If state and federal politicians were eligible for the $950 cash bonus payment, 7.8% of them would not get it because they have not lodged their 2008 income tax return.

The Oz today revealed the softly softly approach by the Australian Taxation Office was not working in trying to get recalcitrant politicians to lodge their yearly tax return. Crikey has been told the rort extends to three current and former federal and state ministers who refuse to lodge their tax returns. I cannot name them as I would be breaching the strict secrecy laws that govern our tax system. Unlike the ATO who have leaked like a sieve during Operation Wickenby I will respect the law.

I have previously told Crikey readers about the failure of the ATO’s Restricted Access Taxpayer System (RATS).  The ATO afford politicians, industry barons, judges, magistrates, ATO staff and other high profile people an extra level of security. They are classified Restricted Access Taxpayers or RATS as we liked to call them. As I reported back then the system has been rorted to allow this special group of taxpayers to dodge their taxation responsibilities including lodging tax returns on time and paying their tax debts.

So what’s the answer to this problem? Prosecute the buggers I say. The namby-pamby approach just isn’t working.

Tax Chief Michael D’Ascenzo prosecuted around 2,500 Australians for not lodging a tax return on time in the ’07-08 year but only one of them was a politician according to the Oz report. Great system!

During a major tax inquiry in 1993 Parliament’s powerful Joint Committee of Public Accounts and Audit put politicians’ tax position on the line which is understood to have frightened senior tax officers. Its then chairman Gary Punch, the former member for Barton in Sydney said:

…if we get to the stage — and this applies to the Customs Service or anywhere else; it does not matter whether it is Liberal, Labor or Callithumpian — where people are being singled out because they are public office holders, then public office holders will eventually be terribly fearful of taking on any or every bureaucracy to reform anything in this country. It will come to the point where we will all put our backs to the wall and slug it out, as I said to you Commissioner once before, on a unity ticket.

Peter Fray

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