Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Commissioner of Taxation says that taxpayers can use the Tax Pack with confidence

JOHN HIGHFIELD: The Commissioner of Taxation, Michael Carmody, says tax payers have nothing to worry about with this year's Tax Pack. An angry tax commissioner has hit back at criticism by the National President of the Tax and Accountants Association, Ray Regan, that this year's Tax Pack '95 is riddled with errors. Mr Regan wants a Royal Commission into the Tax Pack, saying the errors it contains pose the question of how taxpayers can be expected to get their returns right when the Tax Office itself can't manage it. But Michael Carmody says that's wrong. He's been telling P.M.'s Catherine Job that his office will ensure that every taxpayer gets satisfaction.

MICHAEL CARMODY: Well, first of all, there's no evidence that these, what I view as outrageous claims, claims that really do undermine public confidence in their choice to lodge their own tax returns, without, on the evidence I've seen, any substance to them. I just don't see that this is an issue that should be receiving such coverage.

CATHERINE JOB: Are you saying there are no errors in Tax Pack?

MICHAEL CARMODY: No. We've already admitted that there are some errors that affect a limited number of taxpayers. What I've also made clear is our ultimate responsibility is to give people the information and the confidence to be able to lodge their own tax returns should they choose to do that. We will be doing that, and where people are impacted by potential errors in Tax Pack - and there are a few, we've already said that - they affect a limited number of people. We will be contacting them directly so that they can have that confidence. That's our responsibility and we'll meet it.

CATHERINE JOB: How many people fall into that category?

MICHAEL CARMODY: I don't have precise numbers but they are certainly by far and away ....

CATHERINE JOB: Dozens, hundreds?

MICHAEL CARMODY: ... by far and away a vast minority. I want to assure people that if they follow Tax Pack, they won't be disadvantaged. I want to assure people that they do have the right to choose to lodge their own returns. I want to assure people that we will be doing everything to make sure they have that confidence. That's what I view as a responsible approach, not running off to the media with outrageous claims before even coming to us to sort through the issues, and if there are issues, work through them.

CATHERINE JOB: But doesn't the number of people going to tax agents, rising every year and now apparently closing on 80 per cent of people, suggest you've manifestly failed to reassure people that they can manage their own affairs?

MICHAEL CARMODY: Well, first of all, this claim which I've heard from Mr Regan about 80 per cent of people going to agents is an example of where he's just got it wrong.

CATHERINE JOB: Well, how many people ....

MICHAEL CARMODY: The figure is around 70 per cent and, for the last two or three years, I believe it's been around that figure. But what we have heard from people is that they found Tax Pack .. the set out was difficult. You had to go from one section to another; questions weren't sequentially done; the English wasn't plain English. We've spent a lot of time this year, and my people have put a lot of work into .. working with experts to get the layout better, to get the words in more plain English so that people can make that choice to lodge their own returns.

CATHERINE JOB: Well, what do you say to the suggestion that really it's in the ATO's interests if it's a bit too difficult and people just don't bother making claims because they can't work out what the claims should be? That way the Government ends up with more revenue, doesn't it?

MICHAEL CARMODY: Look, I take complete exception to that sort of comment. It cuts across my own personal values and that's why I take exception to it. Everything we've done this year is to enable people to make the choice to have the information to lodge their own tax returns. You tell me how allegations like that rest with the fact that, in an unprecedented way this year, we have worked with unions, with employers, with responsible professional bodies, to get information in practical terms to a wide range of occupation groups, provided through their employers, through unions, through trade magazines, set up a 1-800 distribution service to enable people to get past the language of the law, to a practical understanding of what it means for them. How does that rest with those allegations? How does the fact that we have actively promoted and supported the introduction of a small taxation claims tribunal to give ordinary Australians the ability to seek an independent review? How does that rest with those allegations?

And let me make one final comment: our instructions about what is deductable or not come from only one source - the law. We seek to apply that in a practical and fair way and we're seeking to provide the information to people so that they understand what the law means for them.

CATHERINE JOB: So you're saying you're just as committed to ensuring people do manage to make the claims they deserve as well as making sure they pay the tax ....

MICHAEL CARMODY: Let me give you an example that absolutely evidences that. There's been some publicity about the fact that we are reviewing some returns lodged through tax agents, and we did that this year. We took a sample of returns, and what we were able to do was we looked at a sample of about 30 returns, and then we went back to the agent and discussed where there were problems with the returns. Now, in a number of examples, what we found was that people in fact, after we reviewed it, were entitled to higher claims than they'd claimed.

CATHERINE JOB: And you told the tax agents that.

MICHAEL CARMODY: And we told the tax agent that, and not only that, not only because of the information we were able to give the tax agent, not only did those 30 people on average get those higher returns, but we were able to see that all other returns lodged by that tax agent - we saw an equal increase in the claims of those people.

CATHERINE JOB: Now, what about these relations with the tax agents who are complaining this year that you're, in effect, picking on them, that they're going to have far too much work to do and that you're using the tax agents to act as ATO police?

MICHAEL CARMODY: Let me make it absolutely clear that I believe that tax agents have an important role to play in our community and in our tax system. My interest is in supporting them in performing that role, and that's our number one priority. Equally, it is in my interests and it is in the interests of other tax agents that those agents - and it's not the vast majority, absolutely not - but there are some tax agents who are really, in effect, trying to disadvantage their own colleagues by not playing the game properly, by offering higher claims. It's in my interest and in the interests of other tax agents that we have the strategies in place to support tax agents, to identify those who aren't doing the right thing at the expense of the community and of their colleagues, and deal with that. That's what we're seeking to address.

CATHERINE JOB: So no need for a Royal Commission?

MICHAEL CARMODY: That's one of the more fanciful ramblings I've heard today.

JOHN HIGHFIELD: The Taxation Commissioner, Michael Carmody, with Catherine Job in our Canberra studios.