The announcement that the Federal Parliament’s Public Accounts
Committee will hold an inquiry into the ATO settlements process is a
victory for the ordinary honest Australian taxpayers who need to know
that when they lodge their tax returns with the tax office they are
dealt with in an even-handed manner. Whether you are Bob the builder
from Armidale or Bob the billionaire from Adelaide, taxpayers need to
know they are playing on a level tax playing field.
As mentioned in the Fin Review this morning, the investigation will
look into whether the ATO is “correctly applying its policies on
individuals and businesses, and the tactics it uses when deciding to
settle major disputes ATO settlements.”
What we have seen with the Gerard affair is the tax system brought into disrepute because of the ATO’s failure
to prosecute or penalise one of the worst cases of tax avoidance in our
country’s history. Over the last two weeks we’ve seen murky details of the Gerard case come to
light. On the public record about
this company are allegations of international tax evasion, sham companies set up
in tax havens deliberately contrived to deceive the Commissioner of Taxation,
false and misleading statements made to tax officers and the hindering of tax
officers in the performance of their duties.
From an original bill of $150M the ATO have “settled” the case and cut in
half the debt to $75M. Mr Gerard has
said the ATO didn’t apply any penalties in the case although the ATO case
manager had recommended severe penalties to be applied. Compounding this is the fact the ATO have
defied their own guidelines and not referred this matter to Mr Damien Bugg QC,
the Director of Public Prosecutions. To
be quite frank, I and many others are staggered at how a company with so many
aggravating factors involved, could not be subject to penalties or
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There is also the issue of
the comfort letter Mr Carmody provided to Mr Gerard. It is debatable to say whether Gerard’s
personal tax affairs were in order as Gerard himself is an employee, director
and shareholder of his family company Gerard Industries, even allowing for the
fact that the dispute was with the corporate entity.
Anyone who had anything to do with the Gerard case inside the
ATO will have a very nervous Christmas as they know they will have to
face the full brunt of Federal Parliament’s Public Accounts Committee
in the new year. They’ll have to explain to Australian taxpayers at the
Committee’s inquest how they “settled” a serious case of tax evasion
without penalties or prosecution.
I’ve been in contact with
Joel Fitzgibbon, the Labour member for Hunter,
www.joelfitzgibbon.com, and he was
very enthusiastic for me to be involved further with the Public Accounts
committee (PAC) investigations into the ATO.
I’ll be presenting a submission on behalf of Australian taxpayers
asking them to include a number of things in their terms of reference. I am happy to take input from Crikey
readers. They can email me at