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Economics Legislation Committee
Inspector-General of Taxation and Taxation Ombudsman

Inspector-General of Taxation and Taxation Ombudsman


CHAIR: We will move to the Inspector-General of Taxation. We've just been given an opening statement. Were you happy to just table that, or did you wish to read it?

Ms Payne : That would be excellent, Chair. I would be very happy if the committee would just note that as tabled and if we could publish it on our website once it's published as part of your transcript.

CHAIR: If there is no objection, so agreed that that is taken as a tabled document. Now, the good or bad news, depending on how you look at these things, is that the senator who asked for you to be here has unfortunately been called to another committee, where he is currently asking questions. I do have one question for you, and then we'll see what happens after that. A previous witness, Mr Billson, I believe mentioned that you are currently doing a report on the issue of tax debt and particularly the relativity between the principal and interest and the penalty: (a) is that correct, and (b) where is that up to and when will we see it?

Ms Payne : That is correct. We have a review investigation, which has a final draft of the report currently with the Taxation Office. The title of the review investigation is An investigation and exploration of undisputed tax debts in Australia. So what we're hoping to do in the report is simply take collectable debt levels from FY16 through to FY20 and then dissect that in lots of different ways: we're looking at heads of tax; we're looking at the components of primary versus penalties versus general interest charge; we're looking at how those taxes are allocated across the states and territories; we're looking at how those taxes are allocated to client experience groups, including the small business sector versus individuals, the public, multinational groups et cetera; and we're looking at how those debts sit between industry codes. There is a wealth of information in the report, and from the discussions we've had with stakeholders, everyone is very interested to see some of the data. But the purpose of the report, Chair, if I could add this, is really to just provide information and data and, if you like, some analysis, and then through that to say, 'Here it is, here are the facts, here are the areas that we believe are appropriate for follow-up.' So that is the key objective of the report: to identify areas for follow-up and also to hopefully get some more transparency and information around what's happening in this debt space.

CHAIR: I take it from that, then, we might then be able to say, for example, that this particular tax regime or this particular sector of the economy is particularly problematic in terms of debt occurring? Is that the kind of information that we'll see?

Ms Payne : We would see where the debt is accumulating, which areas of the economy, if you like. Obviously, debt is something that has churn features. It accumulates, it gets paid, it accumulates. So there are some caveats or qualifications we'd make on the information that we're presenting in the report, but I think it does provide some insights into which areas within the economy, within the tax system, within the way in which the system is operating might be appropriate for a follow-up investigation or review, whether that is by us, by the tax office, by the ANAO, by Treasury or by other parties. I think the real benefit of the report is to bring some sunlight onto what is actually happening and the features of the tax debt book space.

CHAIR: And so whilst it may identify some areas of concern, some low-hanging fruit for potential changes, you aren't going to make specific recommendations; this is more pointing out general directions where we should be looking, rather than analysing specific changes that could be made.

Ms Payne : We're certainly not making any recommendations for legislative change. If we were to make recommendations for legislative change, they would go to the minister, not simply be released to the public. In any case it's not that kind of investigation. We're just trying to present facts.

CHAIR: The process from here—so the ATO has a look at it?

Ms Payne : The ATO has had a couple of looks at it. They've now got the final draft. We have protocols with the ATO. They have until 23 June to provide their formal response to the report. There are five recommendations in the report that they can respond to, and then we would publish that report together with the ATO's response to the recommendations.

CHAIR: Excellent, and any time frames, or is that a question for the minister? Would your MOU with the ATO cover when you're likely to release it?

Ms Payne : No, the MOU with the ATO covers only when they might provide us with their feedback. It's then a question of us releasing it when—

CHAIR: When you're ready.

Ms Payne : at our discretion but fair to say as soon as we can.

CHAIR: Excellent. I think I speak on behalf of the entire committee to say that we'd probably like to have a chat with you about that when you do release it.

Ms Payne : That would be excellent.

CHAIR: I suspect we'd all be very interested in your findings. But unfortunately, unless any other senator has questions, we are going to let you go with our thanks and best wishes for a safe journey home, and on that note the committee will conclude its hearings for today. The committee's consideration of the 2021-22 budget estimates will resume tomorrow morning at 9 am with further examination of the Treasury portfolio. As always, I'd like to thank Minister Hume and officers from the Treasury portfolio and agencies for giving evidence to the committee today. I also of course wish to thank broadcasting, Hansard and our secretariat.

Committee adjourned at 22:16