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Part 5: The agency's response

Over the past century the Australian Taxation Office (ATO) has successfully served the nation, but we recognise in today's rapidly changing global environment we need to do more if we are to keep pace with advancing technology and continue to deliver the service that the community rightly expects.

This review of our organisational capability is particularly opportune. We are at a point where we need to make changes that will better position us to move forward. In this context, findings from the review fit well with the broader transformational reform agenda I have begun that will shape and define
our future direction.

The capability review report (the report) is realistic. It gives an impartial assessment and insightful analysis of how we are currently placed, and where we need to improve or shift our focus to meet future challenges. I am pleased the report cites our consistently strong performance in the day-to-day
delivery of our core business of tax and superannuation administration and recognises some of our more significant achievements.

The backbone of our success is undoubtedly the collective commitment, dedication and motivation of our highly capable and hardworking staff. However, as the report points out, to be a high performing organisation of the future, we also need the right strategy, systems and processes that will build
on our strengths.

Five broad priority areas that will help me drive the ATO of the future have been drawn to my attention in the report. I would like to make preliminary comments on each of these high-level priority areas.

Developing a forward-looking enterprise-wide strategy

The report notes the ATO has worked hard in recent years to successfully develop and promote a corporate vision and strategic themes that are well understood by staff. However, while we are already taking steps to position ourselves for the future, I agree we also need to clearly set out our organisation's
direction and how we will get there. An enterprise-wide ATO strategy describing our strategic shifts and the pathway to achieve them needs to be equally well understood.

The development of an overarching ATO strategy will provide the platform to actively shape and drive transformational change over the coming years as part of a broader program of strategic reforms we have started to put in place.

Developing ICT efficiency and agility

Our ICT capability is a critical aspect of how we perform as an organisation. We are proud we have always successfully delivered a large non-discretionary ICT agenda to meet government imperatives and service delivery. However, I agree with the report's finding that our service technology has not kept
pace with contemporary business practices or community expectations.

While our ICT capacity over the last decade has been largely directed to the need to redevelop our core transactional systems, major investment in these systems has positioned us to now focus on designing and implementing innovative business strategies and technology-enabled service solutions. To achieve
the shifts and efficiencies needed to meet future challenges, we have already embarked on a program of work to better manage ICT demand and capacity.

Building our future workforce

I welcome the report's finding that our workforce is professional and committed, and understands how our work impacts on the lives of all Australians. As an organisation we entrust our leaders and managers with responsibility for the successful delivery of our work program, and recognise that the skills
they need to fulfil their important role are critical.

I agree with the report's finding that to better support and develop our people a greater focus is needed on non-technical capabilities such as leadership and management, communication and relationship skills. Work has already begun in this area. For example our highest level technical leaders are
taking on broader leadership roles and we are renewing our leadership and management development program. However there is more to do to further build our people's skill base and experience.

The report identified a culture within the ATO of seeking to avoid, rather than appropriately manage, risk. I agree there is an opportunity to unlock the potential of our people and achieve better business outcomes by strengthening our risk management capabilities.

Streamlining governance

While I am pleased the report found our business continuity planning and quality assurance processes are strong I recognise our governance structures are overly complex and would benefit from streamlining and simplification. The report made a number of suggestions that will help guide me in this regard.

Work has commenced on a strategic review of our internal administrative systems and approaches so we can deliver more effective and simplified governance practices that will support sound, evidence-based decision making.

Improving external connectedness

As acknowledged by the review, our relationships across government and with the community are critically important. I have already instigated some reforms to the way we work and foreshadowed others. I have set in motion internal structural changes designed to increase our focus and efforts towards
a 'solutions-based' approach to policy and law design while continuing to build our collaborative relationship with Treasury. This endeavour recognises that to achieve good tax policy outcomes for government and the community, it is essential to harness both policy and administrative expertise.

Consultation is vital as it helps ensure buy-in from stakeholders and a thorough examination of issues. I agree with the report's suggestion that we need to refresh our thinking and approach to consultation and feedback. I am currently reviewing our consultative arrangements to better position us to
establish a more effective framework that will ensure we speak with the right people about the right issues in a timely way and then act on the feedback.

Concluding comments

As I noted earlier in my response, this review has come at an opportune time for the ATO as we position ourselves for the future. We are at a pivotal moment where, as an organisation, we must embrace change and move forward or fall behind and risk our hard-earned reputation as a trusted and respected
tax administration. For this reason, I accept and appreciate the report's content and findings.

I am buoyed by the support and commitment my leadership team has given the review. We see the capability review as a building block that will help us shape our future direction and drive the transformational changes needed to ensure the ATO is well placed to meet today's needs and tomorrow's challenges.

I would like to thank the Australian Public Service Commissioner, Stephen Sedgwick AO for providing such a high calibre team of senior reviewers and support staff. My personal thanks go to the senior reviewers: Dr Michael Keating, Mr Robert Griew and Ms Rachel Hunter for the balanced and measured way
they applied their wealth of experience and expertise throughout the review.

Lastly, I am in no doubt that ATO staff will view the report as a positive and exciting opportunity for us to work together and successfully build on our strong foundations.

Chris Jordan AO
Commissioner of Taxation

17 June 2013