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Monday, 26 November 2012
Page: 13109

Mr OAKESHOTT (Lyne) (12:11): On behalf of the Joint Standing Committee of Public Accounts and Audit, I present the following reports: Report 433: Annual report 2011-12 and Report 434: Annual public hearing with the Commissioner of Taxation, 2012, together with the minutes of proceedings. I ask leave of the House to make a short statement in connection with the reports.

Leave granted.

Mr OAKESHOTT: These reports mark the 10th time the Joint Standing Committee of Public Accounts and Audit has met with the Commissioner of Taxation and are the first reports made on an annual basis. Firstly, I note the Australian Taxation Office's agreement to all recommendations directed towards it at last year's public hearing, as well is the joint recommendation agreed to by the Australian National Audit Office, the Commonwealth Ombudsman and the Inspector-General of Taxation. The adoption of these recommendations has improved scrutiny of ATO, the reporting of ATO's service standards and the conduct of the committee's review into tax administration. However, the Australian government disagreed with the committee's recommendation to publish ATO notifications on tax administration and legislative problems within 12 months, nor will it publish the government's response to these notifications. Although recognising that this recommendation may mean that sensitive information is realised to the public, the committee remains convinced that the increased transparency and additional incentive for timely action from government would be of overall benefit.

Considering this year's review, the committee found that the administration of Australia's tax system remains robust. Although the committee covered a range of important areas, a handful of issues warrant additional comment. These areas include service standards, increasing complaints to the Commonwealth Ombudsman, calculating the tax gap, and tax reform. Looking at service standards, the committee found some clear improvements in taxation administration in the past year. In particular, the committee was pleased to hear of the positive comments towards the ATO on their service during the tax time period as this was an area that had been of concern in the past—in particular, in the previous year.

However, the committee also found some deficiencies in administration, with the Commonwealth Ombudsman reporting that ATO complaints for the 2012-13 period were at a 10-year high. Further, the Ombudsman reported occasional deficiencies in ATO complaint handling and referred these matters back to the ATO for further consideration. The committee is supportive of the ombudsman doing this but believes the ATO should be properly handling complaints in the first instance rather than having its deficiencies identified by an outside body.

Discussion also took place about calculation of what is known as the tax gap. A tax gap is the difference between the amount of tax payable if there were complete compliance versus the amount actually collected over a defined period of time. The committee believes that development of practical methodology needs to be given more consideration in Australia, as it is done in other jurisdictions, and looks forward to the response to the recommendation made which calls for this analysis to be undertaken. The hearing also briefly discussed general tax reform, identifying the need to consider broadening the tax base, reducing compliance costs and eliminating inefficient taxes. The need to examine interactions with state taxes was also identified. These issues should be examined and addressed as a priority.

This is an ongoing private and public debate that involves the Joint Committee of Public Accounts and Audit but also the executive, the opposition, the parliament, state parliament and many tax experts. Keeping our tax base robust and certain so that we can confidently deliver the services Australians need and expect is our most important duty as parliamentarians. As stated before, this work on comprehensive tax reform should be a priority for government.

On a final note, I would like to take this opportunity to acknowledge the departing Commissioner of Taxation, Mr Michael D'Ascenzo, and thank him for his cooperation throughout this process. I note that it was clear in the public hearing that the commissioner was held in high esteem by his colleagues, the scrutineers of the ATO and the taxation community of practice. Many of the improvements to tax administration in recent years have occurred under his watch, so, upon his departure, he can be proud of the robust system and organisation he leaves behind.

In closing, I thank all witnesses involved in this process. I thank the committee members once again and the secretariat for their assistance in the conduct of this public hearing and the preparation of this final report. I commend the report to the House.

In accordance with standing order 39(f) the reports were made parliamentary papers.