The whistleblower who will ‘never work again’ after helping tax watchdog

Adele Ferguson wrote (The Age 19 October 2019) about what is happening to whistleblowers in Australia, as they are punished by those they tell on and their protectors. Australians must take notice and not allow this injustice to go on.

Ron Shamir has a lot to be angry about. At a Senate inquiry into the performance of the Inspector General of Taxation, which acts as the watchdog for the Australian Taxation Office, the whistleblower outlined how the system had failed him.

“The result has been absolute devastation… My family and I have been living in poverty and I have been told by experts I will never work again,” he told the Senate committee.

Shamir became a whistleblower after he witnessed misconduct in the ATO relating to business activity statement refunds, which he says were being cancelled, to get around an adverse court ruling.

He informed the IGT, which he said would launch an investigation and gave him undertakings that it would protect him.

As part of its investigation, the IGT issued Shamir with a section 9 notice, which has the power to compel the production of documents. A day after receiving the section 9 notice he was sacked and marched off the premises. “I couldn’t comply with the notice because I had been terminated,” he said.

The ATO has always argued that Shamir’s termination related to his performance and had nothing to do with being a whistleblower. Brad Chapman, a deputy commissioner, told the inquiry Shamir’s termination followed two years of performance counselling.

Whatever the case, the IGT failed to support him. He was left to fight his case in the Fair Work Commission, which he won, then lost under appeal.

My family and I have been living in poverty and I have been told by experts I will never work again.

Speaking after the hearing, independent Centre Alliance Senator Rex Patrick said the IGT failed Shamir. “Listening to it, my blood was boiling,” he said.

Senator Patrick instigated the inquiry into the IGT after raising confidence issues with the IGT’s handling of an investigation into garnishee notices, which are a powerful tool that let the tax office take control of taxpayers bank accounts when it believes money is owed. The investigation came after ATO whistleblower Richard Boyle alleged inappropriate use of garnishee notices by the ATO on small businesses.

Boyle’s evidence of inappropriate behaviour included an email sent out by an ATO team leader in May 2017 to a dozen workers in the Adelaide office saying that “the last hour of power is upon us … That means you still have time to issue another five garnishees … Right?”

The IGT released its report in March 2019 and concluded that the email was “conveyed as ironic in style”. It said the facts and evidence indicated that the email couldn’t have been intended literally because it would have taken on average 25 hours to issue five notices.

The wording of the report rang alarm bells for Patrick who told a senate committee that it sounded like the IGT was making excuses for the ATO. “The IGT was someone who should never be making excuses for the tax office. You should always be maintaining the very highest level of standards and should have made a very strong recommendation that that sort of email is simply not acceptable,” he said.

More alarm bells rang on Friday when Shamir said he made a series of Freedom of Information requests into the IGT.  In one communication on June 9, 2015 the IGT confirmed to the ATO a section 9 notice had been issued to Shamir. “The IGT said it did so at the complainant’s request,” he said.

Photo from the ABC: ATO whistleblower Richard Boyle faces 161 years in jail if found guilty.

The committee was rightly concerned about IGT’s motives in telling the ATO it was at Shamir’s request, particularly given his employment was terminated the next day.

When IGT fronted the committee there was a lot of hand wringing and requests to speak in camera, provide information to the committee in confidence, or take questions on notice.

The Inspector General of Taxation Karen Payne, who took the top job in May this year, told the committee that the IGT didn’t have the power to protect whistleblowers. “If they want to give us information … they don’t have a whistleblower style protection.”

There was also a question asked whether it should be given the power to assess whistleblower complaints and protect them.

But what was made crystal clear at the hearing is the IGT is in desperate need of reform. It has a staff of 30, which is minuscule when compared with the might of the ATO, which is one of the most powerful and well resourced institutions in the country.

Equally concerning is the lack of appetite to use the powers that it does have. For instance, it has only ever issued a section 9 notice to one individual, Ron Shamir. Its preference is to take a more collaborative approach with the ATO.

But sometimes it is irresponsible not to use these powers.

Too much collaboration between a regulator and the regulated can result in a cosy, chummy relationship and create a power imbalance.

In his submission, Shamir said safeguards, such as effective, independent oversight of the IGT were required to ensure it wasn’t at risk of capture or compromise public expectations of independence.

A separate submission by Self Employed Australia also raised the issue of regulatory capture. “We have concerns that, on occasions, the ATO may have sought to influence and colour IGT reports to lessen or remove criticism,” it says.

There’s nothing new in calls for reform of IGT, including beefing up its powers and boosting its resources. The small business ombudsman Kate Carnell told a joint media investigation by The Age, Sydney Morning Herald and Four Corners in March last year that the IGT’s powers needed to be looked at so it had greater ability to assist vulnerable taxpayers.

“Not much point in having an independent entity if it doesn’t have the powers or the capacity or the size to actually deal with the issues that we’re talking about … if you’re going to have an independent entity, it’s got to have teeth, and it’s got to have size,” she said.

Not surprisingly, the ATO doesn’t think it needs any more oversight. But then again, what regulated body does?

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