When it comes to public revenue, you need to spend money to collect money, and Treasurer Jim Chalmers has shown that the Albanese government is firmly intent on having a cash-extraction machine that is as highly efficient as what can be built.
As the ATO looks at trying to rein in around $50 billion on COVID-related tax debt, all while not reanimating robodebt, there’s a raft of tightening and extensions that will help the agency keep raking in money from schemes and measures proven to work, while others are being knocked on the head because they have run their course.
To get the show on the road, there’s a circa 1,700 boost to Average Staffing Levels, but it’s hard to say how much of that may be insourcing of debt recovery and IT.
One of the more important changes is legislative, in that the commissioner of taxation will now be able to write off zombie debt rather than be legislatively compelled to pursue it through the courts or garnishee provisions. That kills Frankendebt, son of robodebt, but it also means fresh cash must be found to replace zombie cash, and the effort is all out.
It’s a series of smaller tweaks, nips and tucks but this is arguably more flexible and realistic than big-bang, IT-heavy projects that can take years to deliver and run late.
Take the extension of the Personal Income Tax Compliance Program, which was $180 million in 2027-28 and which basically just keeps an existing crackdown running for more years.
There’s a heap of money for bolstering the ATO Counter Fraud Strategy that gets $187 million (someone in Treasury must be a hip-hop fan) that includes $78.7 million for new IT and upgrades “to enable the ATO to identify and block suspicious transactions in real-time.”
Could they be the fake GST claim transactions that created the Protego scandal? Remember that money usually goes into the ATO, not out of it, and it is a revenue agency, after all.
Some measures don’t even cost a lot of money, like slowing the tax system down. The ATO is giving itself more time to retain and analyse Business Activity Statements to halt “peak fraud events” and the power to hold up refunds for 14 days. But it will pay you interest for the delay.
The haul from these measures comes in at $302.2 million in receipts and $187.4 million in increased payments over five years from 2023-24. It is what Ken Henry might call an “elegant solution” had a heap of money not been lost in the first place.
The extension of the Tax Avoidance Task Force for five years from 2023-24 rakes in $2.4 billion in receipts and $1.2 in payments.
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