Consultation Steering Group Minutes - 23 April 2015 meeting

Meeting details


Australian Taxation Office - Canberra
National Office, McKay Boardroom, Amungula Building
26 Narellan Street, Canberra City


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


Paul Horrocks, Principal Adviser, Corporate and International Tax Division, Revenue Group, Treasury





Andrew England, First Assistant Commissioner, Integrated Tax Design


Jeremy Hirschhorn, Deputy Commissioner, Public Groups and International


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


Peter Coakley, Assistant Commissioner, ATO Corporate


Jorge del Busto, Senior Executive Advisor, Office of the Chief Tax Counsel


Annalissa Alexander, ATO Corporate (Secretariat)

Board of Taxation

Matthew Brine

CPA Australia

Mark Morris

Corporate Tax Association

Michelle de Niese

Chartered Accountants Australia and New Zealand

Andrew White

Institute of Public Accountants

Tony Greco

Law Council of Australia

Mark Friezer

The Tax Institute

Thilini Wickramasuriya

Independent member

Keith James




Association of Taxation and Management Accountants

Keith Clissold

Chartered Accountants Australia and New Zealand

Michael Croker

Council of Small Business of Australia

Peter Strong

SMSF Association

Andrea Slattery

Additional guest attendees




Simon Matthews, Assistant Commissioner, Public Groups and International (Agenda item 2)


Russell Miller, Consultant, Centre for Strategy and Governance (Agenda item 4A)


Shirley Forlin, Senior Director, ATO Consultation Hub (Agenda items 3 and 4A)


Lucy Libertone, Assistant Commissioner, Private Groups and High Wealth Individuals attending via phone (Agenda item 4B)


Nicholas Walter, Senior Adviser, Tax White Paper Task Force (Agenda item 2)


Item 1: Meeting open - attendance and apologies

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Co-Chair Andrew Mills opened the meeting and noted the apologies from Keith Clissold, Michael Croker, Peter Strong and Andrea Slattery.

Mr Mills welcomed Andrew White, who was attending for Michael Croker as CAANZ representative; Matt Brine, attending as the Board of Tax representative and Thilini Wickramasuriya, as the representative for The Tax Institute.

Mr Mills also noted that additional attendees were Simon Matthews (ATO) and Nicholas Walter (from Treasury) for item 2, Russell Miller, Consultant for item 4A, Shirley Forlin for items 3 and 4A and Lucy Libertone for item 4B.

Item 2: Environmental Scan

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Tax reform update

(Nicholas Walter, Senior Adviser, White Paper Task Force, Treasury attended to present this item)

Co-Chair Paul Horrocks introduced Mr Walter, who provided a summary of the consultation process following the release of the Tax discussion paper on 30 March 2015.

Consultations with stakeholders are being conducted through two avenues, the Tax White Paper Task Force located within Treasury, led by Roger Brake and overseen by Rob Heferen and the Tax White Paper Unit located in the Treasurer’s office, led by Robert Jeremenko. Whereas the latter is conducting primarily one-on-one meetings with stakeholders, it is anticipated that the Task Force will be conducting roundtables.

The above consultations are in addition to more modern ways of engagement. A new website,, has been set up which includes animations, summaries of issues and quizzes, aimed at engaging a broad cross-section of the community. It presents problems with the tax system, the sustainability of taxes and makes the case for reform.

New material is uploaded progressively on the website, which also includes more substantial content, such as a recently uploaded technical paper on the marginal excess burden of various taxes.

Treasury considers that evidence-based submissions, with the support of hard data, together with submissions that identify a range of options and trade-offs, will be most useful. In this respect, Treasury can look at addressing requests for information to assist stakeholders.

Submissions will be uploaded as they are received, enabling earlier submissions to generate more conversation.

In terms of next steps, a green paper setting out reform options will be released in the second half of the year, followed by additional consultations on it and then the white paper setting out the Government’s reform package will be released ahead of the next election.

In subsequent discussion it was confirmed that to make consultations more effective, stock is taken of previous submissions or points made by stakeholders ahead of further engagements with them. It was also clarified that not all questions in the discussion paper needed to be addressed in submissions - only those where stakeholders thought value could be added, drawing on their areas of expertise. There is also scope for joint meetings with the Taskforce and the Treasurer’s unit on overlapping themes.

Board of Taxation update

Matt Brine provided an update on recent Board of Tax activities.

The Board completed and delivered its report on the debt equity review by the end of March and had previously delivered an accelerated report on section 974-80. The Board’s recommendations had been accepted by Government and were now scheduled for introduction for the winter or spring sittings.

There were a number of previous reports that had been completed but had not been publicly released. Consideration was being given at releasing them, with or without a Government response, to assist with the conversation on tax issues. Undelivered reports were on collective investment vehicles, Division 7A, Islamic finance, attributions of profits to permanent establishments and on the arm’s length debt test in the thin capitalisation rules.

The Board has two priorities at the moment - assisting with the deregulation agenda and supporting the consultations on the Tax White paper. A working group focussed on the deregulation task, chaired by Peter Quiggin, was gathering ideas and identifying potential topics for repealing. Three other working groups were being established to assist with the consultations on the Tax White paper, focussed on large businesses, small businesses and on international issues.

Issues such as the tax mix switch needed to be raised by stakeholders if they were to be acknowledged by Government as relevant. It was also noted that in consultations with the Board, the Group of 100 had contributed useful and ambitious deregulation ideas.

In subsequent discussion regarding the draft legislation on section 974-80, it was noted that in response to the request for greater certainty by consulters, examples had been included as legislative instruments rather than in the explanatory memorandum, with the draft legislation making reference to them. It is expected this would be a rare practice.

Red tape reduction update

Erin Holland provided a summary of the red tape initiatives covered in the March 2015 quarterly report, of which the simplification of the record keeping requirements for the transfer pricing measures were a significant item. Assistance to the trustees of self-managed super funds was also part of the recently implemented red tape initiatives. A copy of the report containing the quantified red tape reductions will be circulated out of session to CSG members for their information.

Action item: CSG 1504/01

Due date: Out of session

Responsibility: Deputy Commissioner, Tax Practitioner, Lodgment Strategy and Compliance Support

Red tape reduction report
A copy of the March 2015 quarterly report to be circulated out of session to CSG members for their information.

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In subsequent discussion it was commented that the transfer pricing simplification measures was a very positive initiative and that one of the safe harbour working groups was now looking at expanding it into related spheres.

Release of the Reinventing the ATO blueprint

Erin Holland provided a summary of the six strategic programs being implemented as part of the blueprint, noting the outcomes that they are aiming to achieve, with each of them being led by a Deputy Commissioner, senior officers being responsible for the client experience in the different segments of stakeholders and program boards steering their activities.

The blueprint is a journey that is pervasive for the organisation; its purpose is outward looking, aimed at enhancing the client experience to facilitate willing participation in the tax and superannuation system.

In subsequent discussion it was noted the need to pay attention at fixing promptly issues like the tax agents portal, whose extended downtime at times can become a source of frustration and affect the perceptions of positive change engendered by the blueprint.

Members noted that cultural change is often the hardest and longest to achieve and that it was important to hear both the good and bad stories, so that the latter could be addressed and the former promoted. Whereas the feedback from practitioners dealing with large clients was very positive, the feedback from the small end of town was more mixed.

Members also acknowledged that the impact of the blueprint is already being felt in interactions with staff, noting for example the increased willingness to engage early in informal discussions and interactions to clarify and air the issues before contemplating eventual decisions to go to an audit.

Tax transparency – consultation on administrative arrangements for reporting entity information

(Simon Matthews, Assistant Commissioner, Public Groups and International attended to present this item)

Simon Mathews provided an update on the consultations held on this matter and feedback received from submissions. A common theme highlighted in submissions was the need to appropriately inform public debate, providing guidance on what the information means and avoiding confusion created by incomplete information. It was also noted as important having the ability to confirm the information that is to be published.

Options being examined were presenting a table with all reporting entities ordered alphabetically or, like is used in Denmark, allowing a facility to type the name of a reporting entity and obtaining its corresponding data. It was noted that a precedent on a line by line presentation existed in Australia with My School data.

A working group has been established with members from the Large Business Liaison Group, the Energy and Resources Working Group and the Minerals Council of Australia to consult on this measure, which will meet in Sydney on Thursday 30 April. An open invitation was extended to other members who may wish to attend.

Members noted that part of the CSG’s role was to provide comments and input on whether the right people were involved in consultations. It was agreed that the membership of the working group will be circulated to the CSG, asking for their feedback on whether other stakeholders should be invited to join the working group.

Action item: CSG 1504/02

Due Date: ASAP

Responsibility: Assistant Commissioner, New Measures and Government Relations, Public Groups and International (Simon Matthews)

Membership of working group for consultation on tax secrecy and transparency (administrative arrangements for reporting entity arrangements)
The list of attendees for the consultation workshop to be held on 30 April 2015 to be circulated to CSG members asking for their feedback if any other participants should be invited to attend the consultation workshop given we need consultations to be with the right people with the right contributions.

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Other matters of significance (including House of Representatives inquiry into tax disputes and Senate inquiry into corporate tax avoidance)

Members commented briefly on the recent appearance by the ATO at the Senate inquiry on corporate tax avoidance, where the Commissioner followed up on his earlier undertaking to correct the public record on any earlier statements that had been provided by other parties that run the risk of misleading the public and take away confidence in the tax system.

Other non-ATO consultation forums

No comments were provided by members on other non-ATO consultation forums.

Item 3: Update of action items

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(Shirley Forlin attended for the discussion of action item CSG2410/6).

The following action items were accepted as completed.

CSG 158/5

TIES register

For TIES issue 0001/2013, Unintended double taxation of employee share schemes under certain circumstances, it was reiterated that a legislative fix is being progressed and that guidance will be provided once law amendments are passed. The ATO will look at addressing past problems of unintended double taxation.

For TIES issue 0002/2013, Treatment of the transfer of a bundle of shares in a company roll-overs when dealing with CGT event A1 which refers to ‘a asset’ or ‘all the assets of a business’, the ATO is looking at providing public guidance for aggregate transactions comprising the transfer of a bundle of assets, where the schedule of assets has a reasonable split. Feedback will be invited on the draft guidance.

CSG 2410/6

Visibility of consultations with industry associations

ATO noted that the report tabled of stakeholder relationship management groups was a top level picture and that not necessarily all groups were included. The setting up of these relationship management groups predated the new consultation arrangements, with the groups meeting as needed to suit the needs of the parties involved.

The ATO Consultation Hub will provide CSG members with a six monthly update of the stakeholder relationship management groups, reporting key matters on an exceptions basis.

Where these groups are consulting on specific matters, details of the consultation will be available on the website under Matters under consultation.

CSG 1502/01

Post-implementation review of the ATO’s consultation arrangements – Draft Terms of Reference

It was noted that CSG members’ comments were included in the draft terms of reference submitted for discussion by the NTLG at its meeting on 4 March 2015.

CSG 1502/02

New consultation group for privately-owned groups and wealthy taxpayers - update

It was noted that this item was addressed by the scheduled update to be provided at item 4B of the current meeting.


Item 4: Health of consultation arrangements - broad oversight topics

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Post implementation review of the ATO’s consultation arrangements

Seeking members’ views on the efficiency and effectiveness of the consultation arrangements (4A)

(Russell Miller, Consultant, Centre for Strategy and Governance and Shirley Forlin, Senior Director, ATO Consultation Hub attended)

Russell Miller provided a summary of the feedback he has received on a survey of consultation arrangements, noting the good turnaround of 82 respondents out of 188 people surveyed. Respondents comprised both consultation stakeholders including tax practitioners and ATO officers.

Overall feedback received was that the system for consultation arrangements has improved demonstrably and that most groups are now more interactive. That said, there are areas with scope for improvement, such as the dissemination of information on matters under active consultation. It was noted that not many people are aware of the consultations register on the ATO’s website.

Members acknowledged that some consultation participants were very accustomed to the previous arrangements which involved detailed technical consultations in ongoing forums, where minutes of meetings operated, in some cases, as quasi rulings. However, there was a positive progressive acceptance of the current focus around targeted, fit for purpose and time-bounded consultations.

A workshop will be convened with Russell Miller in the first week of May to test a range of recommended improvements to the current arrangements and a draft Post Implementation Review report will be delivered to the ATO by 30 June 2015.

Update on the establishment of a new consultation group for privately owned groups and wealthy taxpayers (4B)

(Lucy Libertone, Assistant Commissioner, Private Groups and High Wealth Individuals attended via phone)

Lucy Libertone provided an update on the membership of the new stakeholder relationship group, noting that it had held its first meeting the previous week, where it started to discuss a forward work program and key topic issues. It was acknowledged that there are different types of privately owned groups, small, large and high wealth individuals, each facing different issues.

The group agreed that the position of co-chair for the newly established group will be held by non-ATO members on a rotational basis.  The co-chair for each meeting will be involved in setting the agenda.  Greg Nielsen volunteered to co-chair the first face to face meeting of the group, to be held on 11 June 2015. Work continues at the moment sourcing items for the forward work program.

Members suggested that given potential systemic issues and tax law implications resulting from the consideration of issues by the group, a Treasury representative and a law practitioner should be invited to join the group. The letters of appointments should specify they are for set periods, not exceeding two years.

Members agreed that a further update be provided at the next CSG meeting on 23 July, including membership of the group, issues being considered and the timelines for the corresponding consultations.

Action item: 1504/03

Due Date: 23 July 2015 CSG meeting

Responsibility: Deputy Commissioner, Private Groups and High Wealth Individuals (Michael Cranston)

Consultation group for privately owned groups and wealth taxpayers - update
A further update to be provided to the 23 July CSG meeting to include information of the group’s membership, issues being considered and the timelines for relevant consultations.

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Item 5: Health of consultation arrangements - reports from consultations

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Update of discussions from the 4 March 2015 NTLG meeting on the ATO’s consultation arrangements (5A)

Peter Coakley reported that discussions have continued on the membership of the NTLG. The aim is to have a tighter, efficient and effective group, which facilitates frank discussion on strategic issues. Discussions are continuing with associations around where their participation would be most effective, addressing the issues that are of most interest to them and on which they could add most value, which in some cases could be the Consultation Steering Group or the ATPAG, rather than the NTLG. This did not mean downplaying the role of associations not participating at the NTLG, as all stewardship committees are valued. Attendance by ATO and Treasury representatives at the NTLG is also being reduced.

Oversight of consultation activities including discussion of the following reports:

Monthly report on ATO’s consultation arrangements (5B)

Consultations on single touch payroll were clarifying that the link between reporting requirements and payments was not an essential feature of the initiative; simplifying reporting requirements was the driving force.

Members noted that the list of consultation participants for the single touch payroll initiative seemed to be very large, that there might be a need to undertake stratified consultations, with more detailed consultations with an inner smaller circle and the use of an outer circle for dissemination of information for awareness and input. The use of a Co-Chair model was also recommended. The meeting agreed that the full list with the names of those being consulted will be provided out of session for the information of CSG members.

Action item: CSG 1504/04

Due Date: Out of session

Responsibility: Acting Assistant Commissioner, Single Touch Payroll

Consultation on Single Touch Payroll
A list with the names of those being consulted to be provided to CSG members out of session.

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Further clarity was asked on the outcome sought by the Tax Agent Rating Tool. Erin Holland undertook to provide this to interested CSG members.

It was also noted that 90 per cent of matters under consultation were initiated by the ATO. Responding to a query whether this reflected that it was not easy for stakeholders to initiate consultations, it was noted that the submission form had been simplified and that the option was always open to call Shirley Forlin, Senior Director, ATO Consultation Hub, to assist with guidance on this process. It was also noted that the matters initiated by the ATO may be the result of strong stakeholder input and urging to the ATO to consult on particular matters raised across the consultation network as was the case with the safe harbours groups.

Progress on TIES issues (5B – Attachment 1)

Andrew England advised that a new process is being considered for handling TIES issues, where the ATO will engage with the Safe Harbour Steering Group project and experts registered with the Consultation Hub to assess whether it could address the submitted issues, including through the potential use of the proposed Statutory Remedial Powers.

For issues that would require legislative amendment, assistance from Treasury and externals would be sought.

Members commented that it was important to have externals’ input as part of the initial assessment of whether an ‘in scope’ issue existed. It was important to consult early in the process, before the ATO forms a view.

Summary of activities by stewardship committees (5B – Attachment 2)

Members requested a review of the membership of the different stewardship committees, instigated by the Chairs of the committees, and noted that co-chairing arrangements with private sector members should be the default model. That said, it was also noted that some committee chairs were already working with members to review membership so that all attendees are active participants.

As part of the requested review, the Chairs should ensure that all members of their committees are active contributors and that there is an appropriate mix of perspectives. Where letters of appointment or formal processes have not occurred, letters of appointments should specify members’ terms are for set periods, not exceeding two years. A report back on progress in meeting these requirements should be presented to the 23 July 2015 CSG meeting. This request needs to be actioned in line with any agreed recommendations from Russell Miller’s post-implementation review.

Action item: CSG 1504/05

Due Date: 23 July 2015 CSG meeting

Responsibility: Peter Coakley, Assistant Commissioner, ATO Corporate

Review of Stewardship Committees
Peter Coakley to co-ordinate a discussion between Andrew Mills and the Stewardship Committee Chairs to agree on a sensible, co-ordinated ATO approach to reviewing the Chair and membership arrangements in line with this request and Russell Miller’s upcoming report.

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Assessing effectiveness of consultations by working groups (5C)

Members noted that there was some good progress across some of the working groups since the last meeting but there needs to be more consistent progresses across all groups and some have more clarity of purpose and better defined timelines than others. Co-chairs of the working groups should be asked to provide feedback on contributions by members, both from the private sector and the ATO and should also ensure that an appropriate mix of perspectives is available to the working groups. Where there are blockers to progress, as for example in trust working groups 1, these should be identified specifically rather than with generic references.

Members noted that the Large Business Liaison Group will consider the need for an international liaison group to be established.

Members also agreed that a new managed investment trusts (MIT) early guidance working group, established as a sub-group of the Trust Working Group 2, should be set up to assist with the implementation of the MIT reforms. It should include one representative from each of Chartered Accountants Australia and New Zealand, Corporate Tax Association, CPA Australia, The Tax Institute and the Law Council of Australia in addition to a representative from the Financial Services Council, the Property Council of Australia and the Australian Custodial Services Association, the last three associations to be approached by the ATO.

Action item: CSG 1504/06

Due Date: 23 July 2015 CSG meeting

Responsibility: David White, Senior Tax Counsel, Tax Counsel Network

Establishment of a new managed investments trust early guidance working group
A new managed investment trusts (MIT) early guidance working group to be set up to assist with the implementation of the MIT reforms. A progress report to be provided to the 23 July CSG meeting.

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Assessing consultation effectiveness on advice products (5D)

Members noted the early warning issued by the ATO regarding its concerns on recent transactions of some public companies involving franked distributions funded by equity raisings. It was noted that the early warning will be followed by a taxpayer alert to be available soon.

Matters for consultation register (5E)

Members noted that some reported consultations have finished and should be dropped from the register.

It was also agreed that the register should add information on the current consultations with industry on tax issues relevant to infrastructure transactions, including on when a veto power can constitute negative control. It was noted that suggested clauses for guidance were being sought.

ATO advice products released for consultation since last meeting (5F)

This report was noted.

Item 6: Other business

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Meeting close

There being no further business, the Co-Chairs closed the meeting at 4.00pm.

The next meeting of the Consultation Steering Group is scheduled for Thursday, 23 July 2015 in Sydney.

    Last modified: 28 May 2015QC 45347