Labor vows to investigate ATO bully boy tactics

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By Leith van Onselen

Last night, ABC’s Four Corners aired a joint investigation with Fairfax on the Australian Tax Office’s (ATO) alleged bullying of small businesses.

The segment featured explosive allegations by former employee turned whistle blower, Richard Boyle, and others who claim the ATO is driven by revenue collection:

ATO debt collection officer Richard Boyle has told Four Corners that last year some staff were instructed to seize funds from the bank accounts of taxpayers assessed to owe the Tax Office money, regardless of their personal circumstances.

Mr Boyle said that on June 8 last year, he and other staff were called into a meeting at the ATO’s Adelaide branch.

“People were rushing around, there was a lot of paperwork, I wondered what was going on,” he said.

“We were instructed quite clearly and categorically to start issuing standard garnishees on every case,” he said.

A garnishee notice is a debt collecting tool that allows the ATO to order a bank to hand over a percentage of money from the taxpayer’s account, without consulting the taxpayer.

A standard garnishee notice requires the bank to keep sending money to the Tax Office on an ongoing basis, whenever money is deposited in the account.

This meeting followed an email sent in May to staff towards the end of a shift: “…the last hour of power is upon us… that means you still have time to issue another five garnishees…right?”…

Mr Boyle believes the decision in June to ratchet up debt collection activities was motivated by a revenue grab before the end of the financial year.

“The motivation appeared to be that we were just collecting revenue before the end of the financial year and it didn’t matter if we hurt members of the community,” he said…

Ken Phillips [pictured], an advocate for small business who runs Self Employed Australia, believes the ATO targets small business, instead of big business and high wealth individuals with deep pockets to fight…

Former senior ATO insider, Ron Shamir, has told Four Corners and Fairfax his division in the Box Hill branch in Melbourne had revenue targets that had to be met.

Mr Shamir says pressure would build and result in shortcuts and staff looking for easy targets.

“You would be looking at taxpayers who are less able to resist the might of the Tax Office. Taxpayers that are more vulnerable, and that often meant individuals and small businesses rather than larger businesses who had less legal resources,” he said…

Four Corners and Fairfax spoke to other current and former ATO employees who confirmed what Mr Shamir said.

One senior Tax Office insider, who wished to remain anonymous for fear of retribution, said “The Plan” continues to exist and trickles down to employees in each business line. He said within each business line, key target areas are identified and revenue goals attached.

In the wake of the report, Opposition leader Bill Shorten has today blamed cutbacks at the ATO and pledged that Labor will investigate the matter when parliament returns:

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Labor leader Bill Shorten said ATO staff were being asked to do more with less and whistleblowers were to be commended for identifying “scandalous” problems.

“I have no doubt the cutbacks at the ATO have undermined the ability to do its job properly,” Mr Shorten told reporters in Perth on Tuesday.

“This is an issue we’ll investigate when we return to parliament.”

Watch this space.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.