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  • Consultation Steering Group minutes 17 December 2015

    Meeting details

    Venue:

    Via video conference in ATO offices:

    • Sydney – 52 Goulburn Street, Sydney CBD – Level 12.727 VC
    • Melbourne – 747 Collins Street, Docklands, Melbourne CBD -
      Level - 3.705 VC
    • Canberra - Trevor Boucher Executive Meeting Room, Level 10,
      Amungula Building, Narellan Street, Canberra City
    • Adelaide – 26-28 Franklin Street, Adelaide CBD – Level 14.705

     

    Chair:

    Andrew Mills, Second Commissioner, Law Design and Practice, ATO

    Attendees

    Organisation

    Name

    ATO

    Erin Holland, Deputy Commissioner, Tax Practitioner, Lodgment Strategy and Compliance Support

     

    Shirley Forlin, A/g Assistant Commissioner, External Relations, ATO Corporate

     

    Jorge del Busto, Senior Executive Advisor, Tax Counsel Network

     

    John Lindell, A/g Director, ATO Consultation Hub, ATO Corporate

    Chartered Accountants Australia and New Zealand

    Michael Croker

    CPA Australia

    Gavan Ord

    Institute of Public Accountants

    Tony Greco

    Law Council of Australia

    Adrian Varrasso

    SMSF Association

    Andrea Slattery

    The Tax Institute

    Thilini Wickramasuriya

    Independent member

    Keith James

    Tax practitioner

    Keith Clissold

    Apologies

    Organisation

    Name

    Corporate Tax Association

    Michelle de Niese

    Council of Small Business of Australia

    Peter Strong

    Additional guest attendees

    Organisation

    Name

    ATO

    • Lucy Libertone, Assistant Commissioner, Private Groups and High Wealth Individuals
      (Agenda item 2 – 201456)
    • Colin Walker, Assistant Commissioner, Tax Practitioner, Lodgment Strategy and Compliance Support (Agenda item 2 – 201483)
    • Lee Beaver, Tax Counsel,
      Tax Counsel North, Tax Counsel Network
      (Agenda item 2 – 201489) 
    • Rose Di Stefano, Senior Director,
      Private Groups and High Wealth Individuals
      (Agenda item 2 – 201537) 
    • David Prenzler, Compliance Director, Operations,
      Public Groups and International
      (Agenda item 2 – 201545) 
    • Tony Poulakis, Assistant Commissioner, Strategy and Policy Branch, Private Groups and High Wealth Individuals (Agenda item 2 – 201525) 
    • Matthew Campbell, Project Manager, Strategy and Policy Branch, Private Groups and High Wealth Individuals (Agenda item 2 – 201525) 

     

    Minutes

    Agenda item 1: Meeting open

    End of example

    Chair's opening remarks including attendance, apologies and confirmation of agenda

    The Chair welcomed attendees, noted that Keith James and Tony Greco were attending by phone and that Michelle de Niese and Peter Strong were apologies for the meeting. This was the first meeting to be held by video conference. Next year the ATO will trial TelePresence, with a number of specialised rooms being progressively deployed in ATO offices around the country. The focus of this meeting was the report for the CSG on ATO consultation activity to 30 November 2015.

    The Chair thanked members for their efforts and contributions to consultation achievements during the year acknowledging that the CSG has bedded down its role and is now more focussed, compared with the start of the year. However, some challenges still remain; including ensuring the right people are involved in consultations and that there is a timely resolution of all issues. The ATO Consultation Arrangements post-implementation review has helped in achieving more focussed, effective and efficient consultation activities.

    Members confirmed the meeting agenda.

    Agenda item 2: The assessment and effectiveness of the ATO's consultation arrangements in accordance with the COAG principles

    End of example

    Report on ATO consultation activity

    Acting Assistant Commissioner Shirley Forlin led the discussion of the report. The number of consultation matters in progress is at a similar level to last year, across the different areas of the ATO. The common themes in the agendas for the stewardship committees over the period of the report were reinventing the ATO and its contemporary digital services program, managing debt and payments and membership reviews, with all stewardship membership reviews expected to be completed by April 2016.

    Snapshot of consultation activity since the last meeting including:

    • New matters
    • Completed matters

    Three new matters have been registered for consultation in November 2015, including updating a law administration practice statement following recent amendments to Part IVA, expected to be completed by April 2016.

    Ten consultation matters have been completed since the last meeting, covering a range of topics. These matters, although diverse, showed common themes which included, but are not limited to:

    • Consultations with the community and their representatives are impacting positively on decision making in the ATO
    • Improvements in the level of ATO better responsiveness during consultations
    • When short timeframes occurred, keeping stakeholders informed was paramount
    • Better engagement in more informal consultation, including early, forthright and clear conversations at the junior levels
    • Members noting that they had an opportunity to feed back and keep respective institutions informed of progress on matters, as this would assist in validating the messages
    • In the case of confidential consultations there were restrictions on the capacity to disseminate information to association members. It was suggested that in these cases, a type of post-meeting communique could be prepared providing some minimum information on progress.
    • A suggestion that the ATO should consider disseminating background research that it undertakes in the context of different projects
    • A suggestion that the calculation for consultation be an ‘average’ that is, removing outliers and consider if the period is appropriate and reflected the nature and complexity of the topics
    • Co-chairs provide access to more rounded feedback and also assist with the effectiveness of consultations.

    Action item: CSG 1512/1
    Due date: 30 June 2016
    Responsibility: Acting Director, ATO Consultation Hub (John Lindell)

    Post meeting communication options for working groups
    ATO Consultation Hub to work with working group chairs to determine an appropriate post-meeting communication product that would allow members to meet the broader stakeholder need to better understand how consultation is progressing in a more immediate way.

    End of example

     

    Action item: CSG 1512/2
    Due date: 1 March 2016
    Responsibility: Acting Director, ATO Consultation Hub (John Lindell)

    Improving reporting of time to complete matters for consultation
    Reflect the CSG meeting discussion to better explain time taken to complete matters for consultation by removing outliers and then consider whether this time period enables effective consultation.

    End of example

    Consultation matters between 12 to 18 months

    The following three matters were discussed by members:

    Matter number and topic

    Summary of discussions

    [201456] Improving the private groups and wealthy individuals client experience with the ATO

    Consultation lead: Lucy Libertone

    • This consultation assisted in establishing the Private Groups Stakeholder Group, which now is the key established group to discuss items relevant to this segment.
    • Consultations have proceeded as part of the reinventing the ATO future experience workshops, focus group discussions and one on one conversations, but this activity is now ready to be closed.
    • With contacts more developed, the focus has now shifted to more one on one direct conversation on particular topics, which are informed by data analytics.

    Members commented that it was important to keep the right balance in communicating public messages related to activities of taxpayers in this group, emphasising that incidences of non-compliance are restricted to a small minority and that corrective action is being undertaken. This would assist in preserving confidence in the system.

    [201483] Tax agent lodgment program

    Consultation lead: Colin Walker

    • The activities of this group have a long history. It was reconstituted in 2014 with the aim of achieving better on time lodgment, with most agents now achieving the 85% on time benchmark.
    • The focus is now on moving the remaining 1,700 tax agents lodging only paper returns to electronic lodgement over the next 6 months, after which the group will be closed.
    • It will be reconstituted after this time if required with refreshed membership.

    Members were complimentary of the activities of this group. ATO officers were very open, flexible and responsive to the needs of participants. It was also noted that portal stability and follow ups on SBR irritants will continue to be looked at by the group, but with subsequent oversight by ATO Practitioner Advisory Group.

    [201489] Tax deductible travel - travelling allowance or living-away-from-home allowance – ‘21 days’ guideline

    Consultation lead: Lee Beaver

    • Consultations have progressed well. The most recent meeting was held on 15th December 2015. Lee advised that the consultation phase is winding up and the next step is to seek formal endorsement to produce a Public Ruling. The stakeholder group considers there is a real benefit in developing a Public Ruling that contains contemporaneous examples and a list of factors to consider in assessing deductibility of travel expenses.

    It has been many years since this issue had been subject to a review and current guidance is not easily applied to current work arrangements. An example of this is the recent Full Federal Court decision in the John Holland case.

    Members commented that a new tone and a more engaging approach were noticeable in the Decision Impact Statement recently released in relation to the John Holland case. It was also noted that the development of a Public Ruling is being discussed with the recently created Public Advice and Guidance Centre, which allows for a coordinated approach with other related initiatives.

    Spot checks

    The following ‘spot check’ matters were nominated by external CSG members for discussion.

    Matter number and topic

    Summary of discussions

    201537 - Review of private advice

    Consultation lead: Rose Di Stefano

    • Consultations had been undertaken through a variety of channels in order to raise awareness and interest from different client groups. This included an open discussion board, focus groups for more tailored conversations, a discussion paper, webinars and workshops.
    • Early thinking on direction, taking on board feedback from consultations, will be shared in the new year. It is envisaged facilities will be provided for tax agents to intermediate on behalf of clients in an online environment. Trends emerging from private advice could inform new public advice products.

    Members acknowledged that the discussion paper was a new process which took time to deliver, but at the end it proved to be very useful, paying dividends by allowing a more contained and focussed feedback.

    201545 - Lease-in Lease-out (LILO) arrangements

    Consultation lead: David Prenzler

    • Consultations on tax risks faced by multinationals operating in this area started with representatives from the Big 4 accounting firms and were progressively extended to a mid-tier firm operating in Perth, a number of regulatory agencies and other externals including procurement firms.

    Members suggested that it would be desirable to also include stakeholders with a legal background, as this is important in this area. Members also advised on the advantages of including representatives from the professional associations, which allows a wider coverage of all market segments.

    201525 - Changes for the new tax system for managed investment trusts

     

    Consultation leads: Tony Poulakis and Matthew Campbell

    • Consultation has focussed on ensuring systems and associated forms are ready for implementation; the potential need for legislative instruments and associated guidance to be provided as the new law companion guide product.

    Addressing a query by members, it was confirmed that there will always be consultation on the content of the new law companion guides. This will generally take place as the law is being developed by Treasury. We are working through if this will be public or more limited private consultation respecting Treasury’s confidentiality needs in law development.

    It was noted that the guides provide the ATO view of how we understand the law will operate and that they are aimed at providing certainty for taxpayers at a much earlier time than has previously been the case. The goal being to release drafts upon introduction of the law into Parliament with final versions being released once the law has received royal assent.

    Consultation arrangements for the law companion guides will be addressed in a Law Companion Guideline to be issued in the new year which will provide an opportunity for comment on the Law Companion Guide process more generally.

    Members commented that consultation on the MIT process has been very good. It was acknowledged that there were some limitations on the early sharing of information due to the nature of Treasury’s confidential consultations on the new law.

    One member also noted the desire to have end users – tax practitioners, included in consultations on the reporting from MITs to beneficiaries. Tax practitioners prepare beneficiaries returns and there was a need for consultation to better align this beneficiary report and the pre-filled information to make it easier and more consistent to use.

    Blockers to consultation

    Shirley Forlin noted that timeliness, providing sufficient time to respond on consultations and ensuring the right people were actively involved in consultations, were the two main blockers that have been noted in this meeting’s report.

    Agenda item 3: Potential new matters for consultation

    End of example

    Going forward in 2016, the members noted the desirability to have a shared understanding, early in the process, regarding the design of any administrative issues.

    It was noted that the newly created Public Advice and Guidance Centre will consider the need and priority of any further guidance that might be needed, acknowledging that not all new developments may require further guidance.

    The Chair noted that following up on recent discussions at the NTLG, a new limited life Cyber Security working group was being established.

    Meeting close

    End of example

    Closing remarks

    Members agreed with the proposal to have two full day face to face meetings and two shorter meetings via video conference in 2016.

    The first meeting will be held in Sydney on 21 March 2016.

    There being no further business, the Chair closed the meeting at 12:45 pm.

      Last modified: 16 Mar 2016QC 48338