• Stewardship groups – some suggestions

    The terms of reference call for advice as to future approaches, shortcomings or opportunities for improvement and alternative approaches. In this and following sections the report suggestions that may assist in improving the efficiency of the stewardship groups and the quality of outcomes are included. Appendix 1 contains a full list of the suggestions.

    Consulting early

    There is an impression that the ATO could consult some of the stewardship groups earlier in the decision cycle. As the Office of Best Practice Regulation’s guidance note states, consultation should be conducted early, when different approaches are still under consideration.

    To take one example, the Civil Aviation Safety Authority issues discussion papers at the start of a rule-making process, before it has decided whether or not to make a rule, and consults publicly on whether it should proceed. Some interviewees expressed the view that there is a tendency to present to stewardship groups somewhat later than might be desirable. The survey questions did not include one specifically on this point.

    Overlapping agendas

    Some interviewees who serve on more than one stewardship group referred to overlapping agendas between some groups – the same matter being discussed in more than one meeting. Overlap between group agendas is, to some extent, inevitable. Many of the issues on which consultation is required will be of interest to more than one stewardship group. For instance, red tape reduction is a topic of relevance to a number of groups. Duplication does not seem to be a significant issue at present. The CSG has an ongoing role to ensure that it is kept to a minimum.

    There has been some confusion about the respective roles of the NTLG and the CSG, although that seems to be receding. Their roles are quite different, as is apparent from the documentation describing them. There seems to have been a ‘settling in’ issue.

    Overall, coordination between stewardship groups has significantly improved, although, there are occasions on which ATO responses are lacking. As one interviewee put it ‘consistency and variability are challenges – different areas respond in different ways’.

    Without constant attention this could become an issue. The CSG is the key, but there may also be benefit in the ATO executives responsible for each stewardship group meeting occasionally to discuss how the groups are going and where improvements might be made.

    The ATO Consultation Hub has made a significant difference, even though not all matters for consultation are registered there and not all group minutes are uploaded in a timely fashion. The Hub provides detailed reports on consultation matters to the CSG, but not to the other stewardship groups. However, the relevant information is on the ATO website, available to all including stewardship group members.

    Suggestion 1

    Consideration should be given to the ATO executives responsible for stewardship groups having a quarterly consultation ‘stocktake’ discussion, informed by an appropriate report from the ATO Consultation Hub.

    Chairs and co-chairs

    Although there is no best practice guidance to draw on in relation to chairing consultative groups, there is a growing propensity for such groups to be chaired by an external member, rather than an executive from the relevant organisation. For instance, the Board of Taxation has an independent chair. Although the Secretary to The Treasury and the Commissioner of Taxation are both members, neither chairs the Board. Some stewardship groups have made a start by appointing co-chairs.

    Consideration should be given to appointing one of the external members of stewardship groups as the chair (or co-chair), at least in some stewardship groups as a trial. A chair drawn from external members would have a number of benefits:

    • the ATO executive who might otherwise chair the meeting can concentrate on, and participate more feely in, the discussion, getting more out of the meetings
    • the role of a chair is to ensure that meetings run more smoothly and that discussion flows freely, ensuring that everyone contributes and that their point-of-view is heard. That is a role difficult to manage if the person in the chair is the ATO executive seeking to get the most from the consultation
    • one of the tasks of the chair is to summarise outcomes at the end of each agenda item and to do that effectively the chair needs to listen to the discussion rather than engage in it
    • any impression that discussion of difficult issues will be curtailed or would be out of place is more easily dispelled if the chair does not come from the ATO (although that is now much less of an issue that it previously was)
    • having an external member as the chair aids cooperation and coordination outside meetings between the ATO and external stakeholders, and encourages formal and informal leadership among external stakeholders
    • any sense that the meeting agenda is ‘controlled’ or relevant matters not open for discussion, can be avoided.

    The review is mindful of the fact that the tradition of ATO executives chairing consultation groups is long-standing. There has been no suggestion that they do not do a good job. The suggestion that a change might be considered, for the reasons outlined above, is because experience has shown that it improves the process and produces better consultation outcomes.

    The time may now be right, given the strong support for, and interest in, the ATO consultation process, to make a change. If there are good reasons, in some groups, for not having an external stakeholder as the chair, consideration should be given to sharing that responsibility through appointment of co-chairs – one from within the organisation and one external. As already noted, there are examples of stewardship groups with co-chairs. By all accounts these are working well. For instance, in relation to the Large Business Liaison Group, members said that the co-chairing works well and the sharing of the agenda setting was welcomed.

    The Commissioner is listed as the chair of the NTLG. If the suggested approach were taken, the Commissioner might consider relinquishing that role but continuing to attend NTLG meetings. It may be appropriate for one of the Second Commissioners to attend other stewardship committee meetings from time-to-time.

    Suggestion 2

    Consideration should be given, within each stewardship group, to an external stakeholder member being appointed chair or co-chair.

    Where an external chair or co-chair is to be appointed it would be desirable for the person to be selected by the external stakeholder members of the group from within the membership in consultation with the ATO executive responsible for the group.

    Chairs or co-chairs should be appointed for a limited period, generally one year, but could be reappointed.

    Their role should include approval of the agenda and they should chair meetings of the group. Where there are co-chairs, the responsibility to do so should be shared equitably.

    If Suggestion 2 were adopted it would be appropriate for the ATO to consider instituting an induction program for chairs and co-chairs, drawing on experience within and outside the ATO of effective chairmanship and on the suggestions made later in this report.

    Stewardship groups – the right size, right people

    The terms of reference include reviewing whether the right people are involved, including whether use is being made of the Consultation Stakeholder Register. In determining with whom to consult, the emphasis should be on experience, ability and availability.

    Best practice for each consultative engagement means having the stakeholders (both organisations and individuals) with a real interest in the subject matter and who can contribute effectively, both in terms of substance and time. As noted earlier, 81% of respondents to the survey thought that current stakeholders have appropriate experience and knowledge. However, there was also the suggestion that, with some groups, an adjustment to the mix and number of participants is warranted. In some groups non-attendance is apparently an issue. If a member cannot attend regularly they cannot provide effective advice.

    Table 10 shows the number of members in each stewardship group. It is clear that some have very large memberships.

    Table10 – Stewardship group membership

    Stewardship group

    External stakeholders

    ATO

    Total

    National Tax Liaison Group

    20

    6

    26

    Superannuation Industry Advisory Group

    19 (incl. other govt. reps)

    5

    24

    Individual Taxpayer Liaison Group

    12 (including Treasury)

    3

    15

    Large Business Liaison Group

    15 (including Treasury)

    6

    21

    Small Business Liaison Group

    14 (including Treasury)

    5

    19

    ATO Tax Practitioners Advisory Group

    17

    5

    22

    Not-for-profit Advisory Group

    13

    6

    19

    GST Advisory Group

    13 (incl. other govt. reps)

    3

    16

    Consultation Steering Group

    12

    7

    19

    Size alone is not necessarily an indication that the group is not fit-for-purpose. It does mean that meetings can become very formal affairs. The larger the group, the less opportunity attendees have for dynamic engagement on relevant issues.

    The role of the stewardship groups is expressed to be:

    • discuss high level significant matters where the outcomes are considered to be in the national interest
    • provide opportunities to discuss the strategic direction of the tax system.

    This indicates that their role fits more closely into the advisory group category than the liaison category, although the names of the various groups may be historical rather than indicative of the differences shown in Table 3. Furthermore, consultative arrangements do not normally fit neatly into one category or the other. Whether or not the right people are engaged depends in large part on what type of consultation is required.

    There are multiple members from the same organisation on the NTLG and the SIAG. There may be good reason for organisations to have more than one member attend meetings, but if the aim is to have dynamic discussion of significant issues it is desirable to reduce membership. Where there is a good reason for doing so, allowing additional attendees for relevant matters is an option.

    The number of ATO members of stewardship groups is also quite large – averaging about six per group, although this is less than used to be the case. It is understood that in some instances those listed as ATO members only attend when an issue touching their area of responsibility is on the agenda. For the same reason it may be desirable to reduce the external members of the groups, the number of ATO members could also be reduced. Consideration should be given to deciding, as a policy, whether the only ATO members should be those who need to be a member on a continuous basis, with others not listed as members, but shown as ad hoc ‘guest attendees’ from time-to-time instead.

    It is undesirable to set arbitrary limits on group membership. If the approach suggested were taken, the numbers of members would likely reduce to a size more conducive to the advisory role the groups are expected to perform.

    Suggestion 3

    Consideration should be given to reviewing and rationalising membership of the stewardship groups to ensure that associations are ‘represented’ in the groups to which they can contribute, and from which they can derive, the most benefit.

    Consideration should be given to reducing ATO membership those who need to be a member on a continuous basis.

    Consideration should also be given to adopting a policy of having one member from each organisation on each stewardship group, rather than multiple members.

    Where an organisation, for good reason, wants to have others attend, those others should attend as invitees at the chair’s discretion.

    Stewardship groups – appointment

    Historically the decision on who should be the individual members of stewardship groups has been left to the participating organisations. That is appropriate in relation to liaison group fitting the description in Table 3. However, the stewardship groups have moved on from that position and their role fits more closely into the advisory group category.

    Best practice indicates that, with advisory groups, the organisation should have a light-handed process to determine who should be a member of the group. That is what happens with consultative arrangements in other agencies, such as the ACCC and ASIC. It also is customary in relation to specialist committees formed by professional associations. The ACCC, for example, invites associations to propose candidates for appointment, including providing their credentials. ASIC appoints institutional and individual members to its committees through an invitation and nomination process. One of the ATO’s stewardship groups, the Small Business Liaison Group, has adopted a light-handed appointment process that appears to work well. Furthermore, a number of external stakeholders agreed that a process of appointment would be desirable. As one put it members should ‘present credentials and earn a place’.

    Of course, any change in the appointment arrangements would need to be handled sensitively, but as the experience with the Small Business Liaison Group demonstrates, it is possible to move to new appointment arrangements with goodwill and cooperation between all involved.

    If the ATO were to institutionalise an appointment process there is little doubt that it would reject a candidate nominated by any of the professional bodies, but the process of inviting them to propose candidates for appointment, including providing their credentials, would provide a worthwhile discipline. The best outcomes result from having the right person from the right organisations at the table.

    It is common practice for members of consultative committees (even those nominated by professional bodies) to be appointed for a term – usually two or three years – to ensure healthy rotation. Sometimes rotation is not needed, especially when history is important and a particular member has made, and continues to make, a worthwhile contribution, but re-appointment is not normally an expectation.

    Suggestion 4

    The ATO should consider establishing a policy of inviting stakeholder associations to nominate suitably qualified persons for appointment to relevant stewardship groups and specifically appointing them to the groups.

    If this recommendation were accepted, the ATO should consider a settling in period, potentially grandfathering current membership of at least some of the stewardship groups.

    Appointments for a fixed period would be quite normal, with re-appointment a possibility rather than an expectation.

    The ATO Consultation Hub should administer the appointment process to ensure consistency.

    Completing consultations – an end date

    As noted earlier, interviewees commented favourably on the use of limited-life and ad-hoc working groups. That innovation was seen as a very significant improvement in the ATO’s consultation system.

    The ATO website contains details of matters under consultation showing the date on which consultation commenced, the purpose and an outline of the subject matter, the group being consulted and the name of the ATO contact officers and their contact details. The ATO Consultation Hub also provides reports on all matters under consultation to the CSG and stewardship committee chairs for dissemination to their members.

    Very few of the matters listed, either in the reports or on the website, have an estimated completion date. No doubt, there will be occasions on which, with the best intentions, matters are not able to be completed by the time originally contemplated, but that is not a good reason for not putting an estimated completion date on each matter and updating it as circumstances require. This is good management practice and it provides an opportunity for the CSG to oversee progress.

    Suggestion 5

    Consideration should be given to setting an estimated completion date, for those matters under consultation that do not currently have one.

    The date should be listed on the ATO consultation website.

    Estimated completion dates should be amended (forward or backward) as the need arises, but when the date is extended the reports to the CSG and stewardship chairs should state the reasons for doing so.

    The CSG should receive and review, at each meeting, progress reports on those matters on the list of matters under consultation that are beyond (or not likely to complete by) their estimated completion date.

      Last modified: 22 Sep 2015QC 46926