Tax commissioner Chris Jordan has acknowledged that fraud-related charges against his former deputy Michael Cranston and major interruptions to the Australian Taxation Office’s online services leave the agency in a “precarious position” and threaten to take the shine off its positive achievements.
The ATO has made significant improvements to its service delivery in recent years and could have expected at least some positive sentiment from the public in return. But the news headlines over recent months have left a very different impression in the public consciousness.
“There is no getting away from the fact that these two matters have had a negative impact on the ATO’s standing in the community — one questioning our integrity and the other questioning the stability and availability of our systems,” said Jordan in an address to the National Press Club this afternoon.
“I understand only too well that we have ground to make up. While we may have had some credits and credibility from the positive changes we have made in the last few years, we’ve lost a bit of ground with Elbrus and the systems outages.”
Not long after the speech ended, the ATO tweeted it had taken its online portals offline again to fix some more problems:
To resolve some intermittent system issues, we’ve had to take our portals, myTax, and other online services offline this afternoon. pic.twitter.com/jvCUmKL7dh
— ato.gov.au (@ato_gov_au) July 5, 2017
While the Elbrus investigation was a success for the federal cops, organised crime investigators and ATO fraud squad who worked together on it, Jordan suggested the charges against such a senior official were at least as shocking inside the agency as in the community, if not more so.
“The involvement of Adam Cranston, son of former Tax Office Deputy Commissioner Michael Cranston, has been difficult to comprehend,” he said.
“The charges against Michael Cranston too, have been equally hard to believe, and at the ATO we are dismayed by the events that have unfolded in this regard.”
He said the case not only “ruined” the former deputy commissioner’s career and reputation but also raised questions about the integrity of other tax officials.
“This is a precarious situation,” Jordan added. “I am keen to defend our reputation and that of the people in the ATO, but have to remain open to looking at whether our processes, controls or systems need to be bolstered.”
He noted the Inspector General of Taxation has begun reviewing the agency’s fraud control arrangements at the behest of the Senate Economics References Committee, before reiterating that Cranston senior was charged with being an accomplice rather than a member of the conspiracy itself.
“We have a very strong culture of integrity and our procedures, controls and monitoring systems work well,” said the commissioner, adding that investigators had “anticipated” the deputy commissioner might try to help his son and put in place “safeguards” as a result.
“Those safeguards worked,” he told the media audience, adding there was “no fraudulent or corrupt activity by ATO officers” uncovered by the Elbrus investigation and he hoped that fact would be “independently confirmed” in due course. Then he turned to the IT issues.
The Press Club heard over 210,000 people had already done this year’s taxes through the myTax system. “Pleasingly, tax time has begun well,” said Jordan, shortly before myTax and other services were taken offline again.
He acknowledged “unprecedented and unplanned outages in December, February, and just last week” had annoyed a lot of users across several industries that support the tax and super systems, but said machines just stop working sometimes.
“I wish I could give an iron-clad guarantee that all systems will work 100% of the time,” said Jordan. “But that is not reality when you are talking about very large and complex systems. And while we believe we have done everything we can, and expect things will go smoothly, we are ready to respond quickly if there are any hiccups or unexpected outages.”
He said an independent analysis of all the agency’s systems and platforms was expected to reduce the risk of future failures. “We are well aware that if we are to offer and encourage the use of digital services, then we have to have our systems available when people need them.”
The commissioner went on to talk about how the ATO would get on with its work, trying to improve a system that he argued was pretty good to begin with. He said that while the ATO had been making it easier and quicker for ordinary wage earners with simple tax affairs to do their own filing and get it right, without needing an agent to interpret a thick booklet of rules, it was also trying to discourage dodgy deductions.
Later, in his concluding remarks, Jordan suggested public servants should look for role models beyond the world of government.
“I do not want to compare the ATO’s performance with other tax authorities or government agencies. I want to compare the ATO with the best of any large organisation interacting with a large and diverse client base anywhere in the world, and for people to think that whilst they didn’t want to deal with us, their interactions were as good as they could ever expect.”
A full transcript of the speech is available on the ATO website.