Taxation watchdog calls for whistleblower protection, inter-agency collaboration

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The tax ombudsman wants greater powers to protect whistleblowers, award compensation and participate in cross-agency investigations.

In its submission to a federal inquiry into the performance of the Inspector-General of Taxation, the watchdog called for stronger protections for “all those who disclose information to the IGTO — including as part of a complaint or review investigation”.

“The IGTO is unable to investigate whistleblower-style complaints where it cannot offer protections to those disclosing,” Inspector-General Karen Payne told the inquiry.

Such protection would include current and former ATO officials who make public interest disclosures, and would provide immunity from liability, absolute privilege in defamation cases, protection from termination of a contract,  and “remedies” such as compensation or apology for harm caused by their disclosure.

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The IGTO made 13 recommendations in its submission, urging a removal of barriers to the body’s ability to access information, and the power to compensate complainants “where the IGTO investigation finds that ATO or TPB action has caused loss or damage”.

Payne also recommended improvements for “inter-agency collaboration to permit joint investigations”.

“Currently, there is no formal mechanism or arrangement for the conduct of joint investigations or information sharing between other government agencies,” the submission noted.

The watchdog also wants its decisions to be binding on the ATO. A submission from Self Employed Australia echoed this, suggesting the tax ombudsman’s powers be expanded so that the ATO would have to “respond to, or take on board, the IGT’s observations, criticisms or recommendations”.

“We find the treatment of whistle-blowers by the ATO to be scandalous,” the organisation stated, referring to the case of former ATO staffer Richard Boyle, who faces 161 years in prison for disclosing alleged abuses of power within the ATO. “This is no reflection upon the IGT, as it has no control over the ATO on this issue.”

“The reality is that any organisation, private or public, that has a dominant position can easily slide towards unaccountability and abuse its powers … Oversight, accountability and transparency are essential if the abuse of power is to be limited.”

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Payne has also expressed the need for her office’s investigations to be made public to promote transparency.

“Concerns have been raised previously in relation to the IGTO function — that that without a public reporting requirement, the independence of the IGTO would be diminished. These
views maintain that for the IGTO function to be principled and effective as a means of identifying and remedying systemic problems in the administration of the tax system, the reporting process
must be open and transparent,” she noted.

“Decisions that are subject of public scrutiny are more likely to be accepted as independent and such public and transparent reporting encourages evidence-based decision-making.”