On 1 July 2000, the Howard Government introduced the GST. Since that time, like clockwork, the ATO has issued paper activity statements either monthly, quarterly or annually to abet businesses and individuals to deal with their intermittent tax obligations. Like clockwork, we as registered agents have received, perused and forwarded these documents to our customers. In my mind the system has worked. It has created triggers for dialogue and interaction between taxpayers and their advisors and it is good for all. I am a firm believer that the GST has forced Australian business as a whole to improve its record keeping and therefore improve business practices.
A lot can happen over 15 years. Economic cycles come and go, elections won and lost, money and hearts won and lost.
One thing we have seen is the impact of technology on communication. True and false urgencies created and a digital footprint created of our virtual dealings.
We are presently witnessing three mega trends:
- The march to the “cloud”;
- The need for “digitization”; and
- The emergence of “big data” as distinct from “data”.
From 1 July 2014, the Government has gotten on board and spent $800m on extending its digital reach. This will result in the demise of the paper activity statement. It is compelling us all to join the digital age by signing on to the Governments business portal.
More information is on these changes can be found on https://www.ato.gov.au/tax-professionals/services-and-support/working-online/interacting-with-us-online/changes-to-managing-electronic-activity-statements/
The next steps follow:
- The ATO will persist in sending paper statements until they receive an electronic lodgement; Once the ATO receives an electronic lodgement, the next activity statement to be generated will not be sent as paper unless the person is represented by another agent.
- From there the ATO will “deliver” all activity statements thereafter to your “ELS mailbox”. Activity statements delivered to your ELS mailbox will also be available in the portal.
- You will need to sign up to the Government business portal (or allow us to receive it for you).
- The ATO will then E-mail you to advise that your next Statement is on line.
It will be business as “usual” from there.
We have not rushed into this for no other reason than us agents have enough on our plate complying with out “85% on time every time” obligations that are necessary for us to retain our license as registered agents. I am of the view that the Government has made this change in a counter intuitive way. It has done so by stealth. It should have given agents the chance to deal with this before the 85% whack your local agent rule was introduced. It should give its portal a proper run before these changes become mandatory. There is no way to change back. Does the ATO have back up procedures and protocol should the system not work well? The ATO will as a result possess more information than ever on us. At some stage they will introduce methodologies that will intrude greatly into our personal and business dealings. Not that there is anything wrong with that.
A fellow agent ominously reported to the Tax Institute recently:
MEMBER 61 writes (April 2nd 2015):
“$800 million system is a lemon.
Dealings with ATO are the cause of endless daily frustration.
Today I need to apply for a TFN for a new unit trust.
I phone the ATO to request assistance finding their correct form, and helpful lady at the call centre proudly proclaims that I can do this online using the ABR website.
Knowing this will be a challenge, I asked her to guide me to the right page on ABR website.
Sure enough, she agreed it was difficult to find thru the maze of menus.
With patience, I proceed to work thru the screens. (Gee, the response is painfully slow.)
At the screen for contact details, I’m blocked by the message: ‘The email address provided is not valid. Please provide a valid email address before continuing
I know my email address is correct, so try again.
Just for confirmation, I tried lots of valid email addresses (knowing I can come back and correct).
Not a single email address gets past this blocker!
Where’s the paper form NAT 3799 for client to sign?
Message to ATO:
YOUR $800 MILLION SYSTEM IS A LEMON.”
No doubt there will be teething problems. However, such is life. I sometimes think that only mugs become registered agents.
We will be in touch with our clients on this change when your June 2015 activity statements issue (after our 2014 lodgements are dealt with) to discuss the best way forward for us to collaborate from there.
As a footnote I do not like the cloud. I believe we give up too much for its convenience. The accounting software providers are slavishly promoting products that promote cloud products. I am not a Luddite and generally embrace technology. But consider these questions before making the move:
- Who owns my data?
- Is it secure?
- Is it available? What happens if the third party servers break down?
- Is it expensive for what it offers? Will it become moreso?
- Do I need the convenience?
- What data can big brother access without my knowledge?
Apple Co-founder Steve Wozniak shares similar views. Google “Steve Wozniak and the cloud” to read more on this matter.
Finally one last question: When did data become “big”? WTF!
2015 Federal Budget or is that 2014 v.2
Looking into my crystal ball, unless the Feds are completely out of touch, there will be little controversy only tinkering around the edges and ongoing focus on spending cuts unless the Lib’s continue to overestimate their power over the balance in the senate. However, there will be ongoing debate on reform to the superannuation system and other “tax breaks for the wealthy” such as negative gearing.
The Liberal Party in my view will not cannibalize the superannuation system. Given the current design was the construct of former Treasurer Costello radical reform would be akin to Dr. Frankenstein killing his monster. There will in my view be further restrictions announced on the Government pension and Centrelink based benefits and focus on defeating Centrelink and Medicare fraud.
We have in the past witnessed attempts to reign in negative gearing with Keating’s loss quarantining measures of 1985. We then witnessed landlords passing the cost on by rent increases. They were then quickly canned. With housing affordability in capital cities an ongoing issue, I cannot see great reform in this area. Also remember that in 1985 interest rates were a lot higher than today.
I reckon that there will be a lot of jawboning about tax avoidable practices of the big end of town. But this will end up a bit of a damp squib.
I have now been self-employed 21 years of which Ian Woods has worked for us for 15. Ian needs to be commended for his outstanding and loyal service.
The Tax Practitioners Board has renewed my license to act as a registered agent for another three years (out to 1 May 2018).