The Tax Institute welcomes the opportunity to make a submission to the Administrative Review Taskforce in the Attorney-General’s Department (AGD) and the Expert Advisory Group in response to its Administrative Review Reform: Issues Paper (Issues Paper) on the development of a new federal administrative body (new review body).
Our submission builds on our earlier submission to the Senate Legal and Constitutional Affairs Committee in relation to its inquiry titled The performance and integrity of Australia’s administrative review system and letter to the Attorney-General, the Hon Mark Dreyfus KC MP, on 17 March 2023, in which we provided our initial views on the core principles that should be prioritised in the design of the new review body. Our comments primarily relate to the legislation and administration of the Australian taxation and superannuation systems, and the Taxation Divisions of the Administrative Appeals Tribunal (AAT) and new review body, though we note that many of the principles and recommendations apply equally across all Divisions.
We would also like to thank the AGD for meeting with The Tax Institute and its members to discuss our feedback and recommendations in relation to the new review body. We appreciate the AGD’s openness to discussing important aspects of the reform and the opportunity to partake in its design.
The AAT plays crucial role in the review and administration of Australia’s tax system. The AAT’s review of decisions made by government agencies allows applicants the opportunity to have adverse decisions reviewed by a trusted and wholly independent tribunal. However, the AAT has had significant shortcomings that have prevented it from being an effective and efficient body. The shortcomings and need for improvement have been recognised in several reviews including the 2018 Report on the Statutory Review on the Tribunals Amalgamation Act 2015 (cth) (Callinan Report) and the Senate Legal and Constitutional Affairs Committee’s Interim Report on the performance and integrity of Australia's administrative review system (Senate Committee Report).
The new review body will play an equally crucial role. It is imperative to ensure that the new review body does not encounter the same issues that adversely impacted the ability of the AAT to provide accessible, efficient and low-cost resolutions to taxation and superannuation disputes. There are a number of aspects of the current approach to the AAT that need to be addressed. These include, but are not limited to:
- ensuring the new review body has practices and procedures in place that will assist it in achieving its intended objectives;
- ensuring the new review body is adequately funded to provide services of the required quality and standard;
- ensuring that members are adequately remunerated, with consideration given to how long it takes to write a decision;
- improving the timeliness of decision making by the new review body;
- retaining separate divisions for taxation and small business taxation in the new review body;
- ensuring that alternative dispute resolution (ADR) is accessible and used as often as possible to resolve matters in a cost-effective and equitable manner;
- increasing the transparency of all aspects of the new review body, including the case triage process;
- keeping aspects of the Administrative Appeals Tribunal Act 1975 (cth) (AAT Act) that are currently working well;
- ensuring that the new review body has a culture that is conducive to achieving its stated outcomes;
- ensuring that the Australian Taxation Office’s (ATO) resources and procedures can better assist in the timely and efficient resolution of taxation and superannuation disputes; and
- re-establishing and potentially expanding the scope of the powers of the Administrative Review Council (ARC);
Further, we consider that the processes and effectiveness of the new review body should be regularly reviewed and benchmarked to ensure they continue to achieve their intended objectives. It may be possible for reviews and improvements in processes to be undertaken by a re-established ARC, or through formal reviews conducted by independent bodies and Parliament.