PROGRAMME 4 — TAXATION ADMINISTRATION

PROGRAMME 4 — TAXATION ADMINISTRATION
Objectives
Manage and shape systems (Taxation, Child Support Agency, Superannuation and Australian Valuation Office) that support and fund services for Australians through increased compliance, reduced compliance costs, improved community confidence and being an efficient and adaptive organisation.
Table 4.1:  Summary of Appropriations to the Programme and Summary of Portfolio Underlying Outlays

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Approp figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings,  savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub‑Programme 4.1 — Income & Other Taxes
Objectives
To collect efficiently and effectively the revenue properly payable, while ensuring that clients are aware of their obligations and their compliance costs are reduced.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays

Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub‑Programme and Summary of Underlying Outlays (continued)

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Approp figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings,  savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation
The following table shows changes in the underlying outlays of the Sub-Programme in 1998-99. 
Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99 (continued)

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.
1998‑99 Budget Measures affecting Portfolio Underlying Outlays
The following are Budget Measures affecting the ATO.
ATO Takeover of Self-Managed Superannuation Funds Regulation
Extension of High Wealth Individuals Taskforce
Funding for Development of Systems for Implementing Tax Reform
For information relating to these budget measures refer to pages 185, 186 and 186 respectively.
Performance of the Sub‑Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 3 to 45 and pages 85 to 93 of the 1996-97 Commissioner of Taxation Annual Report. For additional performance information relevant to the Sub-Programme refer to the Australian National Audit Office (ANAO) report numbers 13 (Tax Debt Collection), 22 (Client Service) and 37 (Risk Management). Information on the performance of the Development Allowance Authority in 1996-97 is in the Development Allowance Authority Annual Report. Performance information for 1997-98 will be published in the 1997-98 Commissioner of Taxation Annual Report to be tabled in Parliament by 31 October 1998.
Performance Forecasts for 1998‑99
Sub-Programme 4.1 ‘Income and other Taxes’ is comprised of five components including:
4.1.1	Large Business and International (LB&I)  covering business taxpayers with gross income in excess of $10 million and associated high wealth individuals and the administration of the Development Allowance and Infrastructure Rebate programmes;
4.1.2	Small Business Income (SBI)  covering business taxpayers with gross income up to $10 million;
4.1.3	Individuals Non-Business (INB)  covering taxpayers with employment, pension and/or investment income;
4.1.4	Withholding and Indirect Taxes (WHT)  covering taxpayers with Withholding and Indirect Taxes responsibilities; and
4.1.5	Superannuation (SPR)   covering administration of superannuation-related activities (ie Reasonable Benefits Limits, Superannuation Guarantee Charge, Superannuation Surcharge, Eligible Termination Payments, Superannuation Holding Accounts Reserve and Lost Members Register) and Superannuation Administration Policy.
The ATO Sub-Programme structure primarily reflects adoption of a strategic and operational focus tailored to the respective individual market segments of taxpayers eg large business, small business. Each business line is responsible for securing optimum compliance with the laws and achieves this through a combination of strategies  including law clarification, legislative changes, service, education and enforcement related activities (eg prosecution, audits, income matching). The balance of these activities varies from time to time and line by line according to on‑going assessment of the nature and extent of risks involved.
The Sub-Programme’s performance (and also that of Sub-Programmes 4.2 (Child Support), 4.3 (Corporate Support) and 4.4 (Australian Valuation Office)) is judged according to the goals established around increasing compliance, reducing compliance costs, winning community confidence in administration of the laws, being an efficient and adaptive organisation and successfully implementing government initiatives.
For performance measurement purposes the ATO apportions the budget revenue targets for each head of revenue, according to client groupings. Performance forecasts for 1998-99 for each Sub-Programme component are set out below.

4.1.1 Large Business and International (LB&I)
Compliance
Achievement of budgeted revenue outcomes (largely company and superannuation fund income tax).
Improved compliance in targeted risk areas, including international transactions (eg transfer pricing), Capital Gains Tax, losses, financial arrangements, tax avoidance arrangements, Sydney Olympics and high wealth individuals.
Compliance Costs
Achievement of compliance cost reductions when opportunities arise.
Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories of work. 
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology (eg improved business and research systems), nationalisation of activities, contestability of key processes, improved accommodation usage.
Government Initiatives
Successful implementation of Government initiatives and measures.
4.1.2 Small Business Income (SBI)
Compliance
Achievement of budgeted revenue outcomes (largely company and other individuals income tax, but also including Fringe Benefits Tax).
Improved compliance in targeted risk areas including undeclared income in cash businesses (eg Prescribed Payments and Reportable Payments), artificial schemes, alienation of income and late/non-payment of taxes.
Compliance Costs
Achievement of compliance cost reductions when opportunities arise through ongoing implementation of proposals resulting from the Small Business Deregulation Taskforce and other measures.

Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories of work.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology (eg electronic commerce), new approaches to field work, market-testing and benchmarking, regionalisation of activities, error reduction initiatives, improved accommodation usage.
Government Initiatives
Successful implementation of Government initiatives and measures.
4.1.3 Individuals Non-Business
Compliance
Achievement of budgeted revenue outcomes (largely other individuals income tax).
Improved compliance in targeted risk areas including work related deductions, and rental income/deductions.
Compliance Costs
Achievement of compliance cost reductions when opportunities arise.
Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories of work.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology (eg electronic commerce), market‑testing and benchmarking, regionalisation of activities, error reduction activities, improved accommodation usage.

Government Initiatives
Successful implementation of Government initiatives and measures, including the Private Health Insurance Incentives Scheme, the Medicare Levy surcharge for high income earners and the Savings Rebate.
4.1.4	Withholding and Indirect Taxes (WHT)
Compliance
Achievement of budgeted revenue outcomes (largely Pay As You Earn, Sales Tax and Prescribed Payments System).
Improved compliance in targeted risk areas including aggressive sales tax planning initiatives pursued by large corporate clients, cash transaction/cash economy within small and medium enterprises and risks to revenue caused by labour market changes and technological and consumption changes.
Compliance Costs
Achievement of compliance cost reductions when opportunities arise through continuing implementation of proposals resulting from the Small Business Deregulation Taskforce.
Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories of work.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology, new approaches to field work, market-testing and benchmarking, regionalisation of activities, error reduction activities, improved accommodation usage.
Government Initiatives 
Successful implementation of Government initiatives and measures.
4.1.5 Superannuation (SPR)
Compliance
Achievement of tax‑related elements of the Government’s Retirement Incomes Policy (viz Superannuation Guarantee Charge).
Achievement of budgeted revenue outcomes (ie funds taxation and superannuation surcharge).
Compliance Costs
Achievement of compliance cost reductions when opportunities arise.
Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories of work.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology (eg electronic commerce), improved work design, market-testing and benchmarking, nationalisation of activities, error reduction activities and improved accommodation usage.
Government Initiatives
Successful implementation of Government initiatives and measures, including self‑managed superannuation funds regulation.

Sub‑Programme 4.2 — Child Support Agency
Objectives
To assist the payment of Child Support between payers and payees for the benefit of children.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub‑Programme and Summary of Underlying Outlays

Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub‑Programme and Summary of Underlying Outlays (continued)

(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Approp figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings,  savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation
The following table shows changes in the underlying outlays of the Sub-Programme in 1998-99. 
Table 4.3: Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

Table 4.3: Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99 (continued)

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.

1998‑99 Budget Measures affecting Portfolio Underlying Outlays
Reform of the Child Support Scheme  Policy and administration is further explained on page 187.
Performance of the Sub‑Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 49 to 60 of the 1996-97 Commissioner of Taxation Annual Report. Performance information for 1997-98 will be published in the 1997-98 Commissioner of Taxation Annual Report to be tabled in Parliament by October 31 1998.

Performance Forecasts for 1998‑99
Compliance
Achievement of budgeted revenue outcomes (ie collections of child support payments).
Improved compliance, including increased emphasis aimed at increasing the proportion of clients who elect to self-administer their child support arrangements or enter into private collection arrangements.
Compliance Costs
Achievement of compliance cost reductions when opportunities arise through improved targeting of services specific to client needs, introducing flexible payment options and helping separated parents to support themselves.
Community Confidence
Achievement of standards specified in the Child Support Charter for all relevant categories of work.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology (eg electronic commerce), improved work design, market-testing and benchmarking, specialisation of activities, error reduction activities, and improved accommodation usage.
Government Initiatives
Successful implementation of Government initiatives and measures.

Sub‑Programme 4.3 — Corporate Support
Objectives
To develop the corporate management process in the strategic and service areas and to support the efficient and effective operations of the ATO.
Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays

Table 4.2:  How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays (continued)
(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Approp figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings,  savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).
Sub-Programme Variation
The following table shows changes of more than 5 per cent in the underlying outlays of the Sub-Programme in 1998-99.
Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99

Table 4.3:  Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99 (continued)

(i)	The 1997-98 figure appears in column 3 in Table 4.2 above.
(ii)	The 1998-99 Budget figure appears in column 4 in Table 4.2 above.
Performance of the Sub‑Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 63 to 82 of the 1996-97 Commissioner of Taxation Annual Report. For additional performance information relevant to the Sub-Programme refer to the Australian National Audit Office (ANAO) report number 19 (Financial Statements Audit of Commonwealth Entities). Performance information for 1997-98 will be published in the 1997-98 Commissioner of Taxation Annual Report to be tabled in Parliament by 31 October 1998.
Performance Forecasts for 1998‑99
Sub-Programme 4.3 ‘Corporate Support’ is comprised of six components including:
4.3.1	Legislative Services (LS);
4.3.2	Tax Counsel and Practice Management (TC&PM);
4.3.3	Corporate Services (CS);
4.3.4	Information Technology Services (ITS);
4.3.5	Financial Services (FS); and
4.3.6	Office of the Commissioners.
Performance forecasts for 1998-99 for each Sub-Programme component are set out below.
4.3.1 Legislative Services (LS)
Compliance
Develop robust legislation that minimises tax avoidance, thus facilitating the ATO’s achievement of budget revenue outcomes and improvements in compliance.
Compliance Costs
Clarification and development of laws that are more understandable and certain, and thus less costly to comply with.
Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through the increased use of modern drafting techniques and benchmarking.
Government Initiatives
Successful development and implementation of the Government’s tax legislation programme.
4.3.2 Tax Counsel and Practice Management (TC&PM)
Compliance
Clarification of areas of the law through rulings, publications, advice and litigation, and development of robust legislation that minimises tax avoidance, thus facilitating the ATO’s achievement of budget revenue outcomes and improvements in compliance.
Compliance Costs
Clarification and development of laws that are more understandable and certain, and thus less costly to comply with.
Community Confidence
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories.
Improvements in the quality of technical decision-making across the ATO through a range of measures including consultation with community experts, specialised training, recruitment of highly qualified staff and better systems to ensure accuracy.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including increased and improved use of technology (eg new tax technical database), benchmarking, regionalisation of activities, reduced litigation costs, improved accommodation usage and other measures.
Government Initiatives
Successful development and implementation of the Government’s tax legislation programme.
4.3.3 Corporate Services (CS)
Compliance
Not applicable to this component of Sub-Programme 4.3.
Compliance Costs
Not applicable to this component of Sub-Programme 4.3.
Community Confidence
In the second year of the Taxpayers’ Charter, we are reviewing the existing Taxpayers’ Charter Standards and developing standards for professionalism and technical quality.
Successful provision of strategic support services (eg external communication and assisting the ATO to comply with their internal and external obligations).
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through the application of strategies  including increased and improved use of technology, an effective records management system, contestability, reduced litigation costs, partnering with other Sub‑Programmes to achieve leading practice in corporate support, and improved accommodation usage. 
Government Initiatives
Successful implementation of the Government’s APS reform programme including contestability, new people management practices.
4.3.4 Information Technology Services (ITS)
Compliance
Not applicable to this component of Sub-Programme 4.3. 
Compliance Costs
Not applicable to this component of Sub-Programme 4.3.
Community Confidence
Successful provision of strategic and operational information technology services (eg mainframes, networks, mid-range and desktop computing and corporate applications development), thus facilitating the ATO’s achievement of goals in each of these areas.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability across the ATO through the application of strategies  including use of electronic service technologies, office productivity and knowledge management systems for information collection, collaboration and communication; preparation for Year 2000; technologies to support remote office and flexible working arrangements; more effective management of infrastructure and technologies to ensure security of data.
Government Initiatives
Completion of competitive tendering process for IT infrastructure.
4.3.5 Financial Services (FS)
Compliance
Increased revenue forecasting accuracy, and enhanced analysis of revenues, with the development and implementation of improved revenue forecasting models.
Compliance Costs
Improved quality of advice to Government on the compliance costs attaching to legislative proposals with the development and implementation of high quality compliance cost models.
Community Confidence
Refinement of the ATO Corporate Governance framework.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability through application of strategies  including a new accrual‑based financial management information system commencing July 1998, a training strategy to upgrade accounting and financial management skills, improved management of large contracts and adoption of principles of contestability in service provision.
Government Initiatives
Successful implementation of the APS procurement reforms, the requirements of the Financial Management and Accountability Act and an accrual budgeting framework.
4.3.6	Office of the Commissioners
Compliance
Achieve budgeted revenue outcomes and improvements in compliance through provision of advice in the development of strategies based around the integration of compliance model and Taxpayers’ Charter.
Compliance Costs
Reduce compliance costs through the promotion of better decision‑making processes within the ATO.
Community Confidence
Providing an independent entry point to the ATO which acknowledges the rights and obligations of the tax paying community.
Achievement of standards specified in the Taxpayers’ Charter for all relevant categories of work.
A strong system for staff accountability increases community confidence in the integrity of staff and the ATO.
Efficiency and Adaptability
Improved productivity, efficiency and adaptability of the administration of the taxation system through a range of measures including improved use of technology and people, and improved knowledge of our clients.
Government Initiatives
Successful implementation of Government initiatives, including the Taxpayers’ Charter.

Sub‑Programme 4.4 — Australian Valuation Office
Objectives
To provide independent valuation services and advice.
Table 4.2: How the Sub-Programme is Resourced;  Reconciliation of Appropriations to the Sub-Programme and Summary of Underlying Outlays
(i)	As presented in 1997‑98 Budget documentation (May 1997  adjusted, where necessary, to reflect underlying outlays).
(ii)	1997‑98 Revised Approp figures amended to include Additional Estimates, Advance to the Minister for Finance, running cost borrowings,  savings and other revisions.
(iii)	Variation percentage = ((1998-99 Budget less 1997-98 Estimated Outcome)/1997‑98 Estimated Outcome).

Sub-Programme Variation

The following table shows changes of more than 5 per cent in the underlying outlays of the Sub-Programme in 1998-99.
Table 4.5: Variations to Sub-Programme Underlying Outlays 1997-98 to 1998-99
(i)	The 1996‑97 figure appears in column 3 in Table 4.2 above.
(ii)	The 1997‑98 Budget figure appears in column 4 in Table 4.2 above.
Performance of the Sub‑Programme in 1996‑97 and 1997‑98
Information on the performance of the Sub-Programme in 1996-97 is at pages 24 to 26 of the Department of Administrative Services Annual Report. Performance information for 1997-98 will be published in the 1997-98 Commissioner of Taxation Annual Report to be tabled in Parliament by 31 October 1998.
Performance Forecasts for 1998‑99
Compliance
Assist government agencies achieve compliance objectives by the provision of independent valuation service and advice.
Compliance Costs
Assist government clients to reduce their cost by improved targeting of services and benefits.
Community Confidence
Provision of impartial valuation advice to government agencies, critical to the success of asset testing of applicants for welfare benefits while maintaining community confidence through equitable decision making and programme administration. 
Efficiency and Adaptability
Achievement of financial and performance objectives and standards.
Government Initiatives
Continued application of competitive neutrality principles and implementation of other government reforms.