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‘Houston we have a problem’—says ATO—at long last!

Sunday, September 08, 2019

In 1970, when the Apollo 13 space mission suffered a major malfunction, the astronauts immediately declared to mission headquarters in Houston, Texas: ‘Houston we’ve had a problem’. Here’s a clip from the 1995 Tom Hanks’ movie on Apollo 13 in which he makes the declaration.

Recognising and admitting to a problem is the first, most critical step to fixing it.

Just a week ago Tax Commissioner Chris Jordan finally declared ‘we have a problem’. But, wow, has that declaration been a long time coming!

We’ve been alerting the ATO about ‘the problem’ for a long time. Here’s the list of our submissions, in which we study, analyse and explain ‘the problem’ since 2014. The ATO’s response to us has been to attack us on at least four occasions in parliamentary inquiries, denying that it has ‘a problem’.

Then ‘the problem’ received huge exposure with the Four Corners program ‘Mongrel Bunch of Bastards’ in April last year. Still the ATO denied ‘the problem’.

The ‘problem’ is ATO abuse of small business people. It has wrecked Australia’s small business research and development entrepreneurship. It has abused its ABN allocation powers. Its audit approach is skewed to maximise its bullying capacity instead of identifying truth and facts. The list goes on. And it’s not only us saying this.

A string of parliamentary and bureaucratic investigations and reports flowed last year. All confirmed bad treatment by the ATO. They included the Small Business Ombudsman, the Inspector-General of Taxation, a retired federal court judge, a top ex-ATO executive, an ATO internal report and more. The parliamentary committee overseeing the ATO confirmed major problems and called for significant changes, including (effectively) a rewrite of the Taxpayers’ Charter (Recommendation 5).

But, like all big organisations, the Australian Taxation Office sees the maintenance of its reputation as more important than acceptance of an internal sickness. We saw this with the banks when they denied their systemic problems with abuse of customers. We saw this with the churches with their systemic problems of sexual abuse of children. We have been seeing this with the ATO.

The pattern is always the same! Deny. Re-victimise the victims. Attack whistle-blowers and truth-sayers! Cover up!

It reminds me of David Bowie’s ground-breaking song ‘Space Oddity’. Here’s the official video clip.

The ATO should take note of Bowie’s words:
  • “Ground Control to Major Tom. Your circuit's dead, there's something wrong…”
The Apollo 13 crew addressed its problem and came back to earth. Major Tom disappeared into outer space, floating in his tin can.

The Tax Commissioner’s admission of ‘a problem’ last week is a positive step. “We have to do better” he said according to media reports. He talked about a series of new “procedural and cultural safeguards”. According to the media, he admits to the fact that ‘the ATO makes mistakes that puts businesses in financial jeopardy’.

This is a big step by the Commissioner and we congratulate him. Thanks for the public declaration!

But, any idea that the ATO can and will fix ‘the problem’ itself is naïve and simply will not happen. The core issue is that the ATO has no effective, independent oversight, transparency or accountability. Bad behaviour always results from bad structures.

Our objective is clear and public. Parliament must take control of the ATO and put in place a proper set of checks and balances which ensure that the ATO is subject to quality systems of oversight, transparency and accountability. That is what a rule-of-law democracy requires of its public service bureaucracies.

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