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We’re not mongrels and we don’t cook people, says ATO boss

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Yesterday morning the head of the Australian Taxation Office, Mr Chris Jordan, denied that the ATO were a ‘mongrel bunch of bastards’. (See ABC report here.)

Mr Jordan was making a presentation to a Senate Estimates hearing and responding to the Four Corners show on 9 April ‘Mongrel Bunch of Bastards’.

Mr Jordan also rejected our comments in the show that the ATO “cooked people slowly, until you are roasted and you are dead”. Mr Jordan said: “People at the ATO do not get up in the morning thinking who can I destroy or boil to death.”

Mr Jordan denied that there are any systemic problems in the way the ATO treats small business people. However, he announced that the ATO has set up new processes to address any problems. That is, the ATO is addressing problems it says don’t exist.

Maybe we are starting to see some early results. We’ve been pushing for significant change in the ATO since 2015. Here’s our background activity. We want a small business tribunal. And recently we went into more detail about ATO reform. We want the ATO broken up. Details here. And we’re calling for a Royal Commission into the ATO.

The problem with the ATO’s doing internal reform is that it has promised this many times in the past. But its ‘reforms’ have not changed the bad treatment of self-employed small business people. Reform has to be imposed on the ATO by Parliament.

I discussed this on drive-time radio yesterday with Ross Greenwood of Radio 2GB Sydney. Yes, I was fairly ‘blunt’ in putting our views about the ATO. You can hear the interview at this link.

Like the banks, the ATO needs a Royal Commission

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We’ve come to the conclusion that the truth about the Australian Taxation Office’s bullying of self-employed people will only come out in a full Royal Commission inquiry.

We’ve been strongly prompted to this conclusion by an article in The Australian yesterday by the doyen of business columnists, Robert Gottliebsen. Robert is correct in his article ‘The ATO is repeating the hideous mistakes of bank boards’.

The ATO controllers are in denial about the ATO’s bad behaviour, just like the banks were with unfair contracts, including abusive customer treatment (and the churches also were on sex abuse!) Robert said:

“…bank boards were in total denial and did not recognise that they had created contracts that almost encouraged staff to treat small business customers badly.”

Robert points out that change is possible but legislation is required and he recognises our efforts to achieve change. He said:

“And the (bank) directors allowed it (abuse) to continue despite years of commentary from myself in The Australian and the efforts of many others, including Self-Employed Australia’s Ken Phillips to get legislation through Parliament to make directors do the right thing and construct contracts that were fair to both parties.”

Major reform of the structures and administration of tax by the ATO is essential. The ATO has operated as is since 1936. Reform involves breaking up the ATO into separate independent authorities and an independent small business tax tribunal. We’ve detailed this in our ATO reform agenda here.

Reform should proceed without delay, however. As Robert says:

“… like the banks before fair contracts, ATO officials have the power to do what they like. And, again like the banks, they will not be caught out until there is an ATO royal commission.”

We spent seven years campaigning for fair contracts. Our campaign commitment to ATO reform is also long-term. And we are proudly obsessive in our efforts!

Our next step is submissions to the Senate Inquiry into whether the Commonwealth (eg, the ATO) complies with its Model Litigant obligations.  At the public hearing on 14 June we’ll be saying that the ATO ignores its obligations. We’ll keep you informed!

PS: Robert Gottliebsen was recently inducted into the Australian Media Hall of Fame. Quite an honour!

Top (retired) Federal Court Judge blows whistle on ATO

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Since the Four Corners show ‘Mongrel Bunch of Bastards’, which exposed the abuse by the ATO of small business people, the ATO has been in denial mode. The ATO’s press release is essentially a ‘nothing to see here folks’ statement.

The Australian Services Union, representing ATO staff, has demanded that we at Self-Employed Australia apologise for ‘scurrilous’ accusations. It is outraged by our statements in our submission opposing the ATO credit agency report Bill. It’s pleasing to report that this Bill has now been put ‘on hold’ by the Minister, Kelly O’Dwyer.

But now something has happened that cuts through the ATO’s (and its union supporters’) hand-wringing!

Recently retired Federal Court Judge Richard Edmonds has spoken out. Edmonds is highly respected as one of Australia’s most knowledgeable tax jurists with 50 years’ experience in tax law. In a letter to the Australian Financial Review the retired judge said:

  • “I have never known … the ATO to apologise to a taxpayer where a court finds that the ATO wrongly assessed … in the collection process.”
  • “… the ATO has even taken the position, pending appeal, that it is not bound by decisions of a single judge adverse to the commissioner…”

The judge refers to:

  • “… the existence of a mentality, maintained by too many ATO officers for too long, that taxpayers on the whole are cheats and liars and anything the ATO does to bring them to account can be justified…”

That such an eminent ex-judge would speak out in this way is quite extraordinary. His comments add significant weight to the observation that there is a major problem inside the ATO, even to the extent that the ATO will ignore a judge’s ruling.

The retired judge made further comments to Robert Gottliebsen in The Australian reinforcing his AFR comments.

This is an ‘Australia: Wake up call’. The government and Parliament must surely take serious notice of such an eminent jurist. We say that the ATO needs urgent reform and not just more talk and investigations. Our ATO reform program is here.

Reforming the ATO. An urgent but common sense agenda

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If you watched ABC Four Corners last night, the evidence of the ATO’s abusing its powers against small business people was compelling.

However, it’s one thing to understand the abuse! It’s another thing to find solutions. That’s why we’ve put together, with considerable legal input, a reform agenda for the ATO.

Today we launch, The Power to Audit is the Power to Destroy.

The reforms we are calling for do not reduce tax collection powers. But they apply the principles of good policing to create checks, balances and accountabilities to ensure powers are used responsibly. Without checks and balances the ATO will continue to be abusive. The ATO has promised internal reform in the past but failed.

In summary we are calling for

  • The ATO to be divided into 2 separate authorities, one for tax collection and auditing, the other for objections and appeals.
  • The Commissioner with all powers concept be changed, so that each authority is headed by a CEO answerable to a board. (Similar to ASIC, ACCC, etc.)
  • A Small Business Tax Tribunal be established
  • Transparency be required on actual debt and prosecution management.
  • Disputed debts cannot be collected until disputes are settled.
  • Capping of penalties.
  • Judicial oversight of ‘fraud’ action.
  • Strengthen the Administrative Appeals Tribunal.
  • Use of State Supreme Courts for disputes.

Our position and discussion paper, The Power to Audit is the Power to Destroy, gives details and explains the reasons.

But we’re not naïve about the difficulty in having these reforms adopted. Plenty of parliamentary committees and previous government ministers have tried to reform the ATO but all have failed. The ATO is expert at stopping reform. The ATO’s well-placed ‘friends’ are already actively defending the ATO.

But, we’re determined. The ATO abuse will not stop without reform. It took us seven years of hard work to achieve unfair contract laws for small business people. On this tax reform issue we are in for the long campaign!

‘Mongrel Bunch of Bastards’ its viewable here on ABC iview.

ATO: Deny. Deny. Deny.

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ATO today released a Media Statement in response to the Four Corners show (‘Mongrel Bunch of Bastards‘) last night.

To our mind the ATO is in denial. But we will leave you to judge. Its release is below. Also, the ATO union—the ASU—has defended the ATO.

Again you judge!

 

Media statement 10 April 2018

ATO Executive statement on ABC/Fairfax coverage

The ATO strongly disagrees with the allegations and views put forward by Fairfax and the ABC in recent coverage about our administration of the tax and superannuation systems.  The media have taken a handful of isolated cases, presented only one side of the story, and then extrapolated these to suggest systemic issues with our administration of the tax and super systems.
It is our view the coverage includes unbalanced commentary and opportunistic journalism, as well as ill-informed analysis of the facts.
The truth is less sensational.
Several of the cases mentioned are more than five years old, and have already been subject to external review, including through the Inspector-General of Taxation.
The work we have done over the last five years in re-inventing the client experience and our culture means many of the allegations from these cases are not representative of today’s practices.
Where we have made mistakes we will apologise and seek to rectify the position and restore the relationship with the taxpayer.
The majority of our clients have a seamless positive engagement with us.
Of the almost 150 million interactions and transactions with have with taxpayers each year, almost all progress smoothly and well.
Less than 0.1% of all interactions result in a complaint or an objection.
There is absolutely no evidence that in roughly 5 per cent of cases the Tax Office gets it wrong. In addition, no review, scrutineer or credible source has ever found a pattern of abuse towards small business owners by the ATO.
We know the overwhelming majority of small businesses want to do the right thing and we are proud of the work we have done to improve the experience of small businesses, and the transformation of our culture to focus on client service and early intervention. In addition, our capability, resources and laws equip us to effectively administer the tax and super systems.
The feedback we consistently receive from credible sources – like small businesses themselves and their key industry associations – is positive about how we listen and respond to their needs. We are concerned this coverage serves only to create tension and worry for small businesses where it did not previously exist, and perhaps even stop people from coming to us to get things sorted. That’s the worst outcome for everyone.

‘Mongrel Bunch of Bastards’: ATO Update

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The evidence mounts on the ATO’s abuse of its powers with small business people. This will culminate in the Four Corners full story this Monday, ABC 8:30.

We highly recommend you watch this. The Four Corners TV promo is here. 

There has already been considerable coverage:

Our conclusion is that the ATO must be reformed. The reform is not to reduce tax collection powers but to ensure that those powers are not abused. More on this later!

‘Mongrel Bunch of Bastards’: ABC exposes the truth about the ATO

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We thought we’d been strong in our criticism of the Australian Taxation Office! But the ABC Four Corners show airing this Monday 9 April at 8.30pm takes the criticism to a whole new level!

We’ve said of the ATO that it:

and we’ve asked:

Four Corners comes bang to the point in its title for the program: ‘Mongrel Bunch of Bastards’.

It’s a documentary exposing the mistreatment of small business people by the ATO.

Here’s the link to the ABC promo.

You’ll see and hear the stories of

In the show I say that the ATO attacks vulnerable people.

We know this because of the huge effort we’ve put into defending self-employed people unfairly under attack from the ATO.

Be prepared: Seven key ATO powers to worry you

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Some might say ‘Panic.’ We say ‘Be aware!’ ‘Be prepared!’

Our coverage and criticism of the ATO’s treatment of small business people is extensive. See here.  We understand why some people might think we are exaggerating. Surely the stories are ‘one-offs?’

But we see a pattern. The ATO’s behaviours are a result of its powers, powers that exceed those of the police. It’s a shock to discover that the ATO can:

  • Raid your home without a warrant.
  • Allege a debt without proper evidence.
  • Demand payment of an alleged debt.
  • Forcibly take (garnishee) money from your bank account.
  • Sell your house.
  • Bankrupt you.

All this before you have a chance to defend yourself. Surely not! But unfortunately, ‘yes’, these powers are given to the ATO in legislation.

We say ‘Don’t panic!’ ‘Be aware!’ ‘Be prepared!’ ‘Knowledge is self-empowering!’

Make sure your accountant knows. If your accountant doesn’t understand the ATO’s powers, he or she could make mistakes in handling your tax.

It’s the gig economy, stupid!!

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Friday, January 19, 2018

Technology is crushing traditional jobs. The command-and-control factory is being replaced by robots. Banks are rapidly removing pen-pusher jobs by the tens of thousands!!! For those with an economic bent, the Milton Friedman-type assumptions about how an economy operates are dead!

What’s taking over is the ‘gig’ economy. But what is it?  It’s pretty simple really.

Traditional jobs (Friedman assumed) involved an employer having a legal ‘right to control’ an employee. The gig economy does away with this wage-slave-like setup. Instead, the contractual relationships are entirely commercial. The on-line business platforms that facilitate this are many. For example, Uber (ride sharing), Airbnb (accommodation), Amazon (manufacturing and retailing), Airtasker (home and other services) operate like stock markets.

The platforms connect people wanting something (for example, to buy shares) to people delivering something (for example, selling shares). The platforms facilitate and manage the commercial transactions including invoicing, payments and so on. Every transaction is commercial.

If you’re scared of this, well, move over and crawl into a hole!!! Some people claim it’s a crisis and we have to regulate this quickly as if its employment.

But other jurisdictions are being positive:

And, in a major development, the Australian Fair Work Commission has just declared an Uber driver to not be an employee. This makes sense.

The importance of properly approaching the gig economy cannot be underestimated. To fail to embrace it is to be a wrecker of opportunity and an oppressor of people.

This is one reason why we attacked the Australian Taxation Office hard late last year over its removal of Australian Business Numbers from 16 gig economy workers. Yes, we were damn angry with the stupidity of the ATO and succeeded in having the ABNs reinstated. Now that were a bit calmer, we’ve summarized the ‘transcribers’ case here.

And we’ve just added a new piece about how this transcribers case relates to the gig economy.

Remember, this ATO-style attack can happen to anyone. The ATO has gone rabid on this. You need protection. Check it out here.

More thanks on ABN restoration. Including the ATO! Hey?

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Yes, I know. We don’t have much of a reputation for giving praise to the Australian Taxation Office. In fact we’re probably pretty mean. Here’s us calling the ATO lifeless, frozen dinosaurs and that they must think that the world is flat.

Given our comments, we’ve had people ask us how in the world we managed to have the cancelled ABNs reinstated.

Well, first we had great legal leadership. Here’s John and Paige Findley (our primary legal team) with Annette Pike (she’s on the left) from OutScribe shortly after the agreement to reinstate the ABNs was formalized.

Then, the support of key journalists was critical:

There were also key people in the ATO with whom we had pretty full-on discussions, but we can’t directly identify them. We’ve got to thank those people. The ATO is a complex machine with lots of moving parts, many of which don’t seem to communicate all that well with each other. The ATO people we dealt with on this issue put in a huge effort and were pivotal in the ABN reinstatement outcome. Our thanks to them.

Further, there is the team at OutScribe, the Pike family. They are super-well organized and run a great small business. We worked very tightly with them. They’ve said this about the reinstatement campaign:

We feel very fortunate that we came across SEA. Ken and John have worked tirelessly on behalf of OutScribe and the contractors, with the result that the contractors’ ABNs have been reinstated. OutScribe’s case is still open to investigation with the ATO but we’ve got the SEA in our corner.

Remember: you need to be a member before you have a problem.

We’ll have more information about this story soon.