Crikey



New chief taxman looks like a winner for all sides

If you want proof Wayne Swan is not only the World’s Greatest Treasurer but a really good bloke, you only need to look at his appointment of Chris Jordan as Australia’s new commissioner of taxation.

Jordan, you will remember, was the chair of Swan’s Business Tax Working Group, which was handed the poison chalice of trying to find a way to bring in the company tax cut — and find a way to pay for it. Jordan was set up to fail — the company tax cut was supposed to be a pay-off for the mining tax, and business wasn’t going to be fooled into losing another tax break to help the federal government make good on its company tax promise.

Clearly, Swan feels bad about putting Jordan in the poo like he did — he’s now rewarded him with the ultimate tax nerd’s job. Good on ya, Wayne.

It does look like a good appointment; all sides of politics and seemingly every business lobby group out there has applauded the decision to appoint the first commissioner from outside the public service. That’s a huge change: outgoing Australian Taxation Office boss Michael D’Ascenzo worked there for 35 years, building a career spanning generations. That’s an awful lot of experience, but it’s also an awful lot of institutional baggage.

Jordan should arrive with none of that. Instead, the long-standing chair of accounting firm KPMG bring plenty of practical knowledge, particularly around how the ATO deals with business.

That’s good news for small business. Jordan should be sensitive to what business owners and leaders — and more recently the inspector-general of taxation — have described as the occasionally adversarial stance the ATO has taken with businesses of all shapes and sizes.

Clearly, small businesses are less equipped to handle ATO enquiries and particularly aggressive ones. Recent revelations around the poor targeting of ATO small business benchmarks, which tied up 6000 small businesses in unwarranted ATO enquiries, is the sort of thing Jordan should be keen to address.

Many commentators have talked about how appointing an outsider with business experience to head the ATO should bring a new level of efficiency and corporate thinking to what is perhaps the ultimate public service institution. I think that’s right, but business should be careful what they wish for — it’s highly likely one of the areas Swan will have charged Jordan with is becoming more efficient and effective in tax debt collection.

Remember that Swan’s recent budget update saw the ATO handed another $390 million in funding to help it chase $1.6 billion in unpaid tax debts over the next four years; in total, the ATO has received $691 million in new funding since May to raise $3.7 billion in tax debts and GST.

The ATO needs to be careful with how it chases these debts in current economic conditions. Jordan will have a good sense of how businesses are travelling at present, but every dollar he brings in helps Swan get back towards a budget surplus. The pressure will be on for collection results.

But for all that, it’s also worth noting Jordan’s time with the Business Tax Working Group did deliver a few real wins for small business, most notably the loss carry-back scheme that allows companies that make a loss to get a refund for tax paid on past profits. It suggests he really understands what makes a business tick and the challenges they can face from one year to the next.

*This article was originally published at SmartCompany

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Categories: BUSINESS, Federal

4 Responses

Comments page: 1 |
  1. Thanx for this, which I found most informative.

    by Gavin Moodie on Nov 14, 2012 at 3:04 pm

  2. I hope the new tax commissioner will finally get rid of the Microsoft-only e-tax return program and install a web-based tax return program so that the ATO can service the whole community instead of only those using windows.

    by Zeke on Nov 14, 2012 at 3:29 pm

  3. I hope the new Fiscal Fiend will recognise the problems facing not only small business, but micro-businesses. As regular traditional employment has been morphed into “contractors” required to have ABNs, Quarterly GST settlement and PAYG income tax, the cost of expert (safe) tax advice has become more expensive than the micro-business income can sustain.

    by Arty on Nov 14, 2012 at 6:01 pm

  4. I wish Mr Jordan the best in his new, thankless role protecting the revenue while copping flak from all sides for being occasionally “adversarial” (as if that’s a bad thing in a tax commissioner).

    And Zeke, don’t hold your breath. Something like 70% of individuals lodge through an agent, with paper lodgers (the group most likely to be affected by the platform limitation) somewhere in the single digits. I just don’t see it as a huge priority, regardless of how much noise people want to make.

    by Charlie Maigne on Nov 14, 2012 at 7:52 pm

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