Tax Technical observations:
- For anyone interested in this, it is well worth following the links embedded in this article.
- Richard Boyle attempted to make protected disclosures under Commonwealth public service whistleblower legislation: Public Interest Disclosure Act 2013, and now there is private sector whistleblower protection, with the passage of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 as Act No. 10 of 2019 on 12 March 2019.(see related Tax Technical article).
- In a related article (2.3.19), in the Sydney Morning Herald, Adele Ferguson also states: “Boyle’s case highlights the need to legislate a public interest defence, to allow any conviction to be suspended or set aside where it can be shown that in committing the offence the whistleblower served the public’s interest and not his own.“
“The government will not act to protect whistleblowers,” Patrick told The Australian Financial Review.
Patrick’s outburst was in response to a letter he wrote to Porter in March urging him to use his powers of intervention to halt the prosecution of Boyle on the grounds of public interest.
Porter’s response, obtained by the Financial Review, made it clear he wouldn’t help Boyle. He said his powers of intervention were reserved for “unusual and exceptional circumstances” and that these powers had never been used before. “For these reasons I do not consider it appropriate for me to intervene in the matter,” he told Patrick late last week.
Garnishee notices are debt-collecting tools that allow the Tax Office to order a bank to hand over money from the taxpayer’s account, without consulting the taxpayer.
The ATO’s use – or misuse – of its powers has been under the microscope since a damning investigation by The Age, Sydney Morning Herald and ABC’s Four Corners, largely thanks to Boyle.
It sparked a series of inquiries, including Treasury, the Inspector General of Taxation and more recently the Australian Small Business and Family Enterprise Ombudsman, headed by Kate Carnell.
Carnell’s report, to be released on Monday, describes the ATO’s use of debt recovery actions against small business as “excessive” and “devastating” and calls for the use of garnishee notices to be reined in.
It says two weeks after the joint media investigation it received 159 requests for assistance and submissions from small businesses and advisers. It collated and analysed the cases and concluded serious system-wide issues impacting small business. They included 127 incidences of heavy-handed practices. It said the submissions from small businesses highlighted an inconsistent and undisciplined approach to debt collection by the ATO.
The ombudsman found that Tax Office debt recovery action happens in a “sizeable” 12 per cent of cases which are before the Administrative Appeals Tribunal. “Such action can severely impact a business’ ability to prosecute its case and carry on its business,” the report says.
It recommends a radical overhaul of the Tax Office’s powers in this area, including a stay order on any debt recovery action when it is before the courts.
The small business ombudsman’s report calls for garnishees to be mandated through external oversight and approval (such as through the court system) before a garnishee order can be made.
It says other forms of security should be used instead of garnishees such as a caveat on property. “Funds removed by a garnishee notice are irreversible. In circumstances where the ATO has wrongly issued a notice, any funds paid by a financial institution go straight into government consolidated revenue which cannot be simply reversed,” the report says.
Boyle’s evidence of ATO’s poor culture included an email sent out by an ATO team leader in May 2017 to a dozen workers in the Adelaide office saying, “the last hour of power is upon us … that means you still have time to issue another five garnishees … right?” Over that period there was spike in the number of garnishees issued in Adelaide.
Boyle became an internal whistleblower in 2017 when he made a disclosure under the provisions of the Public Interest Disclosure Act 2013 (PID) to the ATO. His allegations were investigated by a senior ATO investigator and dismissed.
Days before going public in the joint media investigation his home was raided by the ATO and the Australian Federal Police, with his laptop and phone seized.
He was later charged. Almost half the 66 charges outlined in the information and summons sheet relate to telephone tapping and recording of conversations without the consent of all parties. The others relate to making a record of protected information, in some cases passing that information to a third party. The summons sheet lists ATO Commissioner Chris Jordan as the informant, which includes his signature.
Patrick is concerned that Boyle would only have been protected under whistleblower protections after lodging a Public Interest Document. Patrick believes protection should begin from the time a whistleblower begins to compile evidence.
He is also concerned about how the investigation was conducted and the chilling effect on others in the ATO or public sector who will now be too afraid to speak up. “Without any regard to his guilt or innocence, which is a matter for the court, the prosecution should simply not have proceeded on the basis it is not in the public interest to do so. No matter what way you look at this, this prosecution sends a strong message to ATO employees now and into the future – do not even think about questioning the way we do business or you will be persecuted and crushed,” he told the Financial Review.
Patrick, who is emerging as a kingmaker in the 46th Parliament with his Centre Alliance shaping as the party likely to have the balance of power, has long been an advocate for better whistleblower protections.
Before becoming a senator in 2017, Patrick was Nick Xenophon’s senior adviser and played an integral role in a deal struck in late 2015 with the then Turnbull government to secure a key industrial relations victory over Labor in return for stronger whistleblower protections. The agreement was crucial in the Coalition being able to create a Registered Organisations Commission to oversee the governance of union employer bodies.
In the lead-up to the federal election Labor and the Coalition have demonstrated noticeable differences on whistleblower policies. Labor has promised a suite of reforms to whistleblower protections if it wins office, including introducing a United States-style whistleblower reward system. Other reforms include a protection authority, the appointment of a special prosecutor to go after corporate crooks and an overhaul of the current whistleblower laws into a single act.
For now Patrick has to deal with Porter and he isn’t impressed. “The Attorney-General accepts that he has the power to discontinue a prosecution if that prosecution is not in the public interest. Sadly for Australia’s whistleblower policy, and for Mr Boyle, the Attorney-General has decided not to intervene … indeed he has shown a significant lack of judgment and political cowardice.”