Friday, February 14, 2014

The real Abdul backs Hockey's kebab comments - but tells the Treasurer he might need to book for lunch

A day ago Treasurer Joe Hockey drew a culinary line in the sand on the fraught issue of whether to provide assistance to struggling companies like SPC Ardmona or Qantas.

He made a big point about small business saying that the proverbial Abdul the kebab maker from Parramatta doesn't come looking for a handout when he wants a new oven.

Business editor Peter Ryan can't resist a lunchtime challenge.

He found a real life Abdul the kebab maker in Sydney who agrees with the Treasurer.

Listen to the story here.

Thursday, February 13, 2014

IMF gives Treasurer a tick for hardline budget strategy

The International Monetary Fund has endorsed the Treasurer's anticipated budget cuts but has warned that fiscal buffers are needed to deal with any financial shock.

In its latest economic report card, the IMF said Australia's economy "rests on strong fundamentals" but the near term outlook "remains vulnerable".

The IMF gives Mr Hockey a tick and said it "supported the government's aim to return to a fiscal surplus" while commending Australian authorities "for their sound and prudent macroeconomic management".

The IMF backed the Treasurer's budget strategy and "emphasised the usefulness of early decisions on the spending cut and revenue increases need to reach the fiscal objectives".

However, the IMF appears to be concerned about the rapidly-unwinding investment phase of the resources boom which has been underpinning Australia's economic fortunes.

"A transition phase has now been reached" and "the mining investment boom of the past decade has peaked and the economy is moving to the production and export phase."

The IMF predicts mining related investment will "drop sharply" in the near term and that the recovery of the non-mining sector needs to pick up the slack.

The IMF has also pointed to an "overvalued exchange rate" which is weighing down the non mining economy.

The Australian dollar is currently buying 90.3 US cents in contrast to the Reserve Bank's ambition to lower the currency to around 85 US cents.

With the dollar still strong, the IMF has urged the Reserve Bank to keep the cash rate at its historic low.

The IMF has also pointed to Australian employment and that "labour market conditions have softened" as the jobless rate rises.

Wednesday, February 12, 2014

Software minnow takes on Tax Office over tender veto in David vs Goliath battle

A small software company is taking the Australian Tax Office to court in a case that could expose the way federal government tenders are approved, awarded and sometimes vetoed.

The Melbourne-based Reveal Tools had been the successful applicant to supply workplace productivity software to the ATO and allegedly told its tender had been superior to the existing supplier.

But now the company has now launched a potential David and Goliath legal battle after the ATO abruptly said the contract had been cancelled in "the public interest".

Reveal Tools has lodged a $4.5 million claim in the Federal Court alleging the ATO has attempted to crush the company.

The company's chief executive Paula Crouch acknowledges the "David and Goliath" factor in taking on the might of the Tax Office.

"Without a doubt. They're certainly outgunning us with lawyers and money. But we feel that the ATO should be held to account," Ms Crouch told The World Today.

"But if we can get to court and be heard, then I rate our chance of winning as better than even odds."

Reveal Tools lodged a $6.7 million bid for the ATO contract in February 2011 and spent $770,000 over 12 months developing the proposal.

Ms Crouch says she was advised by the ATO in July 2011 that Reveal Tools was the preferred tenderer only to later learn in a telephone call that the deal was off.

The ATO's reasoning, according to Ms Crouch, was that it was no longer in the public interest to continue with the tender.

"I was absolutely devastated," Mr Crouch said.

"From champagne and celebrations we met with their lawyers and finalised the contractuals and we given the heads up that it would take about two weeks for them to sign off on the final contract.

"It was all handshakes and smiles. Then come December I got a call and they just said they'd basically changed their mind, they didn't have the budget and the whole thing was off."

The ATO has refused to comment on the legal challenge from Reveal Tools, which will be heard in the Federal Court on Friday.

"We are unable to comment on matters before the court. The ATO adheres to the Commonwealth Procurement Guidelines," a spokesman told the ABC.

The case could shine an unwelcome light on how the federal government's multi-billion dollar tender process is administered.

Reveal Tools has cited the recent case of $223 million tender for the Australia Network which was cancelled by the Gillard government after a panel recommended it be awarded to Sky News.

Monday, February 10, 2014

Tax Office watchdog investigating Bill of Rights for taxpayers

The man who watches the tax man is investigating calls for a special Bill of Rights for taxpayers who think they're getting a raw deal.

The Inspector-General of Taxation - whose job it is to scrutinise the operations of the Australian Tax Office - has put the proposed Bill of Rights at the top of ten systemic issues he wants to review this year.

A Bill of Rights if approved by the Federal Government could replace the current Taxpayer Charter which is administered by the ATO and not legally enforceable.

Ali Noroozi is reviewing the viability of a Bill of Rights for taxpayers as part of his powers to monitor the ATO's systems and to make recommendations for improvement.

"People have come to us saying they've had bad experiences with the Tax Office and they don't feel they're being appropriately compensated or that there is not an appropriate avenue for them to take complaints further," Mr Noroozi told AM.

"The question I'm asking if whether there is a systemic issue here and I want to explore whether what we already have by way of the Taxpayer Charter, whether they are adequate and whether we need to go down somewhere towards a taxpayer Bill of Rights."

While Mr Noroozi says there is not a groundswell for better taxpayer protection, some jurisdictions in the United States have introduced a taxpayer bill of rights and Canada is also considering one.

But he agrees that agrieved taxpayers want "some kind of enforceable remedy" which is not available through the ATO's taxpayer charter.

"They want something they can go to court with when they feel that the Tax Office is not living up to its charter. The taxpayers charter is just a declaration by the Tax Office  as to what taxpayers can expect from them and what it expects from taxpayers.

"It does not necessarily create any legal right as such."

Mr Noroozi says the ATO's taxpayer charter - created in 1997 under the Howard government - was designed for different times. But he agrees its administration by the ATO creates at least the perception of a conflict of interest.

"You're right. And that's why people have come to us because they feel that it's all very well for these expectations but without something they can act on, it's not all that useful."

Ali Noroozi first raised the issue of a taxpayer Bill of Rights as "an emerging theme" in last year's annual report from the Inspector-General of Taxation but has now put it on the agenda of his new work plan for 2014.

But the path to a taxpayer Bill of Rights could be a long one.

If make Mr Noroozi makes a recommendation after extensive consultation, the Abbott government would need to pass legislation to introduce a Bill of Rights.

But as the Federal Government seeks to cut costs across departments and agencies, any threat to tax revunue through legally enforceable taxpayer rights could rule out any changes.

Ali Noroozi would not comment on how the ATO would respond to his investigation but conceded that tensions are inevitable.

"My job is not to have cups of tea with the Commissioner of Tax. My job is to scrutinise. But naturally there would be some tension from time to time," Mr Noroozi said.

"But I think that's good for the system and why you have a scrutineer."