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Tax office: crisis of mind and body

By John Passant - posted Tuesday, 26 August 2008

The Australian Taxation Office is in crisis; it just doesn't realise it, yet. This is a crisis of both the mind and the body, of the people in the organisation and the way they think.

It was the former head of the Department of Prime Minister and Cabinet, Peter Shergold, who famously said that an organisation obsessed with process is moribund. The ATO is obsessed with process both in dealing with taxpayers and in dealing with staff.

Surely senior leaders of the ATO have more important thing to do than stress about minor details?


Unfortunately the office is structured in such a way as to give prominence to essentially menial managerial functions. The end result is that much of the ATO's leadership devote themselves to pushing their workers harder and harder. They use the mantra of working smarter but this is just code for doing more and more with less and less.

For the ATO leadership work/life balance is all well and good until life balance gets in the way of work and outputs. No wonder the ATO's Comcare costs skyrocketed in the last decade. There are also funding pressures. The Commissioner, Michael D'Ascenzo, himself highlighted, in my opinion, the stupidity of the ''efficiency'' dividend in Senate Estimates recently. His words were to the effect that any loss of ATO funding would result in a loss of revenue ten times greater.

Couple that with the non-supplementation of wages and the cost cuts (before taking into account specific funding for extra compliance activity) could well be in the order of more than 7 per cent.

Attracting quality staff is becoming more and more difficult. The ATO remuneration levels are trapped within public service boundaries. For sought-after graduates the pay is a pittance compared with accounting and law firms. The discrepancy is only likely to increase as a shortage of lawyers and accountants sees private firms bid more and more for quality staff.

If the work for graduates was interesting and exciting this might be some recompense. But until recently many graduates were forced into call centres for months to relieve operational shortfalls there, or for ''experience''. The rate of turnover of graduates and younger staff is, unsurprisingly, high.

Three months' paid maternity leave and a superficial commitment to the work/life balance aren't enough to keep or attract good staff. A new way of thinking is needed: perhaps 12 months maternity leave, increased pay, proper job structuring and clearer prospects and rapid promotion are some solutions. There will be more but essentially the ATO must break out of the public service remuneration mould and start thinking to ensure its long term survival as an organisation.


The ATO also faces a demographic time bomb. Public servants in the now closed Commonwealth Superannuation Scheme are often better off resigning at 54 and 11 months than retiring at 55 or later. For one of my staff the difference was about $20,000 a year in pension. As she said, the scheme forced her to resign.

There are a large number of ATO officers in the 50- to 54-year-old age bracket. If they were to leave, the ATO would lose experience and expertise on a grand scale. However, its succession planning is poor and the skills of this group are not being passed on to newer staff. Couple the impending departure of wise heads with the inability, to some extent, to recruit and retain younger staff and I fear for the future leadership capability of the ATO.

On leadership, the Office, like most other public service organisations, promotes people on the basis of their technical ability, whether it be in law, accountancy, human resources or the like. Technical ability is not leadership.

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First published in The Canberra Times on August 5, 2008.

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About the Author

John Passant is a Canberra writer ( and member of Socialist Alternative.

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