Should there be a Royal Commission into the ATO?
Ross Greenwood speaks to Executive Director of Self-Employed Australia, Ken Phillips, who was interviewed as part of the ABC’s investigation into the ATO. Mr Phillips slams Tax Commissioner Chris Jordan who claims the Four Corners and Fairfax Media investigation into the Australian Tax Office’s dealings with small business, was an “overblown, sensational story”.
Introduction: Should there be a Royal Commission into the ATO?
Ross Greenwood: One of the biggest issues of the day, there is no doubt was the tax commissioner Chris Jordan appearing before the Senate Estimates Committee and really responding not only in his opening remarks, his presentation but also in the questions about recent exposure by Four Corners and Fairfax Media in regards to the way in which the tax office deals with small business. Let’s just pick up this from Chris Jordan really again about the whole title of this program a mongrel bunch of bastards.
Chris Jordan: I mean seriously how appropriate is it to have the title of the Four Corners program a mongrel bunch of bastards. It is highly offensive and inaccurate. Just put a think of this for a moment. How would the staff of the ABC feel if News Limited splashed across its front page the ABC with simply a mongrel bunch of bastards?
Ross Greenwood: It’s not a bad question to ask because there is certainly merit in that in the tone and the approach of the ABC and Fairfax. The question is, was it justified?. Then Chris Jordan was asked about this and this is. This is just a little of what he had to say.
Chris Jordan: I just didn’t understand why the ABC would simply pick up a dossier of five or six mostly all cases that were known to us. Mostly also known to inspector general of taxation. Compiled by an organization which stands to make financial gain by scaring small businesses to join it. In our view, there was no real investigation by Four Corners just a regurgitation of some known fairly extreme cases to achieve an overblown sensational story.
Ross Greenwood: An overblown sensational story he says but then which is it that organization that could stand to gain if as a result of some of those stories members joined its forces. Well, I suspect that that organization is called Self Employed Australia which is the registered business name of the independent contractors Australia. One person certainly gave interviews to Four Corners and Fairfax in their investigation was Ken Phillips who was the head, the executive director of the independent contractors of Australia is on the line right now. Many thanks for your time Ken.
Interview with: Ken Phillips, Executive Director, Self-Employed Australia
Ken Phillips: How are you this afternoon?
Ross Greenwood: Good thank you. Can you tell me, do you believe it was you that Chris Jordan was referring to? Somebody who might benefit if members joined your organization?
Ken Phillips: Seems to be because there are. I think that’s a fair assumption.
Ross Greenwood: Why do you believe that he is so critical? Is it literally that the ABC has picked up a dossier of five or six old cases known to the inspector general of tax and overblown it for a sensational story?
Ken Phillips: No he’s wrong and he has misspoken in a number of spots. They are not old cases they are all current cases. It’s that the people are continuing their fight for justice. I’ve got to say this very much reminds me and that Mr. Jordan might be happy with my following comment but it so much reminds me of the denials that the banks about their behavior and the denials the churches made about their behaviours in relation to sexual abuse. We’ve got an organization in the that is going, “Nothing to see here folks.” Deny, deny, deny. Attack the people who are blowing the whistle [crosstalk].
Ross Greenwood: Just explain to people the types of stories that you were discovering through your organization that prompted you to cooperate with Fairfax and the ABC in the first place.
Ken Phillips: Well I tried someone who had the with a $440,0000 bill because they were able to go back 10 years and claim that the person had committed fraud. This person had– This is a Rod Douglas, that had given us approval to talk about his case and Rod had done nothing wrong. A very ordinary taxpayer. An IT contractor. He had declared all of his income consistently over all the period of time. Taxation office accused him of fraud because he hadn’t “Used an accountant to fill out his tax return”. This is the sort of behavior that is just obnoxious.
Try Hellen who had was featured on the four corners show. She put in a research and development grant and the ATO has to pick up the grant then accused her of committing fraud in relation to the grant. They whacked her with a massive bill. That caused the collapse of her business because her investors pulled out and she couldn’t proceed with the business. She wound up having to sell her house. She’s now in rental accommodation. She has five children. Ultimately, fortunately, one of the Deputy Commissioners in the taxation office recognized that they had made a small error. Then ultimately apologized, but compensation to her go jump in the lake. They offered her $1500 and she’s proceeding now to court.
Ross Greenwood: Ken do you believe that these are systemic cases or do you believe that these are isolated cases? Because if you listened to Chris Jordan today he would have you believe that they’re isolated cases.
Ken Phillips: Where they are making submissions the board of taxation, the inspector general of taxation to the parliamentary inquiries. They were becoming quite robust in their statements since 2015 that there is a systemic problem. Since that period of time, Mr. Jordan and the other people in the tax office have been saying there’s no one-off cases. Now what’s happening is that we’re now got an accumulation of one-off cases. Now they’re not saying, “Look, it’s a one-off case.” They’re saying they’ve got one off cases. Now, how many one-off cases do you need before you start this turnaround and say, “Hang on a second, this is looking systemic.” Do you make 50, 100, 2,000, what is it? This is the same situation with the banks. The banks turned around and were saying, “Look, this is a one-off case.” Let’s not one-off cases.
Ross Greenwood: Ken what’s required do you believe if some of these situations are to be remedied and remedied quickly is there another fix somewhere around the place?
Ken Phillips: Chris Jordan in my understanding or Mr. Jordan on my understanding made submissions to the Senate inquiry today. That they’re putting together a whole lot of reform processes. Here they are saying, “Look, we don’t have any problems, but look we’re are putting all these reforms processes in place to fix the problems.” and he said there are no problems. Well, we’ve got the stage where we no longer trust the internal operations of taxation office to check themselves. This is the policeman checking the policeman, that’s not good enough. What we require quite urgently is the breaking up of the ATO into two separate organizations. One being the policing and the other being with the department of prosecutions. We need good policing processes in place where institutions check institutions. On top of that, I’m sorry but we need a Royal Commission.
Ross Greenwood: A Royal Commission into the tax office?
Ken Phillips: Correct. The taxation office hasn’t been reviewed since 1936. The act was set up in 1936 to the taxation office after Royal Commission. There has been no proper review of the taxation office since then. The parliamentary reviews are not able to do the sort of review that is required in the timelines that they’ve got viable and very limited resources that have. The inspector general of tax is able to make reports but none of those reports have any legal standing. The board of taxation can make recommendations but it has no legal standing. The taxation office is a law unto itself. The tax commissioner under the tax act has the powers of a dictator. We must recognize that that’s the situation.
When you give anybody dictatorial powers expect those powers to be abused, that is just human nature. What we need is the taxation office that gets the commission position removed and we need it and these other government organizations where the head of the organization is the chair subject to the two and answerable to a board. Normal proper processes in place.
We don’t have that. The tax commissioner is a tax dictator. It needs to be fixed and this is no reflection on Mr.Jordan. I have no qualms about pensions and I have no qualms about the good intentions of the people working in the taxation office.
When you look at the overall product of what they do, they are an abusive organization. There are plenty of people in the organization who are fine upstanding people. It’s not a reflection on them. A lot of the people in the taxation office are victims of the system itself. They’re doing things that disturb them.
Ross Greenwood: Ken Phillips is the executive director of the Independent Contractors of Australia. A man named, well, not named but almost named by Chris Jordan today and you can hear there what Ken Phillips has to say in response. Ken, I appreciate your time on the program this evening.
Ken Phillips: Thanks very much.
Recommended –
Interviewed Ali Naroozi, Inspector-General of Tax, IGT titled ” ATO facing investigations over dodgy debt recovery
Interviewed Kath Anderson, Assistant Commissioner, ATO titled ” 3.5 million Aussies claim work-related car expenses annually. Here are the most common mistakes
Interviewed Bernie Ripoll, Former Parliamentary Secretary, titled ” Former parliamentary sectary says ‘banks have scoffed in the face’ of law
9News: Witness collapses at Royal Commission
Interviewed Petra Andrén, CEO, Cicada Innovations titled ” Sydney-based tech hub awarded Incubator of the Year
Interviewed John Wacka Williams, Senator, titled ” Nationals Senator says ASIC need ‘to act quickly and severely’
Interviewed Clive Palmer, Businessman and former Politician, titled ” Clive Palmer hits out, claims ‘government agenda’ behind charges
Interviewed Gary Singer, CEO, Sotheby’s Australia titled ” Ever wanted to own the Chariot from Gladiator? Here is your chance…
Interviewed Will Day, Deputy Commissioner of Private Groups and High Wealth Individuals, ATO titled ” Largest tax fraud in Australia history ends with man behind bars
9News: Competition Watchdog names 2018 targets
Interviewed Andrew Robinson, Lawyer, to Paul Hogan titled ” Why is Crocodile Dundee suing an Aussie burger company?
Interviewed Bob Katter, Independent Senator,, titled ” What does Government chaos mean for the Independents?
Money Minute – March 30 2017 Debbie, Tomotoes and Sugar
Image source: 2GB
Ross Greenwood
Ross Greenwood is the Nine Network’s business and finance editor, and hosts Sydney's top-rating radio program, Money News, for 2GB, 4BC. 3AW and all networked stations across the Macquarie Media group. He appears daily on the Today Show - and Nine News.
