Australia: Tax cheats to win from ATO cuts, insiders say
16 January 2015
Posted by: Authors: Nassim Khadem and Noel Towell
Authors: Nassim Khadem and Noel Towell (The Sydney Morning Herald Business Day)
Tax Office workers say the agency's massive job cuts have hurt its ability to catch Australia's corporate tax cheats.
Public servants at the ATO's tax compliance unit have responded to a union survey with 75 per cent of them saying budget cuts have affected the Tax Office's capacity to monitor and audit companies rated a risk of tax avoidance.
The compliance workers say cases are being "compromised' because of a lack of resources and that wealthy tax evaders would stand a better chance of getting away with cheating as the multi-agency "Wickenby" operation faces funding cuts.
But the Tax Office said it was keeping its focus on taxpayers who posed "the highest risk" and was beating its targets for revenue collection.
The Community and Public Sector Union (CPSU) surveyed 100 ATO staff, mostly from the compliance area, about their experiences of working in the Tax Office amid the present program of cuts, which will see 4700 jobs shed by 2018.
Respondents to the survey said the "drain of skills" had hit workplace morale and left staff questioning their future at the organisation.
Workers reported the knowledge bank the agency has left is "debilitating" and that some of the remaining staff are "inexperienced and fatigued".
"[The] change in culture has forced experienced staff to leave; years in insight and confidence have been lost," one public servant said.
"The more you care about doing a good job the more uncomfortable the culture is for you."
Compliance officials who responded to the survey feared the lack of future funding to the ATO's high-profile Wickenby project to catch high-end tax cheats would increase tax avoidance.
Respondents reported that cases that in the past would have been followed up vigorously were now being waved through.
"I know of examples where cases are compromised on the basis of 'we don't have the resources to deal with it'," one staff member said.
Workers said the job cuts hit particularly hard in a workplace where the the ATO has very little formal training for auditors and relies on on-the job training by mentors.
"The loss of veterans means rookies need to handle their cases without the assistance of a more experience staff member," an official reported.
Another complained that people who were "able to sort through the web of complex structures that larger entities use to hide transactions and money" had left the organisation.
"The loss of knowledge around company, industry, case product and tax law have been immense," they said.
Respondents to the survey conceded that new talent coming into the ATO was valuable but it could not replace old talent.
"You can have the best graduates with the best marks attained at university," one public servant said.
"However, that will amount to nought if they are not given time and exposure to different situations with competent and experienced mentors in support."
An ATO spokesman said the agency was making its job cuts without compromising the ability to collect the nation's revenue.
"The ATO is committed to maintaining revenue collection with a focus on identifying and following up on those activities and taxpayers that represent the highest risk to the system," the spokesman said in a statement.
"We are exceeding our revenue collection targets for this year, and expect to at year's end.
"While we have lost some good experience, our remaining workforce is flexible, skilled and responsive.
"This ensures priority areas, including our audit areas, are properly resourced."
This article first appeared on smh.com.au.