Senate debates

Tuesday, 5 September 2017


Australian Taxation Office

8:59 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I rise this evening to tell the story of Mr Ron Shamir, an experienced intelligence analyst who blew the whistle on shady dealings at the Australian Taxation Office and lost his job for his troubles. I am willing to table any documents to substantiate the facts I'm about to put on the parliamentary record. Mr Shamir worked in the ATO's serious tax evasion branch, which deals with some of the most egregious cases of tax evasion and fraud. In 2011 an unfavourable High Court decision for Commissioner of Taxation v Multiflex significantly changed the way compliance areas of the ATO, like Mr Shamir's, could operate. The decision meant that the ATO had less time to check the validity around $9 billion in suspicious GST refund claims. Having less time to check claims meant less opportunity to identify and stop fraudulent claims, which threatened the ATO's revenue-collecting targets.

In 2012, Mr Shamir noticed that the ATO was taking intentional short cuts to reach revenue targets. These short cuts involved suspending taxpayer rights while applying extraordinary ATO powers without the required evidence. He was concerned about the potential impact on compliant taxpayers. To Mr Shamir it looked like the ATO was recounting funds paid out to fraud syndicates as revenue collected towards the ATO's collection targets. Even worse, the ATO's actions appeared to shield suspected fraudulent entities from future scrutiny or audit action. What he found was that the ATO was opting to lose future revenue, actual money, in order to give the appearance that the ATO was bringing in revenue and meeting its targets. In fact, no money would ever arrive.

Mr Shamir reported the suspected misconduct to the ATO integrity assurance branch. He received no response. He then attempted to locate the ATO's independent Integrity Advisor. It appeared the position no longer existed. Instead, the ATO's integrity assurance branch referred Mr Shamir's complaint to the business division he had complained about. It is no surprise that the division denied there was an issue. In fact, it said that the senior executive level had signed off on the practice. As a result, the integrity assurance branch closed the case. This is the very same integrity assurance branch that allegedly failed to investigate a 2015 complaint about recently dismissed Deputy Commissioner Michael Cranston.

The last attempt Mr Shamir made to address his concerns was to approach one of the assistant commissioners who endorsed the operations. The following day the assistant commissioner advised Mr Shamir that the operations he was concerned about had been withdrawn and replaced with new procedures. Despite concerns about the difficulty in getting this reply, Mr Shamir hoped that this was the end of the matter. Unfortunately, it was not. He began to experience reprisals. His team and role were abolished, and the ATO refused to move him to one of its many intelligence roles. Instead, he was moved to a senior auditing role, a specialised area in which he had no background or experience. Management also alleged he had breached the code of conduct and threatened to record a complaint on his government security clearance files.

In 2014, Mr Shamir contacted the external oversight agency for the ATO, the Inspector-General of Taxation, about his fraud concerns. By this stage, he had continued to notice other concerning practices at the ATO. After ensuring that the inspector-general could protect him from reprisals, Mr Shamir agreed to proceed with his complaint and was legally compelled to provide evidence under an official section 9 notice. Collecting this evidence was his last act as an ATO employee. A few days after advising the ATO that he had been issued with a notice, Mr Shamir was tapped on the shoulder at work by a security guard. He was issued with a termination notice and escorted off the ATO premises. Mr Shamir contacted the inspector-general for protection but received no help.

The ATO said to the court in response to Mr Shamir's suspension that Mr Shamir:

… cannot be compelled to give what he does not have. He doesn't have access to ATO systems and the ATO does not propose to give it to him to enable him to act as a vigilante inspector.

In that statement, the ATO makes it clear that the motivating factor in his suspension was to prevent Mr Shamir accessing ATO systems. A week later, Mr Shamir was fired on the basis of nonperformance of his audit duties. The Fair Work Commissioner ruled in March 2016 that Mr Shamir's termination by the ATO was harsh, unfair, unreasonable and indefensible and ordered that Mr Shamir be reinstated. Within hours of that decision, the ATO advised the tribunal through a top tier legal firm that an eminent QC would be lodging an appeal of the decision on behalf of the ATO to the full bench. During the appeal, the ATO offered Mr Shamir $360,000 in return for settlement and confidentiality. Under the terms of the agreement, Mr Shamir would not only have to remain silent but also, extraordinarily, actively have to dissuade media outlets from publishing information should they be inquiring about his case. He was advised that, if he did not accept the offer, the ATO would continue to use its extensive legal resources to oppose any future court decisions favourable to Mr Shamir.

Courageously and as a matter of principle, Mr Shamir did not accept the ATO's offer, despite personal legal debts at that time of more than $200,000. He didn't have the resources to adequately oppose the ATO appeal, and the full bench of the Fair Work Commission reversed the initial decision, saying that the ATO had a right to terminate his employment. He could not afford to appeal. He has not been able to find employment since, despite hundreds of applications and dozens of interviews—some in much more junior positions. His legal debts and loss of income now amount to more than $500,000. He is living with the constant threat of bankruptcy, losing his family's home and not knowing how to provide for his young children.

Mr Shamir's experience sends a deeply concerning message about the way Australian government agencies treat whistleblowers. We should be ashamed that someone who has, with the best intentions, exposed fraud or misconduct has been treated so poorly. Ron Shamir was a dedicated public servant who, acting in the public interest, sought to rectify a serious breach within the ATO. After much internal obfuscation, the ATO has acknowledged that there was a breach, yet Ron was not protected at any step along the way. His decision to blow the whistle resulted in him losing his livelihood and having legal debts that he now cannot repay.

Ron has been ground down by the machine. Others who come across fraud or misconduct will look at Ron's experience and think twice before coming forward with information that is in the public interest. This is to the detriment of all of us. It is in contradiction to an efficient and fearless Public Service, and it undermines the peoples' trust in our democratic institutions. What Ron has gone through is a clear demonstration that we need to do more to protect whistleblowers. We need to go further than legal protections. We need to recognise the toll that whistleblowing has on a person's life, their financial stability, their job security and their mental health. It is time for us to follow the lead of the US and the calls by the ASIC Chairman, Greg Medcraft, and offer financial rewards for whistleblowers who come forward. Sadly, that's because they very often find themselves in Mr Shamir's circumstance, where they can no longer get employment.

I will be taking Ron's treatment up with the ATO directly, and I will ask that they cover Ron's legal expenses. I've also written this afternoon to the Minister for Finance, Senator Cormann, to urge him to provide a reference for Mr Shamir so that he is given a fighting chance of being able to regain employment. Someone of Ron's character and integrity is an asset to the Public Service, to this nation and to the wider world, and I hope he secures gainful employment over the coming weeks and months.