Alleged Medicare fraud proves we need US-style whistleblower rewards

The United States shows the most efficient way to collect tax revenue and stop rorts is to incentivise whistleblowers and make sure the system is fair.

The existence of Medicare fraud has been known in the medical community for many years.

The latest alleged ‘discovery’ is a clear-cut warning to governments that they simply don’t have the money to monitor fraud when large numbers of people are involved.

I have been emphasising the same issue in Australia’s crumbling taxation revenue system, but there will be many other examples.

The United States has shown that the most efficient way to collect tax revenue and stop rorts in well-meaning government programs is first to make sure the administration is fair and then to have a system of incentivised whistleblowers, usually from the staff of enterprises or the public service.

Those incentives are usually linked to the amount of money the government saves or raises as a result of the whistleblower’s actions.

There are actually not many US whistleblower situations but the threat they pose to people looking to abuse the system raises vast amounts of money at low cost.

Neither of our major political parties understand the beneficial role of whistleblowers in a complex society where government revenues are exposed to bad practices.

The out-of-date attitudes of our political parties were graphically illustrated in the Richard Boyle case.

In a carefully planned action Boyle informed the community about bad practices in the ATO which contribute to lack of confidence in the tax collection system.

A subsequent government investigation by the Inspector General of Taxation found his base revelations accurate.

Both Australian public and the Australian Taxation Office administration learned from the those revelations.

But the Coalition Attorney-General and now the Labor Attorney-General Mark Dreyfus both approved prosecutions against the whistleblower.

The courts’ role is not to assess public benefit but rather to decide how the law of the land applies to the cases like Richard Boyle.

In particular Boyle is being prosecuted for allegedly recording a telephone conversation, taking tax files home and sharing that information.

The courts will decide on the facts of the case and whether Boyle’s actions were legal.

Accordingly, my comments don’t relate to the legal facts in the Boyle court case but rather that Australian governments do not seem to value testimony like that delivered by Richard Boyle or understand how whistleblowers can deliver better government practices and higher revenue.

Instead, the Liberals wanted Boyle jailed for the term of his natural life and the current Attorney-General is also seeking a long jail sentence.

And in jest I theoretically conjecture that if the law stops tax officials from taking tax files home then, given what happened during Covid-19, it might be necessary to jail half of the tax office’s employees.

Again, it is the courts that will determine what the law actually means and the facts.

But, as a result of the Inspector General’s report, we do know the value of the information that Boyle released.

The Boyle revelations concerned the fast rate at which so called “enduring garnishees” were issued by the Adelaide ATO office.

Enduring garnishees are among the most vicious of the ATO weapons because they take money directly out of the enterprise’s bank account and destroy confidence in the enterprise which often results in its destruction.

As a result of systems difficulties and other factors around 2017 the ATO had fallen behind in revenue collection and a communication was sent out that the Adelaide office interpreted incorrectly.

The Inspector General revealed that Adelaide staff were “unfamiliar with particular practical implications of issuing enduring garnishee notices to a financial institution (or bank) accounts. “They laboured under that misconception for over two months until identified by national management and thereafter promptly addressed.

The Inspector General recommended that ATO improve staff “skills and experience by developing more effective and regular case-specific feedback as well as role-playing exercises.”

“This is particularly the case for those staff who, due to secrecy and integrity requirements, are otherwise unable to view the direct results of their decisions”.

In my words ATO staff do not always understand the devastation they are creating as a result of their actions.

The Boyle revelations covered only a small part the ATO collection activities but helped the Inspector General to assist the nation by giving the ATO much needed advice when making systems changes:

The Inspector General says the ATO prepared contingency plans that “generally considered potential scenarios that could arise … however, these contingency plans did not address the risk that the relevant financial and collection systems changes would not be deployed or that the resulting efficiencies would not be realised.

“Had the contingency plans considered such risks, it would likely have generated a greater appreciation of the potential impacts if those risks materialised — for example, the increased number of activities that would need to be carried out on the basis of the existing case selection processes, the reduced amount of time in which the DBL would need to carry out such activities and the increased number of trained staff needing to be scheduled to conduct these activities”.

Taxpayers around the nation can thank Richard Boyle for triggering that advice.

The attorney-general has legislation supposedly improve the rights of whistleblowers.

It needs to be closely examined by the parliament.