ATO boss says ‘mongrel bunch of bastards’ report by Four Corners and Fairfax was unfair and offensive

ABC News, Updated 30.5.2018

Australian Taxation Office (ATO) boss Chris Jordan has attacked a joint Four Corners and Fairfax investigation as offensive and inaccurate, arguing it breached the ABC’s editorial policies.

Key points:

  • Chris Jordan says the Four Corners and Fairfax investigation into his department was unfair
  • He says the reporting may have breached the ABC’s editorial policies, but hasn’t made a complaint
  • Mr Jordan says claims of a 5 per cent error rate are wrong

But the senior public servant has also announced several changes to improve scrutiny of its decisions and another independent review of its debt collection practices.

The joint investigation published whistleblower accounts of a toxic workplace culture where vulnerable small businesses and individuals were deliberately targeted to meet revenue goals.

The claims — which included staff being pressured to meet revenue raising targets — have prompted two separate investigations into the revenue office by the Treasury and the Inspector-General of Taxation, Ali Naroozi.

The ATO strongly denied any systemic cultural issues when the story was aired, saying many of the case studies used in the Four Corners program were old.

Appearing before a Senate Estimates hearing, Mr Jordan took issue with the title of the Four Corner’s program: A Mongrel Bunch of Bastards.

“How would staff of the ABC feel if News Limited splashed across its front pages the ABC is a ‘mongrel bunch of bastards’ or said that the whole of Fairfax is nothing but a ‘mongrel bunch of bastards’?” Mr Jordan told Senate Estimates today.

“I am sure the indignation would be palpable. I can assure you the people working at the ATO are not mongrels or bastards. They are normal people trying to do a good job for the benefit of the country.”

‘It’s evil and it’s vengeful’

The Tax Office is facing calls for curbs on the ‘draconian’ powers it uses to target small businesses.

The episode title came from a quote by one of the people Four Corners spoke to during the investigation.

Mark Freeman, a man whose business was audited by the ATO in 2011, told the ABC: “Honestly, dealing with the ATO, I’ve never come across such a mongrel bunch of bastards in my entire life.”

Despite being critical of the ABC’s reporting, Mr Jordan told the Estimates hearing that he had not made a complaint.

Financial Services Minister Kelly O’Dwyer was so concerned by the report she launched an urgent investigation into the department, which is still ongoing.

ATO to trial new independent review process

But Mr Jordan did admit the ATO makes some mistakes and has asked the National Audit Office to review its debt collection procedures.

“Inevitably things do go awry every now and then, and we need to be quicker to acknowledge mistakes or misunderstandings, apologise if necessary, remedy and get things on track,” Mr Jordan said.

Mr Jordan has also responded to calls for small businesses to be given greater powers of review.

What the ATO has the power to do

The ATO has extraordinary powers more akin to police and law enforcement agencies and when it makes mistakes, it can destroy small businesses and livelihoods.

Until now, small businesses with a turnover less than $250 million have not been able to get an independent review of their cases, largely due to limited time and resources.

In his opening statement, Mr Jordan signalled that was about the change.

“We are going to trial an independent review process for certain small business audits from July 1 — with the intention over time that businesses, regardless of their size, have access and rights to a fit-for purpose review prior to the finalisation of audit,” Mr Jordan said.

The ATO has pushed back against this trial in recent years, citing time and resource restraints.

The Small Business Ombudsman and the Council of Small Businesses called for the trial after the joint Four Corners and Fairfax investigation.

‘There is no evidence for this’: Chris Jordan

Mr Jordan also took issue with comments by the head of Self Employed Australia, who told the program that the treatment dished out to some business owners was akin to being “cooked slowly, until you are roasted and you are dead”.

“These are such ridiculous allegations that it beggars belief that the ABC would present them as somehow the result of an investigation,” Mr Jordan said.

“People at the ATO do not get up in the morning thinking who can I destroy today or boil to death.”

Mr Jordan strongly denied Mr Naroozi’s claim that roughly 5 per cent of cases — or one in 20 — assessed by the ATO were wrong.

“Human error will result in mistakes being made, however nothing like the unsubstantiated claims that we get 1 in 20 things wrong,” Mr Jordan told a Senate Estimates hearing.

“That would be in the vicinity of 830,000 tax returns or 1.75 million of all lodgements each year — alleged that we get wrong.

“There is no evidence for this. But I will say we could probably be better at acknowledging our real mistakes, apologising, compensating for any actual financial loss and moving on.”

The joint ABC-Fairfax investigation renewed calls to split the ATO’s administrative and policing functions, to create an extra level of scrutiny within the ATO.

“The problem stems from the very great power of the Tax Office to make big decisions affecting people’s income and lives,” former chairman of the Australian Competition and Consumer Commission Allan Fels said.