Most Australian workers pay their taxes. Many will grumble about it – but most pay it without question and will declare everything they ought to, to avoid a confrontation with the dreaded tax man.
And some Australians go to extraordinary lengths to avoid paying it.
In a famous and testy appearance before a parliamentary inquiry, the late Kerry Packer said “Of course I am minimising my tax. And if anybody in this country doesn’t minimise their tax, they want their heads read, because as a government, I can tell you you’re not spending it that well that we should be donating extra!”
If he was still around, this week I think he’d be asking for a refund of the tax he’s paid.
For months, the Australian Tax Office (ATO) has been dealing with glitches with its new computer system, which have led to lengthy delays in processing tax assessments. And for some taxpayers, that’s meant waiting months longer for their refund cheques. In some cases, they’ve waited more than four months.
For the likes of Kerry Packer, that’s not a great imposition – as they have large cash reserves from which to keep paying their employees, their power bills etc.
But for small businessmen and women the “change program” – as the Tax Office quaintly terms it – has led to huge delays in processing refunds, and this has had an enormous impact on their lives.
Some have had to retrench staff, some tax agents say they’ve lost clients – because those customers have lost faith, believing the tax agent has been responsible for the blunders, or hasn’t been truthful about the protracted delays.
An internal tax document given to the ABC this week revealed that hundreds of people are calling the tax office in desperation, to say they were in danger of losing their homes, and in one case, a taxpayer had cancelled surgery for their daughter.
One taxpayer the ABC spoke to said an ATO officer rang him this week and said there was no point in calling the office again to ask when his return was going to be processed, because “there was nothing the tax office could do about it, and when the problem was fixed, everyone would get their money”.
The ATO says in defence, that it has updated its website about progress. But many politicians who’ve been following this saga say they believe the ATO has not been fully up front in declaring the extent of the problems, or the lack of progress in fixing them.
The Opposition’s Sussan Ley says she feels she’s been misled at the highest levels in the ATO about it. She was assured in March, it would be fixed within weeks.
The Independent Senator Nick Xenophon says there should be an Auditor-General’s investigation, as well as an inquiry by the Inspector General of Taxation.
Belatedly, the Government has called in the tax inspector, that development was announced on talkback radio. In an illustration of how hasty the Government’s now moving on this, the terms of reference for that investigation are still being worked out.
Earlier in the week, the ATO asserted it was being transparent about the problem. Yet on the same day this assurance was given the ATO had already sent out an advisory hours before, to tax agents only, informing them that 140,000 assessments had been sent that day, but in error the refund cheques weren’t attached to these letters. This information had not been published on the ATO’s website.
The Minister responsible, Nick Sherry, says the problems should be sorted out within the next fortnight. And the ATO says it’s hiring an extra 800 temporary personnel to process cheques, and that it’s asking full-time staff to commit to overtime to help clear the backlog.
If the cheques are sent in the next 14 days, those waiting for the money will rejoice.
But what all taxpayers are owed from the ATO, is what the office expects of taxpayers: transparency.
Its public declarations must be honest and accurate.
It should also be honest about whether this computer system (which has now doubled in cost to $889 million) will cope when the 2009/10 financial year ends.