ATO power push lacks proper checks and balances—Credit agency reporting

We’re campaigning to create ‘rule of law’ checks and balances on the Australian Taxation Office. But, while we do that, the ATO is pushing parliament hard for new laws to extend its powers, with minimal if any checks and balances. They do this under the excuse of reining in the black economy.

Parliament and the community should not be conned by this ATO power grab. The ATO’s power push perverts both the rule of law and the democratic process.

The latest ATO power push would enable the ATO to report people’s tax debts to credit-rating agencies. The Bill, with the (ahhh!) boring title of Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 Schedule 5—Disclosure of Business Tax Debts might lead you to think that this is just a technical amendment to tax law. But beware the practiced, bureaucratic style of, “butter wouldn’t melt in their mouths”, power-hungry tax officials. (Ummm, lots of adjectives here. Sorry!)

But you might say that it’s a good thing that private-sector credit-rating agencies know about people’s tax debts. Maybe! But there are two big problems:

  • The ATO has a terrible history of getting debt assessments plain wrong—even when people owe nothing! It has destroyed people’s lives with false tax debts.
  • Reporting tax debts to private organisations is a major breach of the solid privacy protections in place under current tax law. In fact, parliament passed important taxpayer privacy protection laws in 2010. These privacy protections are about to be trashed. Where’s the big community discussion about this? Silence it seems!

Fortunately, a Senate Committee is looking at this new proposed law. We’ve put in a submission asking for a halt. But if the law is to proceed, we want strong protections such as:

  • Requiring the Inspector-General of Taxation to check and approve the ATO’s calculations. Experience has taught us not to trust the ATO’s figures!
  • Giving small business people the right to appeal to the Small Business Tax Tribunal before the ATO can make a report.
These are just sensible checks and balances. However, the fact that the ATO doesn’t suggest these checks and balances itself indicates that it just wants more power to bully.

Ken Phillips and the Team at Self-Employed Australia