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  • Better Services and a better experience for Australians

    Commissioner Chris Jordan, AO
    Address to the 12th International Conference on Tax Administration
    Sydney, 31 March 2016

    (Check against delivery)

    Introduction

    Thank you Chris (Chris Styles). It’s great to be here with the University of NSW again.

    I am pleased to see your conference with the theme of service delivery – something I have been focused on since becoming Commissioner.

    I’m almost midway through my seven-year term as Commissioner of Taxation, and want to share with you my reflections on the past three years or so and my vision for the next three – and how that relates to service.

    I’ll reiterate how committed I am to completing this tenure with unprecedented levels of community confidence and trust in the ATO, in the tax profession, and in the tax system more broadly.

    Mission and vision

    We repositioned the ATO a couple of years ago by establishing our mission:

    To contribute to the economic and social wellbeing of Australians by fostering willing participation in our tax and superannuation systems.

    And setting a vision:

    to be a leading tax and super administration known for our contemporary service, expertise and integrity.

    The core of our mission – willing participation in the tax and superannuation system, drives everything we do and our vision describes the kind of organisation we want to be.

    Let me zero in on ‘fostering willing participation’. We are in a good position – we already have high levels of willing participation in Australia – with the vast majority of people willing to do the right thing.

    Research and experience tell us that to realise even greater levels of willing participation, we have to offer better services, make it easier for people to comply, and give them assurance that others are complying with their obligations too.

    To deliver on this, we have established a formal transformation program, Reinventing the ATO, to improve the client experience, the staff experience and to change our culture. Basically change or refine everything we do.

    A service mindset

    A service mindset is critical to the transformation we need to make. And when I think of service provided by the ATO, I think of it from three different perspectives:

    • Quality client service to taxpayers – whether they are an individual with relatively straightforward affairs, a small business, a large corporate, not-for-profit or Self-Managed Super Fund
    • Effective and efficient public service to the community at large, and
    • Responsible and responsive service delivery for government.

    On the theme of this conference, ‘Global trends and developments in service delivery’, I will talk about how the ATO is embracing and adapting to these and how they influence our service offer.

    Trends in service delivery

    Let me first articulate the trends and developments I see in service delivery for tax administration – the things we are actively engaged in:

    • Red tape reduction
    • User-driven design
    • Data, analytics and intelligence
    • Differentiated, tailored engagement
    • Technology and digital
    • Integrated and connected partnerships
    • Cultural change

    Red tape reduction

    In a world of shrinking resources, but with pressure to achieve more, we are all looking at ways to be more effective and efficient. In 2013-14, the government asked public service agencies to reduce red tape and the regulatory burden on business, the community and each other.

    So far, in actual dollar terms, the ATO has contributed significantly to the Government’s $1 billion annual deregulation target with more than $600 million over two years – and we’ve work to do still.

    The way we’ve reduced red tape is by questioning what we do and why we do it, reframing to focus on outcome over process, considering the client experience and rethinking risk management.

    What’s been pleasantly surprising is the willingness of the vast majority of ATO people to try something new.

    A few examples:

    • We have implemented ‘natural conversations’ to debt management phone calls rather than making our staff stick to rigid scripts. By trusting our staff to respond to client issues on the spot, clients get a better experience, staff get a better experience and we get better payment outcomes.
    • We have reduced our internal procedures, streamlined approval processes, and pushed decision-making to the right levels. We have stripped away more than 3,200 pages of certificates of assurance, 7,000 pages of audit instructions and many more on other internal policies and rules. Even our settlement guidelines have been streamlined from 45 pages to 2.
    • Our early engagement approach right across the board is helping to reduce the time and effort required to get to the heart of issues, resolve disputes and agree a way forward. Both clients and staff recognise the benefits of picking up the phone and having a conversation, rather than drawn out paper wars.

    User-driven design

    User driven design is giving clients a voice – getting their direction, input and feedback about the services they receive or, more importantly, want to receive.

    Our Reinvention Program is all about co-designing a much better experience – with different market segments of the community and our staff. This time last year we released the Reinventing the ATO blueprint – describing the kinds of experience people want to have with the ATO. The Blueprint was formed with input from thousands of people from different market segments, members of the tax and legal professions, other agencies, and ATO staff.

    We continue to engage with the community to co-design products and services and get feedback on our performance. We have:

    • Regular community satisfaction and staff engagement surveys
    • A Simulation Centre to test our thinking and products
    • On-site visits to understand the client experience
    • Co-design and planning workshops with different market segments
    • A Beta site for website and online product development – a sandpit, if you like, for people playing with, learning and giving feedback about our products and services.

    Data, analytics and intelligence

    The ATO receives millions of pieces of data each year from a variety of sources. Traditionally, we’ve mainly used this data for compliance purposes; but increasingly we want to use that data to make things easier, reduce the compliance burden and better tailor our activities.

    As an example, pre-filling of individual myTax returns is expanding this year. We’ll use more third party data, including foreign source income from financial institutions and improved reporting on employee share schemes, to make it faster and easier to lodge a return.

    We will also be trialling the use of our Nearest Neighbour tool with myTax. As people complete their returns, it will compare claims for deductions with the claims of people with similar characteristics and provide prompts like – ‘did you know your claim is much more than those who are similar to you? (and by the way if you leave that amount in, it will likely trigger an inquiry from us).

    Our treaties and information sharing arrangements with other countries are also increasing and as implementation of the OECD’s Base Erosion and Profit Shifting (BEPS) action plan gains momentum, this will grow further when we implement the OECD Common Reporting Standard (CRS) from July 2017.

    The single global standard will help ensure Australian residents with financial accounts in other countries are complying with Australian tax law and act as a deterrent to tax evasion. Lyndall Crompton will tell you more this afternoon about our efforts in the international arena.

    Better use of data is critical to integrity. It helps us better understand individual taxpayers as well as broader risks and patterns. I can tell you the recent sharing of data and intelligence across countries to create a global picture of e-commerce multinationals and their activities has been ground-breaking. These shared pictures have given tax authorities unprecedented understanding of the risks and behaviours of taxpayers threatening revenues and integrity of our respective tax systems.

    Differentiated, tailored engagement

    The ATO has known for a long time that differentiation and personalisation is important for engagement – one size does not fit all. The more sophistication we can bring to the analysis of the data we collect, the more options we will have for differentiating and tailoring our services to meet the needs of clients.

    In the past year, we used SMS nudges for people who have a tendency to pay their tax late. We sent 600,000 messages before the due dates, securing $1.4 billion on, or near on-time payments, from these habitual late payers. Clients like the reminders and we like the results – and we send them a ‘thank you’ SMS if they pay on time.

    We also now have risk profiling and analytics working behind our online payment arrangement tools. This back-end system devises parameters that account for both client needs and our need to manage risk.

    We have also reset our debt and payments strategies to take legal recovery action earlier for those who do not respond to help and support. We found that we were waiting far too long before initiating bankruptcy or wind-up action. As an illustration, we were previously allowing individuals to owe an average of $300,000 and companies to owe us more than $345,000 before taking action – a far higher threshold than what the private sector tolerates.

    Taking earlier legal action is having the right impact – people are changing their behaviour and paying up earlier, and importantly, we are not letting those who are insolvent and unviable to continue to operate and get an unfair financial advantage.

    (By the way, we still only account for initiating 4% of total bankruptcies and 24% of wind-ups).

    Technology and digital

    It almost goes without saying that harnessing technology and using digital-as- default is the way of the future. Technology offers clients, agents and the ATO great efficiencies with automation of simpler tasks, freeing us up to work on things of greater value.

    In the future, the vast majority of taxpayers will use our digital services to send and receive information and payments and to complete transactions in real time. All large Australian government agencies are required to offer end-to-end digital service delivery by 2017.

    Let me share with you some examples of our digital services:

    • myTax, with around1.75 million people using the streamlined online return to lodge their tax returns last year. This year myTax will be available to all taxpayers and e-Tax will be retired.
    • ATO App (downloaded 720,000 times) now includes the myDeductions tool – great for anyone needing to capture invoices and receipts. myDeductions users will be able to upload their deductions from the ATO App into their myTax return or to their tax agent.
    • And voice authentication – more than 1.7 million people have registered their voiceprints with us and we’re the first in Australia to deploy this service on an app.
    • We also have the Business performance check tool, which helps people compare their business performance and viability.
    • This year we will offer tax agents a new Practitioner Lodgment Service via their practice software. The new service lays the foundation for agents to eventually use their practice software for all functions and dealings with the ATO.
    • Our newest service offering is Alex, a virtual assistant available on ato.gov.au 24/7 to help clients with their queries. Alex made her debut on ato.gov.au on 29 February 2016 and has already had almost 60,000 conversations. Alex learns through interaction – the more conversations she has the more she will learn. She may not have all the answers today but she will learn over time.

    Integrated and connected partnerships

    Delivering services to the community is not about the ATO doing everything or doing things in isolation. We cannot do this by ourselves – we have to look at the most cost-effective way of delivering.

    Our client experience design workshops tell us that people want joined up and integrated services, they want to tell government once and they want to know that whatever entry point they choose, it is the right door.

    Already the ATO has a myriad of partnerships, alliances and providers that help us deliver our services. We are working with:

    • 55,500 Tax and BAS agents
    • Legal advisers, software providers, communications and IT experts and other providers
    • Fellow regulatory agencies like the Australian Crime Commission, the Australian Securities and Investments Commission, the Australian Federal Police, the Department of Immigration and Border Protection*
      *(In December 2017, the name was changed to Department of Home Affairs)
    • Department of Treasury and other policy agencies
    • Partners in myGov, like the Digital Transformation Office and Department of Human Services
    • Other international tax authorities – directly and via international fora like the OECD’s Forum on Tax Administration, JITSIC – the Joint International Tax Shelter Information Centre, and SGATAR (the Study Group of Asian Tax Administration and Research).

    In such a connected and dependent world, relationship management and performance management is critical to our ability to deliver results at the right cost for government and the community.

    Cultural change

    Cultural change is needed on a number of fronts for us to deliver on our mission and realise our vision. I will be doing everything I can to drive, support and influence cultural shifts:

    • in the ATO – to become a true service organisation
    • in international revenue authorities – to work together multilaterally to deal with globalisation and multinationals
    • across the APS – to provide integrated and whole-of-government services, and
    • in the Australian community – to support willing participation in our tax and superannuation systems.

    We all know the line about nothing being as certain as death and taxes. But as the American jurist Oliver Wendell Holmes once said, “Taxes are what we pay to live in a civilized society.”

    My job is to ensure that the way tax is administered is no more taxing than it needs to be – no pun intended.

    Thank you.

    I’m happy to take some questions.

    Last modified: 31 Mar 2016QC 48601