Rob Heferen, Commissioner of Taxation

Opening remarks ahead of a regulators panel at the Council of Small Business Australia National Small Business Summit 2024

4 April 2024

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Thank you Matthew for that introduction.

I’d like to also acknowledge the traditional owners of the lands that we meet on today, and pay my respects to Elders, past, present and emerging.

I’m very pleased to be here at COSBOA and with my government colleagues from the Australian Competition and Consumer Commission, Australian Securities and Investments Commission, Fair Work Ombudsman and Australian Financial Security Authority.

Minister Collins has referred to small business as “the engine room of our nation’s economy”.

With a small business population of about 6.7 million, it’s one that is critical for the overall tax system. Which is why I’m here today.

As Matthew has noted, I’m still very new to this role and so my key task remains listening and learning. And in this respect, I understand the importance of our Small Business Stewardship Group, and I will be a keen attendee.

I am a career public servant, having been in the APS for about 35 years now.

In one sense I have very narrow experience having always been in the APS, but in another sense my experience is broad from being in around 9 portfolios.

I’ve spent over half of my public service career working on tax, working at the ATO in the mid-90s and then seconded over to Treasury for many years where I worked on helping to design the GST, implementing some of the Ralph Review recommendations, and leading the secretariat for the Henry Tax Review.

I gained vital and varied experience as a Deputy Secretary at Treasury which has prepared me greatly for my return to the ATO as Commissioner, a role I consider a great privilege, and great responsibility.

I’m also just a month into the job, so I won’t sit here and pretend to have all the answers.

We all interact with small businesses, almost every day. The ATO is aware of how vital small businesses are, not just to the economy or tax system as a whole, but also to our communities.

We know most small businesses open their doors and provide their services because they have a passion, and they want to turn their passion into a venture. We know tax is not the first thing on their mind when bringing their passion to the market.

What the ATO exists to do, what our clear task is, is to administer the government’s policy and programs with fairness, compassion, and a strong sense of horizontal equity, and then make sure that the voice of tax administration is considered in the design of government policy.

So how can we continue to help small business? The best thing the ATO can do to help you succeed is to make sure you are aware of your tax obligations, and that there are systems in place to make meeting those obligations as simple as possible.

This is why we recently launched the Essentials to strengthen your small business online learning platform, with free short courses to help small businesses master their tax and super obligations. But it extends beyond just tax knowledge, it also includes modules on the core aspects of effective small business management, including cashflow and business growth. And I’ve heard it’s been received well by the small business community.

This will aim to make it as easy as possible for small businesses to meet their employer, tax and registry obligations, and to help small businesses get it right from the start.

As I’m sure you will all agree, financial and tax literacy are predictors of successful businesses, and we all want viable small businesses to succeed.

It is also important small businesses are savvy about their cyber security and do all they can to protect themselves. Last month, the Federal Government launched its Act Now, Stay Secure campaign to encourage all Australians to take three simple actions to improve their cyber security – create strong, unique pass phrases; set up multi-factor authentication; and install software updates regularly. It is a message we must share and act on.

We are also being creative with some of our assistance. Some of you would already be aware we have pilots underway to explore right-time GST reporting, greater consistency between PAYGW reporting and payment due dates, and providing greater certainty for taxpayers and their representatives by embedding ATO guidance within natural systems.

In respect to debt, you’ll be aware that in December last year we returned to normal debt collection across all markets. Ensuring taxpayers pay their tax and super obligations is a key focus for us.

The amount of collectable debt (which is ultimately tax and super that has gone unpaid by taxpayers) is now at over $50 billion. 65% of all collectable debt owed relates to small business and 74% of that relates to activity statements.

This means a significant portion of the amount going unpaid is GST collected from consumers or PAYG withholding, withheld from employees pay. We are seeing an increasing number of businesses fall behind on these types of payments, from which point it is very difficult for businesses to get back on top of their obligations and remain viable.

It’s critical that all employers – big and small – keep on top of their obligations to their employees first and foremost, as well as their obligations to government in respect to GST, income tax, and other taxes.

Many of your members are telling us how concerned they are about the unfair competitive advantage businesses not complying with ATO obligations are getting over those who are doing the right thing. There’s also a significant risk of businesses trading whilst insolvent and creating a situation where all creditors – including suppliers and employees miss out on what they are owed.

I am still going through the process of listening and learning, and working with stakeholders to gain their perspectives. Our Small Business Deputy Commissioner, Will Day, is also here today. Will leads our relationship with COSBOA and the small business market. Please feel free to reach out to Will or me today, and if you haven’t already, visit the ATO representatives at our booth.

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Commissioner of Taxation, Rob Heferen