ATO Annual Report 2002
ATO Annual Report 2002
We have produced this annual report not only to meet our parliamentary reporting requirements but to meet the information needs of the community as a whole.
There are a number of audiences for this report, including parliamentarians, peak and professional bodies, consumer groups, the media, potential employees and consultants, and taxpayers in general. We have tried to address the requirements of all of these audiences in producing the report this year. This page aims to help you work out which parts of the report will be most useful for you.
Part 1 is an introduction to the ATO, including a review of the year by the Commissioner of Taxation and information about how the organisation is structured and what we do.
Part 2 is where we have reported on our performance in relation to our outcome and outputs which were published in our 2001-02 Portfolio Budget Statements. This is the nuts and bolts section of the report that describes in detail what activities we undertook and how we spent our budget.
Part 3 is a new approach describing some of our achievements as well as many of the challenges we faced. It is divided up into key subject areas of integrity, partnership, innovation and people, and will be of interest to many sectors in the community, including tax professionals and the media. We have included a number of case studies, showing the human side of the ATO, and have also provided some facts and figures that you may find interesting.
Part 4 is the report on statutory authorities that come under our jurisdiction - the Australian Valuation Office (AVO) and Development Allowance Authority.
Part 5 explains our management practices, including our sub-plan structure, scrutiny that has been conducted both internally and externally, and how we manage our human resources. It also includes information about our charter and the professionalism survey we conducted during the year.
Appendixes 1 to 10 provide:
- a summary of our performance information, in a table format (appendix 1)
- legislation tabled during the year (appendix 2)
- information about how we have met our occupational health and safety obligations (appendix 3)
- freedom of information reporting (appendix 4)
- an assessment of our ecological and environmental development (appendix 5)
- a list of major consultants engaged during the year (appendix 6)
- advertising, direct mail, market research and media placement (appendix 7)
- other matters, including corrections to last year's report (appendix 8)
- financial statements for the ATO (appendix 9), and
- financial statements for the AVO (appendix 10).
To make the report easier for you to read, we have included a list of abbreviations at the end. We hope you find the report interesting and informative.
Table 2.1
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Total ATO revenue collections, by head of revenue, 1991-92 to 2001-02
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Table 2.2
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Amount refunded, by tax, 1995-96 to 2001-02
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Table 2.3
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Capital gains tax collections, overview, 1998-99 to 2000-01
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Table 2.4
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Goods and services tax collections, by broad business type, 2001-02
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Table 2.5
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Comparison of actual 2000-01 results, 2001-02 Budget estimates and actual results (cash basis)
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Table 2.6
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Comparison of 2001-02 Budget administered outlay estimates and actual results (cash basis)
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Table 2.7
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Debt collection results, 1998-99 to 2001-02
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Table 2.8
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Collectable debt compared to total collections, 1998-99 to 2001-02
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Table 2.9
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Amounts transferred through Excise schemes
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Table 2.10
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Superannuation guarantee compliance results, 2001-02
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Table 2.11
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Lost members register, 2000-01 and 2001-02
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Table 2.12
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Superannuation holding accounts reserve balance, 2000-01 and 2001-02
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Table 2.13
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Funds transferred to other agencies, 2001-02
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Table 2.14
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Categories of offence, 2001-02
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Table 2.15
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Requesting agencies, 2001-02
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Table 2.16
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Community perceptions survey results, 1996-97 to 2001-02
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Table 2.17
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Percentage of case decisions awarded 'A' for professional excellence, by business area, 2001-02
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Table 2.18
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Percentage of case decisions awarded a pass, by business area, 2001-02
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Table 2.19
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Performance against service standards, 1999-2000 to 2001-02
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Table 2.20
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Resources table by outcomes, 2001-02
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Table 2.21
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Resources table by outcomes, 2002-03
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Table 3.1
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Summary of major components of audit verification program
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Table 3.2
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Revenue outcomes, high wealth individuals, 1996-97 to 2001-02
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Table 3.3
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Adjustments to losses claimed by high wealth individuals and associated entities, 1997-98 to 2001-02
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Table 4.1
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AVO financial and staffing resources, 2000-01 and 2001-02
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Table 5.1
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Salary ranges, by broadband classification, at May 2002
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Table 5.2
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Performance payments, by classification, 2001-02
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Table 5.3
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Ongoing staff at 30 June 2002
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Table 5.4
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Non-ongoing staff at 30 June 2002
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Table 5.5
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Staff numbers, by line, at 30 June 2002
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Table 5.6
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Staff numbers, by regional/branch office, at 30 June 2002
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Table 5.7
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Ongoing staff at 30 June 2001
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Table 5.8
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Non-ongoing staff at 30 June 2001
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Table 5.9
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Staff numbers, by line, at 30 June 2001
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Table 5.10
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Staff numbers, by regional/branch office, at 30 June 2001
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Table A1.1
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Agreed outputs
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Table A1.2
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Maintain overall compliance
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Table A1.3
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Tax design capability
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Table A1.4
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Tax reform infrastructure
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Table A1.5
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Maintain community confidence
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Table A1.6
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Minimise compliance costs
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Table A1.7
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Efficient, adaptive organisation
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Table A1.8
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Output 1.1.1 Contribute to policy advice and legislation
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Table A1.9
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Output 1.1.2 Provide revenue
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Table A1.10
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Output 1.1.3 Provide transfers
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Table A1.11
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Output 1.1.4 Support other agencies
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Table A3.1
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ATO performance compared with the whole Commonwealth scheme
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Figure 1.1
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ATO revenue collections, 1991-92 to 2001-02
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Figure 1.2
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ATO company collections, 1991-92 to 2001-02
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Figure 1.3
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Cumulative growth in company tax, total ATO collections and GDP
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Figure 1.4
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Tax paid on time, 2000-01 and 2001-02
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Figure 1.5
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Collectable debt as a percentage of total collections, 1995-96 to 2001-02
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Figure 1.6
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Variation from Budget estimate, 1991-92 to 2001-02
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Figure 1.7
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Number of debt cases finalised, 1991-92 to 2001-02
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Figure 1.8
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Net cost to collect $100, 1991-92 to 2001-02
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Figure 1.9
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ATO planning and governance arrangements
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Figure 1.10
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Organisational chart at 30 June 2002
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Figure 2.1
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Total revenue collections, by year, 1991-92 to 2001-02
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Figure 2.2
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Revenue collections as a percentage of total collections, 2000-01 and 2001-02
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Figure 2.3
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Revenue collections, by head of revenue, 1991-92 to 2001-02
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Figure 2.4
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Revenue collections from other taxes, by tax, 1991-92 to 2001-02
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Figure 2.5
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Total refunds of revenue, 1991-92 to 2001-02
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Figure 2.6
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Capital gains tax collections, by type, 1990-91 to 2000-01 income years
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Figure 2.7
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Goods and services tax collections, 2001-02
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Figure 2.8
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Community perception survey results, 1996-97 to 2001-02
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Figure 2.9
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Community perception survey results, 1996-97 to 2001-02 (cont...)
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Figure 2.10
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Community perception survey results, 1996-97 to 2001-02 (cont...)
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Figure 2.11
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Taxpayers satisfied/very satisfied with the professionalism of ATO staff, 1998-99 to 2001-02
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Figure 2.12
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ATO expenses, 2001-02
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Figure 2.13
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ATO expenses, by sub-plan, 2001-02
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Figure 2.14
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GST costs as proportion of total ATO costs, 2001-02
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This part includes a review of the year by the Commissioner of Taxation and information about the structure of the ATO.
Michael Carmody,
Commissioner of Taxation
The Australian Taxation Office (ATO) administers a wide range of revenue and related laws.
We do that in an increasingly complex environment. Growth in international trade, supported by e-commerce developments; changes in employment patterns and growth in numbers of contractors; innovations in business structures and financial products; and the commoditisation of tax schemes have substantially increased revenue risks and the complexity and volume of service, audit and other compliance interactions.
Ageing of the population and an increased emphasis on providing for retirement have resulted in initiatives such as the senior Australians tax offset, the continuing personal superannuation contributions to age 75 initiative, and an increase in the use of self-managed superannuation funds.
Recent tax reforms, the increasing complexity of the financial and business environment in which the tax system operates and community expectations about service have resulted in vastly increased demands on the ATO.
In that environment we are required to make choices about how we deploy the resources provided to us by Parliament.
Those choices are framed on the premise that effective revenue administration is about optimising collections under our revenue laws in a way that instils community confidence that the system is operating effectively.
That premise was reflected in the key strategies we employed during the year. These included a continued focus on large corporate compliance and on addressing aggressive tax planning; progressively rebalancing our support and enforcement activities to deliver the revenue and compliance improvements promised by our new revenue systems; and making people's experience with the revenue systems cheaper, easier and more personalised.
The outcome of our audit and other verification activities reflect these strategies, as detailed in part 3. As can be seen, the largest contributors to taxes and penalties raised through those activities were from large corporates and related individuals and scheme cases.
Figure 1.1
Note: Blue dashed line represents the increase due to collection of excise.
Revenue collected by the ATO on behalf of the community continued to grow strongly following changes in payment patterns for 2000-01 that particularly affected collections from companies.
Figure 1.2
Note: The large rise in company collections in 2000-01 was due to an additional income tax instalment falling in that year and companies not fully utilising deferral concessions. In addition, many final payments for companies with early December balancing dates fell due in 2000-01 while refunds for many of these companies were paid in 2001-02. Collections in 2001-02 were affected by a drop in the rate of company tax from 34% to 30%.
While important and integral to achieving compliance with our revenue laws, the outcomes of these activities should not be mistaken for a comprehensive compliance program. This is the reason we have adopted a broadly based compliance model. It is also the reason we put a strong emphasis on supporting the community in implementing the new tax system.
With the second anniversary of the introduction of the new tax system approaching, we signalled a shift in the balance of our compliance activities. This was most publicly demonstrated by our approaches to the application of failure to lodge penalties.
On time lodgments of activity statements for the December 2001 quarter fell away substantially from the generally high levels previously experienced. This was redressed by the end of the year, following the announcement of a progressive move to broaden the application of failure to lodge penalties.
A large majority of participants in mass marketed schemes accepted a settlement offer as the first two cases to come before the courts confirmed that the claimed tax benefits were not available.
In making that offer I was conscious that it would lead to claims from other participants in tax schemes seeking similar treatment. In particular, participants in so-called employee benefit arrangements have raised this issue.
The settlement offer for mass marketed schemes was made because of the particular circumstances involved in these schemes.
Employee benefit arrangements are materially different.
Participants in employee benefit arrangements were often more sophisticated and not subject to the same type of aggressive marketing; they generally did not suffer a real economic loss and amounts contributed generally remained within the control of the participant or his or her associates. Indeed, contrary to their description, employee benefit arrangements were typically about providing benefits to owners and directors rather than employees.
It is important to the long-term health of our tax system that there be a strong deterrent to participation in schemes. Mass marketed schemes involved exceptional circumstances. Participants in other schemes should have no expectation that they will benefit from a similar settlement.
Achieving community confidence in the operation of our revenue systems is not only about compliance. It is also about ease of compliance.
It was for this reason that I announced the Listening to the Community initiative in March. This initiative is designed to gain community input into the development of ways to make the compliance experience easier, cheaper and more personalised. Much of our work in these areas will come to fruition in 2002-03 and beyond.
Our ability to deliver on the community's expectations into the future was aided by the findings, during the year, of the Output Pricing Review, conducted by a government-appointed independent reviewer. The review resulted in extra funding and additional expectations in the 2001-02 Federal Budget. The Output Pricing Agreement gives the ATO a sustainable and predictable base for the next three years.
Administration of revenue laws of any country is not an easy task. Tax Office staff have responded well to the challenges posed this year.
However, administration of our revenue laws relies not only on the efforts of my staff but also on those of Australia's business people, their industry representatives, advisers and taxpayers generally.
Despite the inevitable tensions, all parties have played an important part in delivering the revenue so important to the Australian community.
Michael Carmody
Commissioner of Taxation
Figure 1.3
Figure 1.4
Note: This graph has been modified to exclude debt that is in dispute.
Tax paid when due is another measure of the health of tax administration. About 95% of tax was paid on time. The dip in January is associated mainly with companies and is attributable to transitory effects of the new tax system.
Figure 1.5
Note: Information for this graph has only been captured since 1992-93.
Collectable debt excludes debts that are in dispute.
Collectable debt as a percentage of total collections rose this year, reflecting greater attention to lodgment enforcement action that established liabilities more quickly than in previous years.
Figure 1.6
Note: The note to figure 1.2 is relevant when reviewing this chart, particularly the fluctuation over the last two years.
Figure 1.7
Note: The number of debt cases finalised continued to climb.
Figure 1.8
1.2 - Agency overview
The ATO is the Federal Government's principal revenue collection agency. It aims to manage and shape the revenue systems that give effect to social and economic policy, and to fund services for Australians.
The ATO also administers compliance with the superannuation guarantee legislation and collects the relevant charge from employers who fail to make the required contributions to complying superannuation funds.
Since 1998 we have played an important role in developing and delivering the systems and education programs needed to implement the government's new tax system. This initiative has been largely delivered, with the elements of tax reform becoming business as usual, and the balance of compliance and education shifting to ensure the integrity of the new system.
We have continued to review and address broader issues affecting Australia's revenue systems, such as aggressive tax planning, persistent tax debtors, globalisation, the cash economy and the internet.
The ATO also supports the delivery of community benefits, with roles in other areas, including:
- the Australian Valuation Office
- the Development Allowance Authority
- private health insurance
- family assistance, and
- cross-agency support, such as working with Centrelink to reduce benefit fraud, and with the Australian Bureau of Statistics to reduce the cost to the community of collecting statistics.
Our efforts are guided by the Taxpayers' Charter, the related compliance model, the ATO strategic statement and the current agency agreements, as well as our planning framework. Important supporting documents include internal audit plans, occupational health and safety policies and agreements, workplace diversity plans and a people strategy.
As part of the Treasury portfolio, the ATO employed 19,318 ongoing and non-ongoing staff at 30 June 2002, in offices all around Australia.
The Commissioner of Taxation, Michael Carmody, leads the organisation and is responsible for administering a wide range of revenue laws. For more information about the Commissioner's functions and powers, see appendix 4.
The senior executive includes three statutory offices, that is the Second Commissioners. During 2001-02, Bruce Jones was in charge of Operations, Alan Preston (who retired in February 2002) led Tax Reform and Michael D'Ascenzo was Chief Tax Counsel. They are supported by the National Program Managers, who include Deputy Commissioners, First Assistant Commissioners, the Deputy Chief Tax Counsel and the Chief Finance Officer. We have included information about ATO people in chapters 3.4 and 5.3.
During the year we strengthened our planning and governance arrangements. These are detailed in the chart at figure 1.9 and explained further in Part 5.
The new planning and governance arrangements set the framework for delivery and accountability by our divisions (known as business and services lines, or lines), shown in the chart at figure 1.10.
A line focuses on a type of taxpayer (such as small business or large business), a type of tax (such as excise or goods and services tax), or an aspect of internal support (such as information technology). The ATO also includes the Australian Valuation Office.
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Michael D'Ascenzo,
Second Commissioner
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Bruce Jones,
Second Commissioner
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Alan Preston,
Second Commissioner
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Figure 1.9
During the year we re-aligned a number of functions, which led to the creation of three new lines: ATO Resource Management, ATO Relations and ATO Technology.
We also expanded the Office of the Commissioners line to include the Tax Design Group, Integrated Tax Design and Strategic Directions and Programs (previously the Reform Program Office).
Figure 1.10
At 30 June 2002, the lines and their main responsibilities were as follows.
The Office of the Commissioners includes the Tax Design Group, Integrated Tax Design, Strategic Directions and Programs, Aggressive Tax Planning and the Corporate Leadership Unit.
The Tax Design Group formalises and reinforces three key roles within the ATO:
- policy management
- law design, and
- design integration.
Integrated Tax Design focuses on building and deploying an integrated tax design capability within the ATO, including co-design with the community on specific major projects.
Strategic Directions and Programs helps develop corporate strategy and design, including the ATO Change Program, and ensures an integrated and coordinated approach to planning and governance activities.
Strategic Directions and Programs, together with Integrated Tax Design, helped to shape and directly support the Listening to the Community project that was launched in 2001-02. This corporate initiative recognises the efforts made by the community during the implementation of tax reform, and seeks administrative solutions that make the tax experience easier, cheaper and more personalised. The Listening to the Community project aims to develop tangible and visible processes and capabilities that enable community members to have input into the administration of the tax system.
The Personal Tax line operates within the ATO's compliance sub-plan. It manages and maintains the part of the income tax system that deals with individual taxpayers who are not in business.
The tax issues these clients face can be diverse, so the ATO strives to help them understand and report their tax obligations and claim their entitlements.
Personal Tax also manages the ATO's relationship with tax practitioners. These activities include service, compliance, law interpretation, benefits distribution and the private health insurance rebate.
In addition, Personal Tax provides services to the Department of Family and Community Services for the Family Assistance Office and the Child Support Agency. The ATO processed family tax benefit claims (which are lodged with tax returns) for the first time this year.
Personal Tax has a client base that includes approximately 8.9 million taxpayers, 25,500 tax agents and a range of other intermediaries.
The Small Business line operates within the ATO's compliance sub-plan. It administers the income tax system for business taxpayers in the micro business (those with an annual turnover of less than $2 million) and small business (those with an annual turnover of between $2 million and $10 million) ranges.
The line works with small businesses and non-profit organisations - both directly and through their intermediaries - to support them and help them understand and meet their income tax obligations.
In addition to this, Small Business provides supporting services for all market segments in relation to the fringe benefits tax system.
In 2001-02 the major focus was ensuring the ongoing integrity of the way in which the income tax and pay as you go (PAYG) systems operated. The line achieved this by supporting and implementing the required administrative systems to support tax reform and legislative improvements.
Enhancing the relationship with business taxpayers and their advisers has been a major strategy over the past year. Support services cover enquiries, advice, client education and support, and compliance and enforcement within the small business and non-profit sectors.
Placing more emphasis on market segments has allowed the different organisational elements of the ATO to work together to establish the range of supporting services provided to each segment.
Small Business has developed strategies to manage risk, collect intelligence and incorporate the right business design and assurance processes. These strategies have resulted in the right mix of activities to deliver the ATO's commitments to the government, ensure the ongoing viability of the revenue systems that are managed and maintain community confidence in the line's administration and support for the tax system.
The Large Business and International line operates within the ATO's compliance sub-plan. It administers the income tax system for large businesses (with an annual turnover of over $10 million) and associated key individuals.
Large Business and International conducts a range of programs, including provision of advice, help and education, research and risk assessment, and audit.
They were also responsible for the management of the ATO's approach on international tax matters including, until recently, representing Australia in treaty negotiations to ensure the country receives its fair share of tax. This treaty role was transferred with tax law design to the Department of the Treasury on 1 July 2002.
These programs provide us with insights into compliance behaviour, which assists in providing input into developing law and administrative design and leverage approaches to support, facilitate and encourage corporate citizenship and cooperation between the ATO and taxpayers.
The Goods and Services Tax (GST) line operates within the ATO's compliance sub-plan. It has primary responsibility for managing GST, luxury car tax and the legacy wholesale sales tax that ceased when GST was introduced on 1 July 2000.
The line has direct responsibility for maintaining the integrity of the tax system in these areas and for delivering a comprehensive range of services covering help and education, interpretation, and field verification activities. They also conduct field verification activities in relation to other taxes and payments that are reported on the Business activity statement, including PAYG obligations.
The Superannuation line operates within the ATO's compliance sub-plan. It administers compliance with the superannuation guarantee legislation and collects the relevant charge from employers who fail to make the required contributions to complying superannuation funds.
Other than for large superannuation funds, which are administered by the Large Business and International line, they also administer the system responsible for compliance with other superannuation tax laws. This includes legislation that deals with the taxation of superannuation contributions, investment income and benefits and the superannuation surcharge.
Superannuation also administers the Reasonable Benefit Limits system, the Lost Members Register, unclaimed superannuation monies (where states do not have appropriate legislation) and the Superannuation Holding Accounts Reserve.
The line also has a new regulatory role in relation to self-managed superannuation funds.
The Excise line operates within the ATO's compliance sub-plan. It administers commodity-based revenue and business payment (transfer) systems. During 2001-02 the Excise line collected $19.6 billion in tobacco, alcohol and petroleum excise, and $636 million in wine equalisation tax.
During the year Excise processed nearly 580,000 claims for payments under the government's fuel schemes, including the diesel fuel rebate scheme, the diesel and alternative fuels grants scheme and the fuel sales grants scheme. Payments made under the various fuel payment schemes were worth over $3 billion in 2001-02.
Excise also administers the product stewardship (oil) scheme on behalf of Environment Australia. This scheme encourages the recycling of lubricants and other waste oils that would otherwise need disposal.
The Office of the Chief Tax Counsel operates within the ATO's compliance sub-plan. It provides corporate and professional leadership by managing the ATO view on all tax interpretive and administrative matters.
They manage seven branches: Advice Infrastructure, ATO Legal Practice, Business Support, Centres of Expertise, Professional Excellence, Public Rulings, and the Tax Counsel Network.
The Office of the Chief Tax Counsel is responsible for the following functions:
- professional leadership in settling the ATO view on major interpretation issues across all ATO responsibilities, including through the Tax Counsel Network and the Centres of Expertise
- provision of a high-quality and responsive in-house legal service for the ATO (through ATO Legal Practice), including the strategic management of litigation, the freedom of information policy, compensation claims, and the legal professional privilege and access policy
- operation of corporate quality assurance programs for ATO technical advice
- management of private rulings and quality assurance processes (including leadership on the Provision of Advice Project)
- management of the Public Rulings Program
- professional stream skill development and accreditation for technical interpretation
- management of technical decision-making electronic support systems, and
- management of information services (including the libraries).
ATO Production Management operates within the ATO's operations sub-plan. It incorporates the core process, Payment and Production Processing, which has a primary function of capturing, processing and recording information to help clients meet their tax obligations and enable the ATO to manage the tax system.
This area performs a range of high-volume activities relating to processing tax returns and activity statements, and associated work such as amendments, revisions, variations, correspondence and phone calls. This includes managing systems that receive, bank and bring to account client payments and data products. It also includes transferring to other Australian Public Service agencies funds we have collected on their behalf for schemes (such as the Higher Education Contribution Scheme) and for paying benefits to entitled individuals (for example, the family tax benefit). Payment and Product Processing is the transactional interface between taxpayers and the ATO. As the key data capture process, it has a crucial role in maintaining ATO data quality.
The Applications Solutions area of ATO Production Management provides business and technical solutions to enable core ATO computer systems to deliver the business requirements. This involves maintaining key ATO applications, delivering and monitoring cyclical changes, and developing and integrating new products.
Client Account Management operates within the ATO's operations sub-plan. It manages and maintains all taxpayer accounts and administers the Australian Business Register and the tax file number system.
The line is responsible for the operational management of the core transactional processes of registration, accounting, and debt and lodgment, as well as the administration of the ATO penalties regime. They also develop administrative policies relating to accounting, debt, lodgment, prosecutions, penalties, registrations and payments.
ATO Resource Management was formed in November 2001 as a result of the amalgamation of the former Financial Services and parts of the former ATO Corporate line. It operates within the ATO's people and place sub-plan and is responsible for day-to-day support services, financial systems and corporate infrastructure.
Support services include payroll, recruitment, facilities, property, records management, mandatory market testing, procurement and contract management, and business continuity management.
Financial responsibilities include reporting both administered and departmental items; forecasting and monitoring revenue; advising on revenue implications of policy changes, budget estimates, management accounting and costings; and providing a financial managing policy and framework for the ATO. The line also provides all corporate information technology systems, including human resources and financial systems.
ATO Relations was established in November 2001 to align the people functions with the marketing and education capability of the organisation. It operates within the ATO's people and place and compliance sub-plans.
ATO Relations is the home of the Taxpayers' Charter, which outlines the rights and responsibilities of both the community and the ATO.
The compliance model also governs their operations. This model recognises that taxpayers respond to their tax obligations differently and that a one-size-fits-all approach is not the answer to achieving long-term compliance. Guided by these two principles, ATO Relations is responsible for the ATO's interactions, both internally and within the community.
ATO Technology was established in February 2002 and operates within the ATO's information technology sub-plan. The line is responsible for the provision and operation of the information technology and telecommunications infrastructure functions that had previously been performed within the Information Technology Services line.
The key roles of the line include the maintenance and evolution of enterprise architecture and design principles concerned with ensuring the ATO's business systems are efficiently designed and developed according to a purposeful blueprint.
They also undertake strategic technology research and concept proving, in order to best position the ATO to address future challenges and take advantage of emerging business and technology opportunities.
As stated in the Portfolio Budget Statements 2001-02, Treasury Portfolio, the ATO has an overall outcome of 'strong, sustainable growth and the improved wellbeing of Australians'.
As Output Group 1.1, the ATO has a single specific outcome - Outcome 1 - namely, 'effectively managed and shaped systems that support and fund services for Australians and give effect to social and economic policy through the tax system'.
In this context, 'effectively managed and shaped' means how well the ATO:
- implements tax reform structure while delivering our principal business outcomes
- maintains compliance behaviour by providing comprehensive education and support services to the community and developing compliance strategies to address compliance risks (such as aggressive tax planning and the cash economy)
- minimises the costs of compliance through integrating tax system design and supporting the community to meet their tax obligations, and
- maintains community confidence through working in partnership with the community to foster community ownership of the tax system and providing timely and professional service.
This will be achieved by ensuring the ATO is an efficient and adaptive organisation.
The effectiveness measures stated in the Portfolio Budget Statements are:
- maintaining overall compliance by lodgment and payment compliance
- tax design capability by improving the quality of stakeholder interactions with the systems we administer
- tax reform infrastructure by implementing tax reform effectively on time
- maintain community confidence by:
- community perceptions of the ATO
- meeting ATO commitments in the Taxpayers' Charter, and
- client satisfaction with ATO services
- minimise compliance costs by implementing ATO measures to minimise compliance costs, and
- efficient and adaptive organisation by:
- viability of our financial position
- efficiency and effectiveness of our key processes, and
- degree to which we have developed our people, culture, supporting systems and safe workplace.
There are four distinct outputs that contribute to Outcome 1:
- Output 1.1.1 Contribute to policy advice and legislation.This supports the formulation of effective taxation, excise and superannuation policy and the reflection of that policy in legislation, and includes provision of ministerial and parliamentary services.
- Output 1.1.2 Provide revenue. This contributes to effective taxation and excise arrangements through managing and shaping taxation systems that collect revenue effectively and efficiently. This process, in turn, maintains community confidence in the taxation and excise systems.
- Output 1.1.3 Provide transfers. This puts into effect the movement of money to support government redistribution and savings initiatives (such as retirement income and family initiatives).
- Output 1.1.4 Support other agencies. This cross-agency support involves providing services, such as data matching and the provision of statistical information to other agencies (not involving monies).
Quality and quantity performance measures are linked to each output, enabling the ATO to assess the degree to which its outputs are met. For detailed information about how the ATO performed against these measures in 2001-02, see Part 2 and appendix 1.
During 2001-02 a new outcome output framework was developed for implementation in 2002-03. Details of the new framework can be found in the Portfolio Budget Statements 2002-03, Treasury Portfolio.
This part reports on our performance in relation to our outcome and outputs. It also covers our performance in relation to social justice and equity, purchaser/provider arrangements and the use of resources.
This part reports our performance in 2001-02 in relation to our single outcome and its four related outputs, as described in Part 1 and in the Portfolio Budget Statements 2001-02, Treasury Portfolio.
The Commissioner's review in Part 1 outlines key highlights and challenges for the year, and the feature chapters in Part 3 provide more information about these highlights, including performance aspects. Appendix 1 provides a summary of the performance information directly against each output measure shown in the Portfolio Budget Statements.
Some measures apply to more than one output, for example, maintaining technical quality and community confidence, and meeting service standards in the Taxpayers' Charter. We have consolidated our reports on these measures and have presented them later in this part.
This chapter also covers performance in relation to social justice and equity, purchaser/provider arrangements and the use of resources.
The performance measures relating to Output 1.1.1 are:
- Quantity - capacity to predict and manage risks; legislation delivered according to government programs; costings/estimates delivered to anticipated volume; volume of services delivered.
- Quality - strategic intelligence - no significant risks remain unaddressed; quality of legislation, including consistency with policy, legislation and administration principles; accuracy of revenue estimates - current standard maintained; client satisfaction with services provided.
These measures cover strategic research/risk assessment, provision of policy advice, design and development of legislation, and provision of ministerial and parliamentary services.
Strategic research, intelligence and risk assessment are vital to the health and integrity of Australia's tax system.
The ATO has both market segment and corporate intelligence teams. Intelligence from these teams is fed into the ATO's risk management process, which in turn informs the corporate governance and planning processes.
The Corporate Risk Management Support Group ensures there is an integrated ATO-wide approach to risk management in relation to all aspects of the ATO's work.
Business and service lines use the research, intelligence and risk assessment information to initiate and adapt their planned activities.
When there are proposals to change the tax laws, the ATO provides government with estimates of how these changes might affect revenue and the cost of compliance.
While demand for this analysis is ongoing, it varies according to the magnitude and complexity of possible changes.
Demand this year focused on additional elements of the overall tax reform package, amendments to legislation, variations to the administration of the new tax system, and costings for the election under the Charter of Budget Honesty Act 1998. Throughout the year we met the demand for such estimates within the specified timeframes.
There were 26 bills on the government's tax legislation program in Parliament in 2001-02. This included five bills before Parliament at the beginning of the year and 21 bills introduced during the year. This is an increase on the 17 bills introduced last year, reflecting further business tax reform work and election commitments. Four bills were referred to committees, which is the same number as last year.
The bills contained 78 policy proposals, including significant initiatives such as the Baby Bonus, the consolidation package, the tax value method and the simplified imputation system.
We enhanced our consultation processes with the business community and community groups on many of these projects and received positive feedback on this approach. We also started a significant program of technical corrections during the year.
We exposed two draft bills and consulted widely on another bill. The process of exposing draft bills resulted in changes to those bills, proving that the process of exposure introduced last year is still providing beneficial feedback.
By the end of the year, 20 bills had received Royal Assent and 25 regulations had been gazetted (compared with 35 in the previous year).
Demand for our parliamentary services remained generally constant and increased in some areas, despite the election period of caretaker government and the absence of parliamentary sittings between October 2001 and February 2002.
We prepared extensive briefings for the incoming government and, with a new minister appointed to a new portfolio (Revenue and Assistant Treasurer), we reviewed our services to ensure they catered for different requirements and preferences.
We received 5,345 ministerial representations in 2001-02. We actioned 5,818 (including several received in the previous year), an increase of 1,215 over 2000-01 levels. We did not respond to duplicate ministerials, those not requiring further action, or those received during the caretaker period.
By subject, the largest number of ministerials related to ATO actions to address mass marketed schemes. Organised campaigns on this issue peaked on or around significant dates, for example, following the announcement of the Commissioner's settlement offer and before the closing date of the offer. These campaigns affected turnaround times.
Overall, we turned around more than 50% within 10 days, 11% in 11 to 21 days and 30% in over 21 days.
We provided 309 new question time briefs to ministers and received 75 questions on notice, slightly less than last year. We also prepared 484 sets of minutes, roughly equivalent to last year.
The performance measures relating to Output 1.1.2 are:
- Quantity - maintain the current standard for tax collected as a percentage of estimate.
- Quality - maintain the current standard for percentage of tax collected on time; reduce the level of overdue debt as a percentage of total collectable debt; maintain the technical quality of advice; maintain service standards of the Taxpayers' Charter; improve professionalism; maintain community confidence.
These measures cover direct and indirect revenue.
Figure 2.1
Total cash collections in 2001-02 were $168,660 million - an increase of $3,234 million or 2.0% over the 2000-01 outcome of $165,426 million.
PAYG withholding collections, including interest, dividend, royalty and mining withholding taxes, rose by $3,848 million or 5.1% compared to the previous year. Growth is normally driven by wages and employment growth.
The other revenue heads that contributed significantly to the overall growth in collections were Gross Other Individuals and GST. Gross Other Individual collections increased by $3,005 million or 22.7%, while GST collections increased by $3,110 million or 13.1%. The completion of the transition to the new tax system meant that for both of these taxes an additional payment was made in 2001-02. Debits on assessment for other individuals that were higher than expected under the new tax system also contributed to the strength in collections.
Several revenue heads had little impact on the change in overall revenue because their collections did not vary by large enough amounts. The receipt of an additional activity statement payment during 2001-02 was the main contributor to increases in luxury car tax and wine equalisation tax. Excise revenue (including duty and surcharges), fringe benefits tax and income tax refunds for individuals were all comparable to collections during the previous financial year.
Company collections were $4,423 million, or 14.0% lower than in 2000-01. A number of reasons contributed to this outcome: in particular, there was a higher concentration of payments in 2000-01 than 2001-02 because it was a transitional year to the new tax system. The corresponding higher concentration of refunds in 2001-02, and the lowering of the company tax rate from 34% to 30%, contributed to the lower company collections.
Superannuation fund collections (including superannuation surcharge) decreased by $419 million (or 8.7%) in 2001-02. The main reasons for the decrease were the higher concentration of payments in 2000-01, low net capital gains, and high tax rebates and credits. Lower income tax collections from funds were partially offset by growth in revenue from the superannuation surcharge.
Other revenue heads that experienced a significant decline in collections during 2001-02 were petroleum resource rent tax and sales tax. Petroleum resource rent tax fell by $1,017 million (or 42.8%) due to higher refunds and lower world oil prices and production. Sales tax decreased by $1,428 million as it was being phased out under the new tax system arrangements.
Figure 2.2
Note: These analyses include alcohol and excise surcharges, but exclude diesel fuel rebates and sales tax. Other indirect taxes are WET and LCT. Total individuals include dividend, interest royalty, TFN and ABN withholding taxes.
TABLE 2.1
Note:
| (a)
| Gross PAYE collections up to 1999-00 and gross PAYG withholding collections from 2000-01. Gross PAYG withholding includes amounts withheld from salaries and wages and other payments that were subject to PAYE withholding arrangements or the prescribed payments or reportable payments systems prior to 1 July 2000 plus tax file number and Australian business number withholdings from 1 July 2000. From 1 July 2001 it includes dividend, interest, royalty, and mining withholding taxes which, in previous years, were part of 'other'.
|
| (b)
| Includes Higher Education Contribution Scheme collections.
|
| (c)
| Includes child support trust account receipts.
|
| (d)
| Includes alcohol surcharge on sales tax.
|
| (e)
| Includes surcharges on excise, but excluding diesel fuel rebates.
|
| (f)
| Includes refunds of child support trust account receipts.
|
| (g)
| Includes superannuation surcharge.
|
| (h)
| Includes wine equalisation tax (WET) and luxury car tax (LCT).
|
| (i)
| Excludes prescribed payments system and reportable payments system amounts.
|
| (j)
| Excludes dividend, interest, royalty, and mining withholding taxes.
|
Figure 2.3
Figure 2.4
TABLE 2.2
Note: Rounding may cause totals to differ from the sum of components.
| (a)
| Includes refunds of collections for Medicare levy in all years and child support trust account receipts from 1994-95 to 1997-98.
|
| (b)
| Interest, dividend, royalty and TFN withholding tax refunds.
|
| (c)
| Excludes Commonwealth on-budget departments and authorities.
|
| (d)
| Excludes the impact of diesel fuel rebates and grants.
|
Figure 2.5
Figure 2.6
TABLE 2.3
Note: Capital gains are included as assessable income in tax returns, and tax paid is estimated from this information. It is not a separate revenue line. Only taxable records are included in these calculations.
| (a)
| Revised figures.
|
| (b)
| Preliminary figures.
|
TABLE 2.4
Figure 2.7
TABLE 2.5
Comparison of actual 2000-01 results, 2001-02 Budget estimates and actual results (cash basis)
Note: Rounding may cause totals to differ from the sum of components.
| (a)
| The Pay As You Go (PAYG) system was introduced from 1 July 2000. This system has two main components, namely PAYG withholding and PAYG instalments. Revenue heads Gross Other Individuals, Companies, and Superannuation Funds contain PAYG instalments and other payments.
|
| (b)
| PAYG withholding includes amounts withheld from salaries and wages and other payments which were subject to pay as you earn (PAYE) withholding arrangements or the prescribed payments system (PPS) prior to 1 July 2000, plus tax file number (TFN) withholding and Australian business number (ABN) withholding from 1 July 2000. From 1 July 2001, non-resident withholding taxes were included. The 2000-01 actual includes collections from non-resident withholding taxes of $1,216 million.
|
| (c)
| For Budget purposes, actual collections exclude amounts of $568 million in 2000-01 and $626 million in 2001-02, collected through the Higher Education Contribution Scheme and appropriated to the Department of Education, Training and Youth Affairs.
|
| (d)
| Includes an estimated amount for Medicare levy of $4,605 million in 2000-01 and $4,970 million in 2001-02.
|
| (e)
| Includes collections from superannuation surcharge of $690 million in 2000-01 and $824 million in 2001-02.
|
| (f)
| Excludes collections from Commonwealth on-budget departments and authorities of $263 million in 2000-01 and $357 million in 2001-02.
|
| (g)
| Excludes residual excise surcharge collections on petroleum of $255 million and tobacco of $61 million in2000-01.
|
| (h)
| Includes residual sales tax (sales tax was abolished from 1 July 2000), wine equalisation tax (WET) and luxury car tax (LCT) of $1,245 million, $523 million and $171 million respectively for 2000-01. In 2001-02, includes sales tax, WET and LCT of -$76 million, $640 million and $220 million respectively.
|
| (i)
| Includes sales tax collections by the Australian Customs Service of $3 million in 2000-01. Excludes alcohol sales tax surcharge collections of $106 million in 2000-01 and -$0.5 million in 2001-02. Includes WET and LCT collections by the Australian Customs Service of $3 million and $1 million respectively in 2000-01 and $3 million and $1 million respectively in 2001-02.
|
| (j)
| The goods and services tax (GST) was introduced from 1 July 2000 and is paid to the states and territories under the Intergovernment Agreement. Excludes GSTcollection of $23,788 million in 2000-01 of which $1,702 million relates to collections by the Australian Customs Service. For 2001-02, GSTcollections were $26,898 million, which includes $1,745 million collected by the Australian Customs Service
|
TABLE 2.6
Note: Rounding may cause totals to differ from the sum of components.
Efficient debt collection contributes significantly to the ATO's overall revenue and compliance performance. It is a vital component in improving the community's confidence in the fair and effective administration of the tax laws. In performing this function, the ATO seeks to minimise debt holdings and improve timeliness and efficiency of collection activities, while sustaining the quality of decision-making.
During the year we enhanced the risk-based approach to managing debt.
Table 2.7 summarises overall debt collection results for the past four years.
At 30 June 2002 there were 1.2 million debt cases on hand. This is a 67% increase on 2000-01. The value of debt on hand was $14.05 billion, an increase of 32%. This included $7.49 billion in disputed debt, up by 25% from 2000-01. Collectable debt increased by 51%, or $1.8 billion. A majority of this disputed debt is in the large business sector, with the bulk concentrated in a small number of significant cases. The value of debt finalised at 30 June 2002 was $41.64 million, an increase of 54.3% on 2000-01.
There has been a 2.5 times increase in the volume of debt transactions. A large measure of this growth reflects the more frequent interaction with the tax system now being experienced by most clients. For example, many small businesses historically had annual obligations only, but the introduction of the new tax system has seen interactions increased due to quarterly obligations to lodge and pay. These more frequent interactions result in the earlier recognition of debits.
In 2001-02 the number of debt cases referred for collection action increased significantly (65%) over the preceding year. The increase can also be attributed to the ATO imposing the failure to lodge penalty and placing a greater emphasis on securing lodgment of outstanding activity statements.
The value of new debt referred increased by $13.99 billion (or 50%) on last year. This is inflated by incorrect postings to client accounts as a result of incorrectly completed activity statements. This occurred to a lesser extent than in the preceding year. The increase in debt resulted mainly from a greater focus on activity statement non-lodgment. The likely imposition of the failure to lodge penalty encouraged taxpayers to lodge, but not necessarily to pay.
The greater focus on lodgment and debt activities was supported by the permanent redeployment of 432 staff from other areas of the office to debt, lodgment, registration, and payment and product processing activities.
In addition, in January 2002 we developed a collection improvement strategy to further increase the focus on debt collection and lodgment, and to deliver more timely intervention via automated reminder letters. An additional 320 staff were redirected from other activities in support of the strategy.
The strategy resulted at year end in additional collections in excess of $800 million, and over 300,000 additional activity statement lodgments. Activity statement lodgment reminder letters now also issue from 28 days following the due date for monthly lodgers, and within six weeks for quarterly lodgers.
In ATO staffing terms, the cost of debt collection for the year was one cent for every dollar collected. This is equivalent to last year's performance.
Table 2.7 shows debt collection results for the last four years, while table 2.8 summarises the ATO's results in terms of collectable debt, as percentages of total collections.
TABLE 2.7
Note:
| (a)
| This amount excludes $0.04 billion tax not due for payment at 30 June 1999.
|
| (b)
| This amount excludes $0.07 billion tax not due for payment at 30 June 2000.
|
| (c)
| This amount excludes $0.39 billion tax not due for payment at 30 June 2001.
|
| (d)
| This amount excludes $0.16 billion tax not due for payment at 30 June 2002.
|
| (e)
| Adjusted to reflect account posting corrections.
|
TABLE 2.8
Note: The total collections amount is net of refunds and excludes Child Support Agency collections.
| (a)
| Adjusted to reflect account posting corrections.
|
| (b)
| Collectable debt has been adjusted to reflect accounting modifications and extraordinary collection factors that increased the level of collectable debt reported. The adjustment allows for a direct historical comparison with the percentage of collectable debt to total collections for previous years.
|
The performance measures relating to Output 1.1.3 are:
- Quantity - monetary value of expenditure, outlay, transfers and refunds; number of obligated employers; number of funds.
- Quality - maintain percentage of monetary value collected on time; maintain service standards of the Taxpayers' Charter; maintain technical quality; achieve measures specified in memorandums of understanding with other agencies.
These measures cover the movement of monies not classified as revenue.
Tax expenditures are the financial benefits that individuals and businesses derive from tax concessions of various kinds. They are tax concessions and do not represent taxes collected. Usually they are delivered through tax exemptions, tax deductions, tax rebates or reduced tax rates.
In 2001-02 the ATO administered an estimated $29.3 billion in tax expenditures, compared to $29.6 billion in the previous year. These figures are released by Treasury, and include items for which the value of the tax expenditure can be quantified.
Excise transfer schemes are the:
- diesel fuel rebate scheme - an off-road scheme that provides a rebate for customs or excise duty paid on diesel or 'like' fuels used in certain off-road activities
- diesel and alternative fuels grants scheme - a grant for the on-road use of fuel used in eligible activities by businesses
- fuel sales grants scheme - introduced so that fuel retailers in non-metropolitan and remote areas can pass on a one to two cent reduction at the pump, and
- product stewardship (oil) scheme - designed to encourage oil recyclers to collect and recycle more oil. This scheme was developed in conjunction with Environment Australia - which still maintains and develops policy, but the ATO administers the scheme.
Amounts the Excise line has administered through transfers (payment schemes) are provided in table 2.9.
TABLE 2.9
The Higher Education Contribution Scheme (HECS) commenced in 1989 as a way to supplement funding of Australia's higher education system. It is governed by the Higher Education Funding Act 1988 and jointly administered by the Department of Education, Science and Training (DEST), higher education institutions and the ATO.
Through the scheme, students are required to contribute to the cost of their higher education. They can pay up front to the institution or defer their liability and pay through the tax system when their HECS repayment income reaches the minimum threshold. The minimum repayment threshold for 2001-02 was $23,242.
The amount of the HECS contribution (which is adjusted each year in line with the cost of living) is based on individual units of study and is calculated by the institutions. Units of study are divided into three bands.
The 2002 contributions are $3,598 for band 1, $5,125 for band 2, and $5,999 for band 3. For students who began studying before 1 January 1997, and who continue that same course of study, the HECS rate for 2002 is $2,702.
The Postgraduate Education Loans Scheme (PELS) started in 2002. These loans are also collected through the tax system as HECS debts.
In 2001-02 a total of 351,983 assessment debts were raised, totalling approximately $588 million in HECS repayments. Voluntary repayments of $134.6 million consisted of 47,565 payments. Of these, 42,318 received $19.9 million in bonuses. Voluntary repayments through electronic means continued their upward trend this year.
The indexation rate of 3.6% was applied to the accumulated HECS debt on 1 June 2002, effectively increasing the debt by $252.5 million.
There were 16,877 PELS debts, totalling $50 million.
At 30 June 2002 there were approximately 1.1 million clients with a total accumulated HECS debt of more than $8.7 billion.
The Student Financial Supplement Scheme (SFSS) is a voluntary loan scheme that gives tertiary students the option to borrow money to help cover living expenses while studying. It has been available since 1993.
Students must start to repay their loan in the fifth year after the loan was taken out, if their taxable income reaches the minimum threshold. The threshold for 2001-02 was $32,918.
The debt for loans taken in 1997 was transferred from Centrelink to the ATO on 1 June 2002. This involved 57,773 loans with a total debt of $291.5 million.
During 2001-02 there were 32,624 compulsory financial supplement repayments totalling $38.8 million. Another 3,427 voluntary repayments were made, totalling $3.1 million.
The indexation rate of 3.6% was applied to the accumulated financial supplement debt on 1 June 2002, increasing the debt by $31.2 million.
At 30 June 2002 there were 160,305 clients with a total accumulated financial supplement debt of $1.2 billion.
As part of its November 2001 election commitments, the Federal Government announced a range of new superannuation measures. These measures were contained in the document titled A Better Superannuation System and will be implemented over the next two years.
The measures include splitting superannuation contributions between couples, the Superannuation Low Income Earner Co-Contribution, the quarterly superannuation guarantee, allowing temporary residents access to their superannuation, choice of superannuation and portability.
The ATO has responsibility for implementing and administering 12 measures. The administrative systems to support these initiatives are being developed.
The superannuation guarantee exists to ensure that as many Australian employees as possible have access to superannuation for their retirement. If an employer fails to contribute the statutory minimum level of superannuation for an eligible employee, the ATO will establish the employer's liability to pay the superannuation guarantee charge. The ATO will then transfer the employee's entitlements collected in respect of those liabilities to a superannuation provider chosen by the employee.
In 2001-02 the superannuation guarantee rate was 8% of an eligible employee's earnings base (usually ordinary time earnings). This rate rose to 9% from 1 July 2002 and will remain at this level into the future.
Employer superannuation contributions in the 2001 calendar year totalled $28.8 billion, an increase of 10.2% on the 2000 calendar year.
Superannuation guarantee charge liabilities totalled $138.5 million in 2001-02, an increase of 30.9% on the previous financial year. This rise is generally attributable to increased audit activity and performance.
The ATO has a comprehensive compliance strategy for the superannuation guarantee that involves a mixture of audit and education/communication activities. The audit strategies include investigating all complaints made by employees and other members of the community. Analysis of data and other information available to the ATO also enables identification and investigation of employers who are not meeting their superannuation guarantee obligations.
TABLE 2.10
The ATO maintains a register of people who have become 'separated' from their superannuation funds. Superannuation funds report members as lost when they have received returned unclaimed mail for the member, or the account has not had any activity for some time.
The ATO offers a product called Supermatch, an electronic interface through which funds can check their members' details against the Lost Members Register, the Superannuation Holding Accounts Reserve and unclaimed superannuation guarantee vouchers. The aim of this service is to consolidate members' superannuation monies into their existing account.
TABLE 2.11
The ATO administers a superannuation reserve called the Superannuation Holding Accounts Reserve (SHAR). This reserve is designed to receive small superannuation amounts from employers who are unable to find a superannuation fund that accepts these small amounts.
SHAR does not operate as a superannuation fund, and payment of interest is subject to certain conditions. To encourage and educate employers to use superannuation providers rather than the reserve, we publish on our website the names of some large industry superannuation funds that will accept small amounts.
The Supermatch product referred to above helps superannuation funds consolidate members' superannuation monies into their existing accounts, including transfers from SHAR. This year, approximately $5 million has been transferred to members' accounts from unclaimed superannuation guarantee vouchers and SHAR. Recently, two major eligible rollover funds have identified over 50,000 members with matches with either superannuation guarantee vouchers or SHAR accounts.
TABLE 2.12
The number of self-managed superannuation funds (SMSFs) continued to grow throughout 2001-02, with approximately 237,000 registered as SMSFs currently regulated by the ATO.
We continued to apply the ATO compliance model in our interaction with trustees and funds alike. As part of this approach, we have continued to develop and implement an education campaign to educate trustees of newly formed self-managed superannuation funds about their obligations and responsibilities to self-regulate. As part of this process, we have been in contact with approximately 11,000 intermediaries who represent approximately 30,000 recently registered funds.
We have also been very active in a number of other areas:
- Liaising with trustees and approved auditors where a contravention of the legislation has been notified to the ATO by the fund auditor. In these cases, where possible, a rectification program has been put in place with the fund's trustees to ensure compliance is maintained.
- Liaising with trustees and practitioners to help them ensure their income tax, regulatory and surcharge lodgments are up to date and made within the prescribed time periods.
- Liaising with trustees to help funds that have breached the investment restrictions, including in-house asset rules (such as loans to related parties or fund members). In a minority of cases - and as a final resort - we have been required to take more serious action.
- Reviewing potential breaches of the sole purpose test. By law, a self-managed superannuation fund must be maintained solely for the purpose of providing benefits to fund members upon their retirement, or to their dependants (in the case of a member's death). We have seen a number of cases where we believe the trustees may be managing the affairs of the fund for reasons other than to provide a retirement income, which therefore may be in breach of the sole purpose test.
- Enforcing the preservation rules. We have taken action in a number of instances where self-managed funds have been used as a vehicle to release preserved superannuation benefits illegally. In these cases we have worked closely with both the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority to ensure the practice ceases and the promoters are held accountable.
A total of $816.38 million was transferred from the ATO to other departments and agencies in 2001-02, including Centrelink, the Department of Education, Science and Training (DEST), the Department of Family and Community Services (FaCS), and the Child Support Agency (CSA). Schemes to which funds were transferred included the Higher Education Contribution Scheme and the Student Financial Supplement Scheme.
The breakdown of total funds transferred is provided in table 2.13.
TABLE 2.13
2.4 - Output 1.1.4 - support other agencies
The performance measures relating to Output 1.1.4 are:
- Quantity - output as determined by agreement with clients; measures as specified in memorandums of understanding with other agencies.
- Quality - measures as specified in memorandums of understanding with other agencies.
These measures do not involve the movement of monies. They cover services provided to other organisations.
The ATO and the Australian Bureau of Statistics (ABS) have a memorandum of understanding for activities of mutual interest. Joint committees and work groups support the relationship, and there is an annual meeting between the Commissioner and the Australian Statistician. The ABS also outposts an experienced senior officer to the ATO and, where appropriate, ABS staff participate in certain ATO projects.
Under paragraph 16(4) of the Income Tax Assessment Act 1936, the ATO provides the ABS with specific information about businesses, which is used for the purposes of the Census and Statistics Act. In addition, non-identifiable tax information is made available to the ABS for statistical purposes. With the introduction of the new tax system, the ABS also receives details of businesses included on the Australian Business Register, as well as information from business activity statements for statistical purposes. The secrecy provisions of ABS legislation preclude the ATO receiving from the ABS any information that relates to individual people or businesses.
The memorandum of understanding includes milestones that set standards for the timeliness and quality of data that the ATO supplies to the ABS. This year the ATO met all but one of the agreed milestones.
The ATO classifies the description of industry for all businesses registering for an Australian business number (ABN), using the Australian and New Zealand Standard Industrial Classification. During 2001-02 lower quality was achieved for a few months, but with management intervention and support from the ABS, data quality has now returned to an acceptable level.
A key achievement in 2001-02 was the establishment of a joint ATO-ABS information management unit. The ATO and ABS have both contributed resources to this unit, which will address strategic issues to improve the quality of the management and collection of information in the ATO.
The Commissioner has discretionary powers under section 3E of the Taxation Administration Act 1953 which authorise him to release information to certain law enforcement agencies. This power is available only when the information is relevant to determining whether a serious offence has been, or is being, committed, or when the information is relevant to proceeds-of-crime order proceedings.
Information provided under the legislation can be used for investigative purposes but not as evidence in a court for non-tax prosecutions, except in relation to a proceeds-of-crime order proceeding where the person has been convicted of a serious offence.
There were 32 requests for such information on hand at the beginning of 2001-02, and we received 380 requests during the year, of which 372 were processed and information was disclosed in 369 cases. These cases involved the affairs of 1,528 individual and corporate taxpayers.
Two cases were withdrawn during the year, and 38 cases remained on hand at 30 June 2002.
Tables 2.14 and 2.15 summarise the categories of offence and the requesting agencies.
TABLE 2.14
* Includes 32 requests on hand on 1 July 2001.
TABLE 2.15
* Includes 32 requests on hand at 1 July 2001.
The Commissioner has discretionary powers under section 3EA of the Taxation Administration Act 1953 which authorise him to release information to the Australian Security Intelligence Organisation (ASIO).
This power is available only where the Commissioner is satisfied that the information provided is directly relevant to ASIO's functions under subsection 17(1) of the Australian Security Intelligence Organisation Act 1979.
This year the ATO received and processed only one request for such information from ASIO, covering 11 individual and corporate taxpayers. However, on three occasions the ATO spontaneously provided tax information to ASIO under section 3EA of the Taxation Administration Act 1953. These three spontaneous exchanges involved 17 individual taxpayers.
It should be noted that the legislation allowing ASIO access to tax information was enacted in December 1999 but was not used before 1 July 2001.
The ATO provides a range of services to the Child Support Agency through a memorandum of understanding and several service level agreements. These services relate to prosecution investigations, lodgment enforcement, fraud prevention and control, payment processing, ancillary business, software/systems interfaces, people services, accommodation, security, in-house prosecutions and information technology services.
In 2001-02 most of these services were provided to the agreed standards.
The Data-matching Program (Assistance and Tax) Act 1990 allows the matching of data by specified government agencies on issues such as income, personal/family identity and tax file numbers for the purposes of:
- identifying tax evasion
- detecting a person who is evading tax liabilities by failing to disclose income to the ATO where income information on that person is held in another government agency's database
- detecting instances where a person could be receiving incorrect payments from a government agency, and
- verifying the accuracy of income data held about a person by a government agency.
The specified government agencies are the ATO, Centrelink and the Department of Veterans' Affairs.
Centrelink administers the matching of the data, which is carried out by the data matching agency. Results may be shared with the specified government agencies. The ATO can use the data matching results to issue an assessment or an amended assessment to a person, to correct personal identity data it holds in relation to the person, or to investigate possible fraudulent activity.
Five data matching cycles were carried out during 2001-02, with more than 11 million tax file numbers checked in each of the first four cycles (cycles 58-61) and more than 7 million in the fifth cycle (cycle 62). The number of tax file numbers checked decreased in the fifth cycle because of a change in the client base referred from the assistance agencies for this cycle.
The ATO contributes to maintaining community confidence in the tax system by providing administrative support for the tax agents' board in each state. The boards are constituted under the Income Tax Assessment Acts, with members appointed by the Minister for Revenue and Assistant Treasurer.
For 2001-02, around 20 ATO staff provided secretariat support to assist each state board with their statutory obligations. While working for the ATO, part of their duties was to carry out each board's directions in relation to the registration and discipline of tax agents. The secretariat is funded to provide appropriate support resources to each board.
The Taxation Relief Board operates in accordance with section 265 of the Income Tax Assessment Act 1936 and section 133 of the Fringe Benefits Tax Assessment Act 1986. These Acts provide that the Taxation Relief Board has the discretion to release taxpayers from certain tax liabilities where it is satisfied that recovery of outstanding tax will cause serious hardship.
The Taxation Relief Board consists of the Commissioner of Taxation, the Secretary of the Department of Finance and Administration and the Comptroller-General of Customs or such substitutes for all or any of them as the Minister may appoint from time to time. The law provides that the Commissioner of Taxation or his substitute shall be the Chairman of the Board and that the decision of the majority of board members shall prevail.
The Taxation Relief Board has the sole power to grant relief from a tax liability where that liability is greater than $500. Where an application is made for release in respect of an amount that exceeds $10,000 the board must refer the application to the Administrative Appeals Tribunal for examination. The Commissioner of Taxation may exercise the power to grant release from liabilities not greater than $500 without reference to the Taxation Relief Board.
The Taxation Relief Board receives administrative support from the Relief Board Secretariat, which is funded and staffed by the ATO.
During the course of the 2001-02 financial year the Taxation Relief Board convened on 57 occasions and considered 1,798 cases valued at $27.8 million.
Of the 1,798 cases considered during the financial year:
- 636 applicants (35.4%) were granted full relief
- 270 applicants (15.0%) were granted partial relief
- 835 applicants (46.4%) were refused relief
- 51 applications (2.8%) were deferred pending the receipt of additional information, and
- 6 applications (0.4%) were withdrawn.
Costs associated directly with the administration of the Taxation Relief Board and borne by the ATO were $543,916.60 salary and $8,640.00 administration funds, totalling $552,556.60.
The Innovation Segment, within Large Business and International, jointly administers the R&D Tax Concession Program with AusIndustry in its role of supporting the Department of Industry, Tourism and Resources. The concession is a major instrument of the government to encourage innovation in Australian companies and achieve the broader objectives of developing internationally competitive, export-oriented and innovative industries. Approximately four thousand companies receive tax deductions totalling $5 billion a year for R&D expenditure.
A self-calculating electronic schedule has been provided to assist companies in complying with the legislative and administrative requirements for claiming deductions for R&D expenditure in their tax returns.
As with the R&D tax concession, the ATO's role is to support the Department of Industry, Tourism and Resources and AusIndustry in administering the Pooled Development Funds Program. The object of the Pooled Development Funds Act is to encourage the market to provide 'patient equity' for new or growing small and medium enterprises that find it difficult to raise capital.
There are restrictions on pooled development funds in relation to investments, with the benefit being that they are subject to only 15% tax on income from small and medium enterprises and 25% on bank interest. Unfranked dividends are exempt in the hands of the shareholder and the shareholder can choose whether they want franked dividends to be exempt or taxable in their hands.
2.5 - Maintaining community confidence
Tax reform resulted in significant changes to the tax system, including the introduction of GST and the PAYG system. It also introduced a range of benefit and grant schemes, including the senior Australians tax offset, family tax benefit, refund of excess imputation credits, and diesel and fuel rebate and grant schemes.
After a challenging transition period, the changes are in place, revenue is being collected and grants are being paid. A range of business tax reforms have also been implemented, while others are still being bedded down.
The community has generally adapted well to the changes. Following a long education and information phase, the ATO has increased its focus on compliance around activity statement lodgment and payment. Early intervention on outstanding activity statements has led to improved lodgment and payment, as well as the establishment of previously unrecognised activity statement liabilities.
A number of specific initiatives were directed at maintaining community confidence during the year, including:
- continued focus on our compliance programs in the large corporates and related individuals segment
- continued support for business in implementing the new taxsystem
- successful delivery of the online real-time ABN registration system facility
- management and processing of a large volume of products and transactions (including over 12 million income tax returns, over 14 million activity statements, more than 2 million activity statement refunds and over 15.4 million payment transactions from individuals and businesses, with a value of $180.861 billion)
- improvements in the ATO's client accounting system
- successful delivery of a phone-based service for lodging income tax returns (pilot process) or applying for a refund of excess imputation credits (nationwide service), and
- professional excellence strategies designed to improve our performance in developing, interpreting and applying the laws we administer.
Since December 1996 we have used an independent consultant to conduct a series of surveys to measure community perceptions of the ATO.
The surveys are conducted nationwide, with approximately 2,000 people aged 18 and over randomly contacted by phone. Age and sex quotas are applied to each capital city, state and territory to ensure the sample represents the Australian population. Community perceptions measured this way are expected to change only slowly, and the results to date have remained fairly constant. There has been greater variance in results since 2000-01 when the sample population was modified to include only respondents who had contact with the ATO, other than just submitting a tax return.
Survey results consistently show that taxpayers who prepared and lodged their own tax return within the last 12 months have a more positive view of the ATO and the tax system than those who either do not lodge a return, or have someone else prepare their return.
Table 2.16 and associated figures 2.8 to 2.10 summarise some of the key findings. The surveys were originally conducted bi-annually (these results are averaged for the year). However, given the nature of the survey - and that change is not apparent over a shorter period - they have been conducted annually since 2000-01. These results do not cover all survey questions, but represent the highs and lows in responses. A shift of 6% or more is considered statistically significant.
Figure 2.8
Note: Since 2000-01, these results represent answers from respondents who had contact with the ATO, other than just submitting a tax return, in the previous year.
TABLE 2.16
* Since 2000-01, these results represent answers from respondents who had contact with the ATO, other than just submitting a tax return, in the previous year.
Our complaints service, known as ATO Complaints, is coordinated in the Charter and Complaints Branch of ATO Relations.
This complaints service was previously known as the Problem Resolution Service. Experience with the community indicated that this title was poorly understood and was frequently mistaken for the ATO's general enquiry service. Over the past two years, letters to taxpayers and other materials have described the contact telephone line for complaints (13 28 70) as the Complaints Line, and from March 2002 the name of the coordination area for complaints management was also changed.
Together with the change in name came changes to the way complaints are managed in the ATO. These changes affect internal ATO processes rather than the experience of people who might need to make a complaint about the ATO. If anything, the modified processes should improve the timeliness of complaints handling. However, the changes mean that there are discontinuities in the figures reported in this annual report compared with previous years.
We have now refocused on the principles of the Taxpayers' Charter and good complaint management practices. The intent of the Taxpayers' Charter is that areas that caused certain complaints should have primary responsibility for resolving them. This is why the charter advises taxpayers that they should first try to have their complaint resolved within the area responsible for it. If they are still not satisfied, they should then ring the Complaints Line on 13 28 70.
From the taxpayer's perspective, re-assertion of this principle should mean a simpler process for resolving complaints, with fewer bureaucratic hurdles to overcome.
Since 1 March 2002, ATO Complaints case-manages complaints only if:
- the taxpayer is not satisfied with the resolution of an earlier complaint by the area that caused the complaint
- the problem is recurring, or
- the complaint is about the integrity of ATO people or processes (for example, the complaint is about a manager or supervisor), or about a breach of privacy or confidentiality, indicating a potential systemic issue.
ATO Complaints works collaboratively with lines to change processes, systems and policies where intelligence derived from complaints indicates that taxpayers are having problems in their dealings with the ATO. Complaints intelligence, and intelligence from other frontline areas, is used to provide lines with early warning so they can implement strategies to prevent the problem from affecting more taxpayers. This may require adjustment to policies or procedures, or require an IT solution.
Figure 2.9
Figure 2.10
|
|
ATO Complaints received 22,437 complaint or feedback contacts during the year (or about 90 per working day), mostly by phone but also by email, fax and letter. This compares with 29,881 contacts in 2000-01.
In 2001-02 we:
- case-managed 1,902 complaints (there were 3,810 level 3 complaints in 2000-01, though these categories are not strictly comparable)
- referred 15,794 complaints to lines for resolution, compared with 24,459 level 1 and 2 complaints in 2000-01, and
- received 4,741 items of feedback, compared with 1,623 itemsin 2000-01. This is feedback that expresses dissatisfaction with an ATO service but does not necessarily require the resolution of an issue at the individual level.
The major issue resulting in complaints and feedback during the year was the difficulty taxpayers experienced in accessing our telephone enquiry services. We used this intelligence to enhance our enquiry services by making more lines and operators available.
In 1998 we implemented a program to evaluate our staff's performance in achieving the professional standards of service agreed between the ATO and the community, as set out in the Taxpayers' Charter and agency agreements with staff. In December 2000 we piloted and subsequently adopted a different way of surveying taxpayers, the 'One ATO' model. Under this model, the ATO aims to have 70% or more of clients being 'satisfied' or 'very satisfied' with the professionalism of ATO staff.
Surveys are conducted about every six months and are carried out and analysed by an independent consultant. The survey results are used to identify staff development and training needs, with a view to improving our professionalism across the whole organisation.
The results for 2001-02 continue to reflect that we have maintained a positive relationship with the community post tax reform. In April 2002 the surveys were broadened to include clients who had contacted us with complaints.
Survey results show that clients were most satisfied that ATO staff have respect for them, but that clients felt staff were not always confident about the advice they were giving them. Figure 2.11 shows the percentage of taxpayers who were either 'satisfied' or 'very satisfied' with the overall professionalism of staff.
Figure 2.11
|
|
Under the Professional Excellence Program, we continue to pursue improvements in our performance in developing, interpreting and applying the laws we administer.
This process is steered by the Professional Excellence Forum, chaired by the ATO's Second Commissioner (Law), and has external representation from business and professional organisations, in addition to senior ATO leaders.
The Professional Excellence Program focuses on three key strategy areas: infrastructure, enabling and assurance strategies.
Infrastructure strategies include process and procedural design, knowledge management and decision support.
To facilitate our improvement program in this area, we have formed a new Advice Infrastructure Branch. This branch gives us a stronger focus on the development and maintenance of infrastructure for technical decision-making, especially that relating to binding advice.
In another major initiative we are taking a more concentrated approach to deciding interpretive issues that establish precedent. We are changing the focus of our centres of expertise to cover all areas of the law for which the Commissioner has responsibility. As a result, the number of officers who may determine the ATO view of the law has been reduced. This will further improve the quality of our decision-making and expand our database of precedent, with the downstream effect of more accurate and timely advice.
During the year 1,393 ATO interpretive decisions were published on this database.
We have continued to develop and enhance our internal legal and policy database, ATOlaw, to better support our professional staff. The majority of this information, including ATO interpretive decisions, is available to the public on our website.
We have continued to develop our integrated advice case actioning and case management system to provide a core production process from receipt to issue, including unique identifiers and secure archiving. This system also enables us to extract more reliable performance data to better manage our internal processes. The next version of this system is scheduled for release in late 2002, and will include enhanced support for actioning and managing public rulings. To further enhance integrity, on 1 July 2001 we commenced the publication of GST private rulings, without personal identifiers. This complemented the publication of income tax private rulings.
In addition, we have introduced an improved and consolidated ATO Advice Manual to provide consistent, high-quality procedural direction to our staff who give written and oral advice to the public. A process is in place to continually enhance and refine the manual.
Enabling strategies include workforce planning, recruitment, training, education and development.
Building on our experience with implementing tax reform, during 2001-02 we continued to enhance our infrastructure to recruit, train, develop and educate our professional workforce.
We have started to develop a framework of professional streams within the ATO to allow us to better meet our current and future workforce needs and support the learning and development of our professional staff. This framework is being trialled with the Law and Field streams, with a map of roles in these streams, the capabilities they require, and a catalogue of learning products to be delivered in late 2002.
We have made major advances in our capacity to deliver e-learning solutions as an alternative to conventional delivery methodologies.
We developed and delivered learning products on tax reform issues, including the simplified tax system for small business, uniform capital allowances, thin capitalisation, insurance and superannuation, consolidation, the simplified imputation system and financial instruments. As part of our commitment to helping the community, we have also delivered many external education products to intermediaries and tax professionals on these topics. These products are also available on the business tax reform website.
Aside from our commitment to tax reform, we developed or updated over 60 self-directed learning modules on technical topics, including foundation income tax, PAYG, excise, superannuation and GST.
We developed a high-quality Advanced Interpretation and Research Program for delivery to our key technical staff involved in interpreting and applying the law. This program uses a mixture of theory, experiential learning and on-the-job coaching to improve the capability of our technical staff to produce quality outputs. This program will also be delivered as part of our graduate program.
We also developed and delivered enhanced packages to support our field compliance capability, including financial statement analysis and negotiation in the field modules.
We re-activated the ATO's graduate program to recruit more than 90 graduates in July 2002. These graduates will be provided with high-quality technical and procedural training, sufficient to meet Certificate IV in Government. They will be placed in learning positions in ATO priority technical work areas, where they will complete value-adding work while being mentored by technical leaders in each area.
We continued to support the Australian Taxation Studies Program (ATAX) within the Law Faculty at the University of New South Wales. During the year around 340 ATO staff (including 59 taxation cadets) undertook undergraduate studies and about 490 undertook postgraduate studies.
In this period, 80 ATO staff graduated, bringing the total number of ATAX graduates to 582 since teaching commenced in 1991.
Assurance strategies include technical quality review, professional accreditation and other forms of capability assessment.
We continue to use a judgment model as one means of assessing the success of our improvement program, especially the quality of technical advice provided to the community.
This model sets out the critical elements of a good decision: comprehending the question and providing a correct, well-reasoned and clearly communicated answer.
Twice yearly, panels that include representatives of tax professionals examine a random sample of written advice cases. If all elements are satisfied, the case receives an 'A' rating. This rating is considered a measure of professional excellence, rather than of technical quality.
A case receives a 'pass' for technical quality if it shows, at a minimum, that the core question was understood and the decision was accurate and consistent.
Tables 2.17 and 2.18 show the results of the last two panel reviews.
TABLE 2.17
TABLE 2.18
We have developed a professional accreditation process for key ATO technical decision-makers and technical leaders. Following development work and piloting in 2000-01, this process has now been implemented for staff who approve private rulings and other forms of written binding advice.
To date, 511 approving officers have been accredited under this process, with a further 54 currently undertaking learning and development before being re-assessed. These learning and development needs have been almost exclusively focused on interpersonal communication and effective feedback.
Professional accreditation has two purposes:
- to provide assurance to the ATO, the public and government about the capability of key ATO staff who make critical decisions or provide leadership to ATO staff in these critical roles, and
- to identify learning and development needs of those key staff so that they may be met via the learning and development component of the Performance Development and Management System, and staff re-assessed for potential accreditation.
Professional accreditation focuses on the range of capabilities required to produce high-quality decisions and provide effective technical leadership. The process provides staff with multiple opportunities to demonstrate these capabilities in written, group and one-to-one activities that explore their experience and abilities. Professional accreditation assessments are made by a team of qualified senior technical leaders who are trained and assessed as capable in their roles.
We have started work on a process to maintain this accreditation over time, using information from workplace observation, quality assurance processes and feedback from clients, peers and subordinates. This process will be especially directed to ensuring that officers have the required expertise in the topics relevant to the areas in which they work.
In July 1997 we launched the Taxpayers' Charter, which provided detailed information about the rights and obligations of taxpayers. The review of the charter, originally due in July 2000, was delayed to allow for the introduction of the new tax system.
In 2001-02 NFO Donovan Research was contracted to undertake independent research as part of phase one of the review. Detailed results are provided in chapter 3.2.
Our performance equalled or exceeded this year's target in 11 of the 18 service standards (see table 2.19), and we equalled or exceeded last financial year's results in 9 out of the 15 standards.
Many areas experienced increases in work volumes, including significant increases in rulings, general correspondence and telephone calls, and this had an impact on the performance achieved.
TABLE 2.19
Note:
| (a)
| The ATO and a taxpayer may negotiate an extended timeframe.
|
| (b)
| These figures show the performance in finalising cases within the set timeframe or negotiated timeframe.
|
| (c)
| Paper and electronic amendments were first reported separately in 2000-01.
|
| (d)
| This is the first year activity statements have been reported under a service standard.
|
During 2001-02 the ATO made considerable enhancements to its tax design capability. We had started this work in the previous year with a project initiated to develop an integrated tax design capability, a key recommendation of the Review of Business Taxation.
The capability that had been developed was documented to provide a guide to those involved in tax design, and the approach was applied to a range of new policy measures (see more information in Part 3).
One of the highest profile new policy measures to which we applied the new approach was consolidation. We formed interdisciplinary teams to:
- clarify and confirm the policy intent to ensure all disciplines involved in the project understood the government's intent for the measure, and
- create a blueprint explaining how users would interact with the new measure and what products and services would support these interactions.
The blueprint was brought to life for potential users of the measure at a series of Consolidation Walkthroughs held in six capital cities and two regional centres around Australia. The Consolidation Walkthroughs demonstrated how the measure would work in practice and gave potential users an opportunity to talk with ATO specialists about the change. Feedback from people who attended a walkthrough indicated that it was a very useful and professional forum.
A second high-profile government policy measure to benefit from the application of integrated tax design principles was the Baby Bonus. The Baby Bonus measure entailed user-testing individual products and services such as forms and instructions using observation techniques. We conducted a full end-to-end validation of the Baby Bonus measure before implementation. This validation was a full simulation involving users, staff, systems, call centres, expert systems, forms, information products and skilling programs.
We applied the integrated tax design methodology to 35 new policy measures during 2001-02, including demergers, value shifting and the simplified imputation system.
Overall, the ATO made considerable progress in ensuring our administrative design:
- delivered on the government's policy intent
- met user needs
- involved interdisciplinary approaches, and
- balanced the need to optimise revenue with the need to gain community confidence and reduce the cost of compliance forthe community.
The tax design approaches developed and applied during the year will be applied even more extensively in future design work, with a deliberate emphasis on administrative improvements. Refer to chapter 3.2 for information about the Listening to the Community project and making tax dealings easier, cheaper and more personalised.
A major effort is continuing to involve practitioners and industry in co-design and consultative forums. There is continued movement to electronic products, both specifically with tax practitioners and more generally with our wider client group.
We have made considerable progress in the areas of self-help (for example, single entry point for tax practitioners and eGrant) and the increased use of electronic approaches. Qualitative research from e-tax users continues to be positive, confirming that they find e-tax quicker and easier to use. ATO statistics confirm that telephone enquiries from e-tax users have dropped and error rates are substantially lower than in paper returns (in line with electronic lodgment system lodgments). For the first time, we will use an automatic amendment strategy for seniors who missed claiming the senior Australians tax offset.
We have been progressing the transition from a line approach to a corporate approach via the development of an ATO Plan comprising four sub-plans - compliance, operations, people and place, and information technology. The sub-plan approach is explained in chapter 5.1. This transition is a significant change that is expected to be further embedded in the coming year.
A key objective of this process has been an improved focus on the integration of planning and governance as a single process through the sub-plan executive groups.
It is also helping us be responsive in dealing with hotspots as they emerge (such as telephony, workforce adjustment and aggressive tax planning) and recognising the areas where new work needs to be commissioned.
For 2001-02, the ATO continued purchaser/provider arrangements with the Department of Family and Community Services and the Department of Health and Ageing.
We provided services to the Department of Family and Community Services for the Family Assistance Office and the Child Support Agency.
The government established the Family Assistance Office to administer the family assistance reforms, which came into effect for tax delivery purposes from 1 July 2000. The reforms simplified 12 existing family assistance payments into three benefits.
The initiative is a joint venture of the ATO, Centrelink and the Health Insurance Commission, with the Department of Family and Community Services having overall responsibility.
The Family Assistance Office was built on existing resources, with no inter-agency staff transfers. Staff at each location answer enquiries about the family tax benefit and child care benefit and payment options. They also assist with completion and lodgment of claim forms.
Claims for lump sum payment of family tax benefit through the tax system were first lodged with tax returns for the year ended 30 June 2001 and were processed during 2001-02.
The ATO provided a total of $171,364,758 in entitlement payments through the tax system to 80,417 claimants. We also paid 173,566 top-ups (on reconciliation) totalling $164,413,272, and passed 2,572,854 verified incomes to Centrelink.
There is more information about our arrangements with the Child Support Agency in chapter 2.4.
We continue to provide services to the Department of Health and Ageing under a service level agreement that supports the administration of the private health insurance rebate. The rebate can be claimed in one of three ways:
- reduced health insurance premiums
- a payment from Medicare offices, or
- a refundable tax offset.
The ATO is responsible for rebate claims made through tax returns and also provides data matching services to detect inappropriate claims across all delivery methods.
Our tax system affects people from a wide variety of cultural and socioeconomic backgrounds. To be an effective agency, the ATO needs to be aware of how tax issues affect people within our community and we need to ensure access to information and services is equitable.
In line with social justice principles and practices, we focus on ensuring our systems are accessible, our administrative arrangements are just, and our messages reach our diverse audiences. This approach helps taxpayers meet their obligations and understand their rights and entitlements.
As part of this approach, in 2001-02 we:
- continued the policy of giving more consideration to individual circumstances in recovering outstanding debts
- provided financial assistance to taxpayers involved in litigation where the outcome was likely to resolve tax issues that were important to the general administration of the tax system and would affect a significant section of the taxpaying public
- published public rulings and other interpretive products
- undertook a review of the Taxpayers' Charter with a view to ensuring its ongoing relevance to Australian taxpayers
- provided information and easy access for students applying for a tax file number through local high schools
- maintained a number of telephone information services, including an Indigenous infoline
- maintained access to tax-related websites, including establishing an 'other languages' section for translated information
- produced information and/or education publications and materials in up to 14 languages
- delivered seminars and workshops in various languages and in a wide range of locations, including regional areas
- delivered monthly tax information sessions on SBS Radio in eight languages using bilingual ATO staff
- provided tax return materials in print, cassette tape and electronic formats
- assisted low-income clients through the Tax Help program, by training volunteers to help people complete tax returns, and
- continued the use of interpreter and translation services as required.
We have contracts with 175 third-party providers in remote Australia to provide information and education services to local communities. This network is currently being extended to cover additional communities.
There is a summary of our efforts in relation to the Commonwealth Disability Strategy in Part 5.
During 2001-02 the ATO had an operating budget of $1,984.5 million, of which $1,897.6 million was appropriated by government. The remainder was received primarily to provide services to other organisations and as a result of interest from invested departmental funds.
The 2001-02 budget was originally $176 million less than the previous financial year, reflecting the move from the implementation of major tax reform, including the GST, towards administration of the ongoing tax system. The provision of an additional $107.5 million during the 2001-02 additional estimates process reflected the higher than anticipated workloads experienced by the ATO in managing the new tax system.
The financial management focus of the organisation intensified during this time, with significant changes in financial processes during the year. As part of the revised planning processes across the ATO, our financial reporting was changed to focus on a number of different views of the organisation. We introduced a system of reporting on a sub-plan basis (compliance, operations, people and place, and information technology), as this complemented the more traditional reporting view around business and service lines (organisational units).
Other views of the major activities of the organisation were also taken, some on a regular basis (such as the GST product view), while others were more of a snapshot at a point in time (including other tax products and market segment views).
In addition, the development of the ATO's Output Pricing Review for the three years beginning 2002-03 resulted in a significant focus and analysis of ATO workloads, outcomes and outputs, and costing information during 2001-02. The Output Pricing Review, headed by an independent review principal, Anthony Sherlock, is also discussed in chapter 2.9. The review was presented to government early in 2002, before being reflected in the 2002-03 Commonwealth Budget presented in May 2002.
The ATO is a people-based organisation, with staff and related costs accounting for around 58% of the total budget. In 2001-02 this included $37 million in expenses for approximately 950 staff who took voluntary redundancies during 2001-02. This was necessary for the ATO to meet its 2001-02 budget. A further 11% of the budget was devoted to property costs. Information technology costs - at 11% of the budget - are the next biggest users of resources.
The overall outcome for our 2001-02 budget was in line with the expected budget, with an actual loss of $42.8 million compared with a budget loss of $43 million. In 2002-03 the ATO will move from operating in a loss position back to a break-even financial position. This was factored in as part of the Output Pricing Review.
As part of the Intergovernmental Agreement on the Reform of Commonwealth-State Relations, the ATO is required to maintain systems to allow it to demonstrate the cost of administering the GST. While the ATO is funded directly by the Commonwealth for GST-related activities, the Commonwealth is reimbursed by the states and territories for this expenditure. Each year, a budget for this activity is developed and agreed with the states and territories. The ATO's system of allocating costs to the GST product and statement of attributed costs is subject to separate audit by the Australian National Audit Office (ANAO). In 2001-02 the ATO was within 1.1% of the agreed product budget.
Figure 2.12
NOTE: Office operations include training, transport, printing, postage and legals. Other expenses include payments to other agencies and asset write-offs.
TABLE 2.20
The ATO outcome output framework was updated as part of the ATO's Pricing Agreement 2002-05 to better reflect the business deliverables and new approaches to the way we plan and manage internally to meet those deliverables. Budget estimates are shown in table 2.21.
TABLE 2.21
Figure 2.13
NOTE: Operations includes the compliance activities debt and lodgment.
People and place includes accommodation costs.
Figure 2.14
2.9 - Developments affecting our future
The ATO's existing three-year pricing agreement has now expired.
In line with Department of Finance and Administration requirements, we undertook an Output Pricing Review 'to establish an appropriate price for an agreed quantity and quality of outputs' to be provided by the ATO in future years.
To ensure objectivity, an independent 'review principal' was appointed by government to lead our review.
The Output Pricing Review approach adopted included identifying the outputs and deliverables needed to ensure a sustainable future tax administration. This means ensuring delivery of the appropriate quantity and quality of outputs so that forward revenue estimates are achieved on a sustainable basis.
A rigorous and detailed analysis of the ATO's future funding requirements and management arrangements was undertaken, based on an in-depth bottom-up review of the four key sub-plans that together comprise the ATO's business plan for 2002-03. This involved a focus on existing workloads, efficiencies and outcomes as well as underlying assumptions about the future and an assessment of risks across the whole organisation.
A report was then prepared for consideration by government in the context of the 2002-03 Commonwealth Budget deliberations. This led to additional funding being provided to the ATO for 2002-03 onwards and a new outcome output framework for the ATO, which will be reported against in the Commissioner's next annual report to Parliament.
Responsibility for the design of tax laws and regulations was being relocated to the Department of the Treasury from 1 July 2002. This involved the transfer of 102 ATO staff to Treasury.
Working arrangements between the ATO and Treasury will continue to ensure that the administrative, compliance and interpretive experience of the ATO fully contributes to the policy and legislation processes.
This part describes some of our key achievements and challenges, complemented by a number of case studies. It is divided into key subject areas of integrity, partnership, innovation and people.
3.1 - Ensuring the integrity of the tax system
Now that tax reform has become business as usual, we are re-balancing our support and verification activities, as well as using the features of the new tax system to address the cash economy.
We used a range of products and approaches when undertaking our compliance verification programs during the year, as it is not efficient or effective to adopt a single compliance strategy.
At the broader level, we undertook data matching (both within the ATO and across agencies) and conducted industry-wide reviews. We also analysed intelligence from various sources and participated in joint task forces with other law enforcement agencies.
At a more detailed level, we conducted one-on-one audits, complex investigations, risk reviews, field visits, correspondence reviews and telephone verification.
We applied the compliance model to decide how to address each compliance risk, taking into account factors such as the degree of wilfulness or intent on the part of the taxpayer.
We also selected particular compliance techniques according to factors such as how much revenue was at risk, the inherent complexity of the risk issue, and the number of taxpayers involved. We also took into account the cost-effectiveness of the approach and the likely effectiveness of the strategy in promoting wider community compliance.
Across the full range of income tax and GST verification programs, we finalised over 275,000 cases during the year. This resulted in additional tax and penalty assessments of more than $4 billion, over half of which was raised from the large business and international program. A summary of the major components is in table 3.1.
Additional cases resulted in reduced assessments, as our verification programs are intended to ensure that only the correct amount of tax is paid. For example, during the year, some 65,000 adjustments were made to the assessments of senior Australians, resulting in refunds of about $63 million.
TABLE 3.1
Note:
| (a)
| Amounts include additional tax and penalty.
|
| (b)
| Amounts are rounded to the nearest $million.
|
| (b)
| The figures represent adjustments, not collections.
|
| * These cases contributed to both GST and income tax.
|
Aggressive tax planning undermines the integrity of the tax system and erodes community confidence in the fairness and equity of that system. Dealing with aggressive tax planning continues to be a key priority for the ATO. An ATO steering group provides organisational leadership to ensure an integrated and strategic approach to all aspects of aggressive tax planning.
Significant progress was made during the year to improve taxpayer awareness of the issues and potential risks surrounding aggressive tax planning. In December 2001 the ATO started publishing taxpayer alerts. These are intended to be an early warning of some significant or emerging tax planning issues or arrangements that the ATO has under scrutiny. This initiative is aimed at helping taxpayers and their advisers make more informed decisions about the potential tax consequences of investment decisions. During 2001-02 the ATO published six taxpayer alerts.
As a guide to taxpayers and their advisers, we established a website (www.ato.gov.au/atp) specifically for aggressive tax planning matters. The website is a 'one-stop-shop' featuring an essential checklist of what taxpayers need to consider before putting money into a managed investment scheme or similar arrangement. Other information includes a current list of product rulings, taxpayer alerts, media releases, relevant cases and rulings, and links to the Australian Securities and Investments Commission website.
Evidence suggests the traditional tax scheme marketing season leading up to 30 June 2002 was somewhat quieter than previous years. Feedback was that potential investors were more wary than in past years and were generally taking the sensible precaution of asking whether a particular arrangement had an associated ATO product ruling.
Consistent with this more cautious approach, we are also seeing an increasing preparedness by product developers (including those in the financial sector) to approach us to obtain a product ruling. We have also found that the community is increasingly relying on product rulings when making investment decisions.
The ATO issued 100 product rulings and a further 59 single-issue product rulings dealing with the non-commercial loss provisions during the year. Most of these rulings related to managed investment arrangements involving agriculture, afforestation and films as well as financial product investments.
There was an increase in the number of product ruling applications where the promoter subsequently withdrew the application, usually because we refused to provide a favourable ruling. A total of 53 applications were withdrawn. In some cases we refused to rule simply because applicants did not supply the required information despite repeated requests.
Despite these positive signs, and the apparent demise of the mass marketed investment schemes of the 1990s, it would be wrong to proclaim the death of aggressive tax planning.
Our tax laws, in common with tax laws around the world, contain a number of areas of concessional treatment of revenues and expenditures to support particular economic or social objectives. In common with other countries, different structures and different categories of receipts and expenditures can produce varied tax results.
These accepted features of tax laws become the playground of promoters and scheme devisers. Their objective is to construct arrangements to artificially inflate these benefits or to disguise the true economic substance of a product or transaction to have it appear to qualify for the more advantageous tax regime.
Sometimes these endeavours are directed at devising products marketed to a target audience. Sometimes they are devised to meet the particular needs of a client. Other times, there is little pretence of genuineness at all, with the arrangements simply relying on concealment.
At the end of the year, the ATO had over 100 arrangements under examination. The types of arrangements were varied and included those designed to avoid or minimise capital gains tax, offshore-based schemes, financing arrangements and service trust arrangements which seek to utilise the tax advantage of discretionary trusts in diverting income to reduce the overall incidence of tax.
During 2001-02 our focus was to reduce the marketing of, and the participation in, mass marketed schemes and to resolve the older scheme cases. As noted earlier, media reports, together with our own intelligence, indicate involvement in mass marketed investment schemes has been significantly reduced.
In February this year the Commissioner announced a settlement offer for mass marketed scheme investors. This offer was made following careful consideration of the Senate Economics References Committee's second report on mass marketed schemes, and the offer was generally consistent with the committee's recommendations.
The aim of the settlement offer was to enable a speedy and just resolution of the scheme debts. The terms of the offer were as follows:
- a deduction for actual cash outlaid under the terms of the original contract for the scheme investment
- full remission of penalties and interest on all eligible scheme debt, and
- a two-year interest-free period for debt repayment, subject to the taxpayer entering into an acceptable arrangement to pay off the debt.
The offer applied only to deductions claimed in respect of the 1998-99 year and earlier years.
Case study: Striking a fair balance
A unique approach to resolving a serious issue for investors in mass marketed schemes struck a fair balance between the collection of tax and the circumstances of those people affected, First Assistant Commissioner Kevin Fitzpatrick explained.
'The aim of the settlement offer was to enable a speedy and just resolution of the tax scheme debts these people owed the ATO', Kevin said.
'The offer struck a balance between the fair collection of tax and the special circumstances of those investors who lost thousands of dollars through the actions of unscrupulous scheme promoters.'
Kevin explained that typically, investors lacked full knowledge of the scheme arrangements and the operation of the tax system. They were often subject to aggressive and sophisticated marketing techniques. Most had a good tax record, and they generally took advice from people expected to have the necessary knowledge to foresee the pitfalls associated with the investment.
'An important consideration was that the investors had contributed some real money to the schemes and, in the end, suffered a real financial loss', Kevin said.
The offer expired at the end of June 2002, after being extended to allow investors time to consider decisions from two relevant court cases: Howland-Rose (Budplan) and Vincent.
By 21 June 2002, 36,300 of the 41,000 scheme participants had taken the opportunity to put the issue of their scheme investment behind them and had offered to settle on the terms provided.
'We put a lot of effort into making sure investors understood the offer and were fully informed of their rights and obligations. We were very concerned that they really understood, because some had been misled by promoters and advisers', Kevin said.
'The ATO was criticised for not doing enough, soon enough, about mass marketed schemes.
'We've learned from the events of the past and have put mechanisms in place to help investors understand more about these types of schemes. Our concerted action in alerting people to the problems associated with these sorts of schemes also appears to have led to a significant reduction in these investment schemes.'
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During the year the Federal Court handed down decisions in respect of two mass marketed investment schemes. Both decisions confirmed our view of the law in respect of these schemes.
The first decision was in respect of the Budplan scheme in the cases reported as Howland-Rose & Others v Commissioner of Taxation. The second case was Vincent v Commissioner of Taxation. In both instances, the court denied the tax benefits claimed to be generated by the schemes.
During the year a controlling interest superannuation scheme case was heard in the Federal Court of Australia. The court confirmed our view that the scheme was not effective. The full Federal Court dismissed the taxpayer's subsequent appeal.
At 30 June 2002 we had collected around $400 million in respect of the various employee benefit schemes. While 821 cases had been settled by the end of the year, most taxpayers are awaiting the outcome of court decisions. Further cases are expected to be heard during 2002-03.
In February this year, when announcing a settlement offer for mass marketed scheme investors, the Commissioner also announced a tougher strategy for dealing with promoters of tax avoidance schemes. Promoters are those who earn money from their involvement in the design, marketing, sale or implementation of tax schemes. Promoters include some financiers, accountants, lawyers, tax agents and financial planners. Promoters also include people without appropriate training, qualifications or experience in the tax industry.
The increased focus on promoters will help us to identify arrangements currently being developed and marketed and to deter future development and participation in schemes. We have also been examining promoters' own affairs to ensure they comply with the tax laws.
As part of our tougher strategy against promoters, the ATO has more than doubled its Special Promoters Task Force from 25 to around 55 officers. We are also working in closer cooperation with the Australian Federal Police and the Commonwealth Director of Public Prosecutions on cases where criminal prosecution action may be appropriate.
The promoters task force is mapping the connections between promoters, associates and various tax schemes. This helps us identify issues that pose a high risk to the tax system.
The ATO is making greater use of its access and copy powers under section 263 of the income tax law and comparable provisions in other tax laws. Access visits -which may occur without notice in high-risk cases - have been helpful in providing the ATO with intelligence on currently marketed schemes. Earlier identification of schemes has allowed the ATO, in some cases, to alert scheme participants by sending them 'early warning' letters. These letters advise participants that the ATO is reviewing their scheme, and that it would be advisable to obtain independent advice in relation to the tax consequences.
Following joint activity with other law enforcement agencies, nine promoters have been referred to the Australian Federal Police.
Finance houses, including merchant banks, are a key leverage point in the tax planning industry, often being both promoters and designers of new arrangements. As such, they continue to be one of our key focus areas in seeking to identify emerging arrangements.
Consultation with a number of finance houses during the year resulted in the identification of more timely data on tailored financing arrangements than in previous years. Where specific risks were identified, we followed up with a broader number of financial institutions to quantify the risk to the tax system. In some instances, the ensuing risk treatment resulted in a specific enquiry or interpretive advice.
As noted earlier, there has been an increasing tendency for the larger financial institutions to seek a product ruling before marketing a financial product. It is also apparent that some finance houses are beginning to value a relationship with the ATO that is less adversarial. During the year we sought to encourage such cooperative relationships.
There is continuing use of tax havens to seek to avoid tax on either Australian or foreign source income. The arrangements generally involve transferring money or assets offshore to havens. There is also an increase in the use of offshore connections, such as facilities provided by promoters, or structures set up in havens to hide or delay access to information.
The internet has given the small to medium sized business sector and personal taxpayers easier access to tax haven facilities, such as credit and debit cards issued by financial institutions in these haven countries. This activity provides a potential mechanism to hide taxable activity. Intelligence indicates that the use of offshore cards for the purpose of avoiding tax is increasing.
During the year we issued a taxpayer alert and a subsequent draft taxation determination in respect of an internet marketing expenses scheme.
We are continuing to develop better methods for assessing the risk tax havens pose for Australia. We now have greater knowledge and understanding of the banking processes involving the electronic payment system used in Australia, especially around credit cards.
During the year we received information from financial institutions and card operators on the use of offshore cards in Australia. Our investigations included exchange of information requests with other jurisdictions on the abuse of offshore cards. We are also working with AUSTRAC to identify those who seek to avoid tax in Australia through such activity.
We are continuing our focus on key promoters, and four such tax haven entrepreneurs identified as posing the highest risk were under investigation during the year. One of these cases, a tax agent, has been referred to the Commonwealth Director of Public Prosecutions. We are also working with the Australian Federal Police and the National Crime Authority on other matters.
Apart from specific case investigations, we continued to play an important role at the Organisation for Economic Cooporation and Development (OECD) to reduce harmful tax competition and haven activity.
In May 1996 the ATO established a High Wealth Individuals Task Force to conduct a comprehensive compliance program aimed at expanding our understanding of tax planning techniques used by high wealth individuals and the resulting compliance risks.
The objectives of the task force are:
- to improve the compliance of high wealth individuals, and
- to identify and address emerging tax planning arrangements.
The High Wealth Individuals Task Force manages the compliance of high wealth individuals using a risk management approach. The task force regularly reviews the tax affairs of high wealth individuals and their associated entities with a view to ascertaining compliance risks. Technological support has helped measure tax performance and highlight potential risks in a greater coverage area.
During the year the task force carried out risk assessments on around 180 high wealth individuals, including some newly identified individuals. A total of 24 audit cases were finalised, while 50 cases were in progress at 30 June 2002.
Since the task force was established, the ATO has collected an additional $512 million arising from audits of high wealth individuals. Of this amount, $148.9 million is still in dispute. The total collections include additional revenue of $128.4 million collected during 2001-02, of which $78.7million is in dispute. An additional $21.5 million has been secured by settlement and was due to be paid after 30June 2002. Table 3.2 summarises the revenue outcomes since 1996-97.
TABLE 3.2
* These figures have been rounded to one decimal point.
This year we issued amended assessments in high wealth individual cases that resulted in increased tax payable of $918.7 million (including penalties of $451.5 million). Of this, $910.4 million is still in dispute, meaning the amended assessments are currently subject to objection or appeal.
We continued to focus on losses claimed by entities controlled by high wealth individuals. This year, these efforts resulted in reduced revenue losses of $146.5 million and capital losses of $12.8 million.
Losses claimed have been reduced by $1.332 billion over the last five years. Table 3.3 summarises the results of loss adjustments flowing from our activities.
TABLE 3.3
* These figures have been rounded to one decimal point.
Our examination of high wealth individuals and their associated entities has involved reviewing a number of tax planning arrangements, often tailored to the circumstances of the particular group.
Two major areas of focus during 2001-02 covered arrangements that sought to minimise or avoid capital gains tax, and intellectual property arrangements. In respect of the latter, we issued a draft taxation ruling during the year expressing our preliminary view that the particular arrangements were not tax-effective. This view was confirmed when we issued Taxation Ruling TR2002/19 in July 2002.
Our cash economy project aims to ensure that people who receive cash income are in the tax system and meeting all their obligations for that income, or that their omissions are detected and brought to account. This approach will ultimately benefit small businesses by enabling them to compete on a more equitable tax basis.
Project work is guided by the compliance model, which recognises that taxpayers respond to their tax obligations differently and that a one-size-fits-all approach is not the answer to achieving long-term compliance. Like the Taxpayers' Charter, the compliance model means treating taxpayers as individuals - taking individual circumstances into account.
Now that the new tax system is in place, our project work has shifted away from purely educational activities and towards active compliance, using the strategies and ideas from the compliance model.
Around 2,200 field staff focused on a range of compliance risks. The two major risks being addressed within the ATO's cash economy initiative are omitted income, and entities operating outside the tax system.
To support this focus in 2001-02, there was a significant emphasis on the development of a range of tailored compliance products for field staff. We also made sure a large number of staff (many of whom were new to our compliance activities) were skilled in these products.
Our field activities included a particular focus on potentially high-risk industries within the cash economy. These activities are well under way in seven industries, which were selected on a number of bases, including analysis of financial performance, community information and field intelligence. These industries are:
- building and construction
- road freight transport
- taxi services
- cafes, restaurants and takeaway food outlets
- hairdressing and beauty salons
- cleaning services, and
- smash repair services.
In addition, another 10 industries are in initial profiling or early scoping phases.
Case study: Phoenix companies won't rise from these ashes
The continuing tough stance of the ATO in auditing some of the worst debtors in our community is having a major impact.
Small Business Assistant Commissioner Ian Read explained that the courts had recently handed down several significant jail sentences for people who avoid paying tax by using phoenix companies.
'The sentences send a clear warning to company directors who try to rip off the community by not paying their taxes', Ian said.
'Phoenix companies accumulate debts and then go into liquidation to avoid payment. A short time later they "rise from the ashes" and carry on the business through a newly formed company.
'We've maintained a particular focus on serial phoenix fraud, where phoenix operators intentionally structure their business so as to evade payment of taxes.'
Ian explained that these companies are some of the worst debtors in our community. They cause losses to their employees and the businesses they trade with, as well as to government revenue. The whole community loses because there is less money for hospitals, schools, police, roads and other important community services.
'But we're onto them', Ian said. 'We're onto debts much more quickly than in the past and we're seeing individual debts getting smaller.'
Results since 1998 include 400 finalised cases that raised $140 million in tax and penalties. Another 150 cases are in progress.
In June 2002 the ATO made a submission to the Royal Commission into the Building and Construction Industry where phoenix activities will receive some attention. The majority of phoenix companies come from this industry.
'Although our focus is on the building and construction industry', Ian said, 'we also take on cases in other high-risk industries such as transport, security and computing. Phoenix practices occur across most industries.
'These arrangements must not be allowed to go on. Our work in finding and prosecuting offenders is helping to protect the tax revenue the community expects and needs.'
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There is also an ongoing focus maintained in the more blatant evasion areas. A number of successful prosecution activities were undertaken during the year, including one case which resulted in an Adelaide restaurateur being convicted of fraud. The case involved keeping two sets of books, the non-lodgment of company tax returns, and paying untaxed cash wages. A jail sentence of three years and four months was imposed, with a non-parole period of 18 months. There were over 300 fraud cases accepted for investigation, of which approximately 20% involved cash economy issues.
To support our active compliance work, we are making full use of the financial analysis of activity statements, income tax returns and industry data to identify 'outliers' based on industry norms. This has meant greater real-time identification and contact. Another important source of financial information we use in both selection and case profiling is data provided to AUSTRAC by various financial institutions and similar organisations.
We believe that non-compliance in the cash economy needs to be addressed in the longer term through both systemic and systematic ways. Our work includes a focus on the drivers of non-compliance and the attitudes of non-compliers. We are working with the Centre for Tax System Integrity at the Australian National University on these issues. Based on our research and findings from field and associated activities, we will continue to work with industry and other groups to identify appropriate responses to cash economy risks.
The introduction of the ABN and the related Australian Business Register has helped to minimise the extent and impact of non-compliance in the cash economy.
The new withholding obligations for business-to-business transactions are having a positive compliance effect. Businesses are generally unwilling to deal with suppliers who do not provide a tax invoice or at least quote an ABN. Over 23,500 activity statements have been lodged which include amounts withheld from entities that have failed to quote an ABN. Some $71 million has been withheld from payments because no ABN has been quoted. Analysis of a sample of larger withholding cases has revealed that over 40% of suppliers have registered for an ABN subsequent to the withholding event. When extrapolated over the entire population, this indicates that this measure may have resulted in over 40,000 suppliers now registering as a direct result of the withholding arrangements. Analysis of ABN registrations indicates many more registered as a result of the new tax system.
Other ABN integrity activities during the year included:
- undertaking matching exercises to check that existing small businesses have registered for an ABN and that income is being disclosed
- undertaking invoice sampling to ensure the new tax system is working as intended - findings show that in the vast majority of cases, tax invoices are being prepared correctly, with valid ABNs quoted
- identifying businesses previously operating outside the tax system but now registered, and
- requesting lodgment of previous year income tax returns.
During 2001-02 the ATO:
- processed over 12 million income tax returns (95% of these within Taxpayers' Charter standards)
- captured data from over 14 million activity statements (98% of which were processed within Taxpayers' Charter standards)
- issued more than 2 million activity statement refunds - over 94% of them within 14 days
- processed over 15.4 million payment transactions from the individual and business community, with a value of $180.861 billion
- secured 117 convictions, of which 59 have been sentences to imprisonment (including suspended sentences). There are currently about 400 cases under investigation or before court.
The Cash Economy Task Force, which met during the year, considered and endorsed our current strategies for understanding and addressing the cash economy. On 3 May 2002 the Commissioner announced that he was asking the task force to prepare a new report, the focus of which is the cash economy in the current environment. A specific area of focus for the report is to identify whether there are more effective ways of dealing with non-compliance in relation to transactions between business and consumers.
The Cash Economy Inter-agency Working Group also met during the year, and identified a number of common cash economy risks, a range of strategies to work more collaboratively in addressing these common risks, and opportunities for sharing information and working together. The Budget provided the ATO and Centrelink with additional resources to expand the successful Inter-agency Cash Economy Field Investigation Teams.
Our industry relationships are progressing through formal industry partnerships and other liaison activities. In the main, industry bodies are involved in the initial phases of our projects.
As well as our cash economy project outcomes, the Commissioner estimated that $2.61 billion in additional income tax would be collected over the three years 2000-01 to 2002-03 through the impact of the new tax system on the cash economy. Indicators for 2000-01 and 2001-02 are consistent with the outcome that the estimates of $400 million and $1.1 billion were achieved in each year respectively.
In 2001-02 the Australian National Audit Office conducted a performance audit into the ATO and its approach to dealing with the cash economy. It noted that our strategies to address the cash economy are consistent with those of comparable countries, and offer a wide-ranging approach to dealing with the cash economy. The audit made five recommendations, all of which were accepted by the ATO. Some of the recommendations have already been incorporated into business as usual practices, with the balance addressed under current planning strategies.
Illicit tobacco (commonly known as chop-chop) has been identified as a key risk in overall compliance planning.
To address the evasion of excise by the illicit tobacco trade, the ATO has implemented a strategy that targets key areas in the supply and distribution of chop-chop. Meetings with tobacco growers' cooperatives, manufacturers, retailers, importers and other government agencies have been used to identify areas of risk and develop appropriate responses for each risk.
The illicit tobacco strategy provides for a range of compliance treatments based on assessments of individuals' compliance with their legal obligations. The treatments range from information and support to enforcement and prosecution. Through this spectrum of activity, we continue to work closely in partnership with distributors, manufacturers and tobacco growers' cooperatives.
The legal production of tobacco provides a ready source of tobacco that can be used for illicit purposes. We have adopted a compliance treatment that will see a concentration of activity in the growing end of the industry - that is, tobacco producing districts in Australia. This activity identifies the amount of tobacco being cultivated on each farm and actively monitors each crop throughout key times of the year. Analysis of individual yields assists in targeting producers for further compliance activity.
Over 100 tax officers have been assigned to the tobacco growing regions of Myrtleford and Mareeba to educate licensed growers about their obligations and/or to improve compliance. We have also introduced a risk-rating protocol for each of our licensed producers. The treatment for the most high-risk producers has been escalated, with senior management intervention, resulting in some licence cancellations. This approach has resulted in a shortage in supply of illicit tobacco, with potential buyers becoming more brazen in their approach. There has been an increase in the price of a bale of tobacco from $2,000 in December 2001 to between $6,000 and $7,000 in June 2002.
There has also been an increase in reported thefts from growers of baled tobacco, indicating that growers are not participating as freely in the illicit market. Offenders have also changed their method of operation from large movements of bales (for example, by semi-trailer) to small movements (for example, by van or car) and this is considered to be a response to recent successful seizures of large loads.
An ongoing forum involving other government agencies, manufacturers and other parties (where relevant) has been established to:
- share market intelligence (for example, areas where industry sales of legal tobacco have changed)
- provide feedback on the effectiveness of strategies, and
- provide input into future compliance treatments.
Although the majority of taxpayers comply with their tax obligations, there are some taxpayers with substantial obligations who resist complying. The Serious Non-Compliance area of the ATO uses a range of strategies to help the organisation deal with taxpayers in this category.
We work in partnership with other ATO risk managers and our responses to serious non-compliance include complex prosecution and audit action, forensic accounting, intelligence analysis, fraud risk assessments and a range of strategic activities.
We also work in conjunction with other law enforcement agencies in relation to any tax-related criminal activity to ensure the protection of revenue and to maintain community confidence through the prosecution of wrongdoers.
During 2001-02 we conducted 594 audits and raised revenue totalling $89,942,117. A total of 308 matters were investigated, with false credit claims representing the highest area of fraud risk. A total of 58 matters were referred to the Australian Federal Police, with 146 referred to the Director of Public Prosecutions.
There were 121 prosecutions completed during the financial year, based on the recorded closing of the investigation. The outcomes handed down by the courts reflect the attitudes and seriousness with which courts treat tax fraud.
Of those recorded closed, 60 received sentences of imprisonment, 48 received convictions and fines, and three were ordered to serve community service orders. The Director of Public Prosecutions issued a letter of caution in five cases, four had no conviction recorded, and one had a conviction recorded but was released on a good behaviour bond.
Most cases related to income tax and sales tax fraud, but there is an increasing trend towards identification, investigation and prosecution of GST fraud.
AUSTRAC is an important partner in our compliance work; this year our staff increased their utilisation of the AUSTRAC database substantially. Searches conducted by compliance areas rose by over 20% and there was also an increase in the number of training and awareness sessions delivered to compliance staff across all lines.
Our compliance risk managers and AUSTRAC have continued to build on established working relationships to identify and exploit data sharing opportunities. One area of particular focus has been the development of tailored monitoring tools. In our International Tax Division these tools are now used for the auto identification of anomalies in international funds transfers. This work is being extended to include auto identification of anomalies in cash flow patterns of selected high-risk cash economy participants.
We have also used the AUSTRAC database extensively in compliance work, particularly aggressive tax planning, mass marketed offshore superannuation arrangements and interest schemes. We have been able to uncover schemes, identify participants, confirm identities, track payments into and out of Australia, highlight major countries involved in arrangements and use real-time data to assist us in determining whether arrangements are continuing.
As the business community becomes more familiar with the operation of GST and the new tax system generally, the compliance focus for GST has gradually shifted from education and assistance programs to more targeted verification (review and audit) programs. There has also been a shift in emphasis away from the micro-business market towards medium and large businesses.
Despite these shifts in emphasis, our compliance program continues to incorporate a significant element of assistance initiatives. During the year we delivered more than 70,000 of our highly successful free advisory visits to small businesses. This service will remain as a feature of our overall compliance program and in future will be targeted mainly to new businesses.
We also satisfied our performance targets for the year under our formal performance agreement with the states and territories, including return on investment targets for our active compliance activities. These included more than 50,000 field verification visits and a similar number of outbound telephone-based compliance verification actions. These activities resulted in a net increase of $363 million in GST and more than $100 million in other taxes.
The officers involved in our GST field and telephone-based verification programs were also rated very highly by the business community in independent surveys of staff professionalism in dealing with clients (see chapter 2.5 for more information).
Case study: A challenging but rewarding job
'A visit from the "taxman" might begin with trepidation, but can end in understanding', said one GST field officer from Queensland.
'Recently, I conducted a compliance visit with a business whose accounts person was in tears and reluctant to cooperate at the initial interview, but who has contacted me since for assistance', she said.
'It was an unusual case for us, and a difficult situation for them. They had already had an advisory visit and a compliance visit where problems were highlighted. But they were continuing to make substantial errors on their activity statements.
\'When I go into a business, I generally look at everyone as an individual, look at the business activities and needs, and work out what I need to do. In this case, this meant familiarising myself with their software accounting package and verifying sales, purchases, money transfers, invoices and so on. From this I could tell they were not reading their reports properly and didn't understand what figures to put on their BAS.'
During her second visit, after systemic errors were detected, the situation became tense and the business operator confronted the field officer in an attempt to have the review finish. The field officer insisted that it would continue and convinced the business operator that it was in his best interests to cooperate and understand these errors and the implications of continuing to make them, including the penalty implications.
'I could see they had made honest mistakes, which they were willing to rectify, when they knew how. I brought together the people responsible for accounts and record keeping in the business and showed them what they had to do, spending time educating them.
'By the end of the visit, they were appreciative. Even though I made sizeable adjustments over different BAS periods, they could understand what had gone wrong and what they now had to do. A part payment was made and a payment proposal provided for the balance owing.'
On the client feedback form, the business operator said the field officer 'was very patient and understanding and, as unpleasant as the task was, she made it bearable'.
The field officer said, 'I get real satisfaction out of helping people meet their obligations. I have a responsibility to develop effective working relationships with each individual business I deal with'.
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3.2 - A partnership approach to supporting the community
Dealing with the ATO will become easier through the Listening to the Community initiative and other projects as we develop policies with tax agents and taxpayers, not for them.
In March 2002 the Commissioner launched the Listening to the Community initiative, a major new way of involving the community in designing ATO products and services.
The aim of the initiative is to obtain community ideas about how we can make the tax experience cheaper, easier and more personalised. Small businesses, tax agents, individual taxpayers and ATO staff are all involved in the process.
Listening to the Community is the first phase of a three-year project to develop processes for consulting and then designing products and services with the community. To begin with, we undertook a range of workshops and interviews in the community.
The initiative arose for several reasons, including:
- the need to maintain community confidence in the integrity of the tax system
- a strong desire to bring an administrative process to life through the principles of integrated tax design, and
- a change in the way taxpayers were relating to the ATO, including more paper lodgments, a different reliance on tax agents, and exponential growth in demand for service through telephones.
We brought together a multidisciplinary project team of people with skills in project management, user research, internal and external communication, knowledge capture, and people management. Added to this was an independent external research capability.
The workshops focused on a system for the future, rather than a critique of the current system. They used current experiences, attitudes and behaviour as the starting point to explore new ideas and approaches.
Case study: Really hearing what people are saying
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Taxpayers participating in the ATO's major Listening to the Community initiative expressed surprise that tax staff were 'just like us'.
Design leader Rona Mellor said it was very important to really 'hear' what people were saying.
'We had to learn not just to hear what we wanted to hear, and we had to be careful not to wash what we heard with an ATO perspective. This is a challenging learning process', Rona said.
Focus groups were held with tax agents, individual taxpayers and small business operators. Participants were encouraged to express and explore views and ideas for ways to improve their interactions with the tax system. Feedback from participants generally acknowledged the effort the ATO had made to find out what clients really thought. Following are some comments from workshop participants:
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'I was happy to contribute towards a more workable arrangement with the ATO.' (A tax agent)
'It's wonderful they are listening.' (A small business operator)
'There was no doubt about it - we were listened to. Everyone was given equal opportunity to speak.' (A primary producer)
'Knowing the ATO had undertaken the Listening to the Community initiative shows them in a whole new light.' (A small business operator)
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Of the 800 staff who volunteered to directly participate, 180 were selected for this round. Comments from staff indicated they felt the Listening to the Community initiative was extremely worthwhile.
However, staff also said they could see the initiative's value diminishing if the ATO was slow to provide updates and feedback to staff and the community about the next steps and the progress of ideas designed cooperatively. Some staff said they found 'listening' quite challenging because it's new to the ATO culture and it was easy to become defensive.
Here are some of the comments made by staff after the workshops:
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'One of the best things I've ever done.'
'I walked away thinking/hoping things will change.'
'Externals appreciated the fact that we bothered to listen to them.'
'ATO participants felt special being able to participate.'
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Results from 31 focus groups and individual interviews with tax practitioners, held between April and June 2002, will form the basis of workshops to be held early in 2002-03. New products and service prototypes from these workshops will be tested in the community to ensure they do make the tax experience easier, cheaper and more personalised.
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Specific consultations with tax agents and their professional bodies helped to address irritants in the relationship and work towards a mutually beneficial outcome. For example, peak tax practitioner representative bodies recognised the Accounting Working Party as an effective mechanism for identifying and implementing enhancements to the ATO's client accounting system.
Through this working party (and others like it on other subjects) and through more informal consultative processes, practitioners provided ideas and suggestions about products the ATO could change or enhance to better meet their needs. We took up many suggestions through this process, for example:
- access to client information through contact centres and time taken to have a call answered. We streamlined proof of identity requirements for practitioners calling the ATO, giving priority to tax practitioner calls and increasing practitioner call centre staff numbers
- access to client information. We began work on providing online access to client information, with access to some PAYG instalment information already available, and
- running balance account statements. We made significant improvements to the format of these statements, and online access to account information is in progress.
We also introduced a dedicated tax practitioner infoline for accounting enquiries and made available a range of related accounting web products on our website.
Consultations arising from the Listening to the Community initiative identified further areas where we can improve our services to tax practitioners.
We undertook an extensive help and education program for small businesses during the year. This program included the delivery of seminars and advisory visits and access to hard copy and electronic publications.
There was a particular focus on support for those who are new to business, with over 900 seminars held for 14,750 participants. We also delivered over 200,000 copies of our information booklets to this audience and provided over 148,000 copies of our electronic record keeping facility.
We support a registered software facility that allows commercial developers of tax-related products to test and declare that their products meet ATO requirements. Currently there are 313 products registered on our website. This register assists small businesses in finding software packages that are suitable for their business needs and also meet the requirements of the ATO.
Our website provides electronic access to our publications, rulings and other general tax information for small business. During the year the website had over 22 million visits.
We also have a tax reform website that includes information about the new tax system, an online training facility offering customised help, and a range of business support tools.
During 2001-02 the ATO:
- made more than 43,000 visits and presentations to businesses and tax practitioners
- provided more than 20,000 items of written advice to clients
- handled, on average, more than 21,000 calls per day at the small business call centre, peaking at 31,818 calls on 2 October 2001.
Case study: Call centres busier than ever
Assistant Commissioner of Business Call Centres, John Ryan, explained that the charter for the ATO's Business Call Centres used to be relatively simple. 'Our task was to help the community with implementing the new tax system', John said.
However, during 2001-02 the call centres extended the scope of their operations so that they now also:
- provide a general enquiry point for the business community, with the full range of tax law and account maintenance information, and
- provide a consolidated entry point for tax practitioners via the Tax Practitioner Business Infoline:
- to cover business tax enquiries, including GST, PAYG, income tax and business tax reform, and
- to answer client account enquiries on registration, payment and account explanation matters.
'We've also introduced new quality assurance processes, explored the drivers for phone enquiries to better target help and assistance services, and finalised the roll-out of new telephony technology across the personal tax and superannuation contact centres', John said.
During the year, a total of 5,934,960 calls were taken from the business community, which is more than the 1,492,630 calls received in 1998-99. We received 1,002,320 calls from tax agents.
Despite the improvements detailed above and the increased volume of calls received, the Business Call Centres came in for criticism towards the end of the financial year, particularly from small business operators and tax agents.
'Our performance failed to meet expectations in the later part of the year', John explained. 'April and early May were bad, as there was a shortage of appropriately skilled people to handle the huge volume of calls we received from small businesses and their advisers.
'There were two main problems experienced by callers: they were either getting a busy signal and therefore unable to get through, or they were being placed in a queue and waiting a long time for an answer to their question.
'However, we heeded the calls for improvement and took action to fix the problems, primarily through the recruitment of additional staff and workload balancing strategies.
'The ATO will continue to improve its phone services in response to the community's demands and expectations, such as through the Listening to the Community initiative', John Ryan said.
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The Large Business and International line has 90 key client managers who assist approximately 130 large clients on a one-to-one or one-to-several basis.
This is a partnership arrangement, as the key client manager is the advocate of both the client (to the ATO) and the ATO (to the client). The purpose of the key client manager program is to influence compliance behaviour by:
- providing service and education to the client
- sharing key client manager knowledge and understanding of the client's business with ATO operational teams, and
- providing a focus for Large Business and International's whole-of-client view.
The key client manager:
- is the main interface between Large Business and International and the large client, and has responsibility for coordinating two-way communications and knowledge flows
- is accountable for ensuring the ATO provides an effective and timely response to client enquiries, issues and problems
- builds and sustains collaborative approaches with other lines (including Client Account Management) and client managers in lines such as GST, Superannuation and Excise, which communicate with the ATO's large business clients
- is responsible for ensuring their clients receive the ATO support they need to comply with their tax obligations. The key client manager - together with the team leader -keeps clients informed of their compliance obligations, and identifies and discusses with the client any developments (such as initiatives, laws or strategies) that are likely to affect the client's business, and
- is a key member of the segment team and a contributor to the segment's understanding of the business and industry (in particular, factors such as client and industry demographics, patterns, trends, drivers and risks).
During 2001-02 key client managers sought information from their key clients about their intentions for consolidation. This information is proving invaluable to Large Business and International and other lines, such as Client Account Management and ATO Production, that are preparing for the new measure.
The Taxpayers' Charter, our complaints mechanisms and the professionalism survey show we're open, honest and accessible (these initiatives are discussed in more detail in Part 2). We delivered consistent achievements against Taxpayers' Charter standards in relation to activity statement refunds, activity statements debits (electronic and paper), income tax returns, taxpayer complaints, registrations and phone calls.
In the 2001-02 Federal Budget, the government announced tax concessions for senior Australians: increased eligibility to the senior Australians tax offset, and an increase in the Medicare levy low-income threshold for seniors. The beneficial changes took effect retrospectively from 1 July 2000, and eligibility for the tax offset was extended in the 2002-03 Federal Budget.
In implementing these policy decisions, we had to overcome several challenges, including incorporating information about these measures in Tax Time publications that had already been finalised.
Special efforts are made in Tax Time to assist taxpayers through contact centres and written advice such as private binding rulings. We also provide the Tax Help service, through which 2,300 volunteers offer taxpayers with low incomes advice and assistance at 1,000 community centres around Australia (see our case study).
This year we were also given responsibility for implementing the new Baby Bonus. This is a government initiative to help parents who had a baby (or gained legal responsibility for a child aged under five) after 30 June 2001. People are entitled to the Baby Bonus regardless of their taxable income, and regardless of whether they receive any other family benefits.
We took a very consultative approach to the development and implementation of the Baby Bonus, as explained in the case study.
Case study: Volunteers are a big help at Tax Time
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Pat Bingham, Tax help Volunteer
There are some very special people in the world. We call them Tax Help volunteers.
Tax Help is a free community-based service designed to help low-income earners with their tax questions and completing their tax returns.
The service is run by volunteers and it helps people on low incomes, including seniors, students, people from non-English speaking backgrounds, and Indigenous people.
Tax Help volunteers are trained to answer questions about income tax returns and claims such as the Baby Bonus, the senior Australians tax offset and the family tax benefit.
The ATO trains the volunteers who then work from community centres, migrant centres, libraries and MPs' offices.
Tax Help, which is available from July to October every ear, has helped more than 460,000 people since it began 15 years ago.
But why do people become volunteers for Tax Help?
Pat Bingham from Tasmania has been a volunteer for four years. When asked why she became a volunteer, Pat explained, 'I answered an advertisement in my local paper and, after successfully completing the training, I found how easy it was. So I decided to help people with their tax and I'll keep helping them as long as I can.
'I know a lot of people think the Tax Office is the big bad bogey man, and I try to convince people that this is not so.
'I've worked at different centres over the last four years and am currently working at the Council of the Ageing, a new centre in Tasmania. I have some clients who come to me each year for assistance but I help anyone - pensioners with part-time jobs and aged people.
'The Tax Help program has changed a lot in the last four years and I'm very happy with how it's running now. I would not like to see Tax Help change just for the sake of change.'
We greatly appreciate the volunteer service provided by people like Pat because, as she says herself, 'Tax Help is a good way to bridge the gap between the general community and the Tax Office'.
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Case study: Pink the winner!
'It just shows that designing our products with users really works. I would never have chosen the really pink pink our users decided would best say "Baby Bonus" to them', said Baby Bonus Project Manager John Madelly.
Colour was only one of the many things investigated by the ATO to make sure it met users' needs in relation to the Baby Bonus.
'In developing the administrative system to support the Baby Bonus, we took giant steps towards making the integrated tax design theory work in practice', John said.
'First, the Statement of Intent between Treasury, the Office of Parliamentary Counsel and the ATO had to be developed, agreed and signed off. This was a major achievement in the short time we had.
'Then we went into the field to discover what users already knew, needed to know or wanted to know, and to find out whether there were any issues or problems they would face in accessing the Baby Bonus.
'Then we did complete end-to-end product testing. We developed - with the users - the forms and instructions, awareness information, advisory services and our own response systems to ensure they met users' needs. We didn't just guess what they might need - we did these investigations with a number of users. Mostly these were new and expectant mothers, but some were tax practitioners.'
John explained that this process helped his team find the 'natural pathways' new and expectant mothers use to gain information, advice and assistance.
'Through this integrated tax design process, we've found ways to make accessing the Baby Bonus a reasonably simple process', he said.
'We'll continue to design the administration of the Baby Bonus with users during 2002 and 2003, to make sure we have an even better process next year.'
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In 1993 the Joint Committee of Public Accounts undertook an inquiry into the ATO's administration of the Income Tax Assessment Acts. As a result of this inquiry, the joint committee expressed concerns about the perceived imbalance of power between the ATO and the community, and recommended producing a taxpayers' charter to help redress this perceived imbalance.
The Taxpayers' Charter was launched by the ATO in July 1997. It provided detailed information on the rights and obligations of taxpayers and incorporated extensive input from the community and other stakeholders. Also included in the main charter document was the undertaking to independently review the charter from outside the ATO at least every three years.
The first review was due in July 2000. However, because of the introduction of the new tax system, the review was delayed until late 2001. Delaying the review also meant that issues arising from the introduction of the new tax system could be identified and incorporated into the review.
In 2001 NFO Donovan Research (Donovan) was contracted to undertake the independent research as part of phase one of the review. The primary aims of the independent research component of the review were:
- to assess how the charter was operating in 2001
- to establish how the ATO's stakeholders felt the charter should be applied and implemented, and
- to examine whether, and how, the implementation of the charter had influenced the relationship between the community and the ATO, particularly in terms of issues such as confidence, empowerment and mutual respect.
It was also an opportunity to gauge the level of awareness of the charter, to revisit its content and presentation after four years, and to raise with ATO people the way the charter affects their work.
To do all this successfully, it was necessary to hear from people about their experiences when dealing with the ATO. Donovan's research included talking with representatives from the tax profession, community representatives, volunteers and complainants. Donovan conducted focus groups across Australia with tax agents, small businesses, large businesses, individuals and other key stakeholders.
Donovan also conducted in-depth interviews with senior ATO people, focus groups with staff around particular issues or work areas, and focus groups with staff generally.
Overall, the research indicated that fewer than one in five taxpayers knew of the charter, with awareness particularly low for small business people and individual taxpayers. However, while they did not necessarily identify the charter, taxpayers provided extensive feedback on how the ATO was performing against the charter principles and standards.
In general, there was widespread support for the principles of the charter. The only exception was principle number 11, 'Help you to minimise your costs in complying with the tax laws'. There was a strong view that this needed to be modified to make its intention clearer.
Taxpayers felt they were treated by ATO officers with respect, fairness and professionalism. They were less positive about confidence in the advice they were given, accountability of ATO staff, and being able to trust the person they dealt with.
Many people in the ATO raised issues with the service standards, which some felt were making them focus on timeliness rather than quality. There was a widespread feeling that the standards need to be reviewed.
All the feedback we received is being used to develop a revised charter and an appropriate implementation plan. We anticipate this process will be completed by the end of the 2002 calendar year.
Click here to view the Taxpayers' Charter
The ATO continues to take innovative approaches to designing and implementing new policies and ways of doing business, and we are doing this in collaboration with the community.
The new eGrant process is a leading example.
The ATO recently introduced a new claims process for clients of the diesel and alternative fuels grants scheme (known as the on-road scheme). This new claiming system, called eGrant, reflects the technology development and trends in modern business.
The main objective of eGrant is to simplify and speed up the claims process using systems that come naturally to our clients. This has involved moving from a process of completing and lodging manual claim forms to an automatic point-of-sale system.
Truckers are expected to save time and money through eGrant.
Case study: Quick and easy grants with eGrant
Less paperwork. Better records. Faster payment.
'Businesses want easier ways of claiming their grant entitlements', said Robert Drummond, manager of the eGrant electronic claims process.
'The eGrant system is a new way that truckers can claim their on-road diesel grant without having to lodge any claim forms', he said.
Instead of manually filling in claim forms, thousands of truckers across Australia will be able to swipe their fuel card and they'll receive their grant one to two weeks earlier than at present.
'Having identified our clients' needs through extensive consultation, we wanted to develop a system that fitted into current community and ATO business systems, rather than creating something new', Robert explained.
'To get it right, we co-designed the solution with representatives of on-road clients, fuel suppliers and fuel card providers.'
This eGrant Advisory Group, including ATO staff, examined different scenarios and options, provided input on how their systems worked, and then jointly decided on - and designed - the new system to fit with the existing fuel card system.
Although the project is still relatively new, Robert expects potential clients to gradually sign up for eGrant, and estimates that as many as 50,000 of the 80,000 on-road users will eventually benefit from eGrant.
'Signed-up users of eGrant can save themselves a lot of work', Robert said. 'They no longer need to lodge claim forms, as the information on fuel transactions will be captured at the point of sale and forwarded to the ATO for payment.'
Robert explained that, for tax purposes, eGrant clients can use their fuel purchase records that are kept by the fuel card provider. The system benefits both parties: clients save time and have improved cash flow, and the ATO benefits through reduced paperwork processing and fewer errors on claim forms.
'The co-design process worked so well that in 2002-03 Excise will be looking to do the same for off-road fuel users', Robert said.
'We'll also be looking for ways to improve the system for on-road fuel users who don't use fuel cards.'
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Case study: User-based design reaches new heights
The development of the consolidation measure saw the setting of new standards in designing with users, not for them.
The consolidation measure is commonly referred to as second only to GST in terms of importance. Consolidation enables eligible groups to be treated as one entity for income tax purposes, and to lodge just one tax return on behalf of all their wholly owned subsidiaries.
Consolidation project leader Mark Jackson said his team followed an integrated tax design process - focusing on client needs - to shape all elements of the measure.
'We took a very collaborative approach with the development of new policy', Mark said. 'We shared with stakeholders the key thinking behind the consolidation measure, and engaged them in discussion about how to make it work.'
The team wanted to make sure the government's intent for the measure was realised, and that the needs and concerns of the target audience were taken into account.
'This meant we had client involvement in the measure very early', Mark explained. 'Users had a genuine opportunity to influence direction, rather than being handed a framework that couldn't be changed and then helping us to figure out how best to make it work.'
The design process involved a number of steps, including:
- regular meetings of the project team and key external stakeholders to shape draft law and administrative processes
- a Consolidation Walkthrough travelling exhibition
- two exposure drafts and support materials to demonstrate how the measure would work and showing the 'user pathway'
- a nationwide series of public feedback forums on the exposure draft, with regular emails to all attendees to keep them informed of developments
- an issues register on the internet
- qualitative user-testing of the key products Consolidation in brief and the Consolidation reference manual, and
- use of other ATO communication resources, such as the website, call centres, a hotline, newsletters for tax agents and small businesses, a satellite seminar and emails to all registered tax professionals.
'Many people are saying the process we used for consolidation has set new standards in user-based design', Mark said, 'and clearly there's a strong appreciation for the approach we've encouraged. There's some way to go yet, but it's fair to say we've achieved a very good result to date'.
A Consolidation
Walkthrough
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We have involved users in the design of major projects, such as consolidation (including user groups and walkthrough), Baby Bonus, demergers, non-resident withholding, venture capital, and in information sessions. We have also shaped and directly supported the Listening to the Community initiative, which is outlined in chapter 3.2.
We set up new processes and organisational arrangements to support integrated design, including the Policy Forum, Tax Design Group, assessing and scoping new measures, and ensuring clarity and understanding of the policy intent. We worked directly with new policy projects to design changes, and we built design centres in a number of lines.
We developed tools and techniques, such as a published guide, information sessions, training and mentoring, and we worked with design leaders to further bring to life design in the ATO.
During June 2002 we successfully delivered a new facility to register for an ABN online in 'real time'. Registrants can obtain an ABN online and in real time during the same internet session, providing all the required information is keyed in and correct. Approximately 500 to 600 registrations of this type were being processed daily in mid-June 2002.
During 2001-02 the ATO:
- registered a total of 476,785 ABNs - 22.45% on paper, 27.7% through the electronic lodgment system used by tax agents, and 44.6% through the Business Entry Point on the internet
- registered 5.25% of total ABNs in real time during June 2002 using the new Australian Business Register internet transaction service
- had 3,892,756 active ABNs on the Australian Business Register at 30 June 2002
- processed 2,474,729 transactions to maintain the Australian Business Register database.
We piloted a telephone lodgment service that allows taxpayers to lodge their income tax return or applications for refund of imputation credits by phone. This service uses natural language speech recognition, an interactive voice response system. This means that rather than using the telephone keypad, the client speaks in normal conversation, as if to a person, in response to questions about their tax return.
Reasons for developing this innovative data capture system included:
- improved data quality
- reduced cost for data capture, mailroom processing, storage and paperwork
- development of a shorter income tax return form and instructions for the taxpayer, and
- a further lodgment option for a profiled market.
During the year we ran a pilot for phone-based income tax returns, through which 5,332 taxpayers lodged their returns. We also ran a similar, nationwide service that allowed people to apply for a refund of imputation credits, and 9,151 applications were received in this way. The telephone lodgment service was a popular service, with 87.5% of users indicating they would use it again.
We have been working on the introduction of a range of accounting products for tax agents through our website, including enhanced running balance account statements and internet-enabled accounting enquiries.
The electronic tax return, e-tax, has been embraced by many in the community and continues to grow in use and popularity.
Case study: A TaxPack alternative - e-tax
Need an easier way to do your tax return? Try e-tax.
Since 1999 the ATO has been offering taxpayers easier ways to lodge their tax returns. One of these ways is e-tax. This is a software package clients can download from the internet to enable them to lodge their tax return electronically. Taxpayers use e-tax as an alternative to the traditional TaxPack, and each year use increases.
Users of e-tax come from a broad spectrum of Australian society - from bricklayers to business professionals.
Chris has used e-tax for four years because he finds it quick and easy.
'I think it's great. You don't expect some brilliant program to lodge your tax return', he said, 'it just needs to do the job. e-tax is convenient, quick and easy to use - I get my refund quickly and I can lodge my return whenever I need to.
'I use e-tax because I know I can leave things to the last minute and I'm guaranteed it will get to the Tax Office in time. Also, I love the convenience. Last year I lodged my tax return at the very last minute from my laptop in a hotel room. Not a bad system indeed!
'I think that technically there could be a lot of improvements to the Tax Office website overall. But as far as e-tax is concerned, it does what it needs to do, and I'm happy with that.'
David has used e-tax twice. He likes the way he can come back and work on his tax return whenever he has the time.
'I work shift work', he said, 'so it's a great feature that I can download the software and work on my return offline, any time of the day or night.
'I also like the interview process. I don't know a lot about tax, but the way it takes me through step by step is a great feature.
'Initially, I had a few problems downloading the software. But after a call to the help desk, I sorted it out. I'll use e-tax again next year.
'I'm not surprised by its increase in popularity - I live in a share-house and I know everyone in my house used it this year.'
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Our large business tax administration skills have been in demand from sectors of the international community. We have taken on leadership roles in international forums such as the OECD and have provided practical guidance and advice on the design and build of large business programs. Our expertise has been provided to various tax administrations and development programs through such bodies as the International Monetary Fund, the Australian Agency for International Development (AusAID) and the OECD's Outreach program.
We have helped to advance international compliance and tax design projects through initiatives such as finalising significant international rulings and the Advanced Pricing Agreement program, which is at the forefront of international efforts on transfer-pricing compliance. In addition, the ATO has initiated multi-jurisdiction compliance investigations and exchanges of advice, and we have achieved breakthroughs in e-commerce and aggressive tax planning compliance - particularly in relation to the use of credit cards through tax havens.
We have undertaken a program of international business tax reform measures (such as thin capitalisation) and have finalised the United States Double Tax Agreement, the agreement of the Malaysia protocols and signature of the Canadian protocols. We have also invested significant work in the United Kingdom Double Tax Agreement and similar agreements with other countries.
3.4 - Our people
The introduction of tax reform called for education and support on a large scale to help the community understand and comply with the new tax system. Now that the new tax system has become business as usual, we are continuing to provide support and assistance, but we are also ensuring individuals and businesses are aware of their entitlements and meeting their tax obligations.
We recognise the quality and diversity of our staff - their strengths, loyalty, qualifications and long service. Our 19,318 employees work throughout metropolitan and regional Australia, facing many challenges in being so decentralised. Nevertheless, they continue to successfully deliver for the ATO and the community while redesigning and refining our business.
The people of the ATO faced tight staffing and resourcing constraints during 2001-02. The year saw voluntary redundancies of 952 staff, followed by a focus on stabilising human resource management and staff support systems.
Surveys during the year indicated that staff wellbeing needed ongoing attention. The ATO wellbeing survey had a very high participation rate. The survey showed that although the levels of stress and sickness reported were approximately the same as those experienced by the general Australian population, there was an inattention to early health warning signs, as well as other signs that staff were under a lot of pressure.
The ATO's Comcare premiums doubled during the year (although the premium rate is still less than the Australian Public Service average). The ATO and Comcare will continue to work together in 2002-03 to identify ongoing issues and develop management and infrastructure responses to address these issues.
The independently headed Output Pricing Review during the year resulted in recommendations to the government that the ATO needed increased funding in order to meet its government obligations.
Research into how well the ATO is delivering on its Taxpayers' Charter shows, for example, that the field officer advisory visits have had a significant positive impact on community perceptions of the ATO's work and staff.
These results reflect the fact that our people are highly professional in their approach to their work, their willingness to stay at the forefront of their profession, and the interest they have in the work they do.
The ATO's work requires a renewal of learning and professional development, with about 80% of staff having a learning plan in place in 2001-02. Work began on developing professional streams that will help people map out a career in the ATO. We have also begun developing professional accreditation procedures for staff involved in determining the ATO's view of the law.
ATO staff stay for a long time - the separation rate is only 4% compared with 8-10% in other organisations. People come for the experience to be gained and stay for the diversity of work offered. Productivity has increased without a trade-off in terms and conditions. To attract and keep the best people in a highly competitive industry, ATO pay and conditions are at the forefront of equivalent government agencies.
The ATO is one of the biggest recruiters of graduates in Australia. While there is a relatively high decline rate among graduates offered places, 87% of graduates recruited over the last five years are still with the ATO.
The ATO's seminar program has been very popular, with participants appreciative of the time and effort ATO people go to in order to communicate with them face-to-face.
Seminars can be general or tailored to a range of topics or audiences. For example, a speaker may run a session on GST, tax invoices and record keeping for a non-profit group. Then a GST field visit is organised soon afterwards so the field officer can sit down with the bookkeeper and work through any problems that may have been preventing them from lodging their activity statements.
Indigenous organisations have found the seminars particularly useful. They often have very complex arrangements due to their many roles - from profitable businesses to non-profit and charity functions, and from employers and service providers to grant recipients providing community support.
Working across lines and providing a seamless whole-of-ATO approach has been well received. Participants have told speakers that the seminars give them a better understanding of what they need to do, and that they are in a much better position to comply with their tax obligations afterwards.
In going national with this program, the whole-of-ATO approach involves working closely with other agencies. For example, to meet the diverse needs of Indigenous groups, we've worked closely with the Aboriginal and Torres Strait Islander Commission, the NSW Aboriginal Land Council, and the Queensland Department of Mines and Energy.
This approach means businesses and non-profit organisations continue to gain from an efficient and relevant service that is helping them understand and meet their tax compliance obligations.
Case study: Fishy business
Catching their own lunch is just one of the challenges ATO staff working in the field have happily faced.
Deb Faulkner, one of 37 presenters with the Tax Education and Seminars Section, says there are interesting challenges in taking tax education to Indigenous organisations.
'Setting up tents and fishing for lunch in Indigenous communities in places as far north as the Torres Strait are not the only challenges', Deb said.
'The range of information needed by Indigenous organisations is very wide - from GST and PAYG to FBT and superannuation, from off-road diesel grants to commissions and consignments.'
Deb explained that the seminar program in NSW, including hands-on Indigenous workshops for groups of up to 15 people, had worked particularly well - especially when immediately followed by specialist GST field operatives providing specific one-on-one help.
Another presenter, John Mintoff, said that 'people really appreciate it when we go out to speak to them at seminars, and getting that immediate feedback gives me a real buzz'.
'People who have had no direct contact with the ATO forget that we're just ordinary members of the community too. So they're surprised when they have a positive experience at a seminar and realise they don't have anything to fear from us.
'In March, I ran four seminars in the Pilbara region for business people. We try to reach people wherever they are, when they ask us to. The business operators who came to the seminars really appreciated the effort - they realised I had to come from the east and that I'd travelled many hours to present the seminars.'
John said participants were really interested in what he had to say and were in no hurry to leave at the end of the sessions. They have the same tax issues and concerns as any small business operators anywhere in Australia, although some of their problems - such as isolation and cost of transport - are different.
'We get really positive feedback from participants and organisers, who are often surprised how much they can learn in one session', John said.
'It's a real privilege to do this job - it's extremely satisfying to help so many people in this way and to know immediately that they're also having a positive experience.'
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Other challenges ATO people face include keeping in touch with other people in the organisation and feeling part of the 'tax community'.
The ATO has many large offices around Australia that are responsible for delivering services to the community, as well as often running national programs. For example, a team in one site may be managed by someone 4,000 kilometres away, while the agency agreement process is run out of Brisbane and the Taxpayers' Charter review is managed from Perth.
This unique structure involves significant challenges for internal communication and coordination between lines. The ATO places emphasis on communication between its people, as shown by such initiatives as ATOstory (featured in a case study later in this chapter) and the ongoing success of the internal electronic magazine ATOextra.
The Listening to the Community initiative also emphasised and explored new ways of involving ATO people through polls, a chat room and constant feedback and involvement across lines. It resulted in more than 1,000 ATO people volunteering to be involved in user clinics, creative workshops and other activities to help evolve or revolutionise products and services for taxpayers.
A further challenge is making sure the messages delivered by the ATO to the community align with internal communication and with the ATO's ability to deliver what it says it will do. Work commenced in 2001-02 to build a platform of stability for ATO internal and external communications that will help us deliver the promise of easier, cheaper and more personalised services for taxpayers, as well as for our own people.
Keeping over 19,000 people informed and connected is quite a challenge. Keeping them interested is another one.
For the staff at ATOextra, the internal electronic ATO magazine, meeting these challenges is an important weekly event.
'The magazine helps tax officers feel they are part of the tax community. It's an important vehicle for keeping people informed', editor Frank Geurts said.
'We change as the needs of people within the ATO change. We keep up with the latest technology and use it to bring the latest news to staff - they really appreciate having this service available every Monday. It's an excellent way for all of us to keep in touch', Frank said.
The magazine format is reviewed each year and new sections added where there is a demand. For example, a 'Have your say' weekly poll was added in 2002. Using a newly created tool called ATOsurv, this section poses a topical question on which readers can vote anonymously. This section is very popular, with many people responding to the questions, which can usually be answered by a 'yes' or 'no'.
Frank explained that other sections in ATOextra include:
- a column from the Commissioner on topical issues
- letters from readers, which is the most read part of the magazine
- news sections covering ATO business and upcoming events or changes, such as to tax law
- news about the social club and other activities
- newsworthy information, such as new projects from different business or service lines, and
- more lighthearted sections such as 'Overheard in the tearoom', which reports funny tax-related anecdotes.
'We get a lot of contributions and a lot of feedback from people who like to be kept up to date with the issues, news and events happening in our large, diverse and unique organisation', Frank said.
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Our focus for workforce planning in 2001-02 was on adjusting and realigning the workforce in response to changing business priorities. Our approach was also driven by funding considerations, especially in relation to the outcome of the Output Pricing Review.
We made an important change to our workforce composition in September 2001, replacing labour hire staff with non-ongoing employees. This change reinforced our philosophy of being predominantly an employment-based organisation.
Further changes to our workforce profile resulted from a major workforce adjustment program conducted from October 2001 to December 2001. This program focused on realigning the workforce with core business requirements -through re-allocation of some groups of staff to priority work activities - and a program of voluntary redundancies.
For example, the ATO Production and Client Account Management lines redeployed 432 staff permanently from other areas of the office to debt, lodgment, registration, and payment and product processing activities. Additionally, 400 staff from the Goods and Services Tax and Excise lines were temporarily engaged in debt and lodgment activities from December until June as part of our debt reduction strategy.
Following this workforce adjustment, we have continued to build a flexible, adaptive workforce through the appropriate mix of ongoing and non-ongoing recruitment. This has been achieved by working across lines in collaborative employment activities.
During 2001-02 the ATO:
- employed a total of 19,318 people, which is 1,010 fewer than last year
- had 17,623 ongoing staff and 1,695 non- ongoing staff, most of whom were full time
- employed slightly more women (10,069) than men (9,249)
- had 2,323 employees based in National Office in Canberra and the other 16,995 located in one of the other 46 offices around Australia.
Did you know the ATO held beauty pageants in the 50s and 60s?
This curious fact, along with memorabilia, curiosities, serious speeches and unusual stories, has emerged to help tell the story of the ATO over its 90-year history.
Launched in 2001, ATOstory has captured the interest of ATO staff. Staff are enthusiastic supporters of the work done by the ATO Relations area to link the past to the present and use it to help shape the ATO's identity.
ATOstory manager, Margaret McKenna, says collecting materials was an amazing process.
'Once people knew they could trust us to look after and honour their memorabilia, their stories, memories, photos and other treasures - that we were serious - they were very generous', Margaret said.
'We had three or four people gathering material around the country for a series of stories in the ATOextra internal electronic magazine, a keepsake calendar, and other activities which we ran in 2001. We were given some amazing things, such as an old calculator auditors used, still in its wooden box and with all its dials.
'Best of all, though, was the way we could show how ATO people had met the challenges of the past and their contribution to the country over the years. This process has led to a whole new engagement by staff with their workplace, and an understanding of their place in history, as we actually make it. This is often overlooked as we meet the day-to-day challenges of our work', Margaret said.
The materials gathered have been placed in a fully catalogued collection with the National Archives and will form the basis of the celebration of the ATO's 100th anniversary in 2010.
'We've done most of the hard work now. But we'll continue to work on it as we go digital with the materials to ensure they won't be lost in the future, to us or to the nation', Margaret said.
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ATOconcern is a confidential service through which staff can voice their concerns or complaints about the organisation. It was established in August 1998 and focuses on matters affecting staff wellbeing and the organisation's health and productivity.
The service has three main functions:
- to provide staff with the opportunity and certainty of being heard
- to ensure the ATO takes appropriate action in response to issues raised, and
- to identify organisational issues and contribute to improving policies and processes.
In its fourth year of operation, ATOconcern received 517 approaches compared with 491 in the previous year. This growth of 5.3% has taken place in a year when the ATO's staff numbers have fallen by some 5.5%. The most number of concerns arose from:
- workforce adjustment issues (including concerns about the redundancy program)
- call centre workplace relationship matters, and
- harassment issues.
We have raised and reinforced awareness of the ATOconcern service through a range of strategies, including promoting it through induction training and through articles in internal communication packages.
We are continuing to record cases on an internal database and analyse the data to identify issues and trends. We have started moving to a new and improved recording and reporting system that should be completed in 2003.
ATOconcern staff have forged strong links with the various lines and provide management with regular reports and analyses of issues and trends. We aim to provide a robust reporting system to help identify organisational issues of concern, along with possible resolutions and interventions.
This part reports on the activities of the Australian Valuation Office and the Development Allowance Authority.
The Australian Valuation Office (AVO) provides government agencies with policy and strategic advice on valuation and related issues. The AVO's services cover sensitive and confidential areas that help agencies contain financial outlays and optimise revenue. We also provide valuation advice to the Northern Territory and Australian Capital Territory governments for land management, rating and tax purposes.
The outcomes and strategies in our national plan focus on four key areas: our government stakeholders, our customers, our people and our operations. In 2001-02 our strategic goals were to:
- exceed the expectations of our government stakeholders
- provide vital input supporting government policy on valuation and property matters
- maintain financial viability through the cost-effective provision of holistic valuation and property services
- remain the first choice as the provider of valuation and property services to Commonwealth and territory governments
- continually add value to our customers' operations
- remain a leading-edge, customer-focused organisation
- maintain focus on a continuous improvement process, and
- maintain skilled and committed human resources.
Our key indicators measured performance against the four key result areas of the National Business Plan. Performance in each key area remains interdependent, as each measure often contributes to the success of more than one key area.
The AVO satisfied the key success factors in this focus area by:
- meeting the needs of the Minister by providing advice on property and valuation issues
- delivering a positive financial outcome for the government (an operating surplus of $745,000) while operating within competitive neutrality principles, and
- delivering a satisfactory outcome against each key performance indicator.
The AVO remains a budget-neutral operation delivering valuation services to government customers who benefit from our independent and professional advice and our value-added service. In conducting valuations we use procedures and methodologies that have been approved by the Australian National Audit Office (ANAO).
In 2001-02 we retained our core customers and continued to build on the sound relationships we have with them. Both the Australian Capital Territory and Northern Territory governments retained AVO as their preferred supplier of valuation services and advice. We also entered into a memorandum of understanding with the Aboriginal and Torres Strait Islander Commission for valuation services.
The AVO conducted surveys of its customers after the completion of each major project. In response to a service level agreement performance requirement, we also undertook a customer opinion survey of Centrelink to assess the level of customer satisfaction. We found that customers were still very satisfied with the delivery of services - they particularly valued the confidentiality of the services provided, the competence of the staff, and the consistency of the advice provided.
During 2001-02 the AVO received more than 48,800 requests for valuations and conducted more than 107,000 valuations. The following agencies used our services during the year:
- We helped Centrelink and the Department of Veterans' Affairs assess the effect asset values have on the level of pensions paid.
- We helped the following organisations with their financial reporting: the Australian Federal Police, the Department of Parliamentary Reporting Staff, the Australian Security Intelligence Organisation, the Australian National University, the Commonwealth Scientific and Industrial Research Organisation, the Australian War Memorial, the Aboriginal and Torres Strait Islander Commission, the Department of the Treasury, the Attorney-General's Department, the Australian Securities and Investments Commission, the Commonwealth Rehabilitation Service, the Department of Immigration and Multicultural and Indigenous Affairs, ScreenSound Australia, the Family Court of Australia, the Department of Employment and Workplace Relations, the House of Representatives, the National Crime Authority, the Department of Foreign Affairs and Trade, Telstra, and Environment Australia.
- The Department of Defence exercised its option under the memorandum of understanding and extended its association with the AVO to undertake the valuation of all Defence real property for a further three years. We concluded the third stage of the Department of Defence's initial property portfolio revaluation.
- The Northern Territory government used our services for rating, tax purposes, financial reporting and its first home buyers scheme.
- The Australian Capital Territory government and its agencies came to us for rating, land and housing sales, property management and financial reporting.
- We helped the ATO with the implementation of tax reform, financial reporting, an office accommodation rental review, and the review of research and development claims made by taxpayers.
- We assisted the Department of Finance and Administration, the ANAO and the ACT Kingston Foreshore Authority with property management and sales.
- Telstra sought our help with the valuation of surplus property for sale.
- The Indigenous Land Corporation used our services for the purchase of rural properties.
We advanced our skills and capability base through our commitment to the continuing professional development program for our professional and support staff. This year the program included:
- in-house specialist workshops covering revised asset valuation procedures
- scholarships to allow staff to further their educational qualifications in the fields of financial valuations, plant and equipment valuations, accounting, marketing and information technology, and
- a visit to Vietnam to assist with the development of valuation practices and expertise as part of a project sponsored by the Australian Agency for International Development (AusAID).
The National Resourcing Model continues to provide managers with a tool to match anticipated hours of work and work types with the resources (in terms of numbers and classification levels) required to carry out the valuation work.
Throughout the year we focused on our long-term viability and on improving our processes to ensure the services we provide to customers are timely, professional, and add value to their operations. To address these aspects, we:
- improved our work practices for the provision of valuation services to Centrelink through the implementation of 'AVO Online', an e-business link that enables the transfer of valuation information and requests between Centrelink and AVO. This improves the processing of valuation requests and delivers benefits to both AVO and Centrelink
- provided vital input supporting government policy on tax reform
- developed and implemented a revised marketing plan targeting customers requiring more complex valuations
- continued to develop the strategic valuation model database that provides an information technology-based decision support system that uses information on comparable properties within the database. This allows the AVO to better manage risks associated with determining property values
- achieved sound financial outcomes to meet stakeholder expectations - a net operating profit of $745,000 against a forecast profit of $820,000
- provided sensitive valuation services to Centrelink, the Department of Veterans' Affairs, the ANAO and the ATO
- developed a product-based planning and performance regime for implementation in 2002-03 to improve performance monitoring and reporting
- contributed to increased accountability within government financial reporting through strategic advice, and
- completed the program of upgrading the network, servers and desktop hardware to provide a more robust system to meet customer needs.
TABLE 4.1
The Development Allowance Authority was established in 1992 as a single-person statutory office responsible to Parliament for administering the Development Allowance Authority Act 1992.
The Commissioner of Taxation currently holds the office, with the authority's powers delegated to two senior executives during the year.
The authority administers two investment incentive schemes - the Development Allowance and the Infrastructure Borrowings Tax Offset Scheme. These schemes were designed to encourage the improved international competitiveness of the Australian economy.
The allowance comprises a tax deduction of 10% of the value of eligible investment, in addition to depreciation. The concession was subject to a statutory time limit, which has now expired. To qualify for the Development Allowance, eligible property must have been first used or installed ready for use before 1 July 2002.
The May 1997 Federal Budget announced the Infrastructure Borrowings Tax Offset Scheme to provide Commonwealth support for genuine infrastructure investment in Australia.
Legislation giving effect to the scheme is contained in Division 396, Land Transport Facilities, of the Income Tax Assessment Act 1997. The ATO and the Department of Transport and Regional Services jointly administer the scheme.
The scheme provides a tax rebate for approved infrastructure to the resident infrastructure lenders. In return, the borrower has lower finance costs (in the form of lower interest rates or other benefits) and foregoes tax deductions on interest payments associated with the loan.
Once a project is approved, the borrower and all the lenders who are eligible for the tax offset are required to enter into an agreement with the Commonwealth, represented by the Minister for Transport and Regional Services.
The selection of projects is based on the limited funds available, the eligibility requirements, and the relative merits of the projects. No applications were called for in the year ended 30 June 2002.
This part explains our management practices, including our sub-plan structure, internal and external scrutiny, and how we manage our human resources.
5.1 - Corporate governance
The ATO's corporate governance framework is designed to ensure we apply and practise the principles of good governance in our structure and administrative processes. These principles are set out in the Australian National Audit Office's 1997 Better Practice Guide, Applying Principles and Practice of Corporate Governance in Budget Funded Agencies.
Corporate governance is used to refer to the processes that ensure our directions and design are appropriate, our resources are allocated effectively, our operations are performing to agreed standards, we meet our statutory and other obligations, and we are open and transparent in how we go about these activities.
Our strategic statement for 2000-03 provides an overview of our directions for the future, including corporate outcomes and performance measures. The statement is supported by a range of more detailed plans that guide our activities. These include:
- the ATO Plan, comprising the four sub-plans (which are in turn supported by tactical and line delivery plans), and
- the balance sheet and operating statement, with our financial status being reported to the executive monthly.
The Commissioner also set priorities for 2001-02 to underpin all of our strategies and plans.
During 2001-02 we worked through major changes to the ATO's planning processes to cover the four key focus areas of compliance, operations, people and place, and information technology. This resulted in the development and refinement of the following sub-plans.
The compliance sub-plan encompasses all the work we do to optimise levels of compliance with the tax and regulatory systems we administer.
In 2001-02 we focused on:
- maintaining overall compliance levels to ensure we achieved the budgeted levels of revenues and transfers. We maintained compliance in areas such as GST, income tax, excise and superannuation, and we undertook activities to improve compliance in a number of other areas (including aggressive tax planning, large corporate organisations and losses, the cash economy, the international arena, the illicit tobacco trade, serious fraud and evasion, self-managed superannuation funds, and the superannuation guarantee)
- maintaining community confidence in the tax and regulatory systems through relationship management, marketing and education, and support activities (including call centres, contact centres, technical support and a tax practitioner program)
- minimising compliance costs (within the ATO's control), and
- continuing tax reform design, and implementing specific newpolicies.
The operations sub-plan reflects and outlines the management of revenue collection and transfers. It incorporates all associated transactions between the ATO and taxpayers or their agents and other Australian public service agencies.
This sub-plan covers registration, payment and product processing, client account management, debt collection and lodgment enforcement. It involves extensive interactions with taxpayers and has a major impact on client perceptions of the ATO.
In 2001-02 we focused on:
- further refining our business processes, including the processing of activity statements
- assessing and refining our impact on the community by looking at the Australian Business Register, information technology solutions, improved 'self-service' options, and issuing fewer letters and statements to clients
- working with tax agents to reduce the impacts of our operational activities, and
- maximising the efficiency of our processes and procedures bystreamlining and automating ATO systemsand clearingbacklogs.
The people and place sub-plan covers all the work we do in the ATO in relation to our people, as well as direction setting, financial management, 'plan and manage', and corporate governance and assurance activities.
In 2001-02 we focused on:
- implementing an enhanced financial accountability control environment
- developing an accommodation strategy (based on workforce planning data and business needs)
- enhancing the corporate 'plan and manage' processes across the organisation (through such initiatives as setting a clearer and more integrated strategic direction and developing an Output Pricing Agreement to establish an appropriate funding base for administering the tax system)
- arranging specific development for professional streams,and
- developing internal online facilities to maintain services and meet legal obligations.
The information technology (IT) sub-plan encompasses all information technology activity in the ATO and has been shaped by such inputs as our business directions, client interface design, and whole-of-government initiatives.
In 2001-02 we focused on:
- supporting our change program by delivering and supporting high-quality products, on time and within budget, and providing the tools to support our business directions and client relationships
- providing leadership and management of IT across the ATO by undertaking projects such as whole-of-ATO IT financial management and planning, and
- driving the future of IT in the ATO through initiatives such as designing a future tax administration that better integrates business and community needs with evolvingtechnological capability, and increasing the focuson electronic service delivery and the government's online strategy.
The Commissioners are responsible for ensuring we are meeting our corporate governance requirements. They seek this assurance through two reporting processes that operate at a corporate, sub-plan and line level:
- performance reporting, to ensure we are delivering our outcome and outputs within budget, and
- conformance reporting, to ensure our internal operations are meeting statutory and other obligations, as well as our internalpolicies.
Monthly reports are provided to the ATO Executive on operational financial and non-financial matters, any significant events, and performance against the relevant plan.
This monthly process is supplemented by more comprehensive governance reports every quarter, which deal with more systemic issues, patterns and trends, and the overall performance against the ATO Plan. Corporate assurers report on our compliance with statutory obligations and our internal policies.
To give additional initial impetus to the ATO's work on integrity, we have appointed an external Integrity Adviser for a two-year period. He is responsible to the ATO Executive for:
- providing high-level support to the ATO Executive and managers on integrity issues, including reviewing standards and assurance programs
- reviewing and advising on the capability of ATO processes and systems to maintain the highest level of integrity within the ATO
- assisting areas in promoting corporate values and appropriate standards of behaviour, in accordance with national programs and priorities agreed with the ATO Executive, and
- developing and coordinating processes to ensure that risks and issues are identified and/or resolved within agreed timeframes and in accordance with agreed principles.
As part of the ATO's governance system, the Integrity Adviser is treated as a member of the senior executive team. He has access to all ATO (non-taxpayer) information, people and processes and he:
- gives the ATO Executive a monthly report on current issues, including a separate attachment (prepared by Corporate Directions) outlining performance against agreed integrity indicators
- has a regular report meeting (usually each fortnight) on his current work with the Second Commissioner to whom he is responsible
- is a member of the Audit Committee, the Integrity Advisory Committee and the People and Place Sub-plan Executive
- attends senior management meetings such as the Corporate Design Forum, the Thursday Forum and the Plenary Governance Forum, and
- does not otherwise take part in the management of the ATO, except with the agreement of the ATO Executive.
We apply a formal risk management framework across the organisation, based on the Australia/New Zealand Standard AS/NZ 4360. This standard defines the risk management process as 'the systematic application of management policies, procedures and practices to the tasks of identifying, analysing, assessing, testing, treating and monitoring risk'.
We identify compliance, financial and operation risks through analysing data, research and stakeholder input. Risks are then analysed by the sub-plans and lines to estimate their likelihood and potential consequences. Unacceptable risks are then reviewed and prioritised. We then consider risk treatments with a view to eliminating the risk or reducing it to more acceptable levels. These treatments are then reflected in sub-plan and line operational plans, and revised regularly.
Our most significant input into parliamentary committees was to the continuing inquiry of the Senate Economics References Committee into Mass Marketed Tax Effective Schemes and Investor Protection.
The committee tabled its second report, A Recommended Resolution and Settlement, on 27 September 2001, and tabled its final report on 11 February 2002.
The Commissioner's settlement offer to investors in mass marketed schemes was broadly consistent with the committee's recommendations (see chapter 3.1).
The following describes our principal decision-making bodies and their membership and roles.
The Commissioner and Second Commissioners make up our peak decision-making body, the Executive. In this role, they meet at least monthly. Among their responsibilities are approving the ATO Strategic Statement and Plan, developing the ATO's strategic direction, monitoring our overall delivery and initiating any necessary corrective action.
The Commissioner, Second Commissioners and the National Program Managers meet monthly as the Corporate Design Forum. The forum is responsible for designing and implementing capabilities and processes to further develop and support the strategic direction set by the Executive.
The ATO Plan consists of four parts or sub-plans: compliance, operations, people and place, and information technology. Sub-plan executives, consisting of Second Commissioners and National Program Managers, oversee each sub-plan and are responsible for developing, delivering and reporting on the outcomes and outputs of each sub-plan.
The Plenary Governance Forum comprises the Commissioner, Second Commissioners and all National Program Managers. The forum meets quarterly to review sub-plan progress against directions and plans.
The Audit Committee meets quarterly to oversee internal audit activities, the internal controls for risk management and financial reporting, and the implementation of Australian National Audit Office recommendations.
Committee members include a Second Commissioner, an Assistant Commissioner, the Integrity Adviser, and an independent committee member who is external to the ATO.
The Integrity Advisory Committee meets quarterly to promote and support an ethically based culture in the ATO, which fulfils the principles and intent of the Australian Public Service's values and code of conduct, and of the Taxpayers' Charter.
The committee is chaired by a Second Commissioner and includes the Integrity Adviser, a First Assistant Commissioner, as well as senior representatives of the Public Service and Merit Protection Commission, the Ombudsman's Office, and the Australian Federal Police.
The Finance Committee is chaired by a Second Commissioner and includes relevant National Program Managers and the Chief Finance Officer. They meet monthly to develop the ATO's financial management capability, review our progress against budget, and recommend corrective action if necessary.
The ATO Policy Forum is chaired by a Second Commissioner and includes National Program Managers who are responsible for the integrated design teams and elements of the Australian Tax Code and Compliance Product families. They meet fortnightly and are responsible for the strategic management of the ATO policy change program.
The forum is the peak ATO decision-making body on issues that arise during the course of the ATO's tax design work. While tax policy is the primary role of the Department of the Treasury, the ATO Policy Forum establishes the ATO policy position for new policy and provides guidance in the resolution of project issues where necessary.
Other high-level committees, forums and panels contribute to our operations. Membership is diverse and may include senior executives, sub-plan or line representatives, external representatives and topic specialists.
Some are internal-only groups, such as the corporate assurers, a national Occupational Health and Safety Committee, and the People and Place Forum.
Groups with both internal and external representation include the Tax Practitioners Group, the National Tax Liaison Group, the Corporate Consultative Committee, the Tax Policy Coordination Committee, and various tax ruling and litigation panels.
The Internal Assurance Branch provides independent and impartial audit, security, and fraud prevention and control services for the ATO.
During 2001-02 the Risk Assessment and Assurance area:
- undertook risk assessments and assurance reviews of the ATO's systems, products, processes and projects, and issued recommendations relating to these in accordance with our annual Risk Assessment and Assurance Plan
- undertook 153 assessments and reviews from our annual Risk Assessment and Assurance Plan, to help our lines better fulfil their corporate governance and accountability obligations
- further refined our planning processes to ensure:
- the annual program of risk assessments and assurance reviews provides us with a degree of assurance that is better aligned with, and more responsive to, our risk environment, and
- more meaningful reporting to both the Audit Committee and line managers
- further refined our use of collaborative risk assessment techniques in all our work in order to:
- ensure key business risks are identified and assessed as they emerge, rather than retrospectively, and
- prioritise areas for assurance review coverage before assurance testing commences, and
- re-developed the Australian National Audit Office (ANAO) and Risk Assessment and Assurance area recommendation databases so we can better summarise and monitor action taken by lines in response to these recommendations.
Given our role and profile within the community, we take an active interest in ensuring our employees observe high ethical standards.
Fraud prevention and ethics training is delivered using two innovative interactive CD presentations facilitated by Fraud Prevention and Control personnel.
More than 22,000 employees have participated in the first of these presentations, Judge for yourself, while over 7,500 have participated in the second, Play it again Sam.
During 2001-02 these products were supplemented by a new online e-learning package which covers the areas of IT security, information security, fraud awareness ethics, and privacy. This product is aimed at giving new staff the essential information they need to undertake their new role as tax officers.
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I certify that the ATO is currently preparing agency wide fraud risk assessments and fraud control plans, and has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the agency and comply with the Commonwealth Fraud Control Guidelines.
Michael Carmody
Commissioner of Taxation
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During 1999-2000 the Australian Federal Police and the ATO investigated allegations of misuse of our private binding rulings, leading to one of our former senior tax officers being charged with a number of offences.
It is not appropriate to comment further, as the matter is still before the courts.
During 2001-02 the Security Policy and Services area undertook a corporate security risk assessment and revised the ATO's Security Risk Management Plan. The focus is on protecting client and other sensitive information, and we are continuing to implement the recommendations from the assessment.
We are reviewing our compliance with the mandatory requirements of the revised Commonwealth Protective Security Manual, and implementing appropriate changes where necessary.
The ANAO conducted an audit on personnel security in the latter half of 2001, and we are implementing the recommendations to improve processes. The ANAO acknowledged the ATO's better practice achievements in the areas of pre-employment character checking, the inclusion of security clauses in contractual documentation, and the production and implementation of the corporate Security Risk Management Plan.
As a result of a key recommendation related to raising security awareness, we have developed and released an interactive e-learning security product. This product is generally available to all employees and must be completed by all new staff and contractors who are being given IT access.
The ANAO carried out six performance audits in relation to the ATO during 2001-02. It also completed one protective security audit that included the ATO in the audit sample. These audits are discussed below.
The ANAO tabled its report on The Australian Taxation Office's Administration of Taxation Rulings in Parliament on 17 July 2001.
The objective of this audit was to report on the operation of the ATO's administration of private, public and oral taxation rulings and, where appropriate, recommend improvements in relation to good corporate governance, the efficiency and effectiveness of our administration of the rulings system, and the capacity of our systems to deliver consistency and fairness for taxpayers.
The ANAO drew the following conclusions:
- The processes for producing public rulings of high technical quality operate effectively, although the collection, analysis and use of performance information could be enhanced.
- There were some deficiencies in processes for private rulings, although steps have been and are being taken to address these.
- It was not possible to review the administration of oral rulings, as few such rulings had been issued at the time of the audit.
- The ATO does not have the appropriate mechanisms in place to allow it to report fully on the efficiency and effectiveness of its administration of the taxation rulingssystem.
- The mechanisms in place for public rulings substantially provide for consistent and fair treatment for taxpayers. However, in relation to private rulings, a lack of integration of systems, coupled with inadequate systems controls, undermine certainty, fairness and consistency of treatment for taxpayers.
- The ATO's corporate governance arrangements in relation to public and private rulings can be improved to achieve greater efficiency and effectiveness.
The ANAO issued 12 recommendations to improve the operation of our administration of taxation rulings and we have agreed with all of these recommendations.
The ANAO tabled its report on Administration of Petroleum Excise/Collections in Parliament on 26 October 2001.
The objective of the audit was to report on our administration of petroleum excise collections. The audit examined whether we had implemented effective administrative arrangements for the collection of petroleum excise since the transfer of the function from the Australian Customs Service (Customs) in 1999.
The audit also reviewed the role of Customs in performing functions directly related to petroleum excise collections, and key elements of managing the relationship between the ATO and Customs in this area.
The ANAO concluded that we are implementing effective administrative arrangements for collecting petroleum excise, and that we have implemented several management initiatives to strengthen the administration of the excise function.
The ANAO also found that there was scope for us to further improve our administration of petroleum excise collections, as there were a number of gaps in strategic management and areas for improvement in operational management. Particular matters identified were:
- a less than comprehensive approach to risk management for petroleum excise collections
- incomplete partnership arrangements with Customs, which was continuing to perform relevant functions under legislative responsibilities for both Customs and the ATO
- inefficiencies in the operation of the petroleum licensing systems and associated processes
- insufficient integration of compliance and investigations functions into the overall governance of petroleum excise collections, and
- inadequate assessment of our continuing exposure to fuel substitution activities that impact on our petroleum excise revenue collections.
The ANAO made 12 recommendations to enhance the administrative effectiveness of the petroleum excise function. We welcomed the report and have agreed to all 12 recommendations.
The ANAO tabled its report on Personnel Security - Management of Security Clearances in Parliament on 4 December 2001.
The objective of this audit was to determine if organizations were managing security clearance and vetting processes effectively and efficiently and in accordance with Commonwealth policy, as outlined in PSM 2000 (the Protective Security Manual). Organisations (including the ATO) were assessed against the requirements of this recently revised PSM in the interests of promoting better practice.
Overall, the ANAO concluded that our security clearance processes largely comply with Commonwealth security policy as contained in the PSM. However, there is scope for improving the administration of these processes. The ANAO also acknowledged that the ATO's operating environment has placed significant additional resource pressures on our personnel security function.
The ANAO issued a range of recommendations to enhance the effectiveness and efficiency of the security clearance process. The ANAO recommended particular emphasis be given to:
- implementing greater control over the assessment of security clearance and vetting processes
- introducing procedures to enable the early identification of issues associated with an officer's continued suitability to hold a security clearance
- addressing the significant number of security clearances currently requiring review, and
- implementing treatments to enhance the security culture and security awareness levels in the organisation.
The ATO noted and accepted each of the ANAO's recommendations.
The ANAO assessed some of our practices as better practice. These included our promulgation of the Pre-Engagement Character Clearance Policy, and our development and implementation of the Security Risk Management Plan.
The ANAO tabled its report on ATO Progress in Addressing the Cash Economy in Parliament on 11 March 2002.
The audit focused on our implementation of the Cash Economy Task Force recommendations in light of the tax reform that has taken place over the last two years. The audit also identified those aspects of the cash economy that are being addressed as part of the tax reform process, as well as examining how we measure tax reform's effect on the cash economy.
The ANAO's findings led it to the following conclusions:
- Our strategy to address the cash economy is comparable with those of other countries. It offers a wide-ranging approach to dealing with the cash economy, and current operational plans are consistent with the strategic directions recommended by the task force.
- Whilst most of the task force's recommendations have been implemented, either in full or in part, there is still room for improving our approach to industry partnerships, our use of cash economy intelligence, and our communication and education strategies related to the cash economy. In particular, the task force's recommendation on the strategic use of cash transaction data needs to be fully implemented.
The ANAO issued five recommendations aimed at improving the effectiveness of our approach to addressing the cash economy, and we have agreed to these recommendations.
The ANAO tabled its report on Administration of the 30 Per Cent Private Health Insurance Rebate in Parliament on 7 May 2002.
The objective of this audit was to determine the effectiveness of Commonwealth government agencies' administration of the Private Health Insurance Rebate (PHIR). In relation to the ATO, the primary issues examined included whether:
- the Health Insurance Commission (HIC) and the ATO had adequate financial controls in relation to PHIR payments, and
- the Department of Health and Ageing (Health), HIC and the ATO had clearly defined roles and worked together to fulfil the government's objectives for the PHIR.
The ANAO concluded that Health, HIC and the ATO worked together effectively in the implementation phase of the PHIR to meet the government's tight timeframe for implementation.
The ANAO also drew the following conclusions:
- While the total cost of the PHIR to the Commonwealth Budget significantly exceeded the initial budget estimates prepared by Treasury and ATO, the agencies adopted a reasonable approach to produce these estimates.
- Health, HIC and the ATO developed a clear and common understanding of their respective roles and responsibilities. However, this understanding was not formalised in a timely manner, as agreements between the agencies were not finalised until 2.5 years after the commencement of the PHIR. However, the formal Health-HIC and Health-ATO agreements for administering the PHIR (signed in April and June 2001 respectively) now provide for adequate performance information to be supplied to Health to monitor and evaluate PHIR administration.
In relation to the ATO's role in administering the scheme, the ANAO recommended that HIC and the ATO review their data exchange arrangements. Revised arrangements should ensure the ATO obtains timely access to the data it requires to undertake adequate data matching checks for inappropriate multiple claiming under the PHIR.
Both the ATO and HIC have agreed with this recommendation.
The ANAO tabled its report on Administration of Tobacco Excise in Parliament on 7 June 2002.
This audit focused on the ATO's administration of tobacco excise duties and was intended to complement a previous ANAO audit into the ATO's administration of petroleum excise duties.
The objective of the audit was to assess the ATO's administration of tobacco excise, in particular:
- tobacco excise governance arrangements, including planning, risk management, and performance management and reporting
- collection and analysis of intelligence, including an assessment of intelligence capabilities relevant to the detection and prevention of trade in illicit Australian-grown tobacco, and
- tobacco-related field services compliance and investigation activities, including assessing the extent to which these activities were aligned with the tobacco risk management strategies and plans.
Although the audit examined these broader aspects of the ATO's administration of tobacco excise, the ANAO placed particular emphasis on the strategies used by the ATO to address the proliferation of chop-chop in Australian markets as a major risk to revenue.
The ANAO concluded that the ATO has arrangements in place for the effective administration of tobacco excise, and that the ATO has also implemented appropriate governance arrangements to manage tobacco excise administration. To address the risk of chop-chop to tobacco excise revenue, the ATO has established an intelligence framework to collect, analyse and store suitable intelligence, particularly with regard to chop-chop. Further the ATO is also working to better align its field services compliance and investigation activities with its tobacco risk management strategies and plans.
The ANAO also found that the ATO could improve its administration of tobacco excise in a number of areas, including:
- articulating clearly appropriate strategies and measures aimed at achieving the objectives identified in the tobacco excise business planning documents and assessing agency performance against these objectives
- developing partnerships with appropriate stakeholders to more accurately quantify revenue leakage associated with chop-chop (indicatively, excise loss attributed to the chop-chop market is currently estimated to range between $99 million and $450 million per annum) and to develop more informed risk assessments
- establishing a tobacco intelligence capability that can effectively contribute to the ATO's compliance outcomes and support tobacco-related strategic, operational and tactical levels of decision-making
- establishing suitable liaison arrangements with authorities capable of providing relevant intelligence relating to chop-chop, and
- improving aspects of its internal and external relationship management, including sharing of information and intelligence within the ATO.
The ANAO made eight recommendations to strengthen key areas in tobacco excise administration. We agreed to the recommendations (with qualifications on two of them) and believe the report will help us further develop our tobacco excise program.
The ANAO tabled its report Examination of Allegations Relating to Sales Tax Fraud in Parliament on 10 July 2001.
On 24 June 1998 the Senate referred to the Senate Economics References Committee for inquiry the operation of the ATO with reference to the following issues:
- the equitable treatment of taxpayers
- the performance of the Large Business and International line (including the High Wealth Individual Project)
- ATO compliance with its Client Settlement Guidelines, and
- allegations of infiltration of the ATO by organised crime.
The objective of this examination was to investigate matters relating to allegations made to the Senate Economics References Committee that the ATO and Customs failed to pursue several cases of detected sales tax fraud, the coordination arrangements between the ATO and Customs, and whether any issues arising from these matters had been addressed in implementing GST.
The ANAO examination focused on:
- arrangements in place to coordinate activities between the ATO and Customs for sales tax, and the role Customs played in investigating the sales tax fraud cases
- the ATO's management of the sales tax fraud cases being investigated by the Sales Tax Prosecution Unit and the current status of those cases
- coordination arrangements between the ATO and Customs and systems and processes for collecting/deferring GST on imported goods, and
- the framework within the ATO for detecting and investigating GST fraud.
The ANAO concluded that:
- the ATO did not pursue a number of detected sales tax fraud cases in a timely manner
- the investigations of sales tax fraud undertaken by the Hurstville Sales Tax Prosecution Unit and the Small Business Prosecution Investigation Unit were poorly managed, and
- as GST was introduced in July 2000 and the ATO Fraud Section was established in August 2000, it was considered too early to fully assess the effectiveness of these new systems and processes as, in some instances, they were still being implemented and refined.
In addition, the ANAO noted the following points:
- Analysis of the sales tax fraud cases also highlighted systemic case management problems within both the Sales Tax Prosecution Unit and the Small Business Prosecution Investigation Unit.
- Initiatives currently under development within the ATO Fraud Intelligence Section and the ATO Fraud Section to address management of the sales tax fraud cases need to be completed and implemented as soon as practicable.
- The establishment of a National Liaison Committee supported by a memorandum of understanding which clearly defines roles and responsibilities has improved the coordination arrangements between the ATO and Customs with regard to sales tax.
- The ATO and Customs have developed and implemented systems and processes for collecting, deferring and processing GST, luxury car tax and wine equalisation tax.
The ANAO issued two recommendations aimed at improving the ATO's management of fraud investigations, and we have agreed with both recommendations.
At 30 June 2002 the following ATO-related ANAO audits were in progress:
- one financial statement audit
- one special-purpose audit
- three performance audits specific to the organisation, and
- two cross-agency audits that include the ATO in the audit sample.
The Commonwealth Ombudsman's Office is the prime external body for handling complaints about our administrative decisions and actions. During 2001-02 the Ombudsman's Office received 2,671 complaints about the ATO - a 20% decrease on the previous year.
It is normal practice for the Ombudsman to refer a complainant back to the agency concerned where the complainant has not previously raised the complaint with the agency. This is consistent with the notion of the Ombudsman as an office of last resort.
This year the complaint referral processes between the Ombudsman and the ATO have been further developed, leading to the establishment of a set of protocols to facilitate referral of general complaints to ATO Complaints, our internal complaint-handling area (see chapter 2.5).
The Ombudsman has also established a fax-referral service for written complaints where a complainant has not previously contacted the ATO and is willing for the Ombudsman to facilitate the process. This approach has proven particularly effective and alleviates, in part, the need for the complainant to tell their story again.
During the year the Ombudsman conducted 1,012 tax-related investigations.
Issues raised have included:
- the administration of the superannuation guarantee system, with particular reference to compliance activities
- the continued monitoring of the administration of the new taxsystem
- the administration of the ATO rulings system
- compensation for detriment caused by defective administration, and
- how we deal with community information.
The Ombudsman reaffirmed his decision not to investigate complaints that relate to the substantive legal basis of the Commissioner's actions with regard to mass marketed schemes, stating that these issues should be addressed through the objection and appeal process. However, the Ombudsman continues to investigate complaints relating to our administration of scheme-related issues.
The Ombudsman's principal concern with the alleged delays in the Budplan test case, namely mounting interest charges for investors, was largely overcome by the Commissioner's announced settlement terms in relation to the waiver of penalties and interest. The Ombudsman is pursuing enquiries in relation to any systemic issues and improvements to the test case program.
A review of our procedures for handling freedom of information requests was postponed, but the Ombudsman has indicated that he will most likely resume his investigation in the next financial year as part of a broader review of freedom of information management throughout the Commonwealth.
The Ombudsman is currently conducting an 'own motion' review of our complaint handling systems and has completed the first phase of that investigation.
The Privacy Commissioner placed greater reliance on our ability to identify and resolve privacy issues this year. We also assisted him, as part of the privacy contact officer network, by providing comments on various aspects of the Privacy Act's extension to the private sector.
The Privacy Commissioner began an audit, under paragraph 27(1)(h) of the Privacy Act 1988, of the Family Assistance Office. This audit included the collection and flow of personal information between partner agencies to the Family Assistance Office. This audit is not yet complete.
In accordance with the Privacy Commissioner's Use of Data Matching in Commonwealth Administration, we have been drafting protocols for public release on six data matching exercises that we run.
The Privacy Commissioner referred 12 complaints to the ATO. There were also three unresolved complaints remaining from 2000-01. Nine complaints were resolved and, at 30 June 2002, six were still being considered.
The new complaints related to:
- alleged disclosures to the public, taxpayers' workplaces and the Child Support Agency
- our alleged unlawful access to tax agents' and solicitors' records, and
- our alleged unlawful use of information, including our use of inaccurate address information in recovering a debt and assessing tenders, and our security safeguards protecting taxpayer information.
Litigation is a necessary aspect of our compliance, law clarification and resolution of dispute program. During 2001-02 the Commissioner was involved in litigation (other than recovery action) in the High Court, Federal Court, State and Territory Supreme, District and Local Courts, the Administrative Appeals Tribunal and the Small Tax Claims Tribunal.
The Commissioner was successful in 66% of non-debt substantive court cases, while another 21% were decided wholly in favour of the taxpayer. The remaining 13% were favourable, in part, for each party.
In the Administrative Appeals Tribunal and the Small Tax Claims Tribunal, the Commissioner's decision was wholly upheld in 40% of cases, while there were decisions in favour of the taxpayer in 36% of cases. The remaining 24% of cases were decided partly in favour of each party.
Some litigation is carried out under the ATO's test case program, which is a process we believe can clarify the law for the community. For the test case program, both sides of the argument are funded by the government.
This year there were 19 applications for test case funding:
- three involving actual cases were approved
- two involving issues (but for which no case had been identified) were approved to develop a case
- funding was not approved in one case but the Commissioner agreed to pay his own costs, regardless of the outcome
- four applications are still being considered or are awaiting further information, and
- nine applications were declined.
There were three funded cases decided during the year:
- Morris v Commissioner of Taxation (Federal Court) -whether people whose income-earning activities require them to work outdoors were entitled to claim deductions for sun protection products. The court held that they were.
- Hart v Commissioner of Taxation (Federal Court and Full Federal Court) - whether interest payments on a split loan used to pay for both a residential property and a rental property were wholly deductible. The court held that theywere.
- Howland-Rose & Others v Commissioner of Taxation (Federal Court) - whether expenses of participation in theBudplan mass marketed scheme were deductible. Thecourt held that they were not.
There were a number of other significant cases decided by the courts:
- Mochkin v Commissioner of Taxation (Federal Court) -whether the anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936 applied to income alienated through a personal exertion trust. The court held that, on the facts of that case, they did not (the Commissioner is appealing).
- McCormack v Deputy Commissioner of Taxation (Federal Court) - whether a notice issued under section 264 of the Income Tax Assessment Act 1936 to a partner in an accounting firm requiring him to supply the names andaddresses of clients to the Deputy Commissioner wasinvalid, unreasonable and outside the Deputy Commissioner's power. The court held that the notice was valid and that the names and addresses had to besupplied.
- Australian Communication Exchange v Commissioner of Taxation (Federal Court and Full Federal Court) - the extent to which an employer of casual employees has obligations in respect of those employees under the superannuation guarantee legislation. The court held that it depends on the interpretation of the award they are employed under (the Commissioner is seeking special leave to appeal).
- Vincent v Commissioner of Taxation (Federal Court) -whether expenses of participation in the Active Cattle mass marketed scheme were deductible. The court held that they were not.
- Harris v Commissioner of Taxation (Federal Court) - whether a director or employee of a company, in which the director or employee has a controlling interest, may contribute unlimited amounts for their own superannuation benefits to a non-complying superannuation fund and thereby enjoy full deductibility for the amounts contributed without those amounts being assessable to the trustee of the fund as taxable contributions. The court held that deductions are notavailable.
- Commissioner of Taxation v Jones (Full Federal Court) -whether interest on a loan taken out while a business was being conducted was deductible after the business had ceased. The court held that, on the facts of that case, it was deductible.
5.3 - Management of human resources
A comprehensive report on the demographics of our workforce was completed in September 2001. Topics covered include age profile, classification profile, gender profile, length of service, work types, separations, commencements, and staff numbers in lines, locations and employment categories. This information helps workforce planners and managers develop business and people strategies.
Following are some of the demographics reported:
- The gender profile remained the same as last year, with women representing slightly more than 50% of the workforce.
- The age profile continued to rise, with 56% of staff being 40 orolder.
- Non-ongoing employees and contract staff made up 8% of the total workforce, compared with 13% last year.
- The two largest lines were still Goods and Services Tax and Client Account Management, representing 18.1% and 17.6% of all staff respectively.
- Staff turnover at September 2001 remained low, with an exit rate for ongoing staff of 4.1% (compared with 4.4% last year). A voluntary redundancy program resulted in increased staff turnover from October-December 2001 and a revised exit rate for the full year of 10.5%.
The ATO's people strategy provides the framework for managing people within the organisation.
An integral part of the strategy's design is our people system. Various drivers provide direction and focus for the system. They include our business direction and outcomes, along with our philosophy, values and principles. These help to define the ATO's work. In turn, our decisions on the nature of the work to be done and our views on how the work may be structured help us to design the type of workforce required to achieve our business outcomes.
Overall, our people system aims to ensure that:
- we develop a performance culture aligned with the values in the Taxpayers' Charter
- we are predominantly an employment-based organisation, and
- we are an employer of choice.
The following sections cover some of the areas we focused on during the year.
Our performance management system for senior leaders and general staff was aligned with the Public Service and Merit Protection Commission (PSMPC) Leadership Capability Framework. We continued to refine the multi-source feedback process to more closely reflect our desired leadership behaviours. The improved electronic delivery system for multi-source feedback, tailored multi-source feedback global reports and redevelopment of the system have resulted in a 16% increase in senior executive service (SES) participation and a 19% increase in executive level 2 (EL2) participation.
Other key achievements include a major review of the performance management system over the timeframe of the next agency agreement (for which stage one has begun), and development and endorsement of an employee Rewards and Recognition strategy.
This strategy included consultation with over 3,000 employees and provides for a wide range of activities and awards to acknowledge and reward performance and service in the ATO. In particular, we have introduced awards - for innovation, excellence in leadership, excellence in client service, technical excellence, and contribution to service - to recognise the value of specific contributions of our people.
The ATO has adopted the PSMPC's Leadership Capability Framework as the basis for selection, performance appraisal and development of its leaders at the SES and EL2 levels. Our performance management system for people with leadership responsibilities at all levels is built on this framework, and the multi-source feedback instrument has been refined to align with the capabilities defined within it.
In addition, we continue to build the organisation's leadership capability through:
- meeting identified leadership development needs through executive coaching as well as selected training opportunities
- enabling SES officers to meet at regular intervals during the year in forums designed to promote dialogue and deeper understanding of issues affecting the organisation, and the challenges they face as leaders, and
- introducing an induction program for new SES. In recognition of the pressures encountered by people new to this level, we have recently initiated an induction process and accompanying peer mentoring scheme to provide internal support, as required, to assist new appointees to take on their new roles and responsibilities.
Following are the significant successes in 2001-02:
- The Professional Stream Development Project was established to support career planning now and into the future.
- As part of the human resources integrated people system, the Capability Management System was endorsed for corporate use, allowing for better workforce planning, recruitment, learning and development, career and succession planning, performance management, leadership, and rewards and recognition.
- The Learning and Events Management System was developed and implemented to provide accurate reportingon learning and development information across the ATO.
Our human resources integrated people system will help us deliver on business outcomes into the future through our people. The system will also enable us to effectively determine and deliver current and future needs of our workforce.
We developed a range of policies and tools to support the major workforce adjustment program. These were used by managers and employees, and contributed significantly to the overall success of the program.
We improved our recruitment practices, through greater use of online services, and re-branded recruitment advertising. Enhancements to our website also resulted in external clients having improved levels of access to recruitment information.
We provided large-scale skilling support for recruitment, induction, new systems and new tax reform legislation earlier in the year. This saw the move towards strategies for more efficient ways to support the development of workforce capability, manager and leadership skills, and online learning delivery.
The need for increasing collaboration on learning activities and for supporting cross-line learning activities resulted in the development of the ATO Skilling Network.
There was an increased focus on building and maintaining a competency in e-learning and blended learning solutions to support the move to a culture of performance, professional stream development and self-directed learning.
Infrastructure was developed to support tax officers in learning and development, including the Corporate Assurance System, registered training organisation status, quality assurance, the Learning and Events Management System, and e-learning protocols.
Some of the major training/skilling initiatives that occurred
during 2001-02 included:
- graduate and cadet programs
- manager and leadership development
- performance assurance programs
- the Professional Stream Development Project, and
- development of SES induction strategies.
The certified agreements covering ATO employees - the Executive Level 2 Agreement 2001 and the General Employees Agreement 2001 - both nominally expired on 30June 2002. However, the provisions of both continue while new agreements are being developed.
On 30 June 2002 there were 19,318 employees covered by these agreements.
A separate agreement covering the Australian Valuation Office was certified in November 2000. It had a nominal expiry date of 30 June 2002.
Our 2001 agreements were comprehensive in that they consolidated the terms and conditions of employment for employees into a single source for each employment group. While providing employees with benefits in terms of pay and conditions, they also supported productivity improvements in the organisation by linking pay increases to demonstrated improvements in corporate outcomes.
These approaches have been retained in the development of new agreements. Key design features include:
- a link to productivity for all activities in the ATO, including tax reform
- improved arrangements for communication and consultation with employees and their representatives
- no trade-offs or reductions in current conditions
- new and/or improved conditions to meet changing needs
- continued support for a better balance between work and personal life, and
- updated allowances.
Since February 2002 there have been extensive consultations with employees about the nature and content of the new agreements. Extended negotiations have taken place with unions in relation to a replacement for our General Employees Agreement 2001.
All permanent senior executive staff in the ATO are employed through Australian workplace agreements.
When EL2 staff members act on higher duties as senior executives, they are offered an Australian workplace agreement if the higher duties continue for 12 weeks or longer. On 30 June 2002 there were 204 employees covered by Australian workplace agreements.
The agreements include benefits relating to motor vehicles, parking, semi-official telephones, mobile phones, airline lounge membership and some spouse travel. Senior executives who do not use these benefits may cash them out through their salary.
There are a number of achievements we can report for 2001-02:
- a record voter turnout and record 'yes' vote for the general agreement in a time of tight resources and a redundancy program
- a successful Agency Agreement Implementation Group mechanism, which progressed issues arising from the Agency Agreement
- a continuing improvement in relationships, including an increase in consultation at the line and corporate levels
- an increase in ATO consultation processes around agreementmaking
- the increased engagement of senior management in developing the agreement for 2002-04
- the increased alignment of the 2002-04 agreement with the 'People and Place' planning for 2002-04
- the increased involvement of ATO specialists in ongoing consultations and a sustainable relationship after the Agency Agreement team ceased to exist, and
- the fact that the 2002-04 agreement is a multi-year agreement.
This section addresses our Health and Safety Management Strategy and general occupational health and safety (OH&S) issues. For details of our responses to our legal obligations under section 74 of the Occupational Health and Safety (Commonwealth Employment) Act 1991, see appendix 3.
The Health and Safety Management Strategy combines our management organisational arrangements and is designed to improve our health and safety performance. The strategy is based on the premise that:
- OH&S principles are exercised more appropriately when they are linked with overall business management, and
- applying a risk management philosophy and methodology consistent with business goals and management practices can enhance general business performance and productivity.
The Health and Safety Management Strategy has six key elements:
- senior management leadership and commitment
- the active involvement of each individual
- provision of appropriate information, education and training
- an OH&S risk management methodology
- effective communication through consultation with all relevant parties, and
- development and implementation of appropriate OH&S management information systems.
We have significant support mechanisms and initiatives in place to enhance the application and effectiveness of the strategy. These include:
- client relationship management, through which the ATO provides an OH&S specialist to each line, in a client relationship manager role, to help the line fulfil the requirements of the strategy and carry out risk assessments of work practices, systems or procedures that may have implications for the health and safety of employees
- an injury management specialist who examines the available data relating to the incidence and mechanisms of injury and the injury management processes in place, with the aim of improving our performance
- the OH&S intranet site, which is continually reviewed and updated to provide health and safety and related information,and
- the ATOwellbeing program, aimed at assessing the current state of health of ATO employees and focused on providing employees with the tools to help them balance their work and home life. The program has two phases:
- the health risk appraisal program, available to all employees (completed), and
- the health promotion interventions based on the top 10 health risks.
The Remuneration Tribunal sets the Commissioner's remuneration.
The Commissioner determines the remuneration for the Second Commissioners, within a framework set down by the tribunal. The Commissioner also sets actual remuneration and conditions for our SES employees.
In 2001-02 the minimum salaries for senior executives were $91,745 for Band 1 and $112,488 for Band 2. There is no fixed maximum. Final terms and conditions of employment, including salary, are negotiated through individual Australian workplace agreements.
Note 14 in the ATO's financial statements gives the number of executives whose total remuneration falls within each $10,000 band, starting at $100,000, and the aggregate remuneration paid to all executives.
TABLE 5.1
Performance pay is available to senior executives and EL2staff.
Table 5.2 indicates the:
- number of recipients of performance pay, by level
- rate of performance pay, and
- percentage of staff receiving performance pay at a particular rate.
TABLE 5.2
As noted earlier, our agency agreements link pay rises with productivity. This year staff received a 3.2% pay rise.
At 30 June 2002 the ATO employed 19,318 staff (including ongoing and non-ongoing employees) under the Public Service Act 1999.
Tables 5.3 to 5.6 give a breakdown of staffing by classification, gender, full-time/part-time status and location. The Commissioner and Second Commissioners are not included in these tables.
TABLE 5.3
TABLE 5.4
TABLE 5.5
Note: During 2001-02 a number of lines were restructured. Corporate Communication and parts of ATO Corporate formed the new line ATO Relations, and Financial Services and the remainder of ATO Corporate formed the new line ATO Resource Management. As reporting systems to reflect the new structure were not adjusted until after 30 June 2002, the above table contains data under the previous structure.
TABLE 5.6
|
|
Staffing statistics for the previous financial year are provided for comparison. At 30 June 2001 the ATO employed 20,328 staff (including ongoing and non-ongoing employees) under the Public Service Act 1999.
Tables 5.7 to 5.10 give a breakdown of staffing by classification, gender, full-time/part-time status, and location. The Commissioner and three Second Commissioners are not included in these tables.
TABLE 5.7
TABLE 5.8
TABLE 5.9
TABLE 5.10
* Note: In last year's annual report, this was incorrectly reported as Western Australia/Tasmania region.
The ATO's Accredited Procurement Units have concentrated on reducing supplier costs during the year. Reviews were undertaken in a number of areas, resulting in significant cost reductions in operational travel, fleet, publication distribution, printing, postage and consultants.
In the past 12 months, national contracts or panels were finalised for assistance in the areas of integrated tax design services, career and lifestyle counselling and financial planning, security superintendent services, mailroom processing, vaccinations and health surveys.
We have implemented improved processes for managing memorandums of understanding with other agencies. The new arrangements will reduce the time taken to prepare and finalise agreements. During the year we entered into memorandums of understanding covering a range of areas with Centrelink and the Australian Customs Service.
We have also started a review of simple procurement processes, with a view to reducing purchasing supply cycle times and administrative processes.
Another important development during 2001-02 has been the shift to electronic processing. We have continued to actively pursue and implement arrangements with selected suppliers to electronically process purchases and invoices. We have also implemented the Commonwealth Electronic Tender System, and the majority of open tenders in 2001-02 were conducted through this process.
In accordance with a Senate Order, we have complied with the government's requirements to publish a list of contracts of $10,000 or more on our website.
Assets management is not a significant aspect of the ATO's day-to-day operations, so is not reported here.
In line with government policy, we are undertaking a performance improvement process, beginning with the strategic sourcing of corporate services.
As part of the competitive tendering and contracting stream of work, the approach we have adopted is to undertake a two-phase strategic sourcing process. The first stage of this process involves re-engineering business processes to closely define the service level expectations and benchmarks. The second stage is a market sourcing phase.
Work is currently under way on numerous fronts as part of this process. This includes business process re-engineering across the following functions:
- payroll processing
- accounts payable
- corporate systems support
- transactional banking services
- financial management and reporting services
- purchasing and procurement services, and
- strategic and decision support services.
To date, we have approached the market with a request for tender for mailroom services and an expression of interest for facilities management. The mailroom services tender is currently in the final contract negotiation phase. Having refined its statement of requirements following the expression of interest phase, the facilities management function is now preparing to approach the market with a restricted request for tender.
Decisions on how services will be sourced will be based on whether tenderers can clearly demonstrate value for money and not adversely impact on our core business operations.
We have continued to implement the Commonwealth Disability Strategy in relation to both our internal staff and our external clients.
We provide for our staff with disabilities to help them achieve their potential in the workplace. We have achieved this through the comprehensive Workplace Diversity Program, which incorporates special arrangements that enable people with a disability to participate fully, and maximise their potential, in the ATO environment.
We implemented a data census project to develop a data gathering process on the human resources system, known as SAP. This will allow us to enhance our reporting and planning capabilities as well as better support the government's initiatives in relation to workplace diversity.
The ATO has in place two networks to support employees with disabilities:
- the national forum and regional deaf tax officer network, and
- the visually impaired tax officer network.
Both networks provide an avenue to deal with issues encountered by staff with disabilities and ensure that the specific requirements of people with disabilities are considered in the wider working environment, for example, in IT purchases. Our national Occupational Health and Safety Committee has been looking at adaptive technology to support visually impaired employees.
During the year we worked closely with business clients who use adaptive technology to improve their access to electronic services in lodging activity statements. An accessible internet-based facility was developed to facilitate the electronic retrieval, completion and lodgment of activity statements.
The ATO website is recognised as having a high level of accessibility and provides for people using adaptive technology. Our website exceeds minimum standards set down by the National Office for the Information Economy, and is acknowledged as a world best practice site for accessibility.
We also make tax-related information available in multiple formats, including electronic, print, audio and braille.
Other initiatives include:
- modifying our sites to ensure appropriate physical access for people with disabilities
- providing teletext subtitles on all of our television advertising
- including Radio for the Print Handicapped in the media schedule when undertaking radio advertising
- working with the Royal Blind Society to develop the electronic tax return e-tax to standards set by the society
- meeting the information needs of tax practitioners with disabilities, and
- involving the National Relay Service to assist people wanting information or wishing to lodge complaints.
Appendix 1 - Summary of performance information
The overall outcome of the Treasury Portfolio is the 'strong, sustainable economic growth and the improved wellbeing of Australians'.
The specific ATO outcome is 'effectively managed and shaped systems that support and fund services for Australians and give effect to social and economic policy through the tax system'.
Our major outputs relate to providing revenue to government, providing transfers and contributing to policy advice and legislation.
Tables A1.1 to A1.11 show a summary of performance information against the outcome effectiveness measures and the output measures as stated in the Portfolio Budget Statements 2001-02, Treasury Portfolio.
TABLE A1.1
TABLE A1.2
TABLE A1.3
TABLE A1.4
TABLE A1.5
TABLE A1.6
TABLE A1.7
TABLE A1.8
TABLE A1.9
TABLE A1.10
TABLE A1.11
Output 1.1.4 Support other agencies
Appendix 2 - Legislation
Title of Bill
|
Date of introduction
|
Measures in Bill
|
Regulation impact statement
|
Taxation Laws Amendment Bill (No. 5) 2001
|
23/08/2001
|
Clarify the treatment of religious practitioners under the new tax system.
|
No
|
|
|
|
Change the status of constitutionally protected superannuation funds.
|
No
|
|
|
|
Provide capital gains tax outcomes for investors in managed funds that are broadly comparable to those for investors who choose to invest directly.
|
Yes
|
|
|
|
Extend gift deductibility status to various funds.
|
No
|
|
|
|
Provide an exemption from income tax to a society or association established for the purpose of promoting the development of information and communication technology.
|
No
|
|
|
|
Provide an exemption from fringe benefits tax (by means of a rebate) to not-for-profit organisations established for the purpose of promoting the development of information and communication technology, aquaculture or fishing resources.
|
No
|
Taxation Laws Amendment Bill (No. 6) 2001
|
30/08/2001
|
Petroleum rent resource tax. Provide a clear methodology to determine a gas transfer price.
|
Yes
|
|
|
|
Petroleum Rent Resource Tax Act -five-year rule.
|
No
|
|
|
|
Provide an exemption from income tax to local government businesses that become companies from 1 July 2000.
|
No
|
|
|
|
Allow self-managed superannuation funds to retain their residency status when members go overseas temporarily.
|
No
|
|
|
|
Provide shareholders in listed investment companies with access to the capital gains tax discount so they receive comparable tax treatment to investors in managed funds.
|
Yes
|
|
|
|
Issues arising from the HIH rescue package.
|
No
|
|
|
|
Provide a concession for certain agents and allow self-assessment against certain criteria in relation to the alienation of personal services income provisions.
|
Yes
|
Title of Bill
|
Date of introduction
|
Measures in Bill
|
Regulation impact statement
|
Excise Tariff Amendment (Crude Oil) Bill 2001
|
30/08/2001
|
Reduce certain crude oil excise rates to encourage oil exploration and production onshore and offshore.
|
No
|
Fuel Legislation Amendment (Grant and Rebate Schemes) Bill 2001
|
20/09/2001
|
Extend the expiry dates of the diesel and alternative fuels grants scheme and the diesel fuel rebate scheme from 30 June 2002 to 30 June 2003.
|
No
|
Taxation Laws Amendment Bill (No. 2) 2001 -amendments
|
Amendments moved 27/09/2001
|
Provide concessional tax treatment of conservation covenants entered into by certain taxpayers in order to protect areas of high conservation value - Part 1 - deductions.
|
Yes
|
|
|
|
Provide concessional tax treatment of conservation covenants entered into by certain taxpayers in order to protect areas of high conservation value - Part 2 - capital gains tax.
|
Yes
|
|
|
|
Allow deductions for gifts of property valued at more than $5,000 to be spread over a period of up to five years.
|
No
|
International Tax Agreements Amendment Bill 2001
|
27/09/2001
|
Give the force of law in Australia to the agreement between the government of Australia and the government of the Russian Federation.
|
Yes
|
Taxation Laws Amendment (Superannuation) Bill (No. 1) 2002 Income Tax (Superannuation Payments Withholding Tax) Bill 2002
|
14/2/2002
|
Provide for the taxing of payments made to non-resident members by superannuation funds.
|
Yes
|
|
|
|
Specify the relevant rate of tax to apply to payments made to non-resident members by superannuation funds.
|
Yes
|
Taxation Laws Amendment (Film Incentives) Bill 2002
|
14/2/2002
|
Introduce a refundable tax offset for films with production budgets greater than $15 million.
|
Yes
|
Title of Bill
|
Date of introduction
|
Measures in Bill
|
Regulation impact statement
|
Tax Offset for First Child (Baby Bonus) Bill 2002
|
14/03/2002
|
Introduce the first child tax refund (Baby Bonus) in recognition of the loss of income that generally follows the arrival of a family's first child.
|
No
|
Taxation Laws Amendment Bill (No. 1) 2002
|
21/02/2002
|
Amend the prepayment rules to provide a deduction for certain prepaid expenditure.
|
Yes
|
|
|
|
Amend the non-commercial losses rules to ensure the Commissioner's discretion can be suitably exercised.
|
Yes
|
Taxation Laws Amendment Bill (No. 2) 2002
|
14/03/2002
|
Make consequential changes to the ITAA 1997 following the change in the company tax rate effective from 1 July 2001.
|
Yes
|
|
|
|
Extend the existing tax exemption for income derived by friendly societies on funeral policies, scholarship plans, income bonds and other non-life insurance activities until 1 July 2002.
|
No
|
|
|
|
Deny refunds of excess imputation credits to non-complying superannuation funds.
|
No
|
|
|
|
Amend the inter-corporate dividend rebate provisions to deny the rebate in respect of unfranked dividends, including unfranked dividends paid within wholly owned groups, paid to or by a dual resident company.
|
No
|
|
|
|
Correct the franking rebate provisions to ensure charitable trusts will be entitled to refunds of imputation credits in respect of indirect distributions attributable to dividends paid from 1 July 2000.
|
No
|
|
|
|
Recognise an additional method of demutualisation for non-insurance mutual entities.
|
No
|
|
|
|
Reinstate the qualification relating to a period covered by a Social Security International Agreement in the residency test into the entitlement provision for the senior Australians tax offset.
|
No
|
|
|
|
Restrict veterans' eligibility to those receiving certain pensions.
|
No
|
|
|
|
Ensure Australian members of non-residential mutual companies are not disadvantaged compared with Australian members of resident mutual companies.
|
No
|
|
|
|
Correct demutualisation rules to ensure they work appropriately.
|
No
|
|
|
|
Correct minor technical errors that occurred in the measures that gave effect to the 2001-02 Federal Budget announcements.
|
No
|
|
|
|
Correct the refundable offset rules so that double claiming of a refund of excess imputation credits by both a trustee and a beneficiary will not be possible.
|
No
|
|
|
|
Amend the gift provisions to list new organisations.
|
No
|
|
|
|
Minor drafting and technical amendments.
|
No
|
Title of Bill
|
Date of introduction
|
Measures in Bill
|
Regulation impact statement
|
Taxation Laws Amendment Bill (No. 3) 2002
|
21/03/2002
|
Treat in-kind developer contributions made by developers in return for government approvals for land developments as not being subject to GST.
|
No
|
|
|
|
Allow entities to transfer income tax losses or net capital losses without attracting GST.
|
No
|
|
|
|
Allow financial relief for car rental companies.
|
Yes
|
|
|
|
Allow general insurers deductions on outstanding claims based discounts.
|
No
|
|
|
|
Ensure general insurers use a net premium approach for calculating unearned premiums and ensure the prepayment legislation does not apply to reinsurance of premiums and acquisition costs incurred by general insurers.
|
No
|
|
|
|
Change the inter-corporate dividend rebate eligibility requirements to a test that requires the subsidiary to be part of the group for the previous 12 months.
|
No
|
Taxation Laws Amendment Bill (No. 4) 2002
|
30/5/2002
|
Ensure the thin capitalisation regime operates as intended.
|
No
|
|
|
|
Allow a capital gains tax rollover for a trust restructuring in a company.
|
Yes
|
|
|
|
Provide certain exemptions from Australian tax for individuals who are considered to be temporary residents of Australia for tax purposes.
|
Yes
|
|
|
|
Introduce statutory 'caps' that will be the effective life taxpayers may choose to use in working out the decline in value of depreciating assets.
|
Yes
|
Taxation Laws Amendment Bill (No. 5) 2002
|
27/06/2002
|
Provide a trading stock concession for a transitional year for oyster farmers using the traditional stick farming method.
|
Yes
|
|
|
|
Ensure there is no potential for double taxation on amounts paid or received in respect of work in progress.
|
Yes
|
|
|
|
Allow certain business-related costs incurred on or after 1 July 2001 to be deductible over a five-year period, and other technical amendments under the uniform capital allowances regime.
|
No
|
|
|
|
Make PAYG amendments to allow the estimation of a PAYG withholding debt.
|
No
|
Title of Bill
|
Date of introduction
|
Measures in Bill
|
Regulation impact statement
|
International Tax Agreements Amendment Bill (No. 1) 2002
|
21/03/2002
|
Give effect to the Australian Double Tax Agreement with the Russian Federation.
|
Yes
|
|
|
|
Give effect to the amending protocol to the Australian Double Tax Convention with the United States of America.
|
Yes
|
Taxation Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2002
|
14/05/2002
|
Increase the Medicare levy low-income thresholds.
|
No
|
New Business Tax System (Consolidation) Bill (No. 1) 2002
|
16/05/2002
|
Introduce an innovative and comprehensive consolidation regime for resident entities that comprise a wholly owned corporate group.
|
Yes
|
Taxation Laws Amendment (Superannuation) Bill (No. 2) 2002
|
16/05/2002
|
Impose on employers an obligation to make quarterly superannuation contributions or incur the superannuation guarantee charge.
|
Yes
|
|
|
|
Make miscellaneous superannuation guarantee amendments.
|
No
|
|
|
|
Reduce the superannuation contributions and the termination payments surcharge rates.
|
No
|
|
|
|
Increase the deduction limit for personal superannuation contributions made by the self-employed.
|
No
|
|
|
|
Allow superannuation contributions to be made on behalf of children who would not otherwise have superannuation.
|
No
|
|
|
|
Increase from 70 to 75 the age up to which working members of superannuation funds can make personal superannuation contributions.
|
No
|
|
|
|
Make minor drafting and technical amendments.
|
No
|
Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 2002
|
27/06/2002
|
Provide employees with the opportunity to choose the superannuation fund into which their employer-sponsored superannuation contributions are to be paid.
|
Yes
|
Superannuation (Government Co-contribution for Low Income Earners) Bill 2002
|
27/06/2002
|
Provide for the payment of a co-contribution in respect of undeducted personal contributions made by a low-income taxpayer.
|
Yes
|
Superannuation Legislation Amendment Bill 2002
|
27/06/2002
|
Make amendments consequential on the Superannuation (Government Co-contribution for Low Income Earners) Bill 2002.
|
No
|
|
|
|
Reduce the superannuation surcharge.
|
No
|
Title of Bill
|
Date of introduction
|
Measures in Bill
|
Regulation impact statement
|
Diesel Fuel Rebate Scheme Amendment Bill 2002
|
16/05/2002
|
Extend the diesel fuel rebate scheme to remote small retail/hospitality businesses.
|
No
|
New Business Tax System (Imputation) Bill 2002
|
16/05/2002
|
Allow Australian corporate tax entities to pass on to their members credit for income tax they have paid.
|
Yes
|
New Business Tax System (Franking Deficit Tax) Bill 2002
|
16/05/2002
|
Ensure a company makes good the over-imputation of franking credits it makes to its shareholders when making franked distributions to them.
|
Yes
|
New Business Tax System (Over-Franking) Bill 2002
|
16/05/2002
|
Provide for a mechanism that ensures companies frank distributions they make in accordance with the benchmark rule.
|
Yes
|
Taxation Laws Amendment (Structured Settlements) Bill 2002
|
06/06/2002
|
Provide a tax exemption for the income component of a structured settlement annuity.
|
No
|
New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Bill 2002
|
27/06/2002
|
Introduce the cost-setting rules for the formation of a consolidated group by modifying the basic case rules of a single entity joining an existing consolidated group.
|
Yes
|
|
|
|
Make consequential amendments to the exempting and former exempting company provisions that are concerned with limiting the source of franking credits available for franking credit trading.
|
No
|
|
|
|
Introduce a general value shifting regime applying mainly to interests in controlled companies and trusts that are not consolidated, and also amend the current loss integrity provisions to allow assets to be valued globally in calculating unrealised losses.
|
Yes
|
|
|
|
Introduce tax relief provisions for a demerger by allowing greater flexibility in restructuring a business and ensuring tax considerations are not an impediment to such restructuring.
|
Yes
|
Name of subordinate legislation
|
Gazetted
|
Description of regulatory proposals
|
Regulation impact statement
|
Fringe Benefits Tax Amendment Regulations 2001 (No.2)
|
05/07/2001
|
Exclude travel between home and work in an unmarked police vehicle from having to be reported on an employee's payment summary.
|
No
|
Fuel Sales Grants Amendment Regulations 2001 (No. 2)
|
05/07/2001
|
Address the situation where the location of the boundary between metropolitan and non-metropolitan areas resulted in a service station in a metropolitan area having competitors on either side of their business that are defined as non-metropolitan and thus eligible to register for a grant under the scheme.
|
No
|
Diesel and Alternative Fuels Grants Scheme Amendment Regulations 2001 (No. 2)
|
27/07/2001
|
Revoke provisions that allowed automatic indexation of the rate of grant applicable to diesel and alternative fuels in line with the automatic indexation of the fuel excise rates.
|
No
|
Superannuation Guarantee (Administration) Amendment Regulations 2001 (No. 2)
|
16/08/2001
|
Provide an exemption from the superannuation guarantee for non-resident employees at the 2001 Brisbane Goodwill Games.
|
No
|
Superannuation Guarantee (Administration) Amendment Regulations 2001 (No. 3)
|
17/08/2001
|
Provide an exemption from the superannuation guarantee for overseas employers sending workers temporarily to Australia where the exemption is consistent with a Bilateral Social Security Agreement entered into by Australia with another country.
|
Yes
|
Excise Laws (Licence Fees) Amendment Regulations 2001 (No. 1)
|
23/08/2001
|
Change licence fees because they were nominal and inappropriate (change all regulations to $0.00 licence fees).
|
No
|
Income Tax Assessment Amendment Regulations 2001 (No. 3)
|
05/10/2001
|
Add a new list of private funds to the prescribed list for tax deduction.
|
No
|
Taxation Laws Amendment Regulations 2001 (No. 1)
|
05/10/2001
|
Support 'approved forms' amendments in A New Tax System (Tax Admin) Bill (No. 2) 2000.
|
No
|
A New Tax System (Australian Business Number) Amendment Regulations 2001 (No. 1)
|
15/10/2001
|
Add to the list of publicly available ABN information the dates of effect for cancelling or changing an ABN.
|
No
|
Taxation Legislation Amendment (Application of Criminal Code) Regulations 2001 (No. 1)
|
15/10/2001
|
Amend regulations to harmonise with the criminal code.
|
No
|
Name of subordinate legislation
|
Gazetted
|
Description of regulatory proposals
|
Regulation impact statement
|
Taxation Administration Amendment Regulations 2001 (No. 2)
|
21/12/2001
|
Provide for an entity to withhold an amount from a payment under a contract for talent services.
|
No
|
Excise Amendment Regulations 2002 (No. 1)
|
07/03/2002
|
Provide an exemption for certain fuel additives from the blending provisions.
|
No
|
Income Tax Amendment Regulations 2002 (No. 1)
|
07/03/2002
|
Provide an exemption from income tax to pay and allowances received by Australian Defence Force members performing certain overseas duty.
|
No
|
Income Tax Amendment Regulations 2002 (No. 2)
|
07/03/2002
|
Maintain the increases in rebate amounts for senior Australians provided for the 2000-01 income year, as well as some technical amendments.
|
No
|
Income Tax Assessment Amendment Regulations 2002 (No. 1)
|
07/03/2002
|
Insert a 'cents per kilometre' rate for calculating deductions for car expenses for the 2001-02 income year into the ITAA 1997.
|
No
|
Diesel and Alternative Fuels Grants Scheme Amendment Regulations 2002 (No. 1)
|
22/03/2002
|
Prescribe one or more methods of calculating the amount of fuel eligible for a fuel grant.
|
No
|
Income Tax Assessment Regulations 2002 (No. 2)
|
05/04/2002
|
List funds prescribed as prescribed private funds in the regulations.
|
No
|
A New Tax System (Goods and Services Tax) Amendment Regulations 2002 (No. 1)
|
09/05/2002
|
List two Tasmanian compensation schemes as 'statutory compensation schemes' for the purposes of section 78-105 of the GST Act.
|
No
|
A New Tax System (Goods and Services Tax Transition) Amendment Regulations 2002 (No. 1)
|
09/05/2002
|
Make a technical amendment to Schedule 1 of the original 2000 regulation that ensures consistency of terminology.
|
No
|
Income Tax Amendment Regulations 2002 (No. 3)
|
23/05/2002
|
Provide special tax arrangements for superannuation paid to certain people when departing Australia.
|
No
|
Taxation Administration Amendment Regulations 2002 (No. 1)
|
23/05/2002
|
Provide special tax arrangements for superannuation paid to certain people when departing Australia (non-residents).
|
No
|
Income Tax Amendment Regulations 2002 (No. 4)
|
05/06/2002
|
Amend Schedule 14 of the income tax regulations to remove the SA Electricity Superannuation Fund from the list of constitutionally protected superannuation funds.
|
No
|
Taxation Administration Amendments Regulations 2002 (No. 2)
|
14/06/2002
|
Prescribe two separate Royal Commissions to be eligible Royal Commissions.
|
No
|
Income Tax Amendment Regulations 2002 (No. 5)
|
03/07/2002
|
Ensure superannuation benefits paid before retirement (or under compassionate release) are not taxed concessionally as an eligible termination payment.
|
No
|
Income Tax Assessment Amendment Regulations 2002 (No. 3)
|
03/07/2002
|
Allow three new entities as prescribed institutions to ensure they are exempt from income tax.
|
No
|
Appendix 3 - Occupational health and safety
The following information provides details of our responses to our legal obligations under section 74 of the Occupational Health and Safety (Commonwealth Employment) Act 1991 (the OH&S Act). For more information about our occupational health and safety (OH&S) activities, see chapter 5.3.
The ATO has an OH&S policy and the OH&S agreement was completed and endorsed by all parties.
The National OH&S Committee has representatives from management and the involved unions, and it has overall responsibility for ATO-wide OH&S management and strategic direction. The committee meets regularly and complies with our legal obligations.
In addition, each line has an OH&S committee with representatives from management and unions, and these committees take responsibility for OH&S issues related to their business. The committees meet regularly and comply with legal obligations.
Site safety forums have been established at each site, with representation from management and those health and safety representatives (HSRs) located at the site. The forums deal with physical environment issues within the site.
Designated work groups are defined within each line, and HSR and deputy positions are open to all staff within the work groups. There has been significant structural change and movement of staff between lines, resulting in a number of vacant positions. However, election processes are under way.
Following are preventative measures taken to ensure the health and safety of ATO employees:
- delivery of OH&S training for managers in the following lines: Large Business and International, Goods and Services Tax, Client Account Management, ATO Production and Excise
- development of a training package for HSRs on the role of site safety forums
- anthrax response procedures (following 11 September 2001)
- acoustic incident management
- an influenza vaccination program offered to all staff, with increased participation
- delivery of a hepatitis A/B, tetanus and diphtheria vaccination program to selected field operatives
- an asbestos monitoring program implemented for former Customs employees
- the ATOwellbeing program (phase 1 completed)
- Employee Assistance Program awareness sessions
- HSR accredited training, and
- line risk assessment initiated by management, including:
- field operations (across lines)
- Genesys (CWMS, DWMS)
- laptop use
- a data workflow management system
- personal security outside bandwidth hours (call centres)
- work practices in Large Business and International and the Office of the Chief Tax Counsel
- accommodation refurbishment and consolidation
- excise compliance, grants, collections, investigations, and tobacco and fuel sampling, and
- manual handling activities in ATOaccess sites.
There were 50 notices given under section 68 of the OH&S Act.
Two investigations were carried out under section 41 and section 44. Both of these were for the Small Business line, with one provisional improvement notice found to be invalid and the other outcome is still pending.
There were no directions given under section 45, no prohibition notices given under section 46, and no improvement notices given under section 47.
Seven provisional improvement notices were issued under section 29: three in Client Account Management that were withdrawn, two in Small Business that were found to be invalid following investigation by Comcare, and two in Large Business and International - one that has been resolved, and the other with the outcome still pending.
Preventing and managing work-related injury
The Safety Rehabilitation and Compensation Commission has developed performance indicators to measure Commonwealth agencies' performance in preventing and managing work-related injury. Table A3.1 shows our performance in 2001-02 compared with that of the whole Commonwealth scheme.
Outcome measure and description
|
ATO performance 2001-02
|
Scheme performance 2001-02
|
P1.5
Incidence of injuries resulting in 5 days 'incapacity
Measures the number of claims in which the 5th day of incapacity was determined in the period, per 1,000 full-time equivalent employees
|
10.94
|
14.4
|
P1.6
Incidence of injuries resulting in 30 days' incapacity
Measures the number of claims in which the 30th day of incapacity was determined in the period, per 1,000 full-time equivalent employees
|
5.08
|
Not available
|
P1.7
Incidence of injuries resulting in 60 days' incapacity
Measures the number of claims in which the 60th day of incapacity was determined in the period, per 1,000 full-time equivalent employees
|
3.37
|
Not available
|
P4
Lost time injury (claims) frequency rate
Measures the number of lost time claims with an injury that occurred in the period in which incapacity was determined in the period, per million hours worked
|
9.31
|
12.6
|
C6
Time taken (calendar days) from the date of injury to claim lodgment with Comcare
Measures average time taken for claims determined in the year
|
74.42
|
Not available
|
R1
Percentage of claimants with 10 or more days incapacity payments with a return to work (RTW) plan
Measures the number of claimants who have 10 or more days incapacity and for whom an RTW plan commenced in the period, as a percentage of the number of claimants who reached the 10th day of incapacity in the period
|
58%
|
56%
|
R2
Quality of RTW outcome
Measures the percentage of RTW cases that achieved any return to work at RTW case closure in the period
|
86%
|
87%
|
Appendix 4 - Freedom of information
This appendix provides information required under the Freedom of Information Act 1982, which stipulates that Commonwealth government agencies must report annually on:
- the organisation and functions of the agency
- the arrangements that exist for outside participation in agency decision-making
- the categories of documents that are maintained in the possession of the agency, and
- how people can gain access to information held by the agency.
The ATO is part of the Treasury portfolio. The Commissioner of Taxation has the status of Secretary of a Department.
The main function of the ATO is to administer legislation imposing taxes and excise (other than customs duty). We also work with appropriate departments on policy matters relating to tax and excise and, when that policy is determined by the government, instruct parliamentary counsel in the preparation of necessary legislation.
Responsibility for administering a range of tax and superannuation legislation is vested by Parliament in the Commissioner of Taxation. The Commissioner's authority to administer each levy is written into the law relating to that levy, as are his general responsibilities, discretionary powers and rights.
With some exceptions (the power of general administration, the power of delegation and the furnishing of an annual report for presentation to the Parliament), the Commissioner's powers and functions may be exercised by the three Second Commissioners. In pursuance of the powers conferred on the Commissioner by section 8 of the Taxation Administration Act 1953, nearly all such powers and functions under the tax Acts have been delegated to other tax officers.
These officers would include staff in National Office and in branch offices who, from time to time, occupy or perform the duties of specified senior officers within the ATO. Staff who perform such duties invariably authorise subordinate officers to make decisions on their behalf, subject to various terms and conditions.
At 30 June 2002 the organisation employed 19,318 people. The National Office is in Canberra. There are 23 branch and regional offices (with public access) located throughout Australia. Addresses are provided at the end of this report. Our staff are housed in 73 buildings nationwide.
Chapter 1.2 includes an organisational chart and a description of the functions carried out by the lines.
In 2001-02 the main areas of legislation administered by the ATO were:
- income tax
- company tax
- fringe benefits tax
- the Australian business number and Australian Business Register
- a new tax system
- higher education funding
- Medicare levy
- superannuation guarantee
- small superannuation accounts
- superannuation contributions tax, and
- excise duty.
For more information about legislation administered by the Commissioner of Taxation, and amendments to that legislation, visit our website at www.ato.gov.au
While we do not have any formally established non-statutory bodies, we have a large number of committees set up to help us consult with the community and professional associations.
The Professional Association Liaison Unit works to improve our working arrangements with tax, accounting and legal professional bodies by providing them with a direct liaison and account manager service. The unit also provides communication services to a wide range of joint ATO and professional body liaison forums operating at regional and national levels.
We also have consultative committees with external participation. These include the International Tax Rulings Panel, the Public Rulings Panel, the Litigation Panel, the GST Rulings Panel and the Part IVA Panel (relating to general anti-avoidance provisions).
The ATO produces and/or retains numerous documents, including some that are available for inspection and/or purchase, and others that are available free of charge.
Some documents are generally available, while others are available under the Freedom of Information Act 1982. Some explain operations and future directions, or assist taxpayers or other segments of the public generally. There is also a database of generic lists of taxpayers, gathered pursuant to sections 263 and 264 of the Income Tax Assessment Act 1936. Subject to privacy and freedom of information (FOI) considerations, this information is available on request.
The following categories of documents are maintained in the possession of the ATO:
- agendas for, and minutes of, meetings of senior officers within the office (for example, reports on conferences and departmental committee meetings)
- ministerial, interdepartmental and general correspondence papers
- internal administration papers and records
- ATO tax law and management policy documents, including recommendations and decisions
- reports relating to research and projects undertaken within the ATO
- proposals for legislation, drafting instructions and draft legislation
- documents relating to double tax agreements
- documents received from international organisations or overseas tax authorities relating to meetings and matters of interest to the ATO
- copies of instruments of delegation given to, or by, the Commissioner of Taxation
- requests for legal advice and copies of notes of advice given
- briefing papers prepared for, and submissions to, the Treasurer or government of the time
- answers to parliamentary questions
- correspondence, reports and other documents relating to the structure of all or part of the ATO and the number, size and location of branch offices
- correspondence, reports and other documents concerning human resource management by the ATO
- training materials, including videotapes
- FOI request files and papers relevant to the consideration of those requests
- transcripts of proceedings before the Administrative Appeals Tribunal, the Federal Court and the High Court
- financial reports, expenditure estimates and expenditure reports
- statistical and financial reports detailing the number of income tax returns lodged, the number and types of assessments issued, and tax revenue collected
- reports and associated working papers resulting from internal audit reviews
- manuals (covering topics such as audit, computer training Department of Finance and Administration, personnel, appeals, FOI)
- returns of income and associated papers
- accounting records
- speeches by senior ATO personnel, media releases, staff circulars and press clippings
- applications, research material, reports and submissions relating to cases in which taxpayers have requested relief from tax
- recovery files containing reports, submissions and other material on individual taxpayers and companies concerning the recovery of tax
- instalment files containing information on individual taxpayers and companies concerning activities relating to group employers and tax stamp employers
- taxation rulings and determinations
- superannuation guarantee rulings and determinations
- GST rulings and determinations
- sales tax and miscellaneous rulings, and
- the ATO Plan, corporate information technology plan, telecommunications strategic plan and business plans.
The following documents are available for inspection and/or purchase by the public, or a section of the public in accordance with arrangements made by the ATO:
- income tax returns and associated papers. Branch and regional offices process returns lodged by all classes of taxpayers (individual, trust, company, superannuation fund etc). A return is maintained on an individual file, usually at the office in which it was lodged, and taxpayers may obtain copies of their own returns. Returns are periodically destroyed under a formal destruction program, so some returns are no longer available
- rulings and determinations. Copies of taxation, superannuation and other relevant rulings and determinations are available in National Office and branch offices. They provide guidance on matters of policy, procedural instruction and interpretation of tax law, and are available for purchase (with exempt material excluded)
- Income Tax Ready Reckoner. The ready reckoner sets out the tax payable on incomes of individuals for the relevant income year. It can be purchased at Australian Government Info Shops
- Commissioner of Taxation Annual Report. This report is tabled in Parliament and the latest edition can be purchased at Australian Government Info Shops or viewed on our website
- Taxation Statistics. This publication presents a range of tax statistics and it has an accompanying CD-ROM. The set can be purchased at Australian Government Info Shops or viewed on our website
- handbooks and manuals (with exempt material excluded), and
- lists of funds accepted for the purposes of the gift provisions under the Income Tax Assessment Act 1936.
Each year the ATO produces numerous documents that are available free of charge, on request, from any of the offices listed at the end of this report.
The documents include:
- income tax return forms and schedules for use with return forms
- TaxPack 2002, TaxPack 2002 supplement and TaxPack 2002 for retirees
- brochures and booklets on the Taxpayers' Charter
- brochures and booklets on various elements of the tax system
- guides to taxes collected by the ATO, explaining people's rights and obligations under the legislation
- guides on how to complete income tax return forms (in English and other languages)
- brochures explaining tax topics
- procedural documents and forms for group employers
- income tax instalment deduction schedules for group employers and others
- application forms (such as those used to register as a group employer, to vary provisional tax, to apply for relief from payment of tax, for exemption from debits tax)
- forms relating to superannuation
- forms, information sheets and information booklets relating to diesel and fuel rebate and grant schemes
- application forms and information materials relating to excise, and
- A Fax from Tax and HECS Infofax, through which topical fact sheets can be requested by calling 13 28 60.
Many documents also appear on our website at www.ato.gov.au
TaxPack refers to about 50 publications. These can be ordered, free of charge, by calling the Publications Distribution Service on 1300 720 092.
Enquiries about freedom of information matters can be directed to FOI officers.
Applicants may discuss the nature and scope of an intended request or seek advice on FOI matters. Whenever possible, an FOI officer will help applicants identify relevant documents.
If applicants seek access to a document that is deemed to be exempt or to contain exempt material, the access may be refused. Alternatively, access may be granted, if practicable, to a document from which exempt material has been deleted.
A refusal to grant access will be supported by a statement of reasons, and an applicant has the right to request that the decision be reviewed.
We provide facilities at our National Office and at each branch office in which applicants can inspect documents to which they have been given access under the Freedom of Information Act 1982.
When physical attendance is not practical, we will make a document available through the post or in person. Information about facilities for access by disabled people can be obtained by contacting an FOI officer at one of our branch offices.
The Manager
Freedom of Information Unit
Australian Taxation Office
GPO Box 869
Brisbane QLD 4001
Ph (07) 3213 5408
The Manager
Freedom of Information Unit
Australian Taxation Office
GPO Box 4889
Sydney NSW 2001
Ph (02) 9374 2845
The Manager
Freedom of Information Unit
Australian Taxation Office
GPO Box 1797Q
Melbourne VIC 3001
Ph (03) 9285 1515
The Manager
Freedom of Information Unit
Australian Taxation Office
GPO Box 2934
Adelaide SA 3039
Ph (08) 8208 3680
The Manager
Freedom of Information Unit
Australian Taxation Office
PO Box C109
Perth WA 6839
Ph (08) 9268 5257
The Manager
Freedom of Information Unit
Australian Taxation Office
PO Box 900
Civic Square ACT 2608
Ph (02) 6216 2216
Callers outside capital cities may phone 13 28 69 and ask for the freedom of information unit.
At the beginning of the financial year, the ATO had 250 requests for documents under the Freedom of Information Act 1982. During the year, an additional 475 requests were received.
A total of 294 cases were finalised. Applicants withdrew another 162 requests before a decision on access was made. Full access was allowed in 95 cases, while part access was allowed in 138 cases. Access was refused in 61 cases and five of these matters were appealed to the Administrative Appeals Tribunal.
At the end of the year, 269 cases remained on hand.
Appendix 5 - Ecological and environmental performance
In line with the Prime Minister's 1997 paper, Safeguarding the future, we remain committed to our responsibilities for energy and environmental management.
We have continued to reduce our energy consumption, using only 8,388 megajoules per person for tenant light and power. This complies with the government policy maximum of 10,000 megajoules per person.
Our energy consumption for central services is 427 megajoules per person, well below the government's target of 500 megajoules.
Two major initiatives were implemented in ATO sites:
- we conducted energy audits in five sites and implemented all the key recommendations that were tenant responsibilities, and
- we implemented a lighting management system in three of our sites, which achieved an immediate 25% reduction in consumption and costs.
Our property providers continue to monitor site-by-site consumption to identify opportunities for further savings and they are preparing recommendations on further audit activity.
We are currently developing an Environmental Management Plan to comply with the Environmental Protection and Biodiversity Conservation Act 1999.
In anticipation of the finalisation of this plan, we will be implementing environmental management initiatives in our procurement processes. We are including advice in all new documentation to inform providers that when they are being evaluated, weighting is given to their 'green' policy. In addition, our waste paper strategy now includes the separate collection of secure and non-secure waste for recycling.
The ATO Production area delivered initiatives during the year that led to savings in printing and postage. Consolidation of bulk personalised printing into a single area of responsibility resulted in more effective management and streamlining of bulk printing arrangements. Key results included less duplication of printed and mailed items, and the identification and generation of savings on bulk printing.
Appendix 6 - Consultancy services
The following list summarises the 83 consultants the ATO engaged during 2001-02 who were paid $10,000 or more, their services, the payments made, the selection process and the reason for each consultancy. All amounts have been rounded to the nearest dollar.
The total cost of these consultants was $10,903,915.
- Advertised publicly
- Selective tendering process
- Not advertised because a contract already existed
- Direct selection/sole source
- Joint venture
- Consultants register/panel
- Specialised skills were not available in the ATO in the required timeframe
- Need to access high-technology experience
- Limitations on executive time
- Lack of in-house resources
- Need for independent review
- Need for independent change agent or facilitator
Consultant
|
Task
|
Total cost $
|
Method/ Reason
|
90 East (Asia Pacific)
|
Provision of security technical consultancy services
|
65,700
|
2abd
|
Accenture
|
Building and delivery of products for debt and lodgment case management (RMS) system and tax reform
|
1,222,486
|
2d
|
Accenture
|
Provision of advice and assistance with the implementation of the Australian Business Register
|
310,000
|
3a
|
Accenture
|
Mapping and modelling exercise for the consolidation project
|
137,995
|
6ad
|
Accenture
|
A mapping exercise for the Activity Statement Task Force
|
68,775
|
2ad
|
Accenture
|
Provision of project management services for the Output Pricing Review
|
57,400
|
6f
|
Accenture
|
Documenting the process model for the PAYG system
|
48,000
|
2ad
|
Accenture
|
Call centre simulation model
|
43,691
|
2a
|
Acumen Alliance (ACT)
|
Gap analysis of current and future organisational reporting needs and the corporate systems capability to meet these needs
|
17,415
|
6e
|
Acumen Multimedia
|
Website usage and benchmarking analysis
|
16,631
|
6a
|
Amarjit Singh Verick
|
Service on the Product Rulings Panel and Part IVA Panel (anti-tax avoidance provisions)
|
27,246
|
6e
|
Anthony G Sherlock
|
Review of the planning process and the content of ATO Plan 2002-03
|
17,188
|
4e
|
Anthony McInerney
|
Provision of consultancy services for the consolidation project
|
96,069
|
4a
|
Anthony McInerney
|
Development of processes to assess the quality of the solutions designed in giving effect to government policy
|
26,163
|
4ad
|
Australian Government Actuary
|
Provision of professional actuarial services in relation to capital gains tax assessment - cost base determination
|
34,473
|
4a
|
Australian National University
|
Establishment and operation of a research program - Centre for Tax System Integrity
|
667,840
|
2a
|
Baljurda Comprehensive Consulting
|
Evaluation of the Centre for Tax System Integrity
|
16,500
|
2d
|
Black is White
|
Provision of expert strategic advice in the development, implementation and evaluation of a communication program for business tax reform and other measures
|
46,990
|
2a
|
Blake Dawson Waldron
|
Provision of legal advice for mandatory market testing of corporate services
|
22,007
|
2e
|
bREX
|
Development of electronic business models in the superannuation industry
|
52,650
|
2ad
|
bREX
|
Assisting with the development of electronic commerce standards within the superannuation industry
|
40,000
|
4a
|
Consultant
|
Task
|
Total cost $
|
Method/ Reason
|
Cogent Business
|
Financial analysis of the mandatory Solutions market testing projects
|
51,204
|
2ae
|
Consultants In Industry Economics
|
Provision of economic opinion and advice in relation to transfer pricing arrangements
|
14,046
|
4b
|
Corporate Diagnostics
|
Market testing of human resource services
|
64,555
|
6a
|
CPTConsulting
|
Conduct of a capacity planning review and assessment
|
130,000
|
3ade
|
Cultur
|
Provision of information design services, especially with regard to capturing, synthesising and communicating the work of a design team
|
141,717
|
6ad
|
Cultural Partners Australia & Gavin Jones Communications
|
Development of communication plans to inform and educate the Indigenous business communities about the introduction and implementation of the government's tax reform initiatives
|
15,048
|
2a
|
David Caple & Assoc
|
Conduct of an OH&S survey and reporting of recuperative breaks in ATO call centres
|
33,250
|
2d
|
Deakin University (Rick Krever)
|
Visiting academic
|
82,821
|
2e
|
Deloitte Consulting
|
Design facilitation, ITD capability building and skills transfer
|
510,603
|
6ad
|
Deloitte Consulting
|
Identification, development and resolution of issues relating to the financial treatment and reporting of application development and maintenance costs
|
368,412
|
6ae
|
Department of Employment, Workplace Relations and Small Business
|
Development and early interpretation of changes to the 2001 agency agreement
|
17,429
|
4f
|
Dialog Information Technology
|
Implementation of the IT strategy and provision of high-level technical advice on hardware/software selection implications
|
222,850
|
2a
|
Econtech
|
Provision of a methodology to estimate revenue collection by the ATO
|
27,160
|
2a
|
Ernst & Young
|
Provision of fraud control planning activities resulting in the production of the Fraud Control Plan
|
115,005
|
2ae
|
Ernst & Young
|
Risk analysis - Fraud Control Plan
|
20,969
|
2ae
|
Evans-Smith Communications
|
Provision of communication and information design services for Consolidation Guidelines for Corporate Groups and Consolidation in Brief
|
103,609
|
3a
|
Evans-Smith Communications
|
Provision of communication, information and document design services specifically for the consolidation reform measure
|
52,000
|
6ad
|
Giffnock Consulting
|
Provision of expert financial evaluation services
|
39,313
|
3ae
|
Gilfast
|
Design facilitation, ITD capability building and skills transfer
|
197,863
|
6ad
|
Hoffmann Donohue
|
Design facilitation, user-based research, information design, protocol analysis and provision of support to prototype development of the ITD capability
|
439,937
|
6ad
|
Consultant
|
Task
|
Total cost $
|
Method/ Reason
|
Ian Phillips
|
Service on the Product Rulings Panel and Part IVA Panel (anti-tax avoidance provisions)
|
18,848
|
6e
|
IBM Australia
|
ATO data warehouse improvement study
|
132,364
|
3ade
|
IBM Australia
|
Provision of high-level IT technical advice
|
13,553
|
4b
|
IDP Asia-Pacific
|
Review of ATO skilling processes for the design and development of learning and development programs and resources
|
10,300
|
6e
|
Impart Corporation
|
Design and development of the fraud and security e-learning program
|
66,587
|
2b
|
InfoCLEAR Consulting
|
Provision of information design services, especially with regard to capturing, synthesising and communicating the work of a design team
|
348,681
|
6ad
|
Integrated Consulting (Int)
|
Developing individual development plans for small business management and provide personal coaching and support
|
15,950
|
2a
|
James H Momsen
|
Service on the Product Rulings Panel and Part IVA Panel (anti-tax avoidance provisions)
|
30,070
|
6e
|
John Brodie
|
Provision of private rulings system advice
|
171,008
|
4a
|
Ken Allen
|
Review of Australia's double taxation agreements and other aspects of improving Australia's international tax regime
|
53,938
|
4a
|
Ken Fehily
|
Service on the GST Rulings Panel
|
77,793
|
2a
|
Kevin Burges
|
Service on the international tax ruling panel
|
28,792
|
3,6ae
|
Kevin Burges
|
Service on the product rulings panel and Part IVA panel (anti-tax avoidance provisions)
|
27,397
|
6e
|
KPMG
|
Proof of concept work for portal project
|
41,459
|
6a
|
KPS and Associates
|
Provision of fraud control investigation training
|
154,605
|
2d
|
Leadenhall Australia
|
Provision of valuations for the litigation process for the Innovation Segment and expert valuation advice for the HWI Segment
|
95,127
|
3abe
|
Lonergan Edwards and Associates
|
Provision of advice to the consolidation and HWI projects
|
71,125
|
3abe
|
Marketing Systems (Aust)
|
Service on the international tax ruling panel
|
52,222
|
3,6ae
|
McNamara Mackintosh
|
Tracking of media coverage during tax reform
|
12,348
|
2e
|
Mercer Human Relations
|
Review of SES work
|
72,709
|
3def
|
Meta Group Holdings
|
Benchmarking of distributed systems
|
80,745
|
2b
|
Michael Evans
|
Service on the GST Rulings Panel
|
51,258
|
2a
|
Microsoft
|
Provision of Microsoft Enterprise Agreement consultancy services
|
408,903
|
4abd
|
Mindopeners
|
Facilitation of high-level design for international tax
|
15,020
|
4a
|
Montague Leong Design
|
Provision of information design services, especially with regard to capturing, synthesising and communicating the work of a design team
|
255,489
|
6ad
|
Montague Leong Design
|
Provision of design and consultation services for the Consolidation Walkthrough
|
34,283
|
3a
|
Montague Leong Design
|
Provision of design and consultation services for new activity statement instructions
|
18,375
|
2a
|
Moore Business Systems Australia
|
Development of a print portal
|
20,000
|
2ad
|
Consultant
|
Task
|
Total cost $
|
Method/ Reason
|
NCR Australia (t/a Teradata)
|
Development of a data warehouse security strategy
|
52,727
|
4a
|
Niche Multimedia
|
Provision of specialised information design services for superannuation budget initiatives
|
45,000
|
6d
|
Office of the Federal Privacy Commissioner
|
Provision of legal advice on the privacy implications of the ABR project
|
10,000
|
4f
|
Peter Kennedy
|
Integrity adviser
|
130,650
|
2e
|
Peter Simpson Consulting
|
Performing co-chair duties to the Committee on Fiscal Affairs (OECD)
|
74,510
|
3,4a
|
Price Waterhouse Coopers
|
Provision of accounting advice in relation to GSTand FBTcompliance
|
319,454
|
6ae
|
Price Waterhouse Coopers
|
Assistance to the Output Pricing Review
|
203,587
|
2ae
|
Professor Robin Woellner
|
Research report on potential tax implications of interactive gambling
|
12,273
|
4a
|
Quality Assurance Service
|
Conduct of quality assurance activities to ensure compliance with requirements of international QA certification
|
11,425
|
4e
|
Quality Management Solutions
|
Review of the relevance of section 29 of the Occupational Health & Safety (Commonwealth Employment) Act 1991
|
22,427
|
4e
|
Richard Vann
|
Service on the GST Rulings Panel
|
64,021
|
2a
|
Richard Vann
|
Service on the international tax Ruling Panel
|
14,258
|
3,6ae
|
Richard Vann
|
Advice to the rulings panel
|
10,400
|
6e
|
Robert LDeutsch
|
Service on the product rulings panel and Part IVA panel (anti-tax avoidance provisions)
|
67,897
|
6e
|
Softlaw Corporation
|
Modelling and building of a decision support system as part of the first child tax refund initiative
|
185,403
|
6ad
|
Spyrus
|
Review of the ATO public key infrastructure strategy
|
16,364
|
2ad
|
Stanley & Milford
|
Carrying out a usability and user needs analysis
|
42,680
|
6ae
|
Stanley & Milford
|
Review of web content and corporate information
|
61,762
|
6ae
|
Systemic Development Associates
|
Review, development and delivery of the Strategic Leadership Program and the Operational Leadership Program, including soft systems methodology
|
129,773
|
4,6a
|
Consultant
|
Task
|
Total cost $
|
Method/ Reason
|
TAFE Tasmania
|
Provision of courses and accreditation of internal facilitators on client service skills
|
15,872
|
2d
|
Techniworks Action Learning
|
Provision of an e-learning program for diversity and harassment awareness
|
40,000
|
2a
|
The Allen Consulting Group
|
Development of a best practice stakeholder management framework
|
34,000
|
2,6e
|
The Hiser Group
|
Design of the website for aggressive tax planning
|
16,407
|
4a
|
Think, Plan & Perform
|
Formation of the gateway between ATO and Treasury
|
28,000
|
4acf
|
Tom Reid
|
Specialist legislative drafting services, incorporating ITD methodology and design facilitation support
|
258,806
|
4ad
|
Turnbull Porter Novelli
|
Development of Stage 2 for the corporate positioning implementation
|
44,514
|
2a
|
University of Melbourne
|
Econometric modelling
|
30,000
|
2a
|
University of NSW
|
Ongoing study of taxpayer taxation compliance costs
|
47,162
|
4ab
|
University of Wollongong
|
Provision of advice on an income tax public ruling
|
22,015
|
6e
|
Walsof Pty Ltd (t/a Golsby-Smith Associates)
|
Assisting ITD in the development and institutionalisation of new approaches for designing and delivering changes to the tax system
|
345,525
|
6ad
|
Wayne Mayo
|
Development and support of a working model of an income tax system and provision of user documentation
|
130,862
|
4ad
|
Wesley Corporate Health Program
|
Delivery of corporate health management programs
|
309,765
|
1af
|
William M Mercer
|
Provision of ongoing job evaluation/remuneration advice and data
|
44,417
|
4a
|
Appendix 7 - Advertising, direct mail, market research and media placement
No advertising or direct mail campaigns were undertaken during the 2001-02 period.
Organisation
|
Initiative, event or product
|
Total cost ($)
|
A C Nielsen Research
|
Market testing of family tax benefit products
|
133,214
|
A C Nielsen Research
|
Market testing of TaxPack and family tax benefit publications
|
27,539
|
A C Nielsen Research
|
Administration of the annual community perceptions survey
|
45,339
|
Chant Link & Assoc
|
Completion of a review of self-managed superannuation funds
|
27,700
|
Colmar Brunton Social Research
|
Assistance with the implementation of the first phase of a community consultation program
|
331,181
|
Corporate Diagnostics
|
Development and measurement of professionalism surveys
|
233,113
|
IDEAS! eCentre
|
Research to determine an e-learning framework for tax
|
31,200
|
Minter Research
|
Researching factors that influence perceptions of quality of advice
|
28,580
|
NFO Donovan Research
|
Piloting of the telephone lodgment service
|
53,355
|
NFO Donovan Research
|
Review of the Taxpayers' Charter
|
278,442
|
NFO Donovan Research
|
Research into the service requirements of tax practitioners in the context of the tax reform environment
|
18,100
|
ORIMA Research
|
Market research into the Baby Bonus
|
22,800
|
Quantum Market Research
|
Provision of quantitative market research services and qualitative non-English speaking background and Indigenous market research services for the tax reform campaign
|
112,945
|
Quantum Market Research
|
Business experience with the BAS and the new tax system
|
74,500
|
Quantum Market Research
|
Market research to test and aid development of a guide for new entrants to the tax system
|
17,000
|
Queensland University of Technology
|
Market research to determine whether CharityPack, ClubPack and GiftPack meet the information requirements of their intended audiences
|
40,000
|
The Empower Group
|
Development, conduct and analysis of annual surveys
|
113,420
|
The Research Forum
|
Evaluation of BAS Basics/IAS Information and the four-tier self-help information dissemination model
|
26,972
|
The Research Forum
|
Market testing of four-tier design concepts
|
27,170
|
The Research Forum
|
Pre-testing of an Excise product
|
4,444
|
Worthington Di Marzio
|
Provision of qualitative market research services for the tax reform campaign
|
90,100
|
Organisation
|
Initiative, event or product
|
Total cost $
|
Fairfax press - city search
|
Diesel fuels and alternative grants scheme (advertising the Farmers Buyers Guide)
|
2,000
|
Manpower Services Australia
|
Call centres recruitment advertising
|
3,090
|
Mitchell Media
|
Media planning and buying for advertising campaigns surrounding activity statements
|
468,940
|
Radiowise Media Network
|
Radio public relations campaign for a range of tax topics
|
348,000
|
Starcom
|
Media planning and buying for non-campaign and routine advertising
|
1,119,519
|
TMP Worldwide
|
Call centres recruitment advertisement
|
6,102
|
Appendix 8 - Other matters
There was one omission from the 2000-01 annual report. NFO Donovan Research provided a service in June 2001 and details are as follows:
Consultant
|
Task
|
Value $
|
NFO Donovan Research
|
Development of a professionalism survey
|
21,250
|
Appendix 9 - ATO financial statements (PDF)
Download PDF version
Appendix 10 - AVO financial statements (PDF)
Download PDF version
The ATO occupies office space in 73 buildings in Australia. Only buildings that provide public access are listed here.
For the cost of a local call, most of our offices with public access can be reached by telephone. The general enquiries number is 13 28 61.
|
|
Ground Floor, Ethos House
28-36 Ainslie Avenue
Canberra GPO Box 9990
Canberra 2601
|
|
|
567 Smollett Street
Albury
PO Box 9990
Albury 264
|
|
|
|
|
|
Chatswood Shop 43, Lemon Grove Shopping Centre
441 Victoria Avenue
Chatswood
GPO Box 9990
Sydney 200
|
|
|
|
|
|
First Floor, MacMahon Plaza
14-16 Woodville Street
Hurstville PO Box 9990
Hurstville 2220
|
|
|
|
|
|
266 King Street
Newcastle
PO Box 9990
Newcastle 2300
|
|
|
|
|
|
Ground Floor, Commonwealth Offices
2-12 Macquarie Street
Parramatta
PO Box 422
Parramatta 2123
|
|
|
|
|
|
121-125 Henry Street
Penrith
PO Box 1400
Penrith 2740
|
|
|
|
|
|
Podium Level, Centrepoint
100 Market Street
Sydney
GPO Box 9990
Sydney 2000
|
|
|
|
|
|
93-99 Burelli Street
Wollongong
PO Box 9990
Wollongong 2500
|
|
|
|
|
280 Adelaide Street
Brisbane
GPO Box 9990
Brisbane 4001
|
|
|
|
|
|
Level 2
88 Abbott Street
Cairns 4870
|
|
|
|
|
|
10 Banfield Street
Chermside 4032
|
|
|
|
|
|
Stanley Place
235 Stanley Street
Townsville
PO Box 9990
Townsville 4810
|
|
|
|
|
|
2221-2233 Logan Road
Upper Mt Gravatt
PO Box 9990
Upper Mt Gravatt 4122
|
* By appointment only
|
|
|
2 Lonsdale Street
Melbourne
PO Box 9990
Moonee Ponds 3039
|
|
|
|
|
|
4A, 4-10 Jamieson Street
Cheltenham
PO Box 9900
Dandenong 3175
|
|
|
|
|
|
14 Mason Street
Dandenong
PO Box 9990
Dandenong 3175
|
|
|
|
|
|
92-100 Brougham Street
Geelong
PO Box 9990
Geelong 3220
|
|
|
91 Waymouth Street
Adelaide
GPO Box 800
Adelaide 5001
|
|
|
Level 1
Jock Nelson Centre
16 Hartley Street
Alice Springs
GPO Box 800
Adelaide 5001
|
|
|
|
|
|
Cnr Mitchell and Briggs Streets
Darwin
GPO Box 800
Adelaide 5001
|
|
|
200 Collins Street
Hobart
GPO Box 9990
Hobart 7001
|
|
|
45 Francis Street
Northbridge
GPO Box 9990
Perth 6848
|
ABN
|
Australian business number
|
ABR
|
Australian Business Register
|
ABS
|
Australian Bureau of Statistics
|
ANAO
|
Australian National Audit Office
|
APS
|
Australian Public Service
|
ASIO
|
Australian Security Intelligence Organisation
|
ATAX
|
Australian Taxation Studies Program
|
ATO
|
Australian Taxation Office
|
AusAID
|
Australian Agency for International Development
|
AWA
|
Australian workplace agreement
|
BAS
|
Business activity statement
|
BSL
|
Business and service line (a line, equivalent of a division)
|
CBD
|
Central business district
|
CSA
|
Child Support Agency
|
DEST
|
Department of Education, Science and Training
|
EL2
|
Executive Level 2
|
FaCS
|
(Department of) Family and Community Services
|
FAO
|
Family Assistance Office
|
FBT
|
Fringe benefits tax
|
FTB
|
Family tax benefit
|
FOI
|
Freedom of information
|
GDP
|
Gross domestic product
|
GST
|
Goods and services tax
|
HECS
|
Higher Education Contribution Scheme
|
HIC
|
Health Insurance Commission
|
HR
|
Human resources
|
HSR
|
Health and safety representative
|
HWI
|
High wealth individuals
|
IT
|
Information technology
|
ITD
|
Integrated tax design
|
LCT
|
Luxury car tax
|
NESB
|
Non-English speaking background
|
NPM
|
National Program Manager
|
OECD
|
Organisation for Economic Cooperation and Development
|
OH&S
|
Occupational health and safety
|
PAYE
|
Pay as you earn
|
PAYG
|
Pay as you go
|
PAYG(I)
|
Pay as you go instalments
|
PAYG(W)
|
Pay as you go withholding
|
PELS
|
Postgraduate Education Loans Scheme
|
PHIR
|
Private Health Insurance Rebate
|
PSM
|
Protective Security Manual
|
PSMPC
|
Public Service and Merit Protection Commission
|
R&D
|
Research and development
|
R&R
|
Rewards and Recognition program
|
SES
|
Senior Executive Service
|
SFSS
|
Student Financial Supplement Scheme
|
SHAR
|
Superannuation Holding Accounts Reserve
|
SMSF
|
Self-managed superannuation fund
|
TFN
|
Tax file number
|
WET
|
Wine equalisation tax
|
Case study: A challenging but rewarding job
Case study: A TaxPack alternative - e-tax
Case study: Call centres busier than ever
Case study: Fishy business
Case study: Phoenix companies won't rise from these ashes
Case study: Pink the winner!
Case study: Quick and easy grants with eGrant
Case study: Really hearing what people are saying
Case study: Striking a fair balance
Case study: User-based design reaches new heights
Case study: Volunteers are a big help at Tax Time
| Part 1 - Overview
| PDF
| 176Kb
|
| Part 2 - Report on performance
| PDF
| 288Kb
|
| Part 3 - Highlights and challenges
| PDF
| 251Kb
|
| Part 4 - Other responsibilities
| PDF
| 100Kb
|
| Part 5 - Management & accountability
| PDF
| 230Kb
|
| Appendix 1 - Summary of performance information
| PDF
| 123Kb
|
| Appendix 2 - Legislation
| PDF
| 85Kb
|
| Appendix 3 - Occupational health and safety
| PDF
| 75Kb
|
| Appendix 4 - Freedom of information
| PDF
| 80Kb
|
| Appendix 5 - Ecological and environmental performance
| PDF
| 51Kb
|
| Appendix 6 - Consultancy services
| PDF
| 78Kb
|
| Appendix 7 - Advertising, direct mail, market research and media placement
| PDF
| 61Kb
|
| Appendix 8 - Other matters
| PDF
| 46Kb
|
| Appendix 9 - ATO financial statements
| PDF
| 1230Kb
|
| Appendix 10 - AVO financial statements
| PDF
| 646Kb
|
| ATO Addresses & Abreviations
| PDF
| 111Kb
|
|
Last Modified: Friday, 8 November 2002
|