D'Ascenzo Speaks On Superannuation

by Jason Gorringe, Tax-News.com, London

25 January 2008

Michael D’Ascenzo, Australia's Commissioner of Taxation, delivered a recent speech in which he explained that the Australian Taxation Office (ATO) is working to make tax and superannuation cheaper, easier and more personalised for Australian taxpayers.

He told those attending the Australasian Tax Teachers’ Association Conference that: "A common and devilish error is to mistake the Australian Taxation Office (ATO) with consolidated revenue; but apart from that error there is no devil inherent in either."

He continued: "The ATO has no vested interest in the amount of tax collected, other than to ensure that it carries out its role of administering legislative systems – namely taxation and significant aspects of superannuation."

"The main purpose of Australia’s tax laws nevertheless may be to raise funds for consolidated revenue. For without revenue, government would collapse, society as we know it would disappear, and chaos would follow. However, the revenue referred to is that properly payable under the law, and the quality of administration is a critical intermediating factor for the time impact of a country’s tax system."

"Taxation performs other functions as well, including as an instrument of fiscal, social and environmental policy. This conference highlights many of these other aspects of taxation," he observed.

The Tax Commissioner continued:

"The ATO contributes to the wellbeing of Australians indirectly through enabling the beneficial fruits of taxation. It contributes directly through the just achievement of legislative intent and the minimisation of compliance costs."

"Understanding this dynamic, the ATO’s ‘Easier, Cheaper and More Personalised’ (ECMP) program has sought to elevate the goal of national efficiency by minimising the sum of taxpayer compliance costs and administrative costs as one of our effectiveness indicators."

"Today, I am launching the ATO’s Making it easier to comply 2007-08 booklet which is our annual progress report and future commitment to the community on reducing the tax compliance burden, within the parameters of the law. It outlines in detail current and proposed improvements in our administration. Again no devil here – other than the challenge in their implementation."

"We’ve made a lot of improvements and paved the way for progressive improvements into the future. Not surprisingly, improvements are particularly marked for tax agents, the fillip being that by helping and influencing one tax agent, we help and influence many taxpayers," D'Ascenzo continued, going on to add:

"Our research shows that people’s experiences with us are steadily improving. But we cannot be lulled into a self-satisfied complacency."

"It is worth reiterating why it is so important for us to make it easier to comply. Firstly we believe that it directly supports better compliance behaviours and outcomes. The easier it is, the more likely people are to voluntarily comply. Secondly it is important in its own right that we administer the system as efficiently as possible with minimum additional burden on the community. And thirdly, at a broader level, many of the improvements we support, such as better record keeping and use of electronic services have the potential to help the community and especially businesses become more productive and internationally competitive."

One of the key changes which D'Ascenzo was keen to talk about was the introduction of a more personalised assistance service for small businesses:

"Small business is a diverse sector. Two-thirds of small businesses are home based; one-third of business operators were born overseas; and 39% of small businesses operate in regional Australia."

"More than 60% of small businesses are in property, business services, construction, finance, primary production and retail. They are also an indispensable part of the export sector – small businesses make up around 42% of Australian exporters."

"Our Small Business Assistance Program offers personal visits, seminars, workshops and phone support and assistance through third parties," he explained.

"The program provides assistance to business on start up and at other points in the business life cycle, for example at the stage where a business becomes an employer, registers for GST, or experiences difficulties in meeting their obligations," he added.

The speech went on: "Our research shows that over 70% of businesses report that they believe we are trying to make it as easy as possible for them to comply with their tax obligations. Furthermore, over 60% believe it is easier now that in the past to deal with us."

The ATO chief went on to suggest that large businesses will also benefit from measures implemented this year, which will offer them greater certainty and stability.

Concluding his speech, D'Ascenzo revealed that:

"The next phase of our change program commences in March 2008. We are replacing a multitude of registration, processing and accounting systems with a single system that will cover all tax and superannuation products. When the program is fully implemented by the end of 2009, it will deliver some of the biggest changes and improvements to the taxpayer experience."

"However, there will be hiccups and productivity dips in the transition period as we build for the future. In addition, our plans are predicated on our current budget projections and do not include any new and major IT requirements."

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