Governance of the Australian Tax Office can be ineffective, says a report.
Released by the Australian Public Service Commission, a capability review of the government’s principal revenue collection agency says the ATO’s governance structure is extensive, “but it is not always fit for purpose”.
Speaking to stakeholders – including staff at all levels as well as collaborators across government and industry – the review heard there are too many governance committees and that “some lack a clear purpose”.
There are 130 committees in total, across three tiers of authority. The review heard that the ATO could lift the effectiveness of its leadership capability “by improving governance structures and making sure they are fit for purpose”.
This was a consistent theme throughout the review, with staff remarking that the emphasis on consensus governance “means some committee decisions are not taken seriously and implemented”.
Noting that ATO leadership has plans to conduct a review of its governance framework, the APSC says this “would provide a good opportunity to streamline the committee structure … and ensure accountabilities are appropriately allocated and not diluted by committees”.
The agency will need to work as a coherent unit if it is to fulfill its goal of becoming “one ATO”, says the review. The ATO employs approximately 20,700 employees in 24 locations in capital cities and regional centres across Australia.
An organisation as large and geographically dispersed as the ATO will need to “model the behaviours required to work as a coherent agency”, says the review. These include “having tough conversations about priorities and taking collective accountability for decisions”.
Staff say silos within the ATO make “everyday collaboration across the agency difficult”. Acknowledging that cultural change will take time, the APSC says “it is crucial that senior leadership commits to ongoing efforts to improve the agency’s internal collaboration capability”.
ICT systems on their last legs
Turning to technology, the review heard staff describe the ATO’s internal ICT systems as “outdated, clunky and a barrier to doing jobs well”. In a survey conducted for the APSC review, 66 per cent of staff identified IT systems as something the ATO needs to improve. One staff member described how they need to use 14 different systems just to process one case.
Staff also voiced concern about the significant growth in ICT sustainment costs over recent years. There are nine “critical systems” coming to end of life or out of support. “We are having to make trade-offs to keep some on their last legs and invest in others,” said an internal stakeholder. The review heard ballooning ICT costs are affecting the ATO’s ability to prioritise other work.
And with fraud becoming increasingly sophisticated and complex, the review heard the ATO needs new tools, technologies and skills to keep up.
Elsewhere, the review says the ATO needs to reach out more to other agencies. Stakeholders told the review that while the ATO commonly shares knowledge with its public sector partners, “it doesn’t often take the opportunity to listen to and learn from the expertise of other agencies”. Describing the agency as “self-contained”, stakeholders said the ATO does not always think about “how it fits into the broader system of government”.
The ATO will also need to strengthen its relationships with the small business sector and digital service providers to realise its ambitions to innovate, says the review.
Addressing the workforce, the review notes the agency has a low rate of staff turnover compared to the APS average. This “can limit the diversity of experiences and perspectives within the agency”. The APSC encourages the ATO “to consider how it can support its staff to gain broader experiences”.
In response to the capability review, ATO chief Rob Heferen said: “The outcomes of the review are particularly timely as we refresh our vision and purpose and will assist us in considering the impact of future challenges and opportunities on our capability needs.”
He added: “Importantly, the review also gives valuable insight into the capability areas we will need to prioritse and focus on into the future.”
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