ATO’s Chris Jordan: tough cop on the tax beat
Chair of the world’s anti-tax avoidance taskforce, Chris Jordan is bent on making multinationals pay their share.
Chris Jordan has never run from a fight. Having spent his childhood as the sixth of seven kids in a two-bedroom house in the shadow of Sydney’s Kingsford Smith airport, he learned to scrap for everything: from bedroom drawers to food.
“I grew up in a small room with two double bunks and a set of drawers. It was my brother, me and my two sisters,” he tells The Australian during a rare, lengthy sit-down. “The four of us. But I wasn’t old enough to have any of the drawers.”
The battle for food was no less intense. “I still eat fast,” he confides. “I mean, seven kids, Mum didn’t work and Dad was a policeman. So lots of mouths to feed. My friends always joke about going to yum cha with me because I eat very quickly and they miss out if they go with me. Get in early!”
Australia’s tax commissioner no longer has to fight for his next meal. But he has never lost his appetite for a scrap — he just has them on a larger scale these days, as shown by his toe-to-toe battles with multinational giants such as Google, Facebook, Microsoft and Chevron.
The hulking, 198cm Jordan has the physical stature for the job, and a pedigree made for law enforcement (his uncles also were police officers).
After childhood jobs as a paperboy and working at a Maroubra fish shop, he tried following in his father’s footsteps as a cop. He lasted a year at Chatswood police station on Sydney’s north shore, attending everything from domestic violence incidents to car crashes, before embarking on a glittering tax career at KPMG and the Australian Taxation Office.
Street-level policing ultimately was not for him but it reinforced a sense of right and wrong that ensured he eventually would return to enforcing the law.
He now applies his personal moral code to everyone he collects taxes from in all walks of life, from tradies and small businesses to multi-billion-dollar corporations.
Jordan still brings a policeman’s zeal to his role of keeping the Australian government’s tills ringing: “Our basic mission is to contribute to the wellbeing of Australia by fostering participation in the tax system.”
If the right tax is not collected from multinationals, it “deprives Australians of the funds needed for vital infrastructure and services”, he says.
“If you come here as a foreign company and you use our infrastructure, we’re a good marketplace for you — you should pay tax on the value you create here.”
He adds that if he lets multinationals ride roughshod over the tax office, it would represent the thin edge of the wedge: tax dodging would spread to all levels of Australian society.
“If people don’t have confidence that large companies are paying the right amount, small businesses and tradies could say: ‘I might do more cash business.’ Then individuals might say: ‘Well, I might overclaim on some work- related expense deductions.’ ”
Jordan, 63, is better placed than any Australian tax commissioner in history to take on the global giants. As the leader of the world’s anti-tax avoidance taskforce, the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration, he is in pole position to ensure Australia gets its fair share. And with two decades on the other side as a KPMG tax expert, he knows all the tricks.
He has tough words for a group of former colleagues in the accounting profession, accusing some who represent global corporate giants locally of authoring balance sheet fiction.
“(They) have been writing stories for so long, they’re starting to believe their (own) fairytales,” he says bluntly.
When he came to the commissioner’s role in early 2013, Jordan immediately set about bringing a lens on how the global giants structure their affairs to the ATO. The result has been a much greater insight into multinationals.
“We’ve got better at understanding where the value is created in the supply chain in Australia. Probably more than most other countries, we are focused on not just what happens here but what’s happening upstream (in multinationals). (But) this is what a lot of companies have been reluctant to share with us.”
In tax circles, many see Jordan as a maverick. He is the first commissioner to come from outside the bureaucracy since the inception of the role soon after Federation. For their part, some senior accountants admit to being unnerved by his “take-no-prisoners” approach.
One boss grumbles about the more combative stance towards large companies since Jordan took the role. However, when pressed, the same beancounter grudgingly admits that if he were prime minister he would be happy with the results Jordan has achieved for the government purse.
Jordan also has plenty of admirers. A long-term colleague, KPMG senior tax partner Grant Wardell-Johnson — a friend since the 1980s — says: “I think he’s outstanding. I’ve heard a common view in the public service is that the transformation in the ATO is far superior to what’s happening elsewhere (in government).”
Wardell-Johnson adds that Jordan’s aim is straightforward: “I believe he is trying to convert the ATO into the mindset of a major public company, in terms of culture and at the same time being a revenue authority that needs to preserve the wealth of the Australian community. But he also wants to make it a good place to work.”
For his part, Jordan wears the fact he cut his teeth outside of the bureaucracy as a badge of honour.
He says that after he came to the ATO in 2013, there was a “massive shift” in how it approached chasing tax receipts. He applies the same principles to everyone he audits, from individual taxpayers to huge multinational corporations. “We moved away from being pushed away into a technical corner, to a pragmatic approach to what’s happening on the street.”
But while Jordan has brought a street-smartness to his crusade against tax avoidance, he also has thrown out the traditional ATO rule book.
He has attempted to create a more user-friendly experience for average taxpayers that encourages them to be more relaxed in dealing with the ATO. He wants the silent majority of taxpayers who do the right thing to see a visit to the ATO as “quick and painless”.
“Most government regulations, not just tax, are all designed for the last, worst person. It’s all designed for trying to make sure no one can possibly get around the rules. But I want to turn this on its head and say: well, actually we should design for the majority, not for the last, worst person.”
He reasons that 95 per cent of the revenue the ATO collects comes just “from the existence of the system”. Less than 5 per cent comes in from tax audits.
He is on a mission to make the ATO approachable. “I don’t want to measure it against other government departments,” Jordan says. “I want to measure it against any large organisation in the world with a complex client base.”
He is, however, realistic: “I’m never going to have everyone busting their gut to come to us, right? I get it. We start a relationship from an awkward position because we effectively just take money from people. But I do want them to say: ‘You know what, I didn’t particularly want to deal with the tax office, but the interaction I had was about as good as I could expect it to be.’ ”
Jordan admits that when he took over as tax commissioner, he was up against it. Opinions about the ATO were anything but positive, externally and internally.
“Our whole place was bound up with people who just weren’t willing to make a decision,” he says. “They were just sitting on things or passing it up the line. For example, with the contact centres, say in the debt team, I had people say to me: ‘I ring you up and I feel like I’m talking to a robot.’ Then I’d go visit the contact centres and they’d say, ‘I feel like I am a robot — because all I do is feel like I ask questions and it doesn’t matter what they say, I just ask the next question.’ ”
But he insists change has come. One group of taxpayers he is out to help are those with genuine difficulties in meeting their tax obligations on time.
He has told his call centre staff to “have a natural conversation” and adopt a more compassionate approach. “So they can say: ‘OK, this person’s got a problem, been in business for 20 years. But they’ve never had a problem before and they’ve gone through a divorce.’ ”
He cites the example of a small business struggling with conflicting and pressing commitments. “If you’re growing your business and the bank wants their interest, a supplier wants to be paid, staff have to be paid their wages — well, you might spend that tax. And 28 days after the end of the quarter comes, you might go, ‘Ah, I don’t have the money.’ Now (that person is) not trying to cheat. It’s a temporary thing.”
The Sydney-based Jordan continues to ring in the changes, internally and externally. For one, as the first tax commissioner not to be based in the federal capital, he has shaken up the previously Canberra-centric stance of the ATO.
“All the deputy commissioners had to fly in (to Canberra) on a Tuesday morning and leave on a Thursday night. And it was a strict rule. I was booked in, so I used to do it.
“Then after three or four months I thought: ‘What am I doing this for?’
“There used to be all these people coming in just so all the commissioners who were Canberra-based could see them if they wanted to.
“I just changed it. I said: ‘This is ridiculous. I’m not going to do it, so I don’t expect you to do it.’ People were really relieved. And we had people’s apartments down there that we paid for. I said: ‘Stop all the apartments.’ ”
Another new Jordan initiative is Opening Doors, a recruitment program seeking to offer opportunities to talented people, particularly women with children who need more flexibility than some private sector firms are able to offer.
“I said: OK, there’s a pool of talent right there that we normally wouldn’t be able to access. So we designed a scheme where they can work school hours, with no obligation to work school holidays.
“In that first group of very talented people in transfer pricing and corporate tax, they would never normally think to come work at the ATO on a full-time basis.
“So we’re giving them an opportunity while they’ve still sort of got young kids at home to only work school hours and choose whether they want to work from home.”
The scheme has already recruited 74 people, mostly women. “There are Sudanese refugees in Canberra who had really good qualifications but just couldn’t get a job,” he says proudly.
“And there are veterans, who sometimes have difficulties transferring from the armed services back in. These people are fantastic. They’re highly talented people who are jumping at the bit to be able to work flexible hours.”
He has also implemented a similar program to headhunt top-level ATO staff from the private sector by giving tax high-flyers job flexibility they cannot find in that sector.
“The senior people who have come in have taken a 50 per cent to two-thirds drop in pay. But they’re loving it. They’ve got their lives back and they’re bringing a level of talent and expertise that we just wouldn’t have got.
“They want to make a difference, they understand the work-life balance is better, but they’re willing to trade off their income to enjoy actually making a difference to society and the economy.”
Under initiatives such as these from Jordan, the ATO has attracted record levels of women. Its workforce was already majority female, but there has been a big jump in the numbers of women in senior management positions.
“There’s 56 per cent females in the whole organisation, but in the last two years I’ve gone from 35 per cent to 42 per cent (female) in the top 200 (staff),” he says.
Job satisfaction is also up, with unplanned leave at its lowest level in 15 years at a government institution that a few years ago routinely topped public service absenteeism levels.
“We’re trying to give the staff a more fulfilling work day,” he says.
“My idea was, if I want people to deal with clients in a more streamlined, more effective, more empathetic way, you needed internally to try clean up your own act.
“The tax office used to be full of process, full of checklists. So I came in and said: ‘Look, we need to open up the doors, we need to let the windows open, we need to let air in, we need to declutter.’
“So we went through this enormous decluttering process: petty checklists, guidelines, tens of thousands of pages of guidance, rules, all internal things that were winding people up.”
With an improving culture, Jordan can now turn his attention to his big mission: ensuring the global giants pay their fair share of tax.
In a vote of confidence, Jordan’s role as commissioner was recently renewed for another seven years until 2024 — an extension that means he will be at the helm for more than a decade, until at least his 70th year.
And for multinationals such as Amazon, Google and Facebook, that is bad news: a fired-up Jordan is ready for more scraps with them.
Asked what his agenda will be in his second term, he unhesitantly says he will use his role as the world’s top anti-tax avoidance cop to give the global giants the third degree.
“It’s more of the same. More real-time, multi-country projects. Internationally, we’ve made a huge improvement in the way that tax authorities work, for the benefit of everyone.”
Ominously for the multinationals, he then adds after a moment’s thought: “And we will keep improving.”
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