‘Taxing into the Future’

By Professor Brett Freudenberg
Department of Accounting, Finance and Economics

As President it was great to attend and present at this year’s 31st Conference of the Australasian Tax Teachers Association (ATTA) hosted by Curtin University.

A highlight was the Assistant Treasurer’s, The Hon Stuart Robert, announcement that the Federal Government will fund 10 Australian universities to implement Student Tax Clinics. These Student Tax Clinics will provide students (under supervision) the opportunity to provide advice and advocacy to those vulnerable Australians who do not currently have tax agent representation. Griffith University was short listed as one of the 10 preferred universities to implement one of these clinics, recognising Griffith’s strengths in taxation (including the Tax Minor as part of the Bachelor of Commerce), work integrated learning and its emphasis on social justice. Additionally, these Student Tax Clinics will allow industry (including accounting and law firms) the opportunity to provide pro bono services, as well as the opportunity to mentor student learning. If you are interested in more details or how you may be involved don’t hesitate to contact me here.

The ATTA Conferencealso had Keynote presentations by Andrew Mills (2nd Commissioner of Taxation, the Australian Taxation Office (ATO)) and Karen Payne (Chief Executive Officer, Board of Taxation).

Addressing the conference theme of ‘Tax in a Changing World’, Andrew Mills discussed how improved technology is enabling the ATO to better facilitate the self-assessment system. This included how the ATO will be better be able to use data to prevent taxpayers mis-stepping, thus enabling the ATO to be proactive in assisting taxpayer compliance, rather than coming in after the fact with audits and penalties etc. He also highlighted how about one-third of Australia’s workforce is now within the Single Touch Payroll System, providing better reporting systems. While technology will mean greater automation, this then brings into question what the role of tax agents will be in the future, and how release of the Inspector General of Tax’s report of the Future of the Tax Profession is of great interest. Andrew Mills also outlined various initiatives that the ATO has undertaken to provide better and alternative ways to provide taxpayers more effective and cheaper ways to raise concerns about their assessments, including alternative dispute resolution. The Assistant Commissioner briefly outlined how the ATO is assisting the profession upskill their small business clients through the Cash Flow Training Kit where over 1,000 small businesses to date have been coached by their professional advisers on better cashflow techniques.

Andrew Mills

Karen Payne’s address raised three important things that have become apparent to her in her role as CEO of the Board of Taxation, these being: (1) Importance of an independent voice; (2) Policy matters and (3) Commerce matters. She challenged academics that their voice should be louder in tax policy debates, although she acknowledged that a number of the reviews being undertaken by the Board of Taxation have academics members, such as Professor Chris Evans (UNSW) and myself working on the Small Business Tax Review Committee. Karen also highlighted how it has become more evident to her of the important role the Executive arm of government does play in the formation of tax policy and law. In terms of this, she emphasised the importance of acting in the public interest. In her view having (and knowing) the policy intention of legislation is critical, as it helps, for example the Board of Tax know how consider and evaluation tax law, and whether reforms should be recommended.

Karen Payne

I myself was involved in two technical presentations at the conference, including with Dr Toni Chardon were we presented our preliminary findings into the role that advisors see themselves in developing their small business client’s literacy in terms of taxation and financial. This topic is of growing importance given the regulatory environment that requires advisors to ‘act in the best interest of their clients’. The research explores to what extent do advisors take active steps in ascertaining the financial capability of their clients, which is critical given their clients have to understand their advice.

The other presentation, with Dr Sue Yong and others, discussed the meta-analysis that we have conducted using the Leximancer software to analyse over 700 studies on tax compliance over the past 20 years. This analysis demonstrated how new concepts are being explored in tax compliance studies, with 19 new concepts identified compared to the prior 1998 study. The study finds that the top five concepts over the 20 year period in tax compliance studies are: tax evasion, tax system, probability of detection, tax rate and tax morale. Leximancer is able to determine connected concepts within these studies, and it appears (for example) that tax evasion is linked with the concepts of perceived opportunity, tax avoidance, tax perception and tax inducement. It is with such a thorough analysis of tax compliance we can have a greater sense of which factors are important to this critical part of the tax system.

Also, at the Conference dinner it was my pleasure to announce that Griffith’s Dr John Minas was awarded the 2019 OUP-ATTA Doctoral Prize, as his PhD was judged as making a significant contribution to tax policy. This means John’s PhD will now be published as book by Oxford University Press. This is the second time a Griffith staff member has received this award out of the nine times it has been awarded. This award was for his thesis titled: The Implications of Capital Gains Tax Rate Preferences for Personal Taxpayers in Australia.