Robyn Jacobson
Hello and welcome to Taxvibe, a podcast by the Tax Institute, where we peel back the layers of the Australian tax world. I'm Robyn Jacobson, your host and the senior advocate at the Tax Institute. We bring you the sharpest minds in the tax profession, digging deep into their unique insights and sharing nuggets of wisdom you won't find elsewhere, always keeping it real and interesting. So sit back and relax and let's dive into the world of tax one conversation at a time. We hope you enjoy this episode of Taxvibe.
I'm joined by the tax ombudsman, Ruth Owen, CBE, who is appointed as the Inspector General of Taxation for a five year period commencing on 15 July 2024. Ruth brings a wealth of experience in tax, public sector reform, complaints management and dispute resolution, having spent more than 30 years in various senior leadership positions across the public sector in Australia and the United Kingdom.
Ruth has previously been a Director General and Tax Commissioner of His Majesty's Revenue and Customs in the UK, Head of Profession in the UK Civil Service, Deputy Secretary of the New South Wales Department of Education and Deputy Secretary of the New South Wales Premier's Department, leading the Strategic Implementation Group. Ruth's extensive experience brings a different perspective to her role in providing independent oversight and investigation of the administrative practices of the Australian Taxation Office and the Tax Practitioners Board. Ruth, welcome to TaxVibe.
Ruth Owen
Thanks, Robyn. So great to be with you.
Robyn Jacobson
It is a great pleasure. There's a lot going on in the tax space and we'd really like to unpack more about what your office does, how you do it, what's going on and how you fit into the broader framework. So you've been in the role now for just over a year. The role of Inspector General of Taxation itself was established way back in 2003, but there may be some listeners who haven't heard of your agency or maybe don't fully understand what it does. So can you tell us a little bit about the role?
Ruth Owen
Absolutely, happy to do so. In a nutshell, my organization does two things. So we oversight and scrutinize the ATO and the Tax Practitioners Board, the TPB. Our overall kind of vision and purpose is to improve the fairness and integrity of the tax and superannuation system of Australia. So pretty broad, but very specific.
We're an independent organisation. I think that's probably quite important to stress. So I'm not part of the ATO. I'm not part of the government or treasury. I'm sure many of your members and listeners will have worked with different ombudsman in the past. So think about us as the ombudsman for tax. And what that means is we do two key functions. As an ombudsman, I take complaints from anyone across Australia who wants to raise a complaint with us about the administration of either the ATO or the TPB. And like every ombudsman, we're a kind of escalation service. So to complain to us, you have to have given the ATO or the TPB a chance to resolve your complaint at first chance. If you remain dissatisfied, the role we play is to try and give you resolution of that complaint. So that's that kind of first part of our function. The second part is all about the ⁓ health of the system. So we undertake deep dive investigations and reviews about any part of the tax system that I choose to look at to make sure that it's operating as intended, as Parliament intended, that the administration works as the community would expect, or to do a deep dive on topics within the tax system that really deserve greater investigation and for me to drive systemic improvement across the system working with and making recommendations to either the ATO or the TPB or to be fair, it's mostly the ATO given the impact and influence they have over the whole way the tax system works across Australia.
Robyn Jacobson
Is it fair to say, it's both a macro role and a micro role? Because you're looking at the health of the system and systemic issues in the administration of the tax law, but you're also at a micro level looking at individual taxpayers' cases or complaints or issues.
Ruth Owen
You're spot on there. That's why I love this job so much, because I love being able to help individual taxpayers. As we know, our tax system is super, super complex. And there are many people, particularly people who don't have a tax practitioner to help them, who really get very lost, very distressed within the tax system. So being able to be a channel of help and hope for them is really important. And I get a lot of satisfaction as my team from helping them resolve their complaints.
And as you would imagine, as we see complaints, we get about 2000 complaints a year through our office. So we start to see trends emerge and that starts to then influence. So what are those big macro things that we want to look at and the opportunity and the privilege to be able to kind of cast around the whole tax system and say, I really want to look at that particular point. And people like yourself, Robyn and colleagues and practitioners, professionals across the sector.
Give me a lot of feedback on Ruth. really think you should be looking at this or have you heard about this or we're starting to see a trend. So can I use this podcast just to encourage everyone to do that? Because we can't operate on our own. We really work best as partners within the system, particularly with practitioners or people who support independent taxpayers. So yeah, if we can work together to identify how this massive ecosystem works and what could be improved, that makes my job much easier.
Robyn Jacobson
We'll talk later about how you identify what needs to be investigated. briefly, your branding has changed. You've got new colors and your title was always very wordy. was the Inspector General of Taxation and Taxation Ombudsman. And many knew it as IGTO. But now you're just calling yourself Tax Ombudsman.
Ruth Owen
Correct. So just to be clear, my remit, my statutory responsibilities remain exactly the same, but from a kind of branding and communications point of view, a lot of people really didn't understand what an inspector general meant. Quite a lot of people thought I was in the ATO. Sounds like I'm a tax inspector and people trying to make complaints really didn't know where to go. So I decided last year to do a rebrand because I think the word ombudsman is really well understood within the community. And then just to say, I'm an ombudsman for tax. I told my hairdresser recently, she said, what do you do? I said, look, I'm an ombudsman for tax. Oh, okay, get it. So that's why we've rebranded the nature of the work doesn't change at all. But it's really important for me that everybody across the community feels like we are there to help and that we're accessible for everybody. And that means talking in layman's terms as much as possible. that's why tax ombudsman means more to most people.
Robyn Jacobson
Very good. So at a very high level, you've talked about how your office is an independent agency. Where are you located? How many staff have you got? What does the office look like?
Ruth Owen
So I like to describe my little team as a small team with a big impact. We're about 36 people. We are spread across the Eastern seaboard. So I've got people in Queensland, ACT, New South Wales, Hobart in Tasmania, and quite a large number of people in Melbourne and Adelaide too. So other than the West and the center, we are spread across Australia. I'd love to be in every state and territory because we are here for everybody across Australia. But with 36 people, I just have to create hubs where I can. And we have a mix of people with strong tax and legal background, as well as people who've got really strong experience in ombudsman and complaints type work.
Robyn Jacobson
your office interact with the tax office and with the TPB? So what sort of powers? Have you got the power to go in and ask for information? Is it just a kind request or is it a demand? How does it work when you're interacting with them?
Ruth Owen
Yeah, so it's fair to say, obviously we spend quite a lot of our time working very closely with ATO and TPB. The more we understand what they do and why they're doing it, the better our responses both to the complaints and the systemic reviews is. But yes, at the end of the day, my job is to hold them to account and to scrutinize and oversight their work. So that means that kind of slight distance sometimes is required.
I have a range of powers. Yes, so I do absolutely have a right to demand information from the ATO. That's probably not the tone that I use all the time, but I hold that in reserve if I need to. I can both demand information and demand access to their buildings and demand access to any officer who works in the ATO in pursuit of the investigations that I undertake. My powers were even bolstered further earlier this year off the back of the Robo debt and Royal commission, where myself and the Commonwealth Ombudsman were given additional powers in recognition of occasionally some people in the public service, very few, but occasionally they withhold information. And so, you know, if I might make a request and say, give me all your information about GIC as an example that we're talking about very soon, I might not get everything that I was hoping to get. So I do have the right then to demand and to access directly, I actually go into their systems myself or through my team, rather than hoping that by asking for the information, the ATO gives me 100 % of the evidence. I think that's a really important assurance actually for everybody that I can get access to the evidence that I need to make a fair assessment of either a complaint or a very big systemic or integrity issue. We do the full remit of through to mal-administration or just independent process improvements.
Robyn Jacobson
work with the confidentiality of taxpayer data and information because we all know that's very tightly controlled and the ATO by law is restricted and who it can share that information with. So how does it work in office when you're looking at taxpayer information?
Ruth Owen
So we have full access to all taxpayer information. So that's part of the Act and that's part of the agreement between us and the ATO. But clearly, we can only use that for proper purposes. So we are equally restricted in both what we can use that information for and what we can disclose because I know every taxpayer takes very seriously the privacy of the vast amount of information that either they give the ATO or that the ATO receives from third parties, et cetera. So yeah, everything they've got, we can see, but we won't be disclosing. obviously my team are very restricted on, they must only use that information for the purposes of an investigation that they are undertaking.
Robyn Jacobson
We will talk later on as well about some of the work you're doing in response to some concerns across the community about the way the system is being administered by the agency. So there's been a bit of a spotlight on some of this lately. What's your response to that?
Ruth Owen
Yeah, tax is always topical. We're in tax time right now, but yeah, it's very interesting to see the range of community and media interests, as well as colleagues across the profession are recognizing that the ATO has got a big job to do. And that does mean, as we speak right now in the context of cost of living pressures, people in financial distress because of, you know, businesses doing it tough, that at the same time, the ATO is trying to collect tax that's legally due and catch up on that debt book. And I think that has really brought tax collection and the methods of tax collection into sharp relief. As we all know, the ATO is building up, it's what they call the vulnerability framework at the moment. And I think we're all paying very close attention to that because we all know, as I said, they've got the job to do, but I'm really looking at the potential for people to fall between the cracks. And I want to make sure the ATO recognises every taxpayer as a human being, as well as the revenue that they have to collect.
Robyn Jacobson
So let's turn now to your most recent review. And formally, you were looking at letters from the ATO. Now, letters, we're talking about formal correspondence and whether it's in the mail or it's email, we're not talking at the moment about the mode of delivery. But we look at the volume. The ATO sends 140 million letters and messages to Australians every year. And given our population size, that's an awful lot of correspondence. So there's a lot of resources that clearly goes into funding it, developing it, designing it, and of course, distribution of that correspondence. What were you looking at in terms of what you consider to be effective communication, perhaps at a more general level first, the consequence of communication being ineffective, and why was there a need to go and look at this aspect of the ATO's activities?
Ruth Owen
Yeah. So if you look on my website, we publish what we call nine principles of good tax administration. And that's kind of what we go to when we think about what's really important in our assessment of whether the ATO is fulfilling its role as the tax administration agency for Australia. And right at the beginning of that framework is accessibility. So every Australian, whether they're represented or not, should have clear ways to engage with the ATO and understand how to access their services, whether that's online by phone, by writing, et cetera. The second one is what we call clarity of communications in that the tax office has to deal with people in a way that makes what they are communicating understandable to all. And it was really under this principle that I started to build up this review because just observing how people respond to letters from the ATO, again, whether it's people like us who all work in the sector, whether it's people who rarely get a letter from the ATO, but when they do, primarily, first thing is they don't understand what it says. Secondly, it's pretty scary. And I guess that's something that's been brought to fore with me is really understanding the power imbalance between tax authority and taxpayer. If somebody gets a letter from the ATO, depending on what color it is, what it's got to say, it can be really, really distressing. And as we all know, sometimes that causes people to disengage. Sometimes it causes people stress and anxiety, and they just don't know how to respond to the letters from the ATO because they're just not clear enough. And I like to think of it as the ATO is kind of writing in their language. They're not writing in a language that actually the average Australian would understand. So that's why I thought it was important to do a review at a systemic level. So we picked up a sample of letters, but generally I was looking at, if you're in the ATO and you want to convey information and you think, I know we need a letter for this particular type of case, how do you go from? Point A is we need a letter through to point Z, which is off it goes. And let's hope it's well understood. What's the process by which the ATO designs and drafts and obviously there's a lot of approvals that go into getting a letter signed off, et cetera. So that's what I was looking at in this review.
Robyn Jacobson
What's the adverse impact of having poor communication?
Ruth Owen
Disengagement is the thing I worry about most is people getting a letter from the ATO, it not making sense to them and without the right representation, they're just like, I'm just going to bury my head in the sand because I'm scared. I'm probably better not responding than I am responding. And we all know the consequences. The people disengaging is the problem in tax gets worse and worse, the penalties and the interest grow and the people get into deeper and deeper financial stress. So for me, it is that. It scares people. Literally, I've spoken to people that it causes emotional anxiety and distress. And from a system point of view, we all want system on this call, on this podcast, so we all want the system to work well. And therefore, conveying information, which may or may not be quite complex in a simple way, has to be an expectation of the tax office.
Robyn Jacobson
I’ve certainly received letters that I have not fully understood. And I also think of letters I've seen where, from the ATO's perspective, they're really just sending a letter out to say, look, there's a mismatch in the data. We all know that the ATO collects a lot of data from third parties and they match it up. And if something doesn't agree, then of course they'll take steps to try and understand what's happened. But there's a way of saying that. And there's one way approach of we basically say, something's not agreeing here. Look, can you help us unpack this and work out what's happened? we think you haven't declared all your income, penalties apply if you don't make a voluntary disclosure, which is a far more threatening approach. There is quite a range in the tones that can be used. So it's understandable how someone who's not familiar with the system, who's had no engagement with the ASU other than lodging a return and getting their assessment notice, may receive such a letter if they happen to have left out a bit of interest income. So of course it needs to be included and you make good that error. That tone is so important here.
Ruth Owen
Absolutely right, Robyn. Yeah, tone and that kind of implied threat really does concern me. Again, it's kind of how it's received rather than how it's meant to be conveyed. So my office and the Commonwealth Ombudsman wrote a guide for all government departments last year about how to write to Australians about whether they owe debt to government. And I think we all know the background to that release. And those principles still apply to the ATM. That's one of the ways that we could kind of judge on how well the ATO is writing letters is, as you say, one of the letters we looked at in particular, which I know will be a favorite of some of your members is the rental income letter, which went out, was that earlier this year or last year? Better both, I think. And I got a lot of complaints about that letter because A, it seemed to go to a lot of the wrong people, but it seemed to imply both a threat and a certainty. about the information that the ATO had received through third parties where actually it should have been an inquiry rather than a threat. should be exactly as you sort of pose the question of, think you might have missed something off. Can you just check this information? And of course people go, oh, okay, let me look. No, no, you're actually wrong. Whereas I think most people I think assume the tax office must have something on them and that if they get it wrong, somehow they'll be in trouble. So a lot of people just accepted that letter, whereas actually it was a question or a not a threat, but it didn't come across that way.
Robyn Jacobson
Alright, so the purpose of your review was to investigate the claims that people still find these letters too confusing, too technical, and the tone is either too forceful or too accusatory, and you've talked about the stress and anxiety that that can cause. Now, you've released this report only recently, so coinciding really beautifully with tax time. I just wanted to point out two things. I wanted you to talk us through the report about your recommendations are and so on. But firstly, you've got things to know about this report apart from the full report itself. And I really like this initiative because if someone doesn't want to wade their way through this entire report, they've got this bullet point list of 10 points and they can just understand basically what's going on. So I love that initiative. I also think this idea of you've produced what I think for the first time is called a plain English report. So I really love the symmetry with the topic we're actually talking about communications from the ATO to the community, to business and individual taxpayers to make sure it's clearly understood. And in your own delivery of this report, you have produced a separate plain English report that people can go and read. And I think back to when I studied Romeo and Juliet and The Wretched in Venice back in high school, there used to be something called Shakespeare Made Easy. On one side you have the Shakespeare script and on the other side of the page you had the plain English version. And I just think this is wonderful for
Ruth Owen
Yeah.
Robyn Jacobson
giving people access to the reviews that you're doing. So please share more about what you found and what the recommendations are.
Ruth Owen
Yeah, thanks for that recognition because we live in a glass house, right? So if I make comments about what I expect of the ATO in terms of good public administration, I hold myself to account to those same principles. So I hope that people have seen over the last year since I took on this role, we've been trying really hard to make our written communications from my office more accessible and much more plain English and much, much shorter, much less technical, know, all the technical.
Investigations are there in the background, but actually what we write, we want anyone within the community, not just the tax professional community, to be able to pick it up, read it, understand it. So a kind of one page or upfront of 10 things to know. If you just literally want to zip through that and then hopefully you're intrigued to read more, but if not, you kind of know the headlines and then the report behind it. Yeah. Trying to write it as clearly as possible, following our own recommendations. And then this one in particular, we had to make it as straightforward as possible because that's exactly thepoint of the review. So yeah, we did actually contract in a person who's a professional plain English writer to help us with the review, to help us think really clearly about how we write. And then we've got the supplementary report from that professional. That was a good learning, I think, for my own team, as well as hopefully sharing that insight with the ATO. I think in future reviews, we'll try and build it into the actual report. So in future, you won't get two versions. We did the two versions because it was just so important to kind of compare and contrast. But hopefully the idea being we've learned the lessons from having that professional advice that we write in plain English in all our publications from here on in.
Robyn Jacobson
What were the key findings during your review?
Ruth Owen
So the key findings were, as I guess we expected, that ATO, being a big organization, has a lot of documented process, procedures, guidelines, et cetera, on how it produces a letter. that thing about how do you go from A to Z, it's all there. But again, being a big organization, ATO isn't actually applying that process consistently. And the letters that we're talking about. Div 293, that's one of my favorite ones. There are rental income letter, PNYG installment letter, are some of my favorites that they just don't follow that process. And therefore we see the consequences of that of taxpayer confusion. So first thing to find is in the ATO, they've got, as you well know, huge tax expertise, but they've also got people who've got really good communications expertise. And guess what we found is there's a little bit of a tussle sometimes between those two groups and sometimes the lawyers as well of what's the actual words that go into the letter. So yeah, what we found was the tax experts probably had the final say in how the letters should be written. Whereas in our investigation, we could go into the exchange of guidelines and we saw that the communications experts had some really good ideas and they weren't always taken on board by the tax experts. I guess our first finding and therefore our first recommendation is use the experts that you've got. You've got great communicators within the ATO. Listen to their advice because they're actually acting on behalf of the community and telling the tax experts. If you use a word like that or a phrase like that, this is how it's going to be understood. I'm giving a really strong guidance on that.
Robyn Jacobson
So it reminds me of the tensions we sometimes see in businesses between finance and marketing. The technical people and the communications people and left hand and right hand need to be able to talk to each other and work with each other.
Ruth Owen
Yes, that's exactly right. Correct. Yeah, I think use the expertise you've got. You've got great tax experts, you've got great communicators, bring them together and help them respect each other's professional capabilities. And I guess at the end of the day, and I did speak to the commissioner about this recently, if you do have that tussle going on, be really clear who's the arbiter. So who's going to make that final decision and make sure they are sitting in the shoes of the taxpayer when they do that, not in the view of this letter might be relied on in court, so it has to have the exact wording that I'm going to use in evidence against the taxpayer. Yeah, it's got to be plain English.
Robyn Jacobson
Was there a tendency in any of the communications that they were coming from the perspective of what we want to say, not what we want you to hear, receive or understand?
Ruth Owen
That's my observation. It's very much written from the voice of the tax authority. I don't think they intentionally write like that, but that's kind of what results from their communications. And we'll talk in a minute about how they test whether their communications are conveying the right messages. But yeah, my main concern is they write from their own perspective, which means they're conveying messages using their own language without really thinking through how that's going to be received. think if they thought the opposite, if they wrote as per how they want to be received, we'd get very, very different communications.
Robyn Jacobson
Let's just getting back to basics. Proficiency in English, literacy, people who have a non-English speaking background. Did you look at those aspects of the communications?
Ruth Owen
Yes, because we absolutely have to take into account every member of the community. So that's again, some really good advice that we got from our plain English expert is to recognise the average reading age across the population, to recognize some people have different forms of disability, which means that it might impact on their ability to read and understand letters. And obviously people whose first language isn't English are always going to be on the back foot if the language that's conveyed to them is in jargon or technical information that maybe they're not familiar with. So that's my principles of good tax administration. It's got to be accessible for all. And I take very seriously my expectation of the ATO is to understand the community and understand the expectations of all parts of the community. And that does mean people who have different communication needs, including different languages.
Robyn Jacobson
And can we take that a step further if we look at linguistically diverse or First Nations people? Are there special needs there or special consideration that is needed to make sure that it is being understood by the audience? Because that's the number one objective of communication in any civilised society.
Ruth Owen
Exactly right. Yeah, try to be inclusive. Again, as I say, the ATO is a big part of the Australian government. It is their responsibility to convey information in the way that all parts of the community can understand. And again, you know, to give a credit to the ATO, they do a lot of work on translation material. They do write some of their communications in language. And what we found is in some of the letters, It actually has some really good little kind of information boxes at the top, so if you need this in a different format or if you need help, if you're First Nations person, these are the areas that you can seek further help from, whether that's online or by phone. But unfortunately, that wasn't consistent. So you found some letters had that reference point and others didn't. And again, it's back to consistency because those members of our community need that on every letter to make sure that they know where to get additional help should they need it.
Robyn Jacobson
What were the recommendations in your final report?
Ruth Owen
So key recommendations, starting off with that process. Again, we're trying to think systemically, not by individual letter or individual team. So make sure that the letter process works well and that the appropriate processes are followed consistently, including making sure ⁓ key reference points for people who might need additional help to understand that are there on every single letter and that the expertise of their communications experts in particular is applied. And if appropriate, there's a approval process that means somebody senior is thinking about the receiver of the letter as much as the language that the ATO needs to convey. A second recommendation was about user testing. I think this is absolutely critical. And my recommendation is every single letter, the sort of mass produced letters, not the individual letters, but every single mass produced letter that goes out from the ATO should be user tested. Now the ATO has said to us, you know, that's quite in raw resource intensive. But I say to them, it's even more resource intensive if your customers don't actually understand your letters and the consequences of confusion, anxiety, and actually additional calls into their call center. So it is really important that those letters are tested, tested with all different members and cohorts from the community to represent the full diversity of the Australian community, including tax professionals, but making sure we've got individual taxpayers as well who can say, when I read this letter, I think you're trying to tell me this. And the ATO going, my goodness, no, that's not what we meant at all. That's super, super insight for the ATO and they should be using that process. And I've done it in my experience and working in the UK tax office, it pays off. So I don't think they should be concerned about the resources that that takes. Then the third recommendation is around who you are actually writing to. So key is you can write the most beautiful letter in the world, but if you then send it to the wrong person, not going to be very effective. as we know in particular, there's a real confusion in the tax office of an A which address they use for quite often they've got several addresses for each taxpayer and the multiple databases that they use. And then when do they send a letter to an agent or representative and when do they send it to the taxpayer? And I think we all know it feels from the other end of things pretty random sometimes of if I'm a tax agent, is this letter coming to me? Sometimes I get a call from my client and they've got a letter which I've got no idea that was being sent to them by the tax office. So that's not great. Again, for the health of the tax system, we need transparency between tax authority, tax agent and taxpayer. So a bit of work to do by the ATO in particular, being really clear which addresses they're using when they're sending it to agents, when they're sending it to taxpayers and making that much clearer and much more transparent.
Robyn Jacobson
That's a huge bug there for the profession. I'm sure. As that I've heard, correspondence gone directly to my client. I didn't know about it. The client then rings me. I don't understand what's happened because I'm not across the communication. And then they look at me and say, well, why am I paying you fees if you're not across this? So can backfire quite poorly on the agent through no fault of their own. And they just try to help their client.
Ruth Owen
Yeah, I we're all here to help each other. think if the agent can help the taxpayer, it's the responsibility of the tax authority, the ATO, to help the tax agent do their job. I think trust, as we know, is very, important between client and agent. And the ATO should be supporting that because when the agent does a good job, the system works best.
Robyn Jacobson
and respecting the communication preferences of the tax payer and the agent.
Ruth Owen
Yeah, exactly right. That's a key part of how we work together, I hope.
Robyn Jacobson
Now I am keen to get into your upcoming review and also how you put together your workflow, but quick question, what happens to these reports? Do they just go into some big space where everyone will say, gee, wow, this is good. And yes, we need to do that. What sort of follow-up is there in respect of your recommendations?
Ruth Owen
Yeah, great question. It goes back to my powers again, that I don't have the power to enforce my recommendations. So they are recommendations at the end of the day. The commissioner has to make a decision whether he's going to accept my recommendations or not. But I'm pleased to say he has agreed all of these recommendations. So that's good. So the next thing that happens is I asked the ATO to provide me with an implementation plan. So I will be keen to know how they're going to take forward these recommendations at what time scale. So they will provide me with a timetable. From here on in, I'm going to start publishing them because I think we'll all be interested. You know, as you said, people might really quickly read one of my reports, put it to the back of their minds, but you should be able to go onto my website at any time and hey, remember that report that the ombudsman did about leathers? I wonder when that's actually going to be implemented and how will we recognize it's going to be different. So I will be publishing that going forward on our website. And then obviously. It's my job to hold the ATO to account. every quarter, I have to report to me on progress against those implementation timetables. And if there's been any slippage, I have to be notified of that. And then I will also publish that. again, as a community, including to government and parliament too, it's all transparent that we know what happened to that recommendation. Did it get implemented? If not, why not? And when is it going to be implemented? And then I'm just discussing with the ATO now, there's probably one final loop on that of. Yes, you might have actually ticked off all my recommendations. Did it solve the root cause? You know, I only make recommendations because I feel it's going to solve a problem that we're all concerned about. So there's a final loop. think we all need to go through collectively of, yes, you might have actually implemented all the things you said you did, but has it actually made a difference? And hopefully we can all evaluate that.
Robyn Jacobson
All this with only 36 staff.
Ruth Owen
Yes, indeed.
Robyn Jacobson
to your current review. Now, I think every agent I've ever spoken to has shared at some point the frustration they've experienced sitting on the phone on hold waiting for the ATO to pick up. Or they get through, they speak to three different people and they get three different answers. So the review, the effectiveness of the ATO's registered agent phone line. Please tell us more about this review.
Ruth Owen
Absolutely. got to be one of my favorites. Not least because since I took up my role, I've been overwhelmed by feedback from agents from all different parts of the sector and the profession, all trying to tell me how poor the service is on that agent phone line, how they feel it's deteriorated so they can compare it with the service they used to receive from the service that they're receiving now, and how frustrating it is. that they're not getting the service that they need to again, to fulfill their client's needs. And the word consistency comes up over and over again. It's not so much the kind of waiting time, although I know obviously time is money for agents, but it's the consistency and quality of the interaction with the people at the other end of the phone. And you and I know and everyone listening will know how many times an agent actually does phone up several times because you're not really confident of the answer you just got. So you're going to try again until you get somebody you feel is giving you accurate or the correct information or the decision that you think is based on the right evidence. So yeah, I had to do this review just based on the volume and the scale of feedback that we were getting. So we started off with it being about the phone line, just because that had been kind of front of mind. But I've got to say I've kind of broadened it out a little bit because the more we went into the phone line, we realized it was a symptom of a kind of broader perspective on agents' expectations and experience of receiving a service from the ATO. So it does start with a more fundamental question, which I you and I have talked about Robyn, of what's the value that the ATO sees from tax practitioners? How do they recognize the value that tax agents, BAZ agents bring to the health as stewards of the system? How does it bring value to that sector? And how much does the tax office genuinely collaborate and consult and listen to agents as a key actor within the system. And I think what I found is yes, the volume and scale of the feedback I got was mostly around the phone line, but actually it amplified the fact that agents really feel like the ATO doesn't value them, doesn't see or hear them, or doesn't genuinely listen to their concerns. I've had some really worrying conversations actually with agents saying to us, I've had several times somebody say to me, Ruth, does the tax office think we're the enemy? I mean, that's language that's out there. I didn't make that up. People have actually said that to me. Why does the ATO not value what we do? We're working all really, really hard to get taxpayers to obviously meet their obligations, to fill their tax obligations, to meet the ATO's needs. And if those agents weren't there, the whole system would crash, honestly. And I think, yeah, that's not recognized. So we have kind of expanded that review a little bit further to look more systemically at that point.
Robyn Jacobson
pleased to hear that because we know the stats, two thirds of individuals use a tax agent to lodge the tax return and 95 % of businesses use a tax agent for that purpose. And I feel personally there's a bit of a mismatch because when we deal with the ETO, the people that we engage with as part of the advocacy role, the profession is valued and we hear this all the time, how important the partnership is and what a vital role it plays in the tax system.
Ruth Owen
Massive, right? Yeah.
Robyn Jacobson
But yet so often we speak to our members and the experience that they have is conflicting with that. So it would be great to understand how this particular review goes and your findings at the end. Obviously you can't talk to the recommendations now because they're still being formulated. Yeah. But you've touched on some of the feedback. Is there anything else in particular regarding this review that you think is worth noting at this point?
Ruth Owen
So I think, as you say, I can't go into the recommendations, but I can certainly talk about findings because I'm at least two-thirds away through the reviews. So the themes that we're pulling out is going right back to that fundamental piece about the role of the agents within our ecosystem, if you like, the nature of the relationship between the ATO and agents. So I am probably going to have a whole chapter on that because I think that is so important and likely make some recommendations around that. I think that really is the platform this and actually will be a platform from a number of follow-on reviews that I do too and I hope it pays due respect to all the feedback that I have heard from agents about how they are feeling and their keenness to be recognized within the system. So that's the first piece. Second piece then is before I kind of jump into the phone line itself is the phone line is obviously related to what we all do online. So the kind of the Is it on the phone? it online? It's a really interesting conversation. You of used the word mismatch earlier. There is a mismatch of expectations of the ATO saying, well, know, agents should just be going online. I don't know why they're phoning the ATO. Why don't they just use the platforms that we've provided? And then the agent's going, I really don't want to be sitting on this phone line waiting. If you gave me the capability, of course I would be doing it online for the vast majority of transactions that we want to do. the reality is ATO says, yeah, do it online. But many of the transactions that we know agents need to fulfill on behalf of their clients cannot be fully fulfilled online. Maybe some of the bits can, but not end to end. And therefore we can see people start transactions online and then they have to drop out and complete them over the phone line.
Robyn Jacobson
it seems to me that there's almost an inverse relationship between the telephone service and what's online services because the more that's available online, the more that those systems and the functionality works, the less need there should be to call the ATO. The online services become deficient, then there'd be a greater need to call the ATO. of course, the ATO is always investing in systems and spending a lot of money on their IT, but it's still not perfect.
Ruth Owen
It's definitely not a massive inverse relationship is exactly what I found as we started to dive into what are the key transactions agents want to pursue when they phone up. And then we tried to do a kind of tracker of how many of those can be fulfilled online. And that proved quite difficult to actually track down, which tells me actually there's a big job for the ATO to A, communicate what can be done online, but B, to fill the gaps. There's a lot of gaps where agents would like to transact online, even look at things that practice mail, that's quite an old fashioned way to communicate. I'm sure we've all got expectations of not just the way that we communicate, but the time scales. So again, if you want people to go online, you see this with every other organization that you deal with online is you make the online experience the best, the quickest way for you to transact. And therefore people stop using the phone. And at the moment, as you know, you can send something online or through practice mail and it's 28 days and they come back and they need some more information, another 28 days. When in reality, you can phone up and it's about a seven and a half minute wait to get through on the phone. of course I understand why agents are using the phone because they're not getting the service that they need online. So that will be the second chapter of our findings about the relationship between the phone and the online services and the opportunities to dial down the phone demand, improve the online experience, whilst also recognising there is always going to be times when we sometimes need to speak to a human being and then that's when the phone line comes into its own.
Robyn Jacobson
Notably, there's no dedicated agent phone line. They merely get a higher priority in the queue than, let's call it, the general public, the community. And I don't know if agents appreciate that. So yes, their call will be answered faster than if they're a member of the public. But it's not like they're dealing, once they get through to someone who's got particular skills or can talk their language any better than someone who'd be talking to a member of the public.
Ruth Owen
That's a bit of a myth buster, isn't it? So I don't know how many people really understand that. a lot of people say to you, how many people are there in this team? The Regents of Agent helpline team? Well, there literally is no such team. So you're right, Robyn, the way you describe it. Agents using the agent, dedicated agent phone line and the fast key codes. You do get priority access. So that line, and I've sat there and watched how the lines get distributed. Those calls don't get blocked. Whereas if you're a member of the general public. Quite often you can phone and your call is just blocked. And then the wait time, which is around seven, 10 and a half minutes is a lot less than the general public. So that's what your priority service is. When you actually get through, generally you are speaking to exactly the same person as if you were phoning from the general public. So you're getting through to the ATO's call centers, which as we know includes ATO officers, members of staff, as well as outsourced contracted service providers as well. So, lots of work to be done there within our findings there. And as I've always said, I'm never ever critical of members of staff in the ATO. They all do a really, really hard job, very, very well. My systemic review is, we skilling them up correctly? Are we rooting calls to the right people? What supports do those members of staff need? And I think, yeah, let's look really deeply at what are the types of calls that agents make? should they be rooted to?What skills and experience would we expect those people to have? And then are there a small minority of cases, types of call that really, really are quite complex that are very different from your general public type of call that maybe shouldn't even be going to the call center at all. Maybe there's experts within the ATO who, you know, we need to route calls to, or maybe we need to do call backs and things like that. So still exploring all of that. But I think, yeah, looking at the capabilities and supports for the members of staff within the ATO call center. Because I guess that was the other key call out from agents who've responded to our consultation is, I feel like I'm talking to somebody who doesn't understand me or doesn't understand the tax matter I'm trying to raise. And maybe even if you press a key code and you get through to somebody and I want to talk about a payment plan, let's say as an example, you can understand in the ATO's world, well, most people in the call center are trained to be able to talk about payment plans. But because you're an agent, you might then have three supplementary questions about that payment plan that goes into that taxpayer's details, which take you way beyond the capability and skills that that member of staff has been trained on. So very quickly, an agent's call can go into a place that's very, very different from a general public call. And that service hasn't been designed in that way. So I don't want to prescribe the answer to the ATO. I think they've got to work their way through, but...The service, let's just be clear, the service is not good enough. I'm going to be very straightforward in saying that agents should be respected and deserve a better service. They deserve to be able to talk to people who can provide a response. They don't necessarily can expect to speak to somebody at their same level. know, we can never expect the ATO call center to be manned by professionally qualified accountants. That's not their role. So let's all manage our expectations, but of course it's realistic to be able to expect to make a call to the tax authority and get that response dealt with correctly. Or for that member of staff to very, very quickly add in, wow, this one's not for me. I'm going to escalate this call to the right person. And if that person isn't available, obviously arranging a timely call back.
Robyn Jacobson
Are you still open to receiving feedback from practitioners on this review?
Ruth Owen
So the consultation period is over, hence we're starting to firm our views. But at all times, I am always open to feedback from practitioners because you will always see slightly different perspectives. And obviously you're getting a perspective now of where I'm landing in terms of my recommendations. So please at any time get in touch with us. I'm always keen to hear what you've got because even if it doesn't filter into this report, it might inform my next review, for example.
Robyn Jacobson
When do expect you'll be releasing the report on this investigation?
Ruth Owen
On this one, it's probably either the last week of August or the beginning of September. I'm not far away.
Robyn Jacobson
Yep. All right. So Ruth, we've talked about what you've been doing and what you're currently working on, but you have something called a forward work plan. Basically, what is this and how do you design it? So just in a few minutes, there's obviously a lot of work to do. How do you prioritize what you're going to look at?
Ruth Owen
Yeah. So again, we want to be transparent with the profession and with the community of, we've got limited resources, as you've heard, and I want to make sure what we focus on is what the community and what the sector wants us to focus on. So twice a year, we do a consultation on, hey, what does everybody think are the kind of burning issues that you want my attention focused on? And then anyone can contribute to that consultation. So we've just finished one in May of this year. We'll do it again around November time to think about what we're going to do next year. So internally, obviously, I look at what the complaints I'm getting are, because that might give me a few clues. We apply a framework and principles of good tax administration and see if any are sort of glowing red. We'll talk to parliament, we'll talk to government, and we'll talk to ⁓ the profession. And as I said, if people give us feedback throughout the year, I kind of start to build up a bit of the perspective of, I think this is a really hot topic and that's how we settle on a shortlist. We do four reviews a year, that selection is really important to make sure we're doing the right ones.
Robyn Jacobson
You've mapped out your four reviews for 25- 26.
Ruth Owen
Yes, indeed. So what we've got in our shortlist at the moment is we're about to deep dive into GIC. Now, isn't everybody excited about that? I know it's a hot topic, the remission of GIC. Obviously, it's in the media at the moment. It's all over kind of LinkedIn, et cetera. People are really keen to understand what's happening. Again, consistency. What's the ATO doing? It's changed its posture. We all know that. why and how? What does that mean for you and your clients and your members? So that's the first one. We'll be starting literally within days now.
Robyn Jacobson
I wrote an article in the Financial Review last week and there some comments that I made for that article but also that of your predecessor. And I was really pleased to see that both of us were on the same page and the biggest issue is transparency. Understanding what is possible or why a decision has been made and making sure that everyone has the same opportunities. And there's a legislative change that's also needed which we won't go into the detail but basically you have very limited
appeal rights, can go to the federal court, but it's costly and it's very time consuming and very difficult to prove your case. yeah, reform is needed in this space, definitely.
Ruth Owen
Absolutely. And I'll just take that opportunity as a reminder, one of the channels that everybody does have to review a decision by the ATO is via the Ombudsman. So if you do find yourself in that position, have a think about whether you want to raise a complaint because as you say, going to court is a much longer, much more costly process. Bit plug. All right. So that's my next one off the rank. next one after that, which will be later towards the back end of this calendar year will be online services for agents. For all the reasons we've talked about is I didn't really get to the bottom of what should be the online service for agents as we were focusing on the phone. So I'm going to come back to that and finish that off. And into the new year, then we've got two other reviews to schedule. One is about the support that ATO provides to people whose tax account or TFN has been compromised. As we all know, that's quite a lot of people. And as we all know quite difficult then to manage those accounts because you've got that little window and you can get in, transact and get out again. So important for us to understand more about that and what the ATO is doing about that. And then our fourth one is a really important one, which is going back to ATO's responsibility to make sure it's providing services for everyone within the Australian community. And this one will be about how it engages with our First Nations community members. So really important we'll be working in partnership with First Nations organizations to look at that. So those are our four. We've just got to probably think about the scheduling of those because we've got one additional review that came in as an additional requirement, I suppose, when we looked at the topic that was raised on a current affair a couple of weeks ago, some of you might have seen a particular taxpayer, a particular set of circumstances. When I looked at that, I did think that's something for me to look at because it's not only an individual case, it's raising some quite challenging systemic issues. So I won't talk about that obvious specific case, but that case has made me decide to do an own motion review, which is something I can commence at any time. And that will take a little bit of our resources. So I'll just need to think about how that's scheduled compared to those four systemic reviews that I've already shortlisted.
Robyn Jacobson
You clearly got flexibility to make a call if something needs high priority, then something else may get delayed a matter of months, perhaps until a later time. basically two reasons practitioners might want to contact your office. One would be if they have a complaint in relation to a client issue, or secondly, they would like to raise a systemic issue. That's the best way to contact your agency, your office.
Ruth Owen
Absolutely. So please do use my office for both of those purposes. talk to agents sometimes that say, oh, I don't like raising complaints or, you know, I'll phone my contact in the ATO, which is all of course good. But if we don't hear about it, we can't address the systemic issues. So please do make sure that you keep us in touch with the systemic issues that you're seeing. Or if you've got a client case where you're just stuck and you don't know what to do, just give us a call, ask us for help.
We will either register it as a complaint and seek to resolve it with you. We would be able to test out whether we can help or at least log it as a sort of systemic issue we might want to further investigate. So I guess the most important thing is to go onto our newly refreshed website, taxonwardsman.gov.au and make sure that you can, all our contact numbers are on there and you can lodge complaints directly through that service.
Robyn Jacobson
Finally, in our last 30 seconds, you are speaking at our Tax Summit, which is our premier event, first week of September being held in Melbourne. Can you give us an inkling of what you'll be speaking about at the event?
Ruth Owen
Very excited to be there and to meet you all. So as always with my presentations, hopefully it's a little bit interactive so I can hear that from you as much as you hear from me. But yeah, I will be going into further details then about our inquiry into the tax agent phone line and that kind of the nature of the relationships with ATO in particular. And I will be picking up on some of these sort of really important systemic issues around debt management. payment plans, GIC, the things that are front of mind to all of us right now in terms of what's the administration issues with the ATO right now.
Robyn Jacobson
I am sure it will be a well attended session.
Ruth Owen
Look forward to it.
Robyn Jacobson
Ruth, great to have your insights and great to chat to you.
Ruth Owen
Thanks Robyn, good to talk to you.
Robyn Jacobson
Thanks for listening to this episode of TaxVibe. I've been chatting with the tax ombudsman, Ruth Owen CBE. If you enjoyed this episode, we'd love for you to subscribe, rate and review TaxVibe wherever you listen. We welcome any feedback and suggestions. To capture the latest from TaxVibe and to the Tax Institute, join us on LinkedIn. If you're interested in being at the centre of the tax conversation, a membership with the Tax Institute could be just what you need. Stay current and connected with tangible, real world benefits. Learn more at taxinstitute.com.au. Thanks again. Till next time on TaxVibe.