as well as the tax office and Chris Jordan as we continue to work out the best way to collect tax in this country.