Broader focus of the committees

The Federal Budget for 2014-15 is heavily focused on cutting government expenditure, and leaves us waiting for the tax reform white paper process to achieve any real progress on revenue. The temporary Budget Repair Levy is just that — a temporary fix which attempts to address the government’s immediate budgetary concern without considering the design of the tax system as a whole.

The Institute’s contribution to the white paper process will be the first real test for our new technical committee structure. The renewed structure will have more of a focus on broad tax reform, and encourages committee members to be proactive in raising and addressing fundamental issues in our tax system. While we will have a committee dedicated to this particular focus, I would encourage all committee members and indeed the wider membership to contribute with suggestions for broad tax reform.
Federal Budget

While I am on the topic of the Federal Budget, one measure that has received little attention in the press is the announcement that the ATO must shed 2,100 workers by 1 October, on top of the 900 job losses that were already underway. This is a dramatic cutback to achieve within a very limited timeframe. There will also be cuts to the ATO’s IT budget. It seems odd that a government so desperate to raise more revenue would reduce the capacity of the one department responsible for collecting revenue.
Although the government and the ATO would never admit it, there is a danger that these cutbacks will reduce the ATO’s ability to respond effectively to enquiries by taxpayers and their advisers. The Tax Institute will do what it can to encourage the ATO to minimise the disruptions to its frontline services.

On a more positive note, the government decided not to adopt the Commission of Audit report recommendation that the ATO watchdog, the Office of the Inspector General of Taxation (IGT), be absorbed into the Office of the Commonwealth Ombudsman. In the Budget, the government has taken the opposite approach, moving the tax complaints function from the Office of the Ombudsman to the IGT.
I support the government’s decision to retain the IGT as an independent agency. The IGT plays an extremely important role in holding the ATO to account in improving the administration of the tax laws for the benefit of all taxpayers. The cutbacks to the ATO’s budget only serve to increase the significance of the IGT’s oversight in monitoring the quality of ATO services.
 
Michael Flynn CTA is President of the National Council at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

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