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Standing Committee on Tax and Revenue - 26/11/2014 - Tax disputes

CRANSTON, Mr Michael, Deputy Commissioner, Private Groups and High Wealth Individuals, Australian Taxation Office

HASTINGS, Ms Debbie, First Assistant Commissioner, Review and Dispute Resolution, Australian Taxation Office

HEFEREN, Mr Rob, Executive Director, Revenue Group, Department of the Treasury

MILLS, Mr Andrew, Second Commissioner, Law Design and Practice Group, Australian Taxation Office

OLESEN, Mr Neil, Second Commissioner, Compliance Group, Australian Taxation Office

PRESTON, Ms Kate, General Manager, Small Business Tax Division, Department of the Treasury

VESPERMAN, Mr Stephen, Deputy Commissioner, Small Business Individual Taxpayers, Australian Taxation Office

Committee met at 16:04.

CHAIR ( Mr Alexander ): Welcome. I declare open the public hearing of the House of Representatives Standing Committee on Tax and Revenue and its inquiry into tax disputes. Today we will hear from Treasury and the tax office. These agencies were our first witnesses at the first inquiry in July. We look forward to the comments on the evidence that the committee has taken since then. I would like to thank our witnesses for appearing today. I also welcome those listening or viewing the broadcast of these proceedings.

Although the committee does not require you to give evidence under oath, I advise you that these hearings are formal proceedings of the parliament and warrant the same respect as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make opening statements to the committee.

Mr Mills : I would like to start out by thanking you, Chair, and committee members for the opportunity to be here today, together with my fellow second commissioner, Neil Olesen, and our colleagues from Treasury and the ATO. Disputes, while not desirable, are in fact a feature of our tax system, particularly given its size and complexity. It can sometimes even work to improve the system. By that, I mean that, where the law might be uncertain or where it is in the public interest, it is an opportunity to seek clarification but also, importantly, where it might highlight an area for improvement in our own administration. We are, however, acutely aware of the impact that disputes can have and the importance of trying to manage them properly. They can impact both on the taxpayer themselves and on our ability to maintain public trust and confidence in the ATO, and in the broader tax and superannuation systems.

In the context of the number of transactions, the tens of millions of various transactions we have every year, tax disputes are a relatively low number. But their significance is quite high and we appreciate that. They impact on people's lives and businesses and their effect can be long lasting. When they take too long to resolve and are not managed well, the costs are very high not only in terms of time, money and effort but also in the accompanying stress for everyone involved. So with all these factors in mind we have welcomed the committee's focus on our management of tax disputes. We are keen to work with you in designing a fair and efficient system that works well for all of us in the years and decades ahead.

I would like to take this opportunity to acknowledge that there are cases in the past where we certainly could have done things better. For those who have been adversely affected by our poor handling of their disputes, I would like to extend my sincere apologies. But we are changing. Over the last 18 months we have made significant improvements to our dispute prevention and resolution. We have developed and implemented several new strategies during this time, including ensuring that we are having conversations and getting our people to pick up the phone earlier, to talk to taxpayers, both at the audit and the objection stage, rather than getting into protracted paper wars.

We are trying to implement greater technical decision-making support for our auditors and also increase training and feedback about dispute prevention, as well as dispute resolution. We are using mediators, facilitators and private practitioners, including former judges for alternative dispute resolution. We have implemented a facilitation service, primarily for small business and individuals, for less complex disputes. This service has been available for just over six months and we have had around 29 requests in that time made by either the taxpayer or ATO officers. We are already seeing the benefits and are looking to build further on that particular strategy.

We have revised our code of settlement. We now have it down to just two pages long. It is a settlement practice statement that is very focused on being supportive of settlement as a feasible option for resulting disputes and providing certainty in the future. Just this week the ATO has commenced a survey to understand taxpayers' perceptions of fairness in dealing with us in disputes. This first survey covers 350 taxpayers, mainly small business and individuals. We expect the report to be completed by February 2015.

The ATO's stance, strategy and capability is now focused on resolving disputes as early as possible in a way that is efficient, respectful and fair. Resolving disputes early not only saves time and money for the taxpayer and the ATO; it also provides certainty for taxpayers and promotes a productive relationship. To resolve disputes in this way means we focus on a taxpayers' experience across all their dealings with the ATO, not just when they have lodged an objection. It is better that we prevent the need for an objection in the first place.

We are committed to improving the experience that people have when they deal with the ATO and, in particular, the experience of those who end up in dispute with us. We are pleased with the results we have so far achieved and the feedback we have been getting regarding those improvements over the last 18 months, not the least from evidence before this committee. We are very much looking forward to the committee's observations and recommendations, to help us in our journey of change and improvement. Thank you.

Mr VAN MANEN: Thank you, Mr Mills, for your opening remarks. I am going to focus on a particular issue that was raised at the public hearings in Brisbane but, firstly, if I may, I want to make a more general comment. In your updated submission you acknowledge, in paragraph 32: 'We understand that the technical knowledge of our front-line auditors is essential for taxpayers to have confidence in our service.'

It appears from the rest of your comments in that paragraph that your front-line auditors are not necessarily your most highly trained auditors in the ATO, because you finish off that paragraph with: 'We'll continue to provide formal training, on-the-job support and feedback to audit teams.'

My first question, given some of the testimony we have had from some of the witnesses which, to be frank, from my perspective, is highly concerning, why aren't your best people on the audit side, on the front-line, dealing with those issues early on in the piece? That is the first part.

The second part relates to a more specific matter raised in Brisbane and, to me, it is a very concerning issue. Apparently, an ATO officer, in reviewing a dispute, instructed a taxpayer to break the law in regard to the SI(S) Act. Given that you are also the regulator of the SI(S) Act, if that is proven to be correct—according to the witnesses as presented and I have met with them subsequently and, on the face of it, that appears to be correct—I think that is a very, very serious breakdown in the operations of the ATO and I would like some answers to that.

Mr Mills : If I may take the second one first. As a specific case, I do not know the detail behind the particular one so, if I may, I will have to take that on notice. As a general proposition, of course, we are administrators, you are absolutely right, of the SI(S) Act insofar as SMSFs are concerned.

Mr VAN MANEN: [inaudible] to an SMSF.

Mr Mills : Yes, I figured it must have. It would be concerning to us as well if that were the case. We would have to take that on notice and get more detail around that.

Mr Olesen : I agree, certainly, with Mr Mills, that that would be of concern to us. We would be very happy to look closely at that case. I do not particularly want to talk about individual cases here, but we are very happy to look at that particular instance.

Mr VAN MANEN: I am happy to move with you separately off-line to discuss that further.

Mr Olesen : On the first point, generally speaking, our field force—our auditors, front-line people—are well-qualified people. The majority of them have tertiary qualifications, they are well trained and they do a good job for us. When you have a large workforce—and we do have a large auditing workforce in our organisations, many thousands of officers that do that kind of work—then, as with any large system, you do from time to time get variances in performance. That is not to excuse them. It is just an acknowledgement that is a reality when you are dealing with big systems.

We are, nevertheless, continually focused on trying to make sure that we update the skills of our people, make them as contemporary as we can get them, talk to them in particular at the current moment about alternative dispute resolution approaches—pick-up-the phone strategies, those kinds of things—which may be a shift from the kinds of strategies that we have had in the past. There is active training going on in that sense. It is certainly not to excuse any poor performance by any individual officer at some stage, rather just to make the obvious point that in a big system you do occasionally get people who may not perform as well as you would wish. We acknowledge that. We are certainly very focused on continuing to skill our people and give them the training they need to do the best job they can for us.

Mr VAN MANEN: Just a follow on from your opening remarks, Mr Mills, about improving your dispute resolution system, getting things sorted more quickly, more effectively, both for the taxpayer and for the ATO. How is it being measured and how can we as a committee see the outcomes of that? How is the taxpaying public going to experience that? Also, to give you another two-part question, you also touched on in your opening comments—or you acknowledged—that there has been damaged caused as a result of dispute resolution process not working in various cases: What is being done to rectify the damaged caused in those cases that you acknowledged has occurred, because, without again picking on a specific case, we have had a number of instances of testimony where there are still those cases ongoing? What is being done to finalise and deal with some of those what in some cases appear to be long-term disputes, getting them rectified, sorted and out of the system?

Mr Mills : I will start at the top in terms of our measures, if I may, and come back to the detail. Both within our annual report and much of our published material, we do have quite a number of measures around dealing with objections, independent review and litigation. Those drivers that we want to measure are in terms of earlier resolution of disputes, the average age of disputes and the number of disputed cases that we resolve. So there are some quite quantitative measures around that.

We are focused on independent review. In terms of ensuring that we obtain client satisfaction, we interview every case—all people who are involved, both within the tax office and externally—to determine whether both fairness and independence has been shown, and perceptions of that have been borne out. We take the feedback and we try to use that to improve our processes.

Some of our measures at the moment are very much, as I say, quantitative in the objection space in particular and they need to be qualitative as well. It is not just looking at objections in isolation but rather the taxpayer experience across the whole of the ATO, the whole of the process that they are dealing with. So we are trying to improve our measures. We do make them public. We publish our performance against those measures each year.

In terms of the final matter, insofar as cases still ongoing and we are seeking to get resolution as we can, when applying to our longstanding cases, the types of initiatives that we have been introducing in terms of mediation and other kinds of alternative dispute resolution—talking to taxpayers and where possible try to get some kind of resolution on those matters—in some cases that is not possible. The position of the taxpayer and the position of the tax office are too far apart. We just don't agree and we know that we are going to end up in court. In that situation it is a matter of making sure we are very clear on what the difference is between us—it will be some kind of technical difference, evidentiary difference or what have you—and making sure that we have narrowed the issues, so that when we do have to end up in court that it is very clear and it is as quick and painless a process as it can possibly be under those kinds of circumstances. We do not want to be contributing to any delays. We certainly do not want to be doing anything that gets in the way of speedy resolution in one form or another.

Mr Cranston : In our submission one of the measures we were looking at is the amount of settlements that were done before litigation. In 2014, 77 per cent of all our settlements were done at the audit or objection stage. That was only 52 per cent in 2011. So we are actually moving forward in resolving disputes earlier.

Mr Mills : We are clearing the decks of our older disputes. We have had a quite substantial kick up in the number of disputes that have been settled—I think about 40 per cent of those were greater than three years old. I can confirm the number if you require. That is just to give you an indication that older type of stuff is in fact being cleared out of the books.

Ms BUTLER: From your supplementary submission it looks like there is a really impressive suite of quite significant change happening in the ATO. Is that an accurate description?

Mr Mills : Yes, that is a deliberate strategy. As part of reinventing the ATO, a core thing and a key objective of the ATO is lifting our performance in this area. The whole reason for establishing a separate review and disputes resolution area from 1 July 2013 was about lifting the profile, lifting our focus on this area and bringing different ways of trying to resolve disputes, because we were having longstanding, protracted disputes with people, and the way in which we managed them clearly was capable of improved performance, and we have started to apply some of those.

Ms BUTLER: And you have started to look at perceptions of fairness amongst taxpayers, which we have spoken about before in this committee—

Mr Mills : Yes.

Ms BUTLER: which I appreciate. To have such rapid and significant change must require a significant level of staff engagement as well?

Mr Mills : Yes. One of the key things we have done in relation to this is bringing together the people who are involved in dispute resolution itself within that review and dispute resolution team. I will ask First Assistant Commissioner Hastings to make some comment on that. The other thing is the way in which we are engaging not only with the team of people who are directly involved in disputes and so on but also across the office.

Ms Hastings : Certainly within the area of review and dispute resolution we are responsible for the independent review function—that new function that Mr Mills mentioned. We also look after the objections for corporations with turnover of $100 million and above. But we have also been more corporately looking after our facilitation service and what we do more generally around alternative dispute resolution. We find that by having a group that is looking after all of that we can promote that and be the champion, if you like, for the ATO in doing that. But what we have also noticed, particularly with our younger graduate recruits—a lot of our law grads—is that they are people who have now gone through law school where part of their degree is alternative dispute resolution courses. We find that we have now got a mindset, if you like, that is not really adversarial but looking more to try and resolve disputes. We are only a small group—we are only just over 200 people. At the moment, as I said, we are looking at independent review, that specific area of objections for large market corporates, and really that championing role for ADR more broadly.

Ms BUTLER: You are in enterprise bargaining at the moment, aren't you?

Mr Mills : Yes, we are.

Ms BUTLER: Do I understand that the current pay offer that is on the table is less than CPI?

Mr Mills : There is no current pay offer on the table. We have been talking around other aspects of the EA.

Ms BUTLER: Is there any suggestion of a pay increase of around 0.6 per cent to 0.75 per cent per annum?

Mr Mills : I am not in a position to comment on that.

Ms BUTLER: How is the bargaining process affecting staff morale and engagement, given that you do need a high level of engagement to manage and promote such significant change?

Mr Mills : I am not close to the detail of the reaction, I guess, across the board. Our staff have continued to work very closely with us. They maintain a level of professionalism, without doubt, and can separate the issue of having to negotiate from getting on with their day-to-day job. They are aligned with, I guess, where we are headed on this. That is part of the engagement they have been going through. I have not observed any noticeable change in that level of commitment by virtue of there being—

Ms BUTLER: Notwithstanding that there have been significant redundancies and now some, I assume, contested bargaining?

Mr Olesen : There are a couple of ways to reflect on that. We all get our impressions from the people we talk to day to day around the organisation. I think I would represent my colleagues in saying our impressions are that people remain engaged with the task that they have got. The other way to come at it is to measure it in a more formal way, which is what we do annually. So we do not have to guess about it when we do the next measurement of that. We will have a strong sense of how staff are going and—

Ms BUTLER: You have foreshadowed my next question. I was about to ask you about how often you measure engagement and when the next measurement will be taken.

Mr Olesen : I believe we do it annually. We now do it as part of the State of the service report that the Public Service Commission publishes. So whenever the next one is is when we will be doing it.

CHAIR: Your initial submission to the inquiry advised that you were bringing in a new ATO quality model from 1 July this year. It advised that you will focus on four quality measures—customer service, accountability, accuracy and performance. Can you please advise us on the rollout of these new KPIs, how they are calculated and how you are reporting against them.

Mr Mills : Just as a general comment, in terms of the quality framework that we are using, we have certainly simplified it so that it ensures that it is adaptable to different kinds of roles, and the core themes that you have mentioned will apply across the whole of the office. In terms of the specifics of how that quality framework is being dealt with in each of the business lines, it is adapted then to each business line. Do you want to add something?

Mr Olesen : I could perhaps add that, for example, at our audit committee today we saw a report of the results from the first quarter of the application of that new quality framework. It highlighted some of the good things that it is showing and it highlighted some of the areas of improvement that we have got to make in areas of our business. I do not have the detail before me or in my head, but it is starting to find its way into the reporting we do internally about the quality of the work that our people do. The initial indications are that the framework is working well, people are adapting to it well, they understand the intent of it and it is giving us some good insights into parts of our business where we can make some improvements. I can offer that to you.

CHAIR: Is there an actual measurement of your performance against previous periods, to graph whether you are improving or not?

Mr Olesen : What it shows, against those four different headings, is the extent to which we have met the standard that we have set and the extent to which we can improve against that standard. That is split between the various work types we perform inside the organisation. So you can look, for example, at our auditing capability and you can see a measure there that says whether we meet the standard and to what extent we meet the standard and to what extent there is some capacity for improvement against each of those four measures inside that framework. Then, at a more granular level, you can get inside that and get some sense of what the nature of improvements are that you can make to your business, drawing on those quality results.

CHAIR: In paragraph 16 of your supplementary submission, you discuss a pilot for small business, where you focus on early engagement and conversations. Can you elaborate on this?

Mr Vesperman : As we mentioned earlier, there is a very strong emphasis now on preventing issues emerging and disputes arising by doing as much as we can through the audit and assurance phase. That means that we are ensuring that our people are equipped to have the necessary conversations and that the approaches that they are taking in terms of engagement of taxpayers ensure the issues are understood and all of the matters that need to be considered are available to both the taxpayer and the auditor. That prevents, as much as we can, a dispute arising. That is getting some very early results in terms of reducing the number of disputes flowing through the system. As we mentioned earlier, that is a good measure for us in terms of the strategies we have employed.

The second part is that, when it does get to a stage where an issue needs to be resolved, we are getting significant traction by engaging taxpayers early. In fact, getting people on the phone much earlier and having a conversation and understanding what the real issue is that needs to be resolved is much better than what had happened in the past, where we were doing it all by correspondence. We are finding that, by having the technical people engaged in a conversation over the phone, understanding the issue earlier, that meeting of minds is getting some very good outcomes. We are finding that you can resolve a dispute much earlier than what we have experienced in the past. We are learning from the experiences and the good results we are seeing from the large market framework that is in place now and looking to see how we make that happen in the small business market. That is a result of that in terms of the strategies that we are adopting. The more we have that early engagement, we believe it will contribute quite significantly to the success results we talked about earlier.

Mr SUKKAR: This question is probably for Mr Mills. It is in relation to a discrete area of the general interest charge. PwC had some issues with the current application of the general interest charge. In particular one of their suggestions was around, in effect, remitting GIC where there is a reasonably arguable position—I know we have all dealt with RAPs in the past—but also possibly, when an audit is taking place, stopping the clock on GIC when the ball is in the ATO's court. In a lengthy audit type process, if the ATO is quite rightly spending some time formulating their own position, the clock is stopped for the period that, in effect, the ball is in your court. Has anybody in the ATO given thought to the policy considerations behind that, and would there be an appetite to review the application of the GIC?

Mr Mills : There are several things at play there, and sometimes there is a level of confusion about the different kinds of interest that can apply. Before the assessment is raised, it is not the GIC but rather the SIC, which is a lower rate. I appreciate the point about stopping the clock in that period while we are doing work or if we are causing any delay. It is a reasonable suggestion and we should take that on board. It is something that should be examined. By the same token, once the assessment is raised and not paid, that is when the GIC can apply. If you have a dispute then I can see where people are saying, if it is a genuine dispute, 'Should it in fact be at that rate?' That is where we have arrangements such as the fifty-fifty type arrangement. I should point out that that tends to apply for more substantial taxpayers; I do not just mean the larger end, but where there are more substantial amounts involved. Apart from that, we do not as a rule chase the amount involved. Of course, that can give rise to the growth in GIC if the dispute takes a long time. Hence our resolve to try and deal with the dispute earlier. The suggestion about dealing with it, addressing it and reviewing it is a fair one. We do remit the GIC in those circumstances where we have a fifty-fifty arrangement and the taxpayer has paid the 50 per cent. If they are ultimately unsuccessful then we reduce the GIC, so we do remit it back. But the point you are raising in terms of a broader one is a reasonable one. The point about reasonably arguable positions tends to be around whether or not a penalty applies, which is slightly different again.

Mr Cranston : In relation to stopping the clock, I do not quite understand where PwC are coming from. Maybe they are looking at considering stopping the clock through the process, but we have a particular practice statement which does stop the clock or revert to a lower GIC rate if some of the work in an audit is because of the ATO's inability to deliver quickly. For example, if a taxpayer responds to our position paper and it takes us some time to finalise a view and go to assessment, for that period of time we would potentially stop the clock in relation to the GIC on that.

Mr SUKKAR: Reading between the lines, I think PwC's concern is that there are instances where a taxpayer has adopted a position in a self-assessment system which is reasonable but ultimately there is a shortfall and the quantum of the penalties, GIC and possibly SIC absolutely dwarf the primary tax liability we are talking about. It sounds as though, as I understand it, there are already some reasonably flexible administrative arrangements that are at the discretion of the commissioner. I gather the PwC would perhaps like something that is more legislatively based and would compel the commissioner in those circumstances. Do you have a view on that?

Mr Olesen : That would be a policy consideration for the government. But the point was made before that there is a distinction between the penalty side and the interest side. The interest is designed to recompense for being out of pocket for the money for a period. It is quite a separate consideration to the penalty aspect, as you would understand. That is the logic that underpins the law at the moment. To shift away from that in a legislative sense is a policy consideration for government.

Mr SUKKAR: So there would not be an appetite, then, to stop the clock on GIC— not penalties, but GIC? That is what PwC is talking about.

Mr Mills : As Mr Cranston has mentioned, we do stop the clock on SIC if we have been a contributor to the delay. As to stopping the clock on GIC where there is a dispute after the tax has been raised, as I said, if people enter into fifty-fifty arrangements with us and ultimately have to pay the amount we reduce the GIC anyway. That is part of our practice. That is transparent.

Dr CHALMERS: Some of the testimony that we have received is about the file from the original decision maker being made available to the auditor of a decision. Some firms have been critical, saying that it is hard to have a fresh set of eyes on a case when the briefing for that case is effectively just the original file, including a range of subjective judgements. Can you talk us through what happens between the original decision maker and an auditor and the process of providing that file and what steps, if any, you take to ensure there is a legitimately fresh set of eyes on the audit.

Ms Hastings : I can talk about that from the perspective of the group we look at, which is the large market taxpayers. Within our group, we are completely independent of the compliance area. We sit in the law group of the ATO. The person who looks after the objection does, in effect, have a fresh set of eyes and has not had any involvement with the audit. Even if it is a dispute from a private binding ruling, it is somebody completely independent of the original decision maker. The material they would have before them would be the material that the auditor or the person who determined the ruling had.

We have an arrangement with some of the accounting firms that if they notify us before they lodge an objection we will sit down with them and talk about the case and the issues that will likely be in dispute. The people who talk to them will include the person who will handle the objection. So we have this early engagement with the taxpayer in determining that objection. The person who determines the objection is independent, as I have said. During the course of determining the objection, they may need to speak to the original decision maker. But, if they do that, they will advise the taxpayer. They are advised of that. We are very open and transparent about that.

Dr CHALMERS: What do you say about the criticism that in the original decision maker briefing on the review of the decision there are a whole range of value judgements and subjective judgements?

Ms Hastings : We get the papers. We would have the papers there. As I said, we are completely independent. We will not have been involved in that original decision. We look at it objectively and independently. But we also, as I mentioned, make sure that we have a lot of discussions with the taxpayer and their advisers. We are very open and transparent about that. We even try to get both of the parties together for a case conference during the objection where we can sit down and talk about the issues in dispute.

Mr Mills : I would make this observation in addition to that. It would hamper the process not to get access to that information. If that information contains some value judgements, it is the role of the person making the decision on the objection to discern the difference between something that is a value judgement and something that is a fact. They are supposed to deal with facts. They are better trained around the whole litigation and evidence side of it and understand that distinction and the need to make sure that those kinds of value judgements, if they exist, are taken out of the picture. I would also like to ask Mr Vesperman to make a comment on the small business and individual market because the practices are slightly different.

Mr Vesperman : It is worthwhile just walking through the end-to-end process of an audit being undertaken and the extent to which that is done in compliance teams. It has separate structures, including an assistant commissioner at the SES level. When an audit is undertaken, all of the notes and determinations made by the auditor, including feedback from the taxpayer, are recorded on what we call a case management system. It is all recorded electronically. The finalisation letter and all of that is recorded and sent out by our audit teams. That is when no further action is taken by the audit teams.

When a taxpayer then lodges an objection, that objection goes to a separate team altogether managed by a separate assistant commissioner at the SES level. So there is no crossover there. It is a separate team, a separate structure and a separate SES assistant commissioner managing that. Then that person in that area looks at the material that has been provided by the taxpayer in relation to the objection and looks at the case notes on the case management system and then makes a determination accordingly.

So the extent to which people are saying that it is not an independent assessment, that is just not supported by the facts. The reason I say that is that when you look at the statistics we lodged in our original submission you will see that just on 50 per cent of the objections that are lodged in the small business and individual market segment are allowed. Some of that is because fresh information is provided by the taxpayer at that time. That is what we are trying to sort out. We are trying to get that information much earlier to reduce the flow of disputes. But the reality is that, at this stage, if fresh information is provided a decision is made accordingly. So the independence is very closely managed. Ensuring that happens is close to our heart. Our people are very much aware that if you compromise that independence then you actually compromise the independent review process.

Dr CHALMERS: Despite your best efforts, there is certainly a perception in the community—we particularly heard this in our Brisbane hearing—that there is a lack of independence between the two processes. Your description just now about being provided with the case notes, for example—how does the reviewer begin their review with a whole series of judgements noted by the original decision maker? Can you not see that being provided with a file of that nature makes taxpayers feel in some instances that the review is not starting with a blank sheet of paper?

Mr Mills : Isn't the reviewer starting with the objection lodged by the taxpayer? That is the first thing they see.

Dr CHALMERS: That is the first thing they see but the first thing they know of—

Mr Mills : The first thing they get is the position of the taxpayer and then they go to look at what we have done internally in order to pick up the whole story.

Dr CHALMERS: Their perception is that they lodge the appeal and the first thing that the reviewer does is inform themselves about all the value judgements that the original decision maker had made. I am not an expert on this but, if that is not the case, then you have a perception problem, because—

Mr Mills : I welcome some ideas about how to overcome that perception when it is impossible to simply deal with the case based on the objection that is lodged. It is necessary to understand the whole of the story, without putting the taxpayer through exactly the same process of inquiry that they have been through there first time round and adding to their costs and so on. We already get complaints from taxpayers saying, 'We've told you that already.' We are trying to get that out of the system. As I say, we welcome ideas as to how to remove that perception. It is very difficult. To be fair, I think it underestimates the capacity of the objection officer to determine the difference between what is a value judgement and what is the real basis.

Dr CHALMERS: How is the objection officer chosen for each case? Are the more senior people on the higher-value ones or is there some other way that you select who works on which cases? Is it possible that a junior officer would be asked to review the work of a senior officer and therefore might not feel particularly incentivised to come up with a different outcome?

Mr Mills : No, that should not generally be the case.

Mr Vesp erman : No, that is not the case. Again, it is a separate process that is undertaken in that area in terms of the allocation of work that comes through. So we would have senior people that would triage and say, 'Well, who is the best person in my team that is available to deal with that objection based on the complexity of the objection that is being lodged?' It is then allocated to that officer. That is how that part of the process is undertaken.

Once again, there is absolutely no connection between who did the audit and those sorts of the things. In fact, the people who are dealing with objections could be based in any of our officers around Australia. An objection, for example, that is related to a Brisbane case might be managed by a team that is in Melbourne. It is completely separate in terms of the decision-making process.

Dr CHALMERS: Thanks very much.

CHAIR: Is everything that is provided to the objection officer or team made available, including the notes, to the taxpayer at that point?

Mr Vesp erman : All of the material that we have on our systems is available to a taxpayer—I am not sure whether all of it is made available at the objection stage. Quite clearly, the person who is making the decision regarding the objection ensures that all the matters that have been considered in relation to making the decision are available to the taxpayer.

CHAIR: At what time is it made available to the taxpayer?

Mr Vesp erman : At the time the decision is made, but all through the conversation—this is the early engagement process we talked about earlier—we have got people making contact with the taxpayer early and going through what the real issues are either in a face-to-face or one-on-one conservation. It brings together: what are the real issues that need to be resolved? I think you were asking earlier: is it made available in a formal sense? It is not really made available in a formal sense at that stage; it is more part of that conversation.

CHAIR: Is it possible for the notes to contain opinions other than the facts of a person's character or something that could be seen as prejudicial?

Mr Vesperman : Our internal procedures are that that is not to be recorded on our system, and that is another control measure we have on our processes—that those sorts of views are not to be documented in any way. And the quality assurance programs we have in place actually test that, to ensure that there are facts that are recorded on the system, and that they are the facts that are used in terms of making a decision. So that is part of our quality assurance processes.

CHAIR: And does that process also inhibit the ability of the objection officer to speak to the original auditor?

Mr Vesperman : There would be occasions when the person determining the objection does speak to the auditor. This would arise, for example, when fresh material is provided by the taxpayer at the objection stage. The objection officer may determine that he would like to hear from the original decision-maker on that person's view if this material was available at the time of the original decision. That would be recorded on the system as well, but it is not done in a way to influence the person determining their objection, but to actually understand the total issue from both the taxpayer's perspective and from the person determining the objection's perspective. So it is really to get the full picture rather than operating on just half the picture, if you like.

Mr TAYLOR: Following up from these questions about independence: I am still struggling with the contrast between what you are saying and what we are hearing, both within the hearings and external to the hearings, frankly. The perception is that it is very, very difficult to win in an objection against the ATO. Rightly or wrongly, that is the perception. Now to some specific questions: Ms Hastings, when a dispute happens, it goes into your area. Is that correct?

Ms Hastings : If it is a large market taxpayer with a turnover in excess of $100 million, yes.

Mr TAYLOR: Okay. And I apologise that I was late, so if you have already covered something, move through it quickly. What KPIs are you given in your area? How are you judged on the success or otherwise of your work and your team's work?

Ms Hastings : We have a number of KPIs. We have a KPI, of course, around the time it takes to determine the objection. But also, at the end of every objection, as with every independent review, we seek feedback around the fairness, around the way we have treated the taxpayer—the way we have dealt with them during the course of it.

Mr TAYLOR: But are there macro-level KPIs that you are judged on, on a monthly or quarterly or yearly basis?

Ms Hastings : Yes. They would be around the fairness, and around the time it has taken to resolve.

Mr TAYLOR: Who judges that fairness?

Ms Hastings : The taxpayer.

Mr TAYLOR: So they are surveyed?

Ms Hastings : We seek feedback from them, yes.

Mr TAYLOR: Independently?

Ms Hastings : What do you mean by 'independently'?

Mr TAYLOR: Who asks them whether it has been fair?

Ms Hastings : We have somebody independent of the objection team. So it is somebody who does not sit with the objection team, but someone who has not been involved, who is independent. They do that for both our independent review and our objections. They would get in touch with the taxpayer and seek their feedback.

Mr TAYLOR: And who do you report to?

Ms Hastings : I report to Mr Mills.

Mr TAYLOR: Do your KPIs include fairness?

Mr Mills : Yes. My goals are a reflection of the goals of the people who report to me, as well as a reflection of the overall organisational goals. Importantly, from an organisational point of view, we are trying to lift our game, in this space in particular but also across the board, and, importantly, to improve the experience of taxpayers. So we are focusing on disputes, in a sense, but that is just one aspect. The point we were making earlier, perhaps before you arrived, was about looking at things from a whole-of-system point of view and at the taxpayer's experience across the whole of the system, so that we are actually avoiding disputes in the first place, as much as anything else.

Mr TAYLOR: If I understand it right, you are part of the senior management team that meets on a monthly or a more regular basis.

Mr Mills : Yes.

Mr TAYLOR: Presumably at your management meetings you look at KPIs. What do those KPIs extend to with respect to disputes?

Mr Mills : We do not look at KPIs at every meeting. We are trying to focus on strategic things in a look-forward sense as much as possible. But we do report internally and quarterly on a whole range of KPIs across all of the organisation.

Mr TAYLOR: What is the discussion mostly about? Which KPIs do you spend most of your time talking about?

Mr Mills : Mr Olesen is also part of it; he may have a different view as to what we spend most of the time talking about. At the moment we are looking at taxpayer experience, wherever it occurs in the organisation.

Mr TAYLOR: I assume you talk about revenue collection.

Mr Mills : Certainly, and that is reported on much more regularly as a separate item. Revenue collection is measured against what the budget expectations are and the forecasts. It does not necessarily directly influence what is happening at a microlevel at the front line.

Mr TAYLOR: How often would you have and how substantial are the discussions you have about dispute resolution?

Mr Mills : I could not tell you, off the top of my head, the number of times we have discussed it at the monthly meetings, but it has been quite a lot over the last 12 months.

Mr Olesen : It is worth saying that there are layers of governance inside the organisation. So, in Debbie's world, they will be talking about disputes every month in detail. When Debbie gets together with Andrew at that next layer, they will talk about it less frequently but, nevertheless, it will be a significant part of the conversation. The ATO executive that Andrew and I sit on, it naturally becomes a lesser part of the conversation because we are looking at the entire system, nevertheless, it features significantly in the measures we have with our performance. If you look at our plan and you look at one of the 12 key KPIs we have I am pretty sure I have one that is focused around disputes and the timeliness of disputes.

Mr TAYLOR: What is that KPI?

Mr Olesen : It is a timeliness one, I think.

Mr TAYLOR: Timeliness of resolution of disputes.

Mr Olesen : I think so.

Mr TAYLOR: That is the one that goes to the senior team. Is there any other dispute KPI in that top 12 that goes to the team?

Mr Olesen : Amongst those other ones are community perception indicators which go to issues like fairness.

Mr TAYLOR: That is much broader than disputes though.

Mr Olesen : Yes, but the way we pick the sample of cases that we do those measures on is inclusive of people that we have had dealings with. So it is a sample of people we have had dealings with in the last quarter, and we do samples across that.

Mr TAYLOR: It may include people with disputes, but it is much broader than that.

Mr Olesen : As Mr Mills said in his opening statement, because of that aspect it may or may not, depending on the sample that is picked that we have put in place only recently, focus on people who have been involved in only disputes, so that we can measure directly their sense of fairness.

Mr TAYLOR: If I understand you correctly, beyond timeliness, there is no specific KPI that you look at that is purely dispute focused.

Mr Mills : At the top level, that is correct.

Mr TAYLOR: Thank you.

Mr Olesen : If they can just add something to that. We have a measurement framework that has a range of dimensions to it. It includes the dimensions around revenue, around voluntary compliance, and around integrity and fairness. We are looking to build on that framework. In particular I would draw the committee's attention to a paper that the OECD recently published about how you measure tax compliance outcomes. That framework that the OECD has put together mirrors pretty closely what we have been doing, but we can see some capacity for improvement across those three dimensions of revenue, voluntary compliance and integrity and fairness.

Mr TAYLOR: Sure, but that is still well short of understanding the views of those who have been involved in disputes, that is a pure KPI, and whether they have received a fair opportunity to engage with the ATO.

Mr Mills : As a matter of course, if I may, because we have started this kind of specific survey and, in particular, because it is relatively new, that will in fact find its way to the ATO exec.

Mr TAYLOR: Yes, 'find its way' is different to 'this is a major feature in our regular discussions and a major feature in our core dozen KPIs'.

Mr Mills : Yes, but it is a regular point of discussion in my group because it is one of the key things that we are focused on. When I get together with Debbie and my other deputies that is one of the key things we will be talking about. It is a matter of what level of governance you can apply at each level. It becomes my responsibility then to ensure that we are meeting that.

Mr Olesen : We are deeply interested in fairness because we understand that, in the tax system, if people have a misperception of how the system operates, if they think it operates unfairly, that is a no-no in tax administration. That gets people thinking, 'Well, if it's unfair, I don't want to participate in it'. We understand deeply and, indeed, as part of the work we are doing we are trying to change the organisation and we have to address community perceptions around fairness and, in fact, address any issues around actual fairness where they might arise. It is a huge part of the thinking we are doing at the moment and how we look at our organisation. If you look at the work we have done, for example, around the kind of culture we want to have in the organisation—and we have done a lot of work in that space in the last six to eight months—we have now mapped out what we think are the traits that we would like our organisation to have, and they significantly operate around notions of service to the community, quality of relationships, aspects that goes significantly towards elements of fairness. Built into that new culture framework that we are putting in place is a robust measurement mechanism which we will be running out every quarter to check that the culture is moving in the way that we want it to go. There are a lot of good things about our current culture and a lot of good things in terms of how we treat people in their relationships. We can see that that is a significant thing we would like to improve in the change work we are doing in the organisation. This has been a complete feature of the thinking that Chris has brought into the organisation since he has been the commissioner. It has always been an element of our administration and we are particularly focused on it. That is why I think the OECD framework is useful because it has, as one of the three key pillars, that whole notion of integrity and fairness as being essential.

Mr TAYLOR: I understand that. It seems to me though that dispute fairness, which is a particular type of fairness, is still buried fairly deeply in the organisation.

Mr Olesen : I would take issue with that because we would not have gone for the independent review process for a large market in the way that we did and the huge investment we have made in that in the last 18 months except for the fact that we understood, deeply, the importance of how those people felt they were being treated.

Mr TAYLOR: With respect, if your senior team is not discussing it on a regular basis, it is not a strategic focus.

Mr Olesen : We clearly were because we set up a whole new independent review area, the area that Debbie leads, some 18 months ago because of this very issue around disputes and that market, and have been progressively moving objections out of the rest of our business into that area because we are very interested in it. The whole conversation we are having about alternative dispute resolution in the organisation, which we have been driving hard for at least two years, is because we value the kind of experience people have when they are in dispute with us.

Mr TAYLOR: Is there any plan at this point to have a KPI on dispute fairness reviewed on a regular basis and discussed on a regular basis by the senior team of the ATO?

Mr Olesen : The survey results that Mr Mills talked about before, yes, will be at the executive.

Mr TAYLOR: They are not dispute resolution, they are fairness more generally.

Mr Mills : They are on the disputes and they are on the way in which we resolve disputes. They are a key aspect of it. It is a focus.

Mr TAYLOR: I am not sure that I am getting a straight answer.

Mr Mills : We are trying to answer as best we possibly can.

Mr TAYLOR: You have already answered that it is a question of fairness. I would just like a straight answer. Is there a specific dispute resolution fairness KPI being considered on a regular basis and taking up significant time of the senior team at the moment, or planned?

Mr Olesen : Yes.

Mr TAYLOR: It is planned?

Mr Olesen : Yes, because of the survey.

Mr TAYLOR: The survey is about just dispute resolution?

Mr Olesen : Correct.

Mr TAYLOR: Nothing else?

Mr Olesen : That is right.

Mr TAYLOR: It is by those involved in the dispute resolution?

Mr Mills : Correct.

Mr TAYLOR: It will be one of a small number of KPIs?

Mr Olesen : It will be one of a number of KPIs around disputes.

Ms BUTLER: Can we see a copy of the survey?

Mr Olesen : Of course.

Mr TAYLOR: How many KPIs will it be part of? Is it 100, 200, 500?

Mr Olesen : There are 12 key ones that go to the exec on a quarterly basis.

Mr TAYLOR: Is this one of them,?

Mr Olesen : It is not currently. You asked before: is it planned. Yes, it is planned.

Mr TAYLOR: So it will be one of 12, fairness of dispute resolution?

Mr Olesen : Correct.

Mr TAYLOR: One of the 12?

Mr Olesen : Correct.

Mr TAYLOR: I think that was a different answer to the one you gave me a little while back.

Mr Olesen : Because it is not currently one. You asked about things we are planning.

Mr TAYLOR: Can we see those 12 KPIs?

Mr Olesen : Yes.

Mr TAYLOR: Can we see what is planned? Are they about to change?

Mr Olesen : I mentioned the OECD framework before. We are taking that OECD framework and we are reviewing all of our measures at the moment, as we do every year, in an annual planning cycle.

Mr TAYLOR: But you do not know what is going to come out of that yet?

Mr Olesen : No, because it is a review that we are doing currently. We have mapped out what we think are some of the key gaps, and we are now working through that. There is a bit of work to be done.

Mr SUKKAR: I think I am missing something here. How can you say that they are definitively planned if they are still being mapped out? I am sorry, Neil, if I have missed something.

Mr Olesen : Because there are two separate bits of work going on here. We have already commissioned a separate survey around fairness in disputes, so that is a decision we have taken. That is a survey that is now being done, and the results of that will be reported in February. Separately to that, if I look more broadly at the measures we have in the organisation, every year we review those measures. This year we are being particularly guided by some of the work that the OECD has done that creates a framework of how you think about it.

Mr SUKKAR: They are the 12 that are current.

Mr Olesen : Currently those 12 are the ones that are reported to the ATO executive. At other layers of management there are other KPIs that are reported to the ATO executive. There are 12 key ones that are reported to that committee. They will be part of the review, as will measures that cascade down deeper into the organisation.

Ms BUTLER: Are they the ones in the corporate plan?

Mr Olesen : Yes.

Mr Mills : The ones in the corporate plan include specifically a focus on earlier resolution of disputed cases. That is one of the 12 there. It is a specific focus, reported on quarterly.

Mr TAYLOR: It is about timeliness.

Mr Mills : That is partly a timing issue, yes, absolutely. It is—

Mr TAYLOR: It is a timeliness measure, isn't it? That is what you said earlier.

Mr Mills : Yes, and that is why we are trying to improve what we are doing. We recognise that a lot of the focus around measuring that has been what I would call a quantitative one rather than a qualitative one. So we are trying to move to a qualitative one, which is why we have the survey and so on. We are trying to actually uplift what we are doing in that space, in what we are reporting on.

CHAIR: Is it true that an officer in the Tax Counsel Network can provide advice to an auditor and then to an objections officer on the same dispute? If yes, how do you think this is perceived by the community?

Mr Mills : No, that is not our current operating model. I understand that there have been accusations of that in the past and, to the extent that that has been the case, it should not have been. But the Tax Counsel Network officer who has been advising on an audit is effectively excluded from being involved in any objection or subsequent dispute.

CHAIR: The committee received evidence that sometimes the ATO starts collecting a debt while a dispute is still current. Can you respond to that?

Mr Mills : I will make the observation that our general policy is not to collect the tax in dispute while the dispute is current. The exception to that is where there is some concern about the assets being dissipated. The other part of that is where there is a large amount of tax involved. That is when we encourage taxpayers to enter into fifty-fifty arrangements with us, where half of the tax in dispute is in fact paid.

CHAIR: Are there any protocols in place regarding communication between auditors and objection officers?

Mr Mills : I think this is something that Mr Vesperman touched on earlier.

Mr Vesperman : We talked about this in our earlier hearing. We are now putting in place and working through documenting appropriate protocols so it is very clear in our systems that there has been a conversation between the person determining the objection and the auditors if a conversation takes place. We are now in the process of documenting those protocols. That applies in relation to the small business and individuals end. There are very clear protocols—I think written protocols—for the large market end that we talked about earlier. As I mentioned, we have been looking carefully at the success of some of the procedures we have in place at the large market end and are now rolling out those procedures at the small business and individuals end. That is a long-winded way of saying written protocols will be in place very soon. But we have actually had it in practice, not in a written format, to date.

Mr Cranston : In relation to privately owned businesses greater than $2 million, and some of the submissions would be focused on that sort of area, we do actually have guidelines about how these protocols will work. For example, it is clear in those that the objection officer has to make a decision independent of the relationship with the auditor. But it does acknowledge the fact, especially when there is further information provided by the taxpayer to the objection officer, that there may be times when the objection officer needs to get clarity around the context or an understanding of the facts from the auditor who had spent a lot of time working through some of these complex matters. It constantly refers to the fact that the objection officer clearly is the person making the decision.

Mr WILLIAMS: The appeals system currently operating in the United States has a strong appearance of independence and there is limited communication between the appeals and investigation officers and also multiple opportunities for taxpayers to request that appeals consider their case. Have there been any lessons from that or applications of those elements applied to what you are doing here?

Mr Mills : We are aware of what is done in the US, and there are similarities in terms of taxpayer rights and the processes they go through. I will ask Ms Hastings to expand on that.

Ms Hastings : When we set up the independent review looking at the large market audits we looked at a number of overseas jurisdictions and the way they manage disputes. We looked specifically at the US, New Zealand, the United Kingdom and a couple of others. Certainly, what we were striving for was to have a similar model as the US in terms of the independence that the appeals group has. So, in terms of the way we manage our independent reviews and objections, it is around that notion of independence, and, as I mentioned before, when we do have communication with the original decision-maker we would advise the taxpayer of that. So we are very conscious of the fact that we are independent, but we are also very transparent. If there is any internal communications, we keep the taxpayer informed of that. So we have taken on board the model that is in place in the US. It is not completely the same, but we have tried to build what we saw as the best elements of a number of those jurisdictions.

Mr Mills : So, in effect, there are a number of points at which—like in the US—a taxpayer can seek review.

Mr VAN MANEN: We have spoken at length about the dispute resolution process at the big end of town. For most of us here—and most of the testimony—I would respectfully suggest, most of the evidence has been about the smaller end of town. What proportion of disputes are at the small end of town as against the big end of town?

Mr Mills : About 95 per cent.

CHAIR: Could I just get some clarification. Is that 95 per cent the number of disputes at the small end?

Mr Mills : Of all of the disputes we have, I think about 60-something per cent are from the small business sector, 30-something per cent are from the individual sector, and the balance—the other five per cent—is at the upper end.

CHAIR: What would be the number of dollars involved?

Mr Mills : It would probably be completely the reverse, I suspect, but I do not have those numbers to hand.

CHAIR: It is a little bit like a golf club, isn't it?

Mr Mills : Yes.

CHAIR: Ten per cent of the members play 90 per cent of the time and 90 per cent play 10 per cent of the time.

Mr Olesen : Most of the value would be in the large cases. You would expect that kind of distribution because we do a lot more audits and there are a lot more small business taxpayers and individual taxpayers.

Mr VAN MANEN: You made the point in your additional submission that you have reviewed all the submissions and listened to the statements presented to the inquiry. As a result of those submissions and the statements to the inquiry, what action are you now taking to resolve those issues where people have disputes and have come to a public inquiry and put their lives on public display, so to speak. What action is the ATO now taking to contact those people and to seek to bring those matters to a resolution?

Mr Mills : In a number of those cases the matter had already been finalised before they came. They have spoken to you about their experiences in a dispute in the past tense, if you like. Obviously I cannot talk about individual cases. But, for example, we are aware that a couple of them involve excess contributions tax, and that is an area that is fraught. Parliament has chosen to change the law from 1 July 2013 to ameliorate some of the impacts of the previous, rather harsh, law. I suspect that there is a level of disquiet about the way that the previous law operated. But that is not something within the power of the commissioner to deal with. That required, as is obvious by the law change, something to happen.

Others involved disputes about the classification of people as employees versus contractors and so on. There is a range of different kinds of disputes. As I say, many of them are historical, in a sense, and quite a number of them also are ones where the taxpayer's experience predates the changes and in fact you might say they were part of the impetus for us making the changes. They are very good case studies, in some cases, in what we have done wrong and how we needed to improve the process—hence the changes we have been making across the board. But I cannot talk to the specifics of any of the particular cases.

Ms BUTLER: I have a follow-up question on the fairness survey. I just had a look at the measures that you have for the 'resolving disputes' KPI, which appear to be on page 40 of the corporate plan. We have spoken about one of them before, which was, 'Client satisfaction with independence of review and the service provided'. That would seem to be, to me, more than a timeliness measure. It is actually a satisfaction measure.

Mr Mills : That is right. Of the 12 measures on page 15 of that corporate plan, it only refers, on its face, to the timeliness aspect. It is the detail behind it. So it is the difference between perhaps the point that was being made previously about the way in which matters get reported at the whole-of-ATO exec level as opposed to what happens within my group and the kind of focus that we have.

Ms BUTLER: My question was about how you cannot have a timeliness KPI without hanging underneath that timeliness KPI the things that actually contribute to timeliness, which would include perceptions on the part of taxpayers of whether they are getting a fair go.

Mr Mills : Correct, and the actions that we are taking to ensure that we are getting the timeliness. As I also said earlier, one of the things we are concerned about is timeliness not just in relation to the objection itself but in terms of the whole process that the taxpayer has experienced. So that is very much our focus going forward.

Ms BUTLER: The results of the survey, once you have them in February, presumably will contribute to your reporting against the measures that are in your corporate plan?

Mr Mills : Yes, that is right. I think that by the time the committee meets in February we may well have some of the preliminary information in relation to that. I think that we are due to appear before the committee again at that time—not in relation to this, but more generally—and we will certainly be happy to update the committee at that time.

Ms BUTLER: Thank you very much. We appreciate it.

CHAIR: Sometimes the ATO develops a view of the law. Can this view be reconsidered with fresh eyes at the objection stage?

Mr Mills : Yes. I think that perhaps what underlies your question is a view of the law that may have been formed for the purposes of the office as a whole doing its work—and I understand where that question comes from, in a sense—and the impact of a decision then on an individual taxpayer in relation to that kind of view. It is fair to say that the tax office forms a view not lightly and takes into account a particular higher level, if you like, interpretation of the law. But, when seeking to apply a particular taxpayer's circumstances to the law, there may well be differences that can be discerned. In the same way that judges have to bring their minds to a particular case before them and the view of the law, it is not always the case that the general statement will apply to the specific individual case.

Often objection officers and reviewers have the opportunity to, on the face of it, depart from what the broader ATO view is, because the particular circumstances warrant that. If there were ever to be a situation where the view of the ATO was being questioned, then there are mechanisms to challenge that view internally, to ensure that it does in fact get escalated so that the view that was previously formed is reconsidered.

CHAIR: Following your experience relocating the staff that manage large objections, would there be any benefits in applying the same principle to all objection officers and other staff to effect a structural separation?

Mr Mills : It is not something that has gone unnoticed by us, I guess, in a sense. Certainly, it is something we have been looking at and considering what possibilities are available in that space. We have been doing some preliminary work as to what might be involved to have all of our objections move into our independent space, if you like; into our review and dispute resolution area. It is early days, but that is what we have been looking at—the possibilities around that. If the committee was to form the view that that would be a good thing, we would certainly welcome that kind of direction.

Mr TAYLOR: I am going back to an old theme, but I think we are making progress here. So following up on Terri's question, I have now found page 40. Let me put something to you here: you do have a KPI, which I will read out:

Client satisfaction with independence of review and the service provided.

That is down a layer; it is not in your top 12.

Mr Mills : Correct.

Mr TAYLOR: The one in the top 12 is timeliness. The KPIs around dispute resolution, I read the overriding thought here as 'we want to work to reduce the time to resolve disputes'. I understand that is a good KPI, but it strikes me that if you are saying you should not separate disputes via a new second commissioner but you still want to focus on it more, one way of doing that would be to take that KPI and put it up into the top 12.

Mr Mills : Yes.

Mr TAYLOR: I do not know what your reaction is to it, but it would be one way to get—you know and I know that what gets measured gets done in life, and this would be a way of raising the—

Mr Mills : And that is not to say that it is not being measured, but your point is a very valid one.

Mr TAYLOR: And gets discussed.

Mr Mills : Yes. Your point is a very valid one—and it does get discussed. Your point though is that the one that gets discussed at the highest level of the organisation—

Mr TAYLOR: It would be the top floor.

Mr Mills : And I fully accept that.

Mr TAYLOR: Okay, thank you. I am sure you will think about that.

Mr Mills : It certainly will be what we take on board in terms of reviewing what our KPIs are.

CHAIR: As there are no more questions, I think we might conclude. Is there anything else that anybody would like to add? No? In that case, thank you for your evidence today. On behalf of the committee I would like to thank all of the witnesses who have given evidence at this public hearing. I would also like to Broadcasting and Hansard for their assistance. Following the hearing we may wish to provide Treasury or the tax office with questions in writing. We will be in touch if this occurs.

Committee adjourned at 17:22