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The Public Sector Informant

Tax commissioner's lesson for public servants in handling unethical instructions

Chris Jordan stood up for all APS staff when he refused to compromise his independence.

Australians have endured five different prime ministers between 2010 and 2015, but at least we've had the women and men of the Australian Public Service providing continuity in service delivery and policy implementation, and much-needed stability with their frank, honest and timely advice to the government of the day.

As a community, we can often be quick to criticise the public service but, frankly, given the dysfunction in political offices and ministerial suites over the past decade, we'd well and truly be in the muck and mire without them.

That said, constantly changing governments, ministers and polices have meant that public servants have never been under more pressure. As prime ministers and ministers seek to manage the 24/7 news cycle, their appetite for positive "announceables" has become almost insatiable, with corresponding demands on the public service from their political masters pushing the boundaries of political interference.

As the circumstances around the government's efforts to secure certain declarations from the Australian Taxation Office demonstrate, it's a state of affairs that must be resisted.

In the 2016-17 budget, handed down in May last year, the government announced it would change the income tax schedules and increasing the 32.5 per cent threshold from $80,000 to $87,000. The measure, to cost the budget bottom line $4 billion over four years, was designed to combat "bracket creep" or "fiscal drag".

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In relation to implementing this good news initiative for many taxpayers, the government said the cuts would take effect from July 1 this year but details of how this change would come into effect were unclear.

With a too-narrow window for a legislative solution closing rapidly and an election set to be called soon after the budget was handed down, the government needed certainty around delivery of the tax cut and looked to the tax commissioner to exercise his powers and provide an administrative solution.

Emails obtained by Fairfax Media under freedom of information law and reported widely showed subtle pressure from the government on the commissioner, Chris Jordan, to release the new schedules, before the legislation was introduced or passed in Parliament.

As the discovered emails showed, the ATO resisted entreaties from various elements of government over three months, from Treasury officials to staff from the Treasurer's office. The ATO needed to see the legislation introduced and evidence that "the measure has sufficient support in Parliament" before they could consider amending the schedules. Once the government was re-elected and when support for the passage of the measure became clear, in September last year, the ATO indicated it would issue the new schedules.

It's apparent that Jordan and the ATO were not for being pressured. He acted in a manner consistent with the APS code of conduct, for which the guidelines note "it is right to be responsive to ministers and their advisers by providing quick advice, but it is also right to follow due process and established protocols".

These rules are in place for a reason: to ensure probity, trust and confidence in the operation of our public institutions. They underpin the administration of our democracy.

Here was a situation where the government was "leaning" on the public service to give effect to a multibillion-dollar tax cut announcement, effectively pre-empting parliamentary consideration just before a double-dissolution election.

In another circumstance, it's easy to imagine such "unauthorised" action by a public servant being pursued vigorously.

Ministerial staff don't have the power to direct public servants in their own right. Whether any of these emails crossed any line is for others to determine, but there's no doubt that such approaches come with implied pressure on public servants to act in a particular way.

Governments of all persuasions will always want to deliver good news to the electorate; some back and forth between the ATO and the executive to explore options for implementing this initiative would be expected. But once the rules were understood and boundaries for action established, that's where the pressuring should have ended.

In resisting these approaches, Jordan was standing up for all APS employees, reminding politicians that appropriate process and the independence of the public service should never be compromised for the expedience of a political message.

Alex Malley is the chief executive of CPA Australia, which represents professional accountants.

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