• The ATO consultation governance framework

    The terms of reference call for a view on the effectiveness of the means and channels used for stakeholder consultation and the structure of the ATO’s consultation arrangements.

    Essentially this seeks a view on whether or not the governance framework is right – whether it is conducive to consultative inputs to the efficient, effective and fair administration of the Australian taxation and superannuation systems. Also, whether it meets or exceeds the requirements of the Regulator Performance Framework.

    The starting point is to note that, with 78%+ of respondents to the survey expressing the overall view that they are ‘very satisfied’ or ‘satisfied’, it can readily be concluded that the governance framework is fit-for-purpose.

    Current governance framework

    The following diagram describes the current governance arrangements.

    Diagram 2 – Overview of ATO consultative arrangements

     

    ATO consultative arrangements

    The governance framework is appropriate, having regard to the scope and complexity of the systems the ATO is required to administer and taking into account the requirement for consultation at each of the stages in Diagram 1. It is logical to have, at the apex, two groups – one focused on tax and the other on superannuation.

    The six sector or subject-matter specific stewardship groups that make up the balance appropriately cover large and small business, the not-for-profit sector, tax practitioners and individual taxpayers, as well as GST, a subject requiring special focus.

    In addition, as the diagram shows, technical and special purpose working groups and stakeholder relationship management groups interact with the stewardship groups. There are 14 of the former, involving over 230 participants, and 18 of the latter, involving up to 440 participants. Each has its own specific terms of reference. A number of stakeholders serve on two or more groups.

    Technical and special purpose working groups have a limited lifespan, but that is not the universal position. Stakeholder relationship management groups do not, but as the name implies they provide an important vehicle for dialogue between the ATO and the relevant association or interest group. These groups provide their advice to relevant Deputy Commissioners, who also convene smaller ad-hoc panels to obtain advice on specific matters as the need arises.

    Interviewees reported that working groups, focusing as they do on discrete issues, are increasingly being used to good effect, as are the ad-hoc panels. Some external stakeholders were unsure of the authority of their stewardship group to refer issues off to working groups.

    The ATO Consultation Hub, is of central importance. It is the focal point for information going into and coming from the stewardship and other groups and for ensuring public transparency of the ATO’s consultation system. Its role is to ensure that the consultation system runs smoothly, including referring issues to relevant groups or line areas, tracking progress and maintaining the consultation website.

    That leaves the Consultation Steering Group. It plays a useful role in overseeing the whole consultation process. It works collaboratively to improve the efficiency and effectiveness of the ATO’s consultation framework.

    Whether system is sufficiently flexible

    The review considered whether the governance structure was too elaborate or rigid, given the central focus on a hierarchy of stewardship committees – whether it can accommodate the flexibility best practice requires. The arrangements are more structured than most, in part reflecting the broad reach, complexity and importance of the Australian taxation and superannuation systems, and in part reflecting history.

    Best practice consultation does not depend on standing committees alone. As Table 2 shows, there is a variety of useful consultation methods, including the opportunity for discussion on a bi-lateral basis where the level of trust required for that to occur has been built up. The ATO uses each.

    The working groups, industry relationship groups and ad hoc panels provide flexibility to efficiently deal with issues as they arise. Furthermore, as interviewees commented, the relationships established through the stewardship groups and other groups have facilitated informal discussion and feedback, including through ad-hoc panels. As one ATO interviewee put it we have some key people who are much more connected externally which are helping to develop and enhance our client service focus and deliver on our reinvention strategy. While that is not universally the case, the use of informal networks seems to be growing and that is a good result.

    Finding 2:

    The current governance framework is appropriate. It is a coherent structure, with flexibility to engage stakeholders in the full range of appropriate consultative approaches.

      Last modified: 22 Sep 2015QC 46926