If you want proof that Wayne Swan is not only the World’s Greatest Treasurer but a really good bloke, then you only need to look at his appointment of Chris Jordan as Australia’s new Commissioner of Taxation.
Jordan, you will remember, was the chair of Swan’s Business Tax Working Group, which was handed the poison chalice of trying to find a way to bring in the company tax cut AND find a way to pay for it.
Jordan was frankly set up to fail – the company tax cut was supposed to be a pay-off for the mining tax, and business wasn’t going to be fooled into losing another tax break to help the Federal Government make good on its company tax promise.
Clearly, Swan feels bad about putting Chris Jordan in the poo like he did – he’s now rewarded him with the ultimate tax nerd’s job.
Good on ya, Wayne.
Seriously though, this does look like a good appointment and all sides of politics and seemingly every business lobby group out there has applauded the naming of Jordan as the first Tax Commissioner to come from outside the public service.
And it’s a huge change. Outgoing ATO boss Michael D’Ascenzo has worked for the ATO for 35 years, building a career spanning generations. That’s an awful lot of experience, but it’s also an awful lot of institutional baggage.
Jordan should arrive with none of that. Instead, the long-standing chair of accounting firm KPMG should arrive with plenty of practical knowledge, particularly around how the ATO deals with business.
For SMEs, this is good news. Jordan should be sensitive to what business owners and leaders – and more recently the Inspector-General of Taxation – have described as the occasionally adversarial stance that the ATO has taken with businesses of all shapes and sizes.
Clearly, small businesses are less equipped to handle ATO enquiries and particularly aggressive ones. The Inspector-General of Taxation’s recent revelations around the poor targeting of ATO small business benchmarks, which tied up 6,000 small businesses in unwarranted ATO enquiries, is the sort of thing that Jordan should be keen to address.
Many commentators have talked about how appointing an outsider with business experience to head the ATO should bring a new level of efficiency and corporate thinking to what is perhaps the ultimate public service institution.
I think that’s right, but business should be careful what they wish for – it’s highly likely that one of the areas Swan will have charged Jordan with becoming more efficient and effective in is tax debt collection.
Remember that Swan’s recent Budget Update saw the ATO handed another $390 million in funding to help it chase $1.6 billion in unpaid tax debts over the next four year; in total, the ATO has received $691 million in new funding since May to raise $3.7 billion in tax debts and GST.
As I’ve argued before, the ATO needs to be careful with how it chases these debts in current economic conditions. Jordan will have a good sense of how businesses are travelling at present, but every dollar he brings in helps Swan get back towards a budget surplus. The pressure will be on for collection results.
But for all that, it is also worth noting that Jordan’s time with the Business Tax Working Group did deliver a few real wins for SMEs, most notably the loss carry-back scheme that allows companies that make a loss to get a refund for tax paid on past profits.
This suggests to me that Jordan really understands what makes an SME tick and the challenges they can face from one year to the next.
Hopefully this shines through in his dealings with the sector.
James Thomson is a former editor of BRW’s Rich 200 and the publisher of SmartCompany and LeadingCompany.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
