Transformation, trust, and tax: A Commissioner’s story
Chris Jordan, former Commissioner of Taxation, discusses his unconventional path to leading the ATO, with a focus on transformation, innovation and client experience
The former Commissioner of Taxation, Chris Jordan, AO, had a somewhat unorthodox career path on the way to becoming the head of the Australian Taxation Office (ATO). “My journey has certainly been less than traditional,” said Mr Jordan, who recently delivered an address to the National Press Club.
After briefly kicking off his career in the police force, he switched to study commerce and law at UNSW Sydney. Following graduation, he worked for accounting firm Arthur Andersen and then spent some time in academia at the University of Technology Sydney, before joining KPMG in the 1980s. He stayed with KPMG until mid-2012 and also served as an adviser to both Labor and Coalition governments along the way.
When he was approached to lead the ATO, he reflected on how working in the private and public sectors better prepared him for the job. “None of us knew what to expect when I took this job in 2013,” he said. “I was the first ‘outsider’ ever to run the Tax Office. It was considered quite ‘radical’ when former Treasurer Wayne Swan appointed me – not just because, as he said, who better to run the Tax Office than a 6-foot 6 ex-copper? I think it was the fact I was not a career public servant, I lived and stayed based outside the ‘Canberra bubble’, that allowed me to radically transform and modernise the ATO over the past decade.”
Being the Commissioner of Taxation was a job he never envisaged. “I must admit I was as surprised as anyone that I ended up here,” said Mr Jordan, who recalled that when the former Secretary to the Treasurer, Martin Parkinson, approached him on behalf of Treasurer Swan about the role, he initially laughed. “Obviously I took it seriously in the end and I knew it wouldn’t always be smooth sailing,” he recalled.
Taking on the job of Commissioner of Taxation
With that in mind, Mr Jordan said he was tasked with a specific brief in leading up the ATO. First and foremost was to effect real change by making the ATO less rigid and isolated, and more in touch with the community’s needs and expectations: “to focus on helping people get it right, not just catching people who did the wrong thing”, he explained.
“My private sector experience gave me hands-on understanding about how difficult the ATO could be to deal with, especially when the focus was on processes rather than outcomes,” said Mr Jordan, who recalled that, within months of commencing and speaking with some graduates, he discovered employees were bogged down in outdated and redundant manuals which, in turn, negatively impacted the experience of clients.
“My mission was to transform the organisation, and I had a mandate from the government to do so. This marked the beginning of our reinvention journey,” he said. “I remember pondering the enormity of the task ahead of us, which certainly wasn’t helped by comments from my friends at weekend barbeques. ‘It’s a huge ship,’ they warned me. ‘You’ll struggle to turn it around, let alone keep it afloat – are you crazy?’”
However, in moments of uncertainty, he reminded himself of what he had control over: his leadership style. “My main message to our people was to be part of the solution – not part of the problem,” said Mr Jordan. “Over the years, I’ve also relied on this approach when partnering with the tax profession to solve irritants and deliver the best outcomes for them.”
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Transforming the ATO
A decade later, Mr Jordan said the ATO had made significant progress towards its vision of being a leading tax, super and registry administrator, recognised for its contemporary service, expertise and integrity. “How? By emphasising and prioritising a culture where we don’t, and won’t, accept the status quo,” he said.
“We’ve successfully chartered a massive program of transformation. We did it all in a deliberate and considered way, and we did it all ourselves – without paying millions to consultants,” said Mr Jordan. The ATO has demonstrably improved the client and staff experience, made it easier to comply (and harder not to), cut red tape, and modernised the administration of the tax system as part of a digital revolution to make ‘tax just happen’, he said – “all while operating in a rapidly changing environment”.
In late 2023, for example, the ATO launched its refreshed website with enhanced navigation and improved search functionality. To provide a sense of the scale of change, Mr Jordan said the ATO website is one of Australia’s largest and most accessed government websites, with over 40,000 pages and over 115 million visitors annually.
“The Mandarin reported we updated our website, and no one really noticed. This is a good thing. My favourite quote is: ‘any major government customer-facing website that can flip its entire content management system without significant initial blowback puts similar corporate overhauls in the shade,’” he said.
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Mr Jordan also shared some key insights into how the process of the ATO’s core function of collecting tax revenue has changed. In 2013, for example, 2.7 million people lodged their tax returns online through e-tax (which was the predecessor to the ATO’s current service myTax). This has more than doubled to 5.5 million as of 2023, and Mr Jordan emphasised that it now takes around half of taxpayers less than 15 minutes to prepare and lodge their tax return.
There have also been significant financial benefits to streamlining and simplifying ATO operations and processes, with the cost of collecting every $100 of tax falling from 91 cents to 54 cents since 2013, for example.
Behind the scenes, driving this kind of change for such a large government agency is a whole-of-organisation exercise. “We all had the goal of making the system better for everyone,” he added. This started with the ATO’s own workforce of 20,000 employees, and in the recent APS census, Mr Jordan said 79 per cent of its people would recommend the ATO as a good place to work. “That’s much higher than any other large agency in the public service,” he said.
There has been a corresponding shift in taxpayer sentiment. In a 2022 survey of 12,000 Australians by the Department of Prime Minister and Cabinet, the ATO was named as the most trusted federal agency in the Commonwealth. “81 per cent trusted us,” said Mr Jordan. “Interestingly, we also had the highest satisfaction rating at 82 per cent. And we’re the ones that take money from people,” he quipped.
Fighting fraud, collecting debts and managing cybersecurity
Life as the leader of the ATO has not been all smooth sailing. Post-COVID, for example, there has been a marked rise in fraud and tax debt, which Mr Jordan said has required a more sophisticated and sometimes unpopular approach on the part of the ATO. “Increasing safeguards and resetting our debt collection approach are not always popular decisions, however, I am unapologetic about our focus. We have a job to do,” he said.
“When you pay GST to a store or see the tax taken on your payslip, you rightfully expect this has been paid on to the ATO. Likewise, you expect your super has been paid to your super fund. Some businesses are telling us that they’ve collected GST and withheld tax from your wages and promised to pay super, but they haven’t paid it on. We cannot allow that to stand, especially super for their employees. I think you and the community would agree that we cannot allow people to live off money that’s not theirs.”
Risks of sophisticated fraud attempts through the increase in enormous data theft have also grown. “I’ve been asked many times what keeps me awake at night, and my response is always ‘cybersecurity’. We hold about 50 petabytes of data, equivalent to 1 billion tall filing cabinets,” said Mr Jordan. The ATO has a security operations centre and advanced systems that monitor, detect and respond to cyber threats, and on average, the agency defends against 4.7 million attempted cyberattacks each month targeting its websites, services and infrastructure.
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Collecting tax from the “top end of town” has also been a priority for the ATO. In his Senate Estimates opening statement in 2016, Mr Jordan said ‘enough is enough’ when it came to tax avoidance on the part of multinational corporations. “I said we would not be stooged by multinationals, and we now have the capability to go toe-to-toe with the best advisers in the world,” he said.
In the same year, the ATO established its Tax Avoidance Taskforce, which has since secured around $30 billion in additional tax revenue from multinational, large public and private businesses. “More importantly, we’ve locked in future tax performance by requiring companies to agree to the tax treatment of their operations,” he said.
“Apple, BHP, Chevron, Facebook, Google, Microsoft, ResMed and Rio Tinto have all publicly acknowledged finalising disputes with the ATO. These are landmark victories. The size of these successes for the benefit of all Australians is without precedent in the history of the ATO.” To illustrate, the ATO is currently operating at 93 per cent willing tax performance when it comes to tax gap figures for large corporate groups, with 96 per cent after-compliance intervention – figures Mr Jordan said are world-leading.
Next steps for the ATO
Mr Jordan reflected on his professional journey and achievements to date, for which he received an Honorary Doctorate in Business from UNSW in recognition of his service to the community and his role as a leader and innovator in the Australian Public Service. Mr Jordan has also been an active and ongoing contributor to academia and served as the Chair of the UNSW Business School Advisory Council until recently.
As an agency, Mr Jordan said the ATO has had to keep up with a range of significant changes. The number of small businesses in Australia, for example, has increased from 2.5 million to 4.6 million. The gig economy has created entirely new kinds of small businesses (such as ride-share drivers and social media influencers) that create new concepts of small business. At the same time, the number of wage and salary earners who are also deriving income from a business has also increased.
In response, new regulatory requirements have been introduced, and Mr Jordan gave the example of the Sharing Economy Reporting Regime – a new reporting requirement for sharing economy platforms. “The data collected will help us assist taxpayers to know, comply with, and pay their tax obligations, levelling the playing field,” he said.
The ATO also uses tax gaps to draw insights into taxpaying behaviour. Tax gaps estimate the difference between what the ATO expects to collect and the amount that would have been collected if every taxpayer fully complied with the law. “The tax gaps act as our annual ‘health check’. No other country publishes such comprehensive estimates,” he said.
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Further, he said the ATO does not have criminal investigation powers, unlike many revenue authorities worldwide. “This means we rely on others, such as the Australian Federal Police, to be able to do our job. Unfortunately, this also means we have to get in line with their priorities. I would like to see more alignment with our counterparts across the world,” he said.
Looking ahead, Mr Jordan said the ATO’s journey of change is “far from over” and explained that the next part of the ATO’s journey will include being fully digitalised by 2030. This will see the agency offering real-time tax reporting and payment information, where data will flow from taxpayers’ natural systems to the ATO’s without any extra effort or intervention from them. “We know the community expects all taxpayers to pay the right amount on time, and we know the majority do. That’s why we put so much effort into making it easier for people who do the right thing and harder for those who don’t,” he said.