Chapter 2

Accountability and independence

Overview

2.1
Strong accountability arrangements and independence safeguards are vital in ensuring the Inspector General of Taxation and Taxation Ombudsman (the IGTO—the agency) is effective in discharging its functions and achieving its objectives. The following discussion describes these accountability and independence arrangements.
2.2
In her opening statement to the committee, the Inspector-General, Ms Karen Payne, outlined the key areas that she believed needed to be addressed for the agency to continue to improve the administration of the tax system:
I would like to note that if there were one factor we could improve about our operating environment, it would be to improve that statutory framework. Principally, that would be to clarify the public interest divide that is to be drawn between confidentiality and secrecy on the one hand, and disclosure, investigation and reporting on the other.1
I think there are different views and expectations within the community about the role and function of both the Inspector-General of Taxation and the Taxation Ombudsman, which would be greatly assisted by further clarification.2
2.3
Ms Payne went on to say that she believed that there were three areas that might be addressed to achieve this goal:
Firstly, in the case of whistleblowers, the office of the Inspector-General of Taxation statutory framework is not designed to allow whistleblowing to our agency. We are only able to offer limited protections. We are not able to offer whistleblower protections, for example, from either professional or personal reprisal. Second, the limited protections we can provide, for example to ATO officers, are only available where the Commissioner of Taxation has first approved the information being made available. Finally, we do not have unlimited or unfettered access to ATO systems and personnel. Our restricted access is only available where there is an investigation and only within the terms of reference and for the purpose of that investigation, and then only to some ATO systems.3
2.4
This chapter commences by examining the governance structures, accountability mechanisms, and independence of the IGTO. The subsequent two chapters look at other aspects of the points raised above by the InspectorGeneral, and include how the IGTO undertakes investigations, what impacts them, and the protections available to whistleblowers.

Accountability and governance

Corporate structure

2.5
An Inspector-General and Taxation Ombudsman (the Inspector-General) is recommended by the Treasurer and agreed by Cabinet with final appointment by the Governor General for a period not exceeding 5 years, and may terminate the appointment on certain grounds.
2.6
On 6 May 2019, the current Inspector-General, Ms Karen Payne, was appointed.
2.7
As a public office holder the IGTO reports to, and is accountable to the Treasurer as the relevant minister; and, pursuant to the requirements of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the IGTO has responsibility for the operation and performance of the office.4
2.8
As indicated in the IGTO's 2020-23 Corporate Plan, the IGTO is a small agency of approximately 30 people5 who are employed under an enterprise agreement in accordance with the Public Service Act 1999.6
2.9
The agency has a relatively streamlined corporate structure with three senior positions: the Inspector-General and the Deputy Inspector-General (who together are the agency's senior executive), and the General Manager. Below these positions are the Business Improvement Unit, Reviews and Engagement Unit, Complex Complaints Unit, and the Complaints Services Unit.7 The Inspector-General states this simple structure provides minimal layers of bureaucracy, allowing staff to easily access senior executives.8 Geographically, it is a single office based in Sydney, which can make pose difficulties in engaging with the broader community, particularly those in remote areas.
2.10
The IGTO's 201819 Annual Report notes that its corporate governance and administrative practices are generally designed to align with, or adapt to, the administrative and governance processes of the Department of the Treasury (the Treasury).9 The Inspector-General states that this approach provides synergistic benefits, through cost efficiency and reduced risk in service delivery.10 These arrangements are implemented under a comprehensive shared service arrangement, in the form of a memorandum of understanding, between the Treasury, as service provider, and the IGTO, as recipient.11
2.11
The adoption of the Treasury's policies and guidelines was undertaken for administrative efficiency, and to obtain coverage for areas which the IGTO did not have its own policies.12 The IGTO notes, however, that it has progressively adopted more tailored and specific policies and guidelines in a range of areas.13
2.12
The IGTO notes in its annual report that it has established a number of committees to support good corporate governance in areas of administrative, operational requirements, and research and analysis.14 It also has an Audit and Risk Committee whose membership is independent of the executive and is governed by its own charter.15
2.13
As mentioned in chapter one, since 2015 the IGTO has incorporated elements of the Ombudsman Act 1976, which means it now effectively performs the dual roles of:
Taxation Ombudsman with respect to tax complaints—investigations are conducted, and recommendation made, in private, which is consistent with taxpayers’ rights to privacy and secrecy in respect of their tax affairs; and
Inspector-General of Taxation with respect to reviews of systemic and other tax issues—investigations are conducted, and recommendations made, publicly, which is consistent with the public interest in systemic issues and assurance regarding their recommended treatment.16

Australia's tax system—stakeholders and participants

2.14
As the IGTO notes in its submission that Australia's taxation and superannuation system is very large and complex, with numerous participants and stakeholders.17
2.15
The IGTO's 2020-23 Corporate Plan shows the scale of the Australian taxation administration system, stating that it comprises approximately 11.5 million individual taxpayers, 3.8 million small businesses, over 20,000 ATO employees and ATO complaints.18
2.16
The following provides a list of the IGTO key stakeholders across the Australian taxation and superannuation administration system that the IGTO interacts with regularly and is accountable to:
the Australian community, including taxpayers, their representatives (tax practitioners, advisers, solicitors, and barristers), and representative bodies;
the government, including the Treasurer and the Assistant Treasurer;
parliamentarians and parliamentary committees;
the Taxation Office (the ATO) and the Tax Practitioners Board;
the various courts and tribunals;
other government agencies, such as the Treasury; the Commonwealth Ombudsman; the Australian National Audit Office; the Australian Small Business and Family Enterprise Ombudsman; and the Board of Taxation;
the education system, including universities and their associated programs, such as tax clinics;
international organisations, including overseas revenue agencies and counterparts; and
ombudsmen associations, both domestic and international.19

Accountability framework

2.17
As discussed in chapter one, the IGTO is a player in a complex system operating within a large accountability framework. The IGTO describes these interplays as 'vertical and horizontal' accountability, with vertical accountability reflecting how its accountability flows:
…top down from the Australian community who elect member representatives in Parliament to form the Parliament to make legislation and provide direct scrutineering over the IGTO agency’s performance and all other government agencies and functions against those laws. This vertical accountability also flows bottom up from members of the community (complainants) seeking scrutineering services from the IGTO in the form of complaints and reviews in relation to the ATO and TPB as outlined in the Corporate Plan and ultimately tested and reflected in complainant satisfaction levels as a measure of performance delivery against that legislation.20
2.18
In describing 'horizontal accountability', the IGTO notes that:
[a]cross government, specific scrutineer agencies have oversight (including the IGTO) in considering performance against the Parliament’s legislation. The primary agency in this regard is the Australian National Audit Office (ANAO) through its audit functions. In addition, there are specific oversight responsibilities undertaken by the Office of the Australian Information Commissioner (OAIC) and the Commonwealth Ombudsman.'21
2.19
The main elements of the IGTO's accountability framework are shown diagrammatically in figure 2.1 below.

Figure 2.1:  Accountability framework

2.20
Source: Inspector General of Taxation, Submission 5, p. 17.
2.21
As the framework shows, it operates on a number of different levels and includes a range of actors, including:
the government and the minister;
the Parliament and its committees;
complainants—both individuals and businesses;
the Commonwealth Ombudsman; and
the Office of the Australian Information Commissioner

The government and the minister

2.22
The Inspector-General, as a statutory appointment, reports directly to the Treasurer. As the relevant minister, the Treasurer has the power to direct the IGTO to conduct an investigation into systems established by the ATO and the Tax Practitioners Board to administer taxation laws, as well as systems established directly by taxation laws themselves.22
2.23
The minister, or a resolution of either or both Houses of the Parliament, may also request the IGTO to conduct an investigation. However, the IGTO is not required to comply with such requests.
2.24
Where the minister directs a review be conducted, details must be included in the IGTO's annual report.
2.25
As with all commonwealth agencies falling under the PGPA Act, the IGTO is required to publish a corporate plan and annual report. The corporate plan includes:
the agency’s planned performance, detailing the methodology, data, and information that it will use to measure and assess its performance;
the capability of the agency, including the plans and strategies it will implement to achieve its purposes; and
the agency’s risk oversight and management systems.23
2.26
The IGTO is also required, under paragraph 46 of the PGPA Act, to provide an annual report to the minister for the financial year, which the minister subsequently presents to the Parliament.24
2.27
Section 41 of the IGT Act also imposes additional reporting requirements beyond the normal PGPA Act requirements on the IGTO, such as disclosing:
the number of complaints received;
the number of investigations into complaints that were started and completed;
the number of investigations into system issues that were started and completed; and
the number of times a formal notice was issued to a person to provide information and documents along with the circumstances giving rise to that action.25

Parliament and its committees

2.28
As a commonwealth entity the IGTO is require to report directly to the parliament to provide an account of its performance specifically, its expenditure and administration through appearances at annual estimates, as well as making submissions and providing oral evidence during specific committee inquiries.
2.29
The IGTO regular appears before Senate Economics Legislation Committee to provide input to inquiries on bills referred by the Senate and for Senate Estimates. It also appears before the Economics References Committee to provide input to other matters referred by the Senate.
2.30
Subsection 8(3) of the IGT Act, committees of either house26 can also resolve to request the IGTO to undertake an investigation; however, it is important to note that the IGTO is not obliged to comply with such requests.27
2.31
Up until the House of Representatives' Standing Committee on Tax and Revenue (SCTR) was appointed under Standing Order 215, the IGTO appeared before the Joint Committee of Public Accounts and Audit (JCPAA).

Complainants: individuals and businesses

2.32
Since 2015, the IGTO has been accountable to individuals who lodge complaints. The IGTO's submission notes that, as a general observation, complainants' expectations over the past decade have changed substantially.28 While it may have been acceptable to wait 28 days when using traditional media to lodge a complaint, such as via letters and telephone, the IGTO notes that recent studies indicate that clients expect a same day response for a reply to an email or voicemail, and one to two weeks for a reply to a letter.29

Office of the Australian Information Commissioner

2.33
The Office of the Australian Information Commissioner (Information Commissioner) is the independent regulator responsible for overseeing the provisions of both the Privacy Act 1988 (Privacy Act) and the Freedom of Information Act 1982 (FOI Act).30 The IGTO, in administering its functions must comply with the privacy principles contained in the Privacy Act regarding collecting, holding, using, or disclose personal information; and individuals access and correction thereof.31
2.34
The Information Commissioner has the power to apply sanctions and penalties on the IGTO for breaches of the Privacy Act.32
2.35
Individuals may lodge a privacy complaint against the IGTO with the Information Commissioner if they believe their personal information has been mishandled.33 Individuals may also seek a review of a decision made by the IGTO regarding requests they have made under the FOI Act.34

Commonwealth Ombudsman

2.36
The IGTO has sole responsibility for investigating Taxation Ombudsman matters; however, the Commonwealth Ombudsman may undertake an investigation into the IGTO and the conduct of its officers in carrying out those investigations.35
2.37
The Commonwealth Ombudsman also has general oversight of the Public Interest Disclosure Act 2013 (PID Act), and, like other government agencies, the IGTO is only responsible for investigating internal public interest disclosures made within its own agency.36
2.38
Importantly, the responsibility to investigate public interest disclosures related to the ATO and the Tax Practitioners Board were not included in the transfer of the tax complaints function to the IGTO in 2015; being expressly retained by the Commonwealth Ombudsman.37

Independence

2.39
A number of submitters to the inquiry commended the level of independence of the IGTO. For example, the Corporate Tax Association (CTA) stated that, in all their interactions with the IGTO, it has shown to be 'fiercely independent, objective, professional, and thorough in its role'.38 Further, the Institute of Public Accountants (IPA) stated that, in its opinion, the IGTO has shown its independence across all 49 reviews it has undertaken since its inception in 2003, and is a 'vital component in improving the administration of taxation laws for the benefit of all taxpayers, tax practitioners, and the wider community'.39
2.40
The IGT Act establishes the IGTO as a statutory authority separate from the bodies it is tasked to investigate.40 The IGTO's submission notes that it is not an advocate for any particular taxpayer or government agency, and its object is to improve tax administration through investigating complaints, conducting reviews, and providing public reporting and independent advice to the government and its relevant entities.41
2.41
The agency is protected by a number of safeguards which improve the independence of its investigations, the reporting of those investigations, and the making of recommendations. As highlighted by the IGTO's submission, a number of these safeguards are embedded in legislation, while others are incorporated in various internal controls maintained by the office.42

Safeguards to protect the independence of the IGTO

2.42
The following discussion expands upon a number of key safeguards protecting the IGTO's independence.

Stand-alone legislation

2.43
As an independent statutory position with functions separate to the Commissioner of Taxation (the Tax Commissioner), the Tax Practitioners Board, and the Commonwealth Ombudsman, the IGTO's submission states that it believes the jurisdictional boundaries are clear and defined, and allow complaints to be transferred between relevant agencies to facilitate their consideration by the most appropriate entity. 43

Nomination, tenure, and remuneration

2.44
The IGTO is appointed by the Governor-General for a maximum term of 5 years,44 with a salary set by the remuneration tribunal.45 As noted in the IGTO's submission, the appointment is based on a nomination by Cabinet from a recommendation made by the Treasurer.46
2.45
The IGTO suggests this appointment model is more independent than some comparable jurisdictions, such as the United States, where the National Taxpayer Advocate (the Advocate), who is the scrutineer of the Inland Revenue Service, is appointed by the Secretary of the Treasury (the Secretary) after consultation with the Commissioner of the Inland Revenue Service (IRS Commissioner) and the Congressional Oversight Board.47 In this arrangement, the Advocate reports directly to the IRS Commissioner and can have its remuneration set by the Secretary.48

Funding and geographical location

2.46
The IGTO has one national office which services the entire country, and is not shared with any other government agency, such as the ATO or the Tax Practitioners Board.49 The IGTO noted in its submission that funding arrangements are also separately identified allocations within the annual budget, and, hence, are independent of the funding provided to the ATO and the Tax Practitioners Board.50

External reporting and scrutiny

2.47
The IGTO's submission states that the external scrutiny of its performance contributes to its independence and accountability.51 The IGTO notes that it is accountable to the Australian community through the Parliament; the Australian National Audit Office; the Office of the Australian Information Commissioner; and the Commonwealth Ombudsman.52
2.48
In discharging its reporting obligations, the IGTO is responsible for independently developing a corporate plan and annual report, which are published and tabled in the Parliament, and available on the IGTO's website.53

Information systems

2.49
The IGTO notes in its submission that, although its information systems reside within the Treasury’s information and communication technology network, they are separately located.54 Further, the IGTO states that its systems have strong safeguards and are independent from the ATO and Tax Practitioners Board's, and cannot be accessed by officers from either of these entities.55

Audit and risk committee

2.50
As noted in paragraph 2.12, the IGTO has an Audit and Risk Committee with an independent chair and members.56 This committee examines the office's risk framework and strategies for managing key risks, including those which may impact on independence.57

Potential threats to the IGTO's independence

2.51
In its submission to the inquiry, the IGTO listed a number of potential constraints it sees that could inhibit, or be perceived to inhibit, its independence. These issues, as well as those raised by other submitters, are explored in further detail below.

Portfolio arrangements and tenure

2.52
The IGTO, ATO, and the Tax Practitioners Board all fall within the Treasury portfolio and, hence, have similar reporting lines. Further, the IGTO notes that its written responses to parliamentary committees are submitted through the Treasury as part of a 'portfolio response'.58
2.53
As observed within the Australia's Future Tax System report, such an arrangement may contribute to the community's perception of reduced independence.59
2.54
Given that the Treasury makes recommendations to government regarding the administration of the tax system, it is clear that the subject matter of the IGTO best aligns with the Treasury portfolio. Notwithstanding this, and by comparison, other ombudsmen and scrutineers, such as the Commonwealth Ombudsman and the AuditorGeneral, commonly undertake reviews and engagements which examine entities outside of their respective portfolios.60 Regardless of whether or not an actual conflict of interest exists, such arrangements may improve the general community's perceptions of independence.
2.55
A number of submitters and stakeholders raised the independence of the IGTO as a key concern. For example, the former IGTO from 2008 until 2018, Mr Ali Noroozi, in his valedictory speech delivered on 4 October 2018, stated:
Turning to the independence of the IGT, I have consistently asserted that it is paramount to the identity and work of a scrutineer. If a scrutineer lacks or is perceived to lack independence, it becomes ineffective. It loses the trust of the community and those who require its help the most will not use its services. It will not be able to protect the subject of the scrutiny either when unsubstantiated allegations are made against it. In brief, the scrutineer can no longer act as a safety valve and the system may suffer undue pressure with irreparable damage.61
2.56
The CTA notes that, although there is no indication that the existing reporting arrangements lead to an inherent conflict of interest or the undue influence of one agency over another, other scrutineers, such as the Auditor-General and the Commonwealth Ombudsman, have different reporting lines to those they oversee.62

Authorisation required for the release of information

2.57
The IGTO is empowered by the IGT Act to obtain information and documents via formal compulsory disclosure processes; however, the IGTO considers this power to be used only as a last resort.63 The IGTO considers that, if the compulsion powers were used as a standard or routine feature of conducting investigations, potential adverse inferences or perceptions may arise.64 In addition, using the compulsory power for all information gathering requirements could impose particularly onerous arrangements due to the need to publicly report all such instances.65
2.58
To complement the compulsion powers, the IGTO notes it can also make voluntary requests for information.66 In these circumstances, however, the Tax Commissioner must first be notified of an investigation and he or she must authorise the provision of the information by the relevant taxation officers.67

Restricted access to information systems

2.59
Prior to accessing any ATO system, the IGTO is first required to notify the Tax Commissioner, or chair of the Tax Practitioners Board, of the action, and issue an investigation notice.68
2.60
Under existing inter-agency arrangements, the IGTO may only access lowerlevel security classified information held within the case management and accounts processing systems.69 Depending on the concerns raised, there may be a need to access information outside of these systems. In these instances, the IGTO must request permission to access such systems, and, in some instances, may be denied, or only be provided information on a data field by data field basis.70
2.61
The IGTO also notes that it does not have direct access to systems maintained by the Tax Practitioners Board, and, hence, is also reliant on its discretion in providing relevant information during reviews and the investigation of complaints.71

Adequacy of resourcing

2.62
The effectiveness of any organisation is, in part, dependent on the relative resourcing provided to it and the services it is tasked with delivering. In its submission, the IGTO notes that an ongoing challenge has been the office's ability to manage its resources efficiently so that it can maintain a reasonable level of review work, whilst also maintaining high standards in the handling of complaints.72 Such challenges exist, in part, due to the limited control the office has over the number of complaints it receives, and their timing.
2.63
The IGTO notes that complaint numbers have been increasing over the previous four years as the community’s awareness of the office has increased. Specifically, the number of complaints received has increased by 26 per cent, from 2,148 in 201516 to 2,712 in 20182019. This material increase contrasts markedly with the IGTO's static funding over the same period, which decreased marginally from $6.50 million to $6.45 million.73
2.64
With increasing complaints, and in the absence of additional resources, the IGTO expects that difficult decisions will need to be made in the future to create efficiencies.74 The IGTO sees these decisions as potentially adversely affecting the amount of work which can be undertaken in a timely fashion and, hence, impact its service standards.75 Furthermore, such efficiencies may reduce perceptions of independence, as greater reliance is placed on streamlined processes with increased risks.76
2.65
The CTA also believes this is an issue, noting that the number of complaints handled by the IGTO has materially increased, yet staffing and funding levels have remained roughly constant.77
2.66
The IGTO, Ms Karen Payne, discussed the impacts of this imbalance when providing evidence to the committee. Specifically, she said:
One of the impacts is that, when the normal investigation process is interrupted or blocked so that we're not able to achieve it at the APS level, and we have to escalate that through the ranks, we have thin senior ranks. We have Mr Pengilley, who is SES1, who looks after complaints. We have Duy Dam and Jarrod Joseph, who are EL2s. So we have one SES and two EL2s, and, on top of that, we're conducting reviews. One of the risks is: if we get obstructed in getting access to information, and we're escalating that and we're matching APS levels as between agencies—which apparently is what you should do—then we get stretched on a resource basis because we have very limited senior resources.78
2.67
The Deputy IGTO, Mr Andrew McLoughlin, also spoke on this issue, and summarised his position by stating:
…we are not well placed—we are a very small organisation of 30 people against 20,000—to match where escalation is required.79

Suggestions to improve the IGTO's accountability and independence

The IGTO's views and suggestions

2.68
In the IGTO's submission to the inquiry, it made a number of observations and recommendations related to its accountability and independence. Specifically, the IGTO recommended:
that it should have improved rights to access the ATO's and the Tax Practitioners Board's records, data, and systems;80
that it should have a formal role to independently advise the minister as part of the tax law design process, where the relevant tax law impacts on taxation administration matters affecting the community;81 and
that its office be adequately resourced to provide ongoing effective assistance to Australian taxpayers, and meet the increasing demands for such assistance.82

Other views and suggestions

Arguments to increase resourcing

2.69
A number of submitters provided their views on the current and future resourcing requirements for the IGTO. For example, the Tax Institute stated in its submission that the IGTO must be properly resourced to carry out its functions and maintain its independence.83
2.70
Mr Ali Noroozi, the prior IGTO, recommends increased funding, enhanced independence and a higher public profile.84 He states that the workload of the IGTO continues to increase, and that, without further resourcing, the IGTO's service standards are at risk of degrading, and there will be a diminished capacity for the office to undertake systemic reviews.85
2.71
The CTA notes that the number of complaints received by the IGTO has increased materially, from 2,148 in 201516 to 2,712 in 201819, an increase of approximately 26 per cent, yet the staffing and funding levels have roughly remained constant.86
2.72
The Law Council of Australia (the LCA) also recognises these increasing demands, and recommends the government increase the IGTO's funding.87 The LCA notes that, since 2018, the ATO has been provided with additional funding which has created a funding ratio between the IGTO and the ATO at 'embarrassing levels'.88
2.73
The IPA recommends the government revisit the IGTO's funding, and have regard to the additional key roles and responsibilities that have been placed on the agency and the number of complaints it has to deal with.89 Further, the IPA believes this issue will become more acute in the future as awareness of the IGTO's complaints handling function becomes more widespread amongst tax practitioners.90

Alteration of existing portfolio arrangements and an increase in tenure

2.74
In relation to the IGTO's independence going forward, Mr Noroozi, in his valedictory speech, provided a number of suggestions:
I believe the independence of the IGT may be bolstered by making his or her appointment for a non-renewable term of 10 years, as is the case with the Auditor-General, and moving the agency out of the Treasury portfolio and having it report directly to Parliament like the Australian National Audit Office. An inherent conflict exists in having both the IGT and the ATO within the same portfolio.91
2.75
In its submission to the inquiry, the LCA supported Mr Noroozi's call for the office to be taken out of the Treasury portfolio and for the IGTO to report directly to the Parliament, stating:
It is inappropriate for the body with the role of reviewing the ATO's systems, administration of the tax laws and individual taxpayer complaints to report to the same body as does the ATO.92
The more suitable place for the IGT to report is, as recommended by the prior IGT, directly to Parliament, similar to the Auditor General and the Commonwealth Ombudsman.93
2.76
The CTA believes that, to avoid any appearance of conflict or undue influence, there may be an in-principle case for the IGTO to report directly to the Parliament or to the Attorney-General.94
2.77
Although supportive of reforms which improve the independence of the IGTO, such as having the IGTO report to a minister outside the Treasury portfolio, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) recommends that, if the reporting arrangements were to change, the IGTO continue to report to a Cabinet minister, and not directly to the Parliament.95
2.78
Noting the calls for the IGTO to report directly to the Parliament by other stakeholders, Chartered Accountants Australia and New Zealand (CAANZ) highlights in its submission that the original rationale for the current reporting lines was that the IGTO's initial role was to provide advice to the government, in the interests of all taxpayers, to improve the administration of the tax system.96
2.79
The above point raised by CAANZ is best articulated in the report provided to the then Minister for Revenue and Assistant Treasurer, Senator the Hon. Helen Coonan, by the Board of Taxation in 2002, which stated:
The key difference between the Inspector-General and both the Ombudsman and the Auditor-General is that while the Inspector-General would report to the Minister, the Ombudsman and the Auditor-General report through the Parliament to the public at large. The service provided by the Inspector-General to the executive arm of government would be akin to that provided by the internal auditor of a large corporation, while the services provided to the Ombudsman and the Auditor-General are more in the nature of an external auditor. While each office would review systemic issues in tax administration, the different accountability arrangements would provide the distinguishing characteristics for each office.97

Committee view

2.80
The committee notes the large increase in the IGTO's workload since the Taxation Ombudsman function was transferred in 2015, and calls by numerous submitters that the government augment the IGTO's funding. The committee agrees that it is vital for the IGTO to be adequately resourced now, and into the future, to ensure it can discharge its two disparate roles in an independent and timely manner.
2.81
The committee agrees with inquiry participants, such as the former IGTO, Mr Ali Noroozi, who noted that the independence of the IGTO, both perceived and actual, is vital in ensuring its efficacy in performing both its investigative functions.
2.82
The committee acknowledges that, although the original purpose of the InspectorGeneral was the provision of advice to improve the administration of the tax system, given its broader remit since 2015, there may be merit in the government reconsidering the current reporting and portfolio arrangements to improve its independence.
2.83
The committee notes the former IGTO's suggestion that the IGTO's maximum tenure be extended from the current 5 year nonrenewable term to a 10 year nonrenewable term, as is the case for the AuditorGeneral. A longer tenure may improve the independence of the IGTO in undertaking its complaints investigations and reviews.
2.84
While the committee can see some merit with this suggestion, it is of the view that a 5 year fixed-term is a reasonable timeframe to achieve significant outcomes. Especially as the Inspector-General role is often seen as a final public service career role for an individual. However, one possibility to address an individual's commitment to continue in the role would be ability to offer an additional 5 year term—so the arrangement could be a fixed 5 year term with the option for an additional 5 years.
2.85
The committee notes that the IGTO would prefer unobstructed access to records, data, and systems held and maintained by the ATO and the Tax Practitioners Board. The committee understands this may improve the IGTO's ability to effectively undertake its dual roles as inspector and ombudsman.
2.86
Given its expertise on the subject matter, the committee sees merit in the IGTO's suggestion that it have a formal role in independently advising the minister on the administrative aspects of new tax laws and amendments to existing tax laws.

Committee recommendations

Recommendation 1

2.87
The committee recommends the Australian Government assess whether the IGTO is adequately resourced, both now and into the foreseeable future, to effectively discharge its dual role as the InspectorGeneral of Taxation and the Taxation Ombudsman.

Recommendation 2

2.88
The committee recommends the Australian Government consider whether the IGTO's current portfolio arrangements are appropriate, and whether alternative arrangements could improve actual, or perceived, independence.

Recommendation 3

2.89
The committee recommends the Australian Government review the IGTO's current access to the ATO and Tax Practitioners Board's systems, data, and records and considers improving access, where necessary, to further enable it to perform its legislative functions.

Recommendation 4

2.90
The committee recommends the Australian Government consider whether the IGTO should have a formal role to independently advise the minister on the administrative aspects of new tax laws and amendments to existing tax laws.

  • 1
    Committee Hansard, 18 October 2019, p. 20.
  • 2
    Committee Hansard, 18 October 2019, p. 20.
  • 3
    Committee Hansard, 18 October 2019, p. 20.
  • 4
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 5
    Inspector General of Taxation, Corporate Plan 2020-23, p. 18
  • 6
    Inspector General of Taxation, Corporate Plan 2020-23, p. 7.
  • 7
    Inspector General of Taxation, Corporate Plan 2020-23, p. 28.
  • 8
    Inspector General of Taxation, Corporate Plan 2020-23, p. 28.
  • 9
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 10
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 11
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 12
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 13
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 14
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 15
    InspectorGeneral of Taxation, 2018-19 Annual Report, p. 49.
  • 16
    Inspector-General of Taxation, Submission 5, p. 3.
  • 17
    Inspector-General of Taxation, Submission 5, p. 18.
  • 18
    InspectorGeneral of Taxation, Corporate Plan 2020-23, p. 18.
  • 19
    Inspector General of Taxation, Corporate Plan 2020-23, p. 20.
  • 20
    Inspector-General of Taxation, Submission 5, p. 18.
  • 21
    Inspector-General of Taxation, Submission 5, p. 22.
  • 22
    InspectorGeneral of Taxation Act 2003, ss. 8(2).
  • 23
    Inspector-General of Taxation, Submission 5, p. 19.
  • 24
    Inspector-General of Taxation, Submission 5, p. 19.
  • 25
    Inspector-General of Taxation, Submission 5, p. 26.
  • 26
    Please note this also includes joint committees consisting of members from each house of the Parliament.
  • 27
    InspectorGeneral of Taxation Act 2003, ss. 8(3).
  • 28
    Inspector-General of Taxation, Submission 5, p. 21.
  • 29
    Inspector-General of Taxation, Submission 5, p. 21.
  • 30
    Inspector-General of Taxation, Submission 5, p. 22.
  • 31
    Inspector-General of Taxation, Submission 5, p. 22.
  • 32
    Inspector-General of Taxation, Submission 5, pp. 22–23.
  • 33
    Inspector-General of Taxation, Submission 5, p. 22.
  • 34
    Inspector-General of Taxation, Submission 5, p. 22.
  • 35
    Inspector-General of Taxation, Submission 5, p. 23.
  • 36
    Inspector-General of Taxation, Submission 5, p. 23.
  • 37
    Inspector-General of Taxation, Submission 5, p. 23.
  • 38
    Corporate Tax Association, Submission 6, p. 2.
  • 39
    Institute of Public Accountants, Submission 9, [p. 1.]
  • 40
    Inspector-General of Taxation Act 2003, s. 6.
  • 41
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 42
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 43
    InspectorGeneral of Taxation, Submission 5, p. 44.
  • 44
    Inspector-General of Taxation Act 2003, s. 28.
  • 45
    Inspector-General of Taxation Act 2003, s. 30.
  • 46
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 47
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 48
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 49
    InspectorGeneral of Taxation, Submission 5, p. 44.
  • 50
    InspectorGeneral of Taxation, Submission 5, p. 44.
  • 51
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 52
    InspectorGeneral of Taxation, Submission 5, p. 43.
  • 53
    InspectorGeneral of Taxation, Submission 5, p. 44.
  • 54
    InspectorGeneral of Taxation, Submission 5, p. 44.
  • 55
    InspectorGeneral of Taxation, Submission 5, p. 44.
  • 56
    InspectorGeneral of Taxation, Submission 5, p. 45.
  • 57
    InspectorGeneral of Taxation, Submission 5, p. 45.
  • 58
    InspectorGeneral of Taxation, Submission 5, p. 52.
  • 59
    Commonwealth of Australia, Australia’s future tax system - Report to the Treasurer - Part Two, December 2009, p. 667.
  • 60
    The Commonwealth Ombudsman falls within the AttorneyGeneral's portfolio and the AuditorGeneral falls within the Prime Minister and Cabinet portfolio.
  • 61
    Mr Ali Noroozi, IGT Valedictory Speech, http://igt.gov.au/publications/publication/igt-valedictory-speech/ (Accessed 14 January 2020).
  • 62
    Corporate Tax Association, Submission 6, pp. 2–3.
  • 63
    InspectorGeneral of Taxation, Submission 5, p. 53.
  • 64
    InspectorGeneral of Taxation, Submission 5, pp. 53–54.
  • 65
    InspectorGeneral of Taxation, Submission 5, p. 54.
  • 66
    InspectorGeneral of Taxation, Submission 5, p. 53.
  • 67
    InspectorGeneral of Taxation, Submission 5, p. 53.
  • 68
    InspectorGeneral of Taxation, Submission 5, p. 54.
  • 69
    InspectorGeneral of Taxation, Submission 5, p. 54.
  • 70
    InspectorGeneral of Taxation, Submission 5, p. 54.
  • 71
    InspectorGeneral of Taxation, Submission 5, p. 54.
  • 72
    InspectorGeneral of Taxation, Submission 5, p. 55.
  • 73
    See Appendix 1 Inspector–General of Taxation resourcing.
  • 74
    InspectorGeneral of Taxation, Submission 5, p. 55.
  • 75
    InspectorGeneral of Taxation, Submission 5, p. 55.
  • 76
    InspectorGeneral of Taxation, Submission 5, p. 55.
  • 77
    Corporate Tax Association, Submission 6, pp. 1–2.
  • 78
    Committee Hansard, 6 December 2019, p. 19.
  • 79
    Committee Hansard, 6 December 2019, p. 19.
  • 80
    InspectorGeneral of Taxation, Submission 5, p. 14.
  • 81
    InspectorGeneral of Taxation, Submission 5, p. 15.
  • 82
    InspectorGeneral of Taxation, Submission 5, p. 15.
  • 83
    The Tax Institute, Submission 2, [p. 2].
  • 84
    Mr Ali Noroozi, IGT Valedictory Speech, http://igt.gov.au/publications/publication/igt-valedictory-speech/ (accessed 11 February 2020)
  • 85
    Mr Ali Noroozi, IGT Valedictory Speech, http://igt.gov.au/publications/publication/igt-valedictory-speech/ (accessed 11 February 2020)
  • 86
    Corporate Tax Association, Submission 6, [p. 1.]
  • 87
    Law Council of Australia, Submission 3, p. 2.
  • 88
    Law Council of Australia, Submission 3, p. 2.
  • 89
    Institute of Public Accountants, Submission 9, p. 2.
  • 90
    Institute of Public Accountants, Submission 9, p. 2.
  • 91
    Mr Ali Noroozi, IGT Valedictory Speech, http://igt.gov.au/publications/publication/igt-valedictory-speech/ (Accessed 14 January 2020).
  • 92
    Law Council of Australia, Submission 3, p. 2.
  • 93
    Law Council of Australia, Submission 3, p. 2.
  • 94
    Corporate Tax Association, Submission 6, pp. 2–3.
  • 95
    Australian Small Business and Family Enterprise Ombudsman, Submission 1, [p. 1].
  • 96
    Chartered Accountants Australia and New Zealand, Submission 7, [p. 4].
  • 97
    The Board of Taxation, Inspector-General of Taxation: A Report to the Minister for Revenue and Assistant Treasurer, p. 9.

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