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In Praise of the Australian Taxation Office – Coronavirus

Sunday, May 24, 2020

The Australian Taxation Office has been subject to heavy criticism following its announcement last Friday (22 May) that the JobKeeper program will cost $60 billion less than the predicted $130 billion.

In other words, the government’s (Treasury and ATO) original prediction is wrong, that some 6.5 million Australians will need JobKeeper support. Instead they now say around 3.5 million will need JobKeeper. This could be good news.

Look at it this way. The revised lower figure could indicate that the economic harm of the Cornoavirus lockdown is potentially not as bad as first expected. As the domestic economy begins to reopen, the economic/jobs base for rebuilding may be stronger than first thought. Still bad—but not as bad as first thought! Let’s hope so.

But the media spin on the Friday announcement has been ‘horror!, horror!’ See here and here and here as examples.

The ATO’s calculation ‘stuff up’ is explained in this Treasury/ATO release from Friday. It was pretty simple. Around 1,000 businesses applying for JobKeeper entered incorrect figures. For example, many self-employed people who should have put a ‘1’ in the box for number of employees eligible instead put in 1,500 (the JobKeeper payment for each fortnight). Human error. The forms could have been better the ATO admits.

But we’re not going to criticise the ATO for this. On our observations and experience the ATO has done an impressive job, even an awesome job! Look at the timelines and pressure they were/are operating under:
  • The extent of the Coronavirus threat started hitting home early March.
  • Mid-March the first government support packages were announced.
  • JobKeeper was announced on 30 March.
  • Enabling legislation was passed and enacted on 9 April.
  • JobKeeper enrolments (the form that caused the problem) started on 20 April.
  • JobKeeper payments started in the first week of May.
That is, the ATO had three weeks (with Easter in the middle) to:
  • Understand the JobKeeper system and wait for the legislation.
  • Bolt on an entirely new, massive payment program to their existing systems.
  • Get the enrolment forms operational.
Then another two weeks to:
  • Activate payments.
That the ATO has pulled this off without a major collapse of its systems is truly impressive. JobKeeper payments have been flowing. That there has been an administrative error is not surprising.

But we’ll point out a communication step that the ATO needs to take. The ATO reports that some 150,000 businesses have not yet filled out the online forms to trigger JobKeeper payments. Our experience is that many businesses don’t know they have to fill out further forms each month to get the JobKeeper payments. We addressed this on 5 May with our headline ‘If you don’t do this, the ATO won’t send you your JobKeeper $$$$s.’ This simple fact is still not clear on the ATO website. The ATO needs to push this message hard.

That said, we say “Well done, ATO”.

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