Chris Jordan, the Australian Tax Office commissioner, has issued his first major statement about the scandal engulfing senior ATO staff linked to a huge tax fraud investigation, saying he needs to restore the public’s trust in the tax office.
He said the ATO could not do its job if the community didn’t trust it and events of the past couple of weeks had “potentially been detrimental” to the ATO’s reputation.
Jordan appeared in Senate estimates hearings in Canberra on Tuesday.
Two weeks ago, Australia was rocked by revelations of an alleged $165m tax fraud involving Adam and Lauren Cranston, the son and daughter of the deputy ATO commissioner Michael Cranston.
Adam, 30, and Lauren, 24, were among a group of friends charged over the alleged scam uncovered by Australian federal police during an eight-month investigation, which began last year.
The alleged conspiracy saw a company set up in Sydney, called Plutus Payroll, to provide payroll services to legitimate companies, with funds received from the companies used to pay the after-tax wages of their employees or contractors with the tax to be sent to the ATO.
It is alleged that Adam Cranston and his co-conspirators paid the after-tax wages to the contractors but withheld millions of dollars in tax from the ATO.
The AFP originally estimated the alleged scam was worth $165m but the ATO has since revised that to $130m, with about a third of the money being collected so far.
Michael Cranston faces two charges of abusing his position as a public official by allegedly seeking information about the ATO’s investigation into his son and daughter, while the investigation was ongoing.
He was suspended without pay from the ATO but the AFP says he was not involved in the syndicate.
Jordan told senators on Tuesday that the evidence to date showed Michael Cranston made no intervention, nor had any influence, on the ATO’s investigation.
He said the fact that Michael Cranston was picked up for allegedly trying to access data he was not allowed to showed the ATO’s internal processes were working.
“I don’t want to be defensive on this because I’m acutely aware of the need for people to have confidence in the integrity [of the ATO] and our processes and our systems,” Jordan said. “However, the existing processes did work. No access was gained. People tried but they could not. They were locked out of the audit files.”
Three ATO staff are currently being investigated for potential breaches of the Australian public service code of conduct, in relation to the ATO investigation, by the former Fair Work commissioner Barbara Deegan.
The ATO’s chief operating officer, Jacqui Curtis, said she hoped Deegan’s investigation would be completed in four weeks.
Jordan said the ATO would be honouring the PAYG amounts that were deducted from the pay of contractors and employees caught up in the alleged tax scam.
Contractors working for eight federal and state government departments, the ABC and private companies such as Telstra and Fujitsu have said their pay was affected by the scandal.
Jordan said on Friday that the ATO would now be running an internal review of its policies and procedures to see if anything needed to change after Cranston was stood down.
