Robert Gottliebsen: ATO, Canberra elites need to wake up to the problems of ordinary Australia
In the US, greater accountability will be driven by an examination of the workings of 400 government bodies.
In Australia, the decision to undertake mass executions of small enterprises by the Australian Tax Office is intensifying a deep underground hostility towards the way taxation is administered in Australia.
Both major political parties are starting to recognise the change in direction but so far only the Coalition has shown signs of embracing fundamental policy change.
If this sentiment gathers pace — and I believe it will — the taxation reform movement will embrace the means Australia uses to collect tax (totally separate from the tax rate).
This has been an area where I have been writing for a long time, but I will now intensify examination because we are approaching decision-making time.
As so often happens in our nation it is the High Court of Australia which recognises a required change before politicians and the court sets legal rules, often to the annoyance of public servants.
Top Australian public servants are particularly vulnerable because many are based in the affluent areas of Canberra which have become totally isolated from what is happening in the rest of the nation.
Nothing illustrates public servant isolation better then the past behaviour of the Australian Tax Office in setting artificial rules to determine whether a person was an employee or a contractor.
The High Court stepped in to end the public servant-created confusion in the so-called Personnel Contracting case. In the clearest possible terms the High Court determined if there was a detailed contract setting out a contractual relationship then the person is a contractor.
In other words, the existence of a proper contract supersedes all other criteria.
This seven to nil High Court decision created much anger among the ALP government and unions officials. But, it also annoyed those public servants in the ATO who had their own complex ways of determining whether a person is a contractor or an employee. These ATO criteria were very different to the High Court of Australia rules.
Where the High Court makes a decision at odds with politicians and many public servants, watch out for strange actions.
And so it was just before Christmas the ATO put out a new set of instructions on contracting/employment. The ATO correctly stated the “totality of relationship” between a worker and employer consists of the legal rights and obligations arising from the contract between the parties.
But then the ATO started playing games to obscure the fact the contract is the dominating criteria.
And so the ATO claimed: “To work out if your worker is an employee or independent contractor, you need to determine whether your worker is serving in your business.”
They added volumes of other situations which also might be useful but what they don’t spell out in clear unambiguous language is all these other criteria have been basically overridden by clear instructions from the High Court.
The High Court’s simple rule makes it so much easier to conduct business in Australia. To be fair to the ATO it also publishes a long practice statement which does spell out the true situation, but an ordinary tradesperson or an accountant will look for the short version of the rules rather than an overriding statement.
Of course the fury of the government politicians with the High Court rules was reflected in the 700-page government industrial relations legislation.
That act claimed to override the High Court decision but the so far-unchallenged legislation was limited to industrial relations affairs and even then was confined to Uber drivers and owner-truck drivers as part of a planned cartel to push up prices and lower productivity.
Matters like taxation rules are not industrial relations issues, so the High Court rules apply.
ATO opinions can be very dangerous, because when the ATO makes an ‘assessment’ it becomes ‘law’. So, if the ATO determines someone is an employee and assesses a debt as a consequence then that assessed debt becomes a debt due and payable by law.
Once banks or creditors get wind of these dubious tax assessments a business can go bankrupt. This method of collecting tax goes against everything we treasure in our democracy.
One of the side impacts of the debate over Australia Day is ordinary Australians are now coming to realise on January 26 we are celebrating our democracy and its fairness.
For the 16th consecutive year I celebrated Australia Day on the banks of the Anglesea river. All the local community groups joined in support and this year the numbers exploded. They sang with gusto the National Anthem and “I am Australian”.
Speakers included a Vietnamese migrant and a person of Aboriginal heritage who understands the meaning of Australia Day. Also in attendance was the local member, a couple of local councillors and a former Premier.
Australia Day now has much greater meaning to ordinary Australians, including recent migrants. They will demand accountability and proper practices by government bodies like the ATO.
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