Do you know what would really help, Passy?

Simplification of our tax laws.

This would ease the workload on small business, whose biggest concern is to be caught unawares by an ambiguous clause (or a pair of conflicting clauses) that could jeopardise their existence.

It would ease the workload of the ATO, who would need to spend less time on justification of arcane, unrealistic and contradictory areas of the Act, and more on hunting down malefactors.

It would also make less work for lawyers, which is probably one of the most significant inhibitors to change. Lawyers don't complain about the complexity and sheer volume of tax legislation, because they get $500 an hour to work their way through it.

It would - if properly thought through and meticulously drafted - reduce avoidance.

However, I suspect this would not be a particularly great outcome for employees of the ATO. They would need lower levels of skill for the bulk of the work, and experience would no longer be at a premium except in some areas of fraud detection.

Such is the cost of addressing a problem at its source, rather than merely its symptoms.

But it would at least provide a genuine "efficiency dividend"

Continued:

We hear a lot about Wickenby, and the ongoing investigations and the successful prosecution and jailing of a high profile individual. My question is, in light of the trouble this investigation has had in getting more than one prosecution in 3 or 4 years, and the seeming luck in grabbing the portable PC of one of the major architects of some schemes, how many more Wickenbys are there we as a society don't know about? (Or am I being Rumsfeldian?)

To use an analogy, you can find gold by dropping someone in the middle of nowhere and letting them stumble around for years, or you can do all the various geological studies and go to where you think, based on scientific analysis, there is a greater likelihood of finding it.

Is Wickenby an example of the former stumble in the desert approach or the latter scientific evidence approach?

The recent Liechtenstein discovery doesn't inspire much confidence either. A disgruntled employee sells details of a Liechtenstein bank's information to German and other tax authorities. Australia has exchange of information clauses in treaties with those other authorities.

This is reactive, not proactive. I would have hoped the ability of the ATO and its fraternal agencies around the world would be such that they prevent these apparently widespread abuses.

I am not trying to gainsay the ATO. The staff there work their guts out. Perhaps it is Sisyphus. Perhaps it is, as Marx said, tragedy followed by farce. But I do think something needs to change.

Pericles, you mention tax simplification. In a draft article I have written I mention this. Essentially the development of the tax value method (cash flows plus changes in the tax value of assets) would have simplified our system. The ATO supported this simplification, which would have created simplicity, certainty and the scope for ongoing change for them and for society. Big business and tax advisers opposed it and turned Costello from a supporter to someone who abandonnd it

Pericles is right.The whole system just ties itself in knots particularly with the legal disease."The process is more important than the outcomes."A friend who worked for 30 yrs in private enterprise at a corporate level did a stint of 7 yrs with the NSW Public Service and the quote above back in 2001,was his.

Nothing will change unless we have serious reform and rationalisation of all our PS.We have to stop the process of empire building and bring in a survival component as exists in private enterprise.

The less tax we give them,the better off are hard working people.