Labor calls for ATO fraud detection review

A Senate committee wants the taxation watchdog to undertake a review of the Australian Taxation Office following an alleged fraud case involving one of its most senior officials.


Labor senator Chris Ketter, chair of the Senate economics references committee, has written to the Inspector-General of Taxation requesting a review of the procedures and practices the ATO uses to detect fraudulent behaviour, with a focus on staff conduct.

Former deputy commissioner Michael Cranston was caught up in an alleged $130 million tax-evasion racket involving his son, Adam Cranston, who was charged with conspiring to defraud the Commonwealth.

Shadow assistant treasurer Andrew Leigh says the ATO faces serious challenges in detecting and addressing fraudulent activity.

“Labor wants to ensure that public confidence in the ATO is restored,” Dr Leigh told AAP.

“Maintaining the taxpayers’ trust is an essential part of a functioning system.”

Tax commissioner Chris Jordan told a Senate hearing last month 30 tax office workers have been investigated and 12 have been sacked over the unauthorised access of taxation records this financial year.

Labor also wants to give the ATO more tools to tackle issues such as fraud or “phoenixing”, where dodgy operators deliberately burn companies in an attempt to avoid their obligations to employees, taxpayers and honest businesses.

This includes the introduction of a director identification number, which will make it harder for dodgy directors so they can’t pretend to be a different person when they get shut down and then want to go back into business.

“Labor also believes in better incentives for whistleblowers, who draw the ATO’s attention to companies and individuals using overseas tax havens,” Dr Leigh said.