Conference snapshot

Day One 17 June 2014

Program Introduction NOUS Group

Driving forces presentation Michael Monaghan, ATO

Scenarios for the future Michael Monaghan, ATO

Transforming business models David Koch

What do clients want? Michael Monaghan, ATO

What do we see in the future scenarios? Association Industry Panel

Challenges for regulators Cynthia Coleman, Tax Practitioners Board

Where do we want the system to go? NOUS Group

Changing a model Catherine Walsh, Australia Post

Day Two 18 June 2014

Summary Day One NOUS Group

Tax administration transformation Geoff Leeper, Second Commissioner ATO

Technology transformations & ELS to SBR Chris Thorne, Enterprise Solutions and Technology ATO

Future business models NOUS Group

What now? How do we make our preferred world a reality? Michael Monaghan, ATO

Event program

Program introduction

The environment is changing

Be alert, not

alarmed

Computers talking to computers

We need to work

together

Client expectations are changing

A call to arms for

the profession

Driving forces

In late 2013 and early 2014, the ATO, in partnership with ThinkPlace, undertook a research study with thought-leaders and practitioners in both the tax/superannuation industry and the tax administration. The research sought to understand strategic drivers that will lead to important and sometimes fundamental shifts in the taxation environment. The Australian Tax Office (ATO), business, and the tax profession will need to respond to these challenges and opportunities, and these responses will need a mix of evolved approaches and sometimes entirely new thinking to optimise compliance and ensure a healthy, effective taxation regime that delivers a fair revenue outcome. The next decade promises a tax environment of increasing complexity for all players. This complexity will be driven by shifts right across the taxation ecosystem. Some of these shifts are already emerging, others are strongly indicated by current trends and forecasts.

Scenarios – The development Scenario planning: also called scenario thinking or scenario analysis, is a strategic planning method used to make flexible long-term plans. Scenario planning may involve aspects of systems thinking, specifically the recognition that many factors may combine in complex ways to create sometime surprising futures. What did we do?

Identify the focal issue or decision

•Interview practitioners and stakeholders

Identify key forces in the

local environment

•Multi-country country business •Engaged public •Disruptive

technology •Changing

professional capability

List the driving forces

Rank key factors and

driving forces by

importance and

uncertainty

•Connected –Disconnect •Cutting Edge –

Out of Touch

Select scenario

logics (the x and y axes)

•Traffic jam • Booming

business •Desert island •Big fish, small

pond

Flesh out the scenarios

Explore implications

Select leading

indicators and

signposts

Scenarios – The development

Multi-country business

Disruptive technology

Changing professional

capability

Engaged public

Connected / Disconnected Cutting Edge / Out of touch

David Koch: Chairman Port Adelaide Football Club

Six Pillars of Port Adelaide Football Club

Discipline of Board •Governance •Diversity

Leadership and culture

•Set big goals •Be best practice •Professional development

Local build retainment

•Think global, support local •Change the way we think

Eastern seaboard strategy

•International brands •Good brands attract good

brands

Relevant national brand

•Appeal to everyone •Influence changes you

want •Everyone signs onto

changes

Bunch of go getters •Have stretch goals •Think outside the box •Leverage opportunities •Data analysis

What do clients want?

What makes your tax advisor

‘valuable’ to you? Provide me with business advice

Understands my industry

Do more than just my tax return

In touch with things that

will build my business

What role does your agent play in your

business? Helps me manage my affairs so I can spend more time

running my business

My agent manages the relationship between me and the ATO

Provides me advice on how I can

minimise my tax

Helps me build my own wealth and the wealth of my business

How do you think electronically sharing your

business data with your adviser

helps you?

It means I’m getting a

better level of service

Real time data – real

time solutions

I can invest once in my software and my advisor can do the rest

for me

He can help me identify

trends in my business

How do you think ‘computers talking to

computers’ will help you in your business

Less filling in forms

and wasting time

The data’s all just there

Changing and moving my

business around will be easier

I’ll have more time to think about where I’m taking my

business

Hopefully one day, I won’t

need to lodge a BAS

statement

Catherine Walsh Australia Post

Changing environment

• Mail services reducing • Parcel delivery • Competition

Customer focus

• Remain relevant

Legislative requirements

• Postal service standards • Profit requirement

Business Transformation

• Electronic mailbox • Customer life events

Clients > • Embrace their reporting obligations • Embrace education more to make the job easier • Have a go with the software • Work with advisors to ensure they get the right software

for their business • Make the investment • Be confident to not have to depend on tax practitioners

or ATO

ATO professionals > • With borders being eroded, education

understand slants • Increase technological capability

• Don’t be afraid of change • Embrace disruption • Diversify from ATO related services • Engage with the ATO • Education and provision of other services • We need to move • Build knowledge and skills • Increase our value added services

Software providers > • Shared vision • Holistic approach • Honesty – what does the software do? • Functionality and connected • Common interest in engagement • Competitiveness in software – allow for transfer

ATO > • Can’t put ‘tax’ and ‘simplification’ together • Change laws – jurisdictional issues • International cooperative regimes • Consult and engage • Cut red tape and accessibility • More accurate information • Impose penalties and sanctions to increase participation

Greater collaboration

Common themes for change

Clients > • Need to embrace technology • Hard to change people • Pressure for bigger refunds • Immediate responses on queries • Continually upgrade IT systems • Need to adopt new technology • Open minded, educated,

qualified • ATO and service provider need

to improve communication • Not getting help from

practitioners on time • Proactive • Email for information exchange • Full cooperation with tax

practitioners • Submission of source documents

on time • Improve record keeping • Full, honest disclosure • Provide tools to implement and

embrace technology • Increased risks for clients

sourcing advice online or overseas

Tax professionals > • Awareness of technology, law

and practice • Agility, education, knowledge,

skill • Willingness to do other things • Grow business • Be proactive • Awareness of risks in gaining

overseas advice • Need to co-design with ATO and

software providers • Support and assistance to adapt • Acquire skills to change • Make clients aware of risks of

self-diagnosis • Be aware of clients’ needs • Be prepared for change • Succession planning and

environmental impacts • Professional bodies need to

support education of members • Use appropriate software to

ensure integrity of data • Build networks overseas to

enable timely and correct international advice to clients

• Professional development

Software providers > • Tell us the limitations of the

software • Co-design with clients and

practitioners • Make any transition as seamless

as possible • Provide information on SBR and

software enhancements • Be aware of fast moving world • Reliability, accuracy, ease of use • Scalability, personalisation and

customisation of software • Talk to clients • Consistent with other software • Provide more training • User friendly, intuitive,

compliant software • Auto-fill data and report

generation • Reasonable cost • Ease of transferring • Cloud based systems • Cooperative communication • Commercial principles • Adhere to Trade Practices Act • Products exist but not

developed to suit modern needs

ATO > • ATO Prefill information • Transparency of plans • Provide more relevant training • Website more searchable • Better relationships with

practitioners and clients • Provide a disclaimer that advice

is general • Get consistency in advice • 6 weeks response to 2 week • More in touch with practitioners • Improve technical support • Simplify legislation • Regular CPD • Upgrade Portal • Consistent information and

advice • Improve help line • Webinar on the website • More reliable technology • More collaboration with

software providers • Simplify language • React more quickly to change in

legislation • Interact with other jurisdictions • Outline expectations • Cut red tape

Traffic jam

Booming business Clients > • Qualifications • Clients working in an improved

system • Real time data availability from

business stakeholders • Good record keeping • Conscious with deadlines • More consultation with tax advisor • Training for clients • Be aware of international tax

obligations • More timely interaction with tax

agent • Need to be aware that there is a

difference between accounts figures and deductibility

• Confident that systems work • Self selected tax practitioner • See themselves as part of compliant

culture • Use SBR to enter information • Large clients talking to other

offshore business units • Change how information is

presented • Invest in software needed • Interactive, timely, real time,

complete and accurate information • Consult before acting • Invest in technology • Seek advice from qualified advisors

Tax professionals > • Education • New technology platforms • Connect and communicate with

clients, software providers and ATO • Provide quality service • Easy backup and access of files • Make more money • Work on business not in business • Quality of staff • Quicker processing times • Training • Be accessible to clients • Have 3rd party contracts where

information isn’t available in-house • Educate clients in technology & law • Help clients embrace change • Filter content to client to meet client

needs • Differentiate between transactions

that need practitioner advice and those that don’t

• Associations talk to international counterparts

• Improve processes and procedures • Educate clients • Work with educational institutions • Update curriculum • Investment in people, knowledge,

systems • Are accountants & business advisors • Globally connected • Deal with increased competition

Software providers > • Clients, banks and business

collaboration • Why enter transactions? • Standardised • Build computerised tax system • Timely software • Real time data and data sharing • Free training on software updates • Rebate incentives • Electronic data transfer • Up to date information for clients • Easier to produce reports to share

with clients • Reliable • Cloud based • All computers communicate • Keeping up with pace of change • Providing solutions for storage • User friendly software • Architecture covers most needs (no

bespoke systems) • Easy to use • Has a shelf life • Incorporate SBR • Have appropriate security • Be involved with users’ businesses • An NBN • Connectivity of platforms • Reliable software • Learn from best practice • Webinars and training

ATO > • Proactive advice • Encourage simplification of system • Bypass low-risk taxpayers • Business visits • Push to simplify tax law • Real time data availability • Consistent advice and information • Provide alerts • 24/7 availability • Update Portal over-night • Collaboration with software

providers • Keeping up with the pace of change

and advise community • Provide up-to-date information

when sending letters • Can’t put ‘simplified’ and ‘tax’

together • Improve data sharing between ATO,

client and practitioner • Invest in systems • Reward clients and practitioners for

compliance • Engage with practitioners • Aim for long term consistency • Lead the development of a global

standard • Security of data • Help yourself to raw data • Reduce dependence on income tax • More rapid upload of data • Accessibility

Desert island Clients > • Education • Willingness to embrace new

technology • Invest in better value from software

profession • Already restricted by its

geographical location • Give clients choices on

communication • Coordinate with practitioners • Lose faith in practitioner • Be more informed • Need to realise tax difficulties • Need an element of compulsion to

get connected • Use technology to optimise business • Need reliable access to internet • Buy right software • Education and financial awareness • Shoe Box • Not fully embracing technology • Current incompetence with basic

bookkeeping • Encourage tax agent to skill up and

diversify • Meet with accountant and look for

better accountants

Tax professionals > • Proactively promote change • Skill up • Move with technology changes • Build client trust • Give client choices • Client follow-ups • Set reminders • Internet access for all staff • Out of date and not satisfy quality

assurance • Open clients’ minds to a change • Enhance international networking • Control data integrity • Embrace change with their clients • Change client’s acceptance of

procedures • Invest in technology • Encourage clients to expand

overseas • Find a way to add value • Add value by analysis • Seriously look at service offering • Educate on provision of services • Don’t give up • Influence institutions • Articulate needs, not just irritants • Learn to complement technology • Associations to pressure members • Diversify from ATO related services • Stop doing routine things • Network with people who are able to

step out of this world

Software providers > • Common platform • Stop being greedy • Share some useful tools • Listen to clients and profession • International software providers

give cheaper, faster services • Innovation – software will be easily

implemented & upgraded • Differentiated models • Update compliance • Educate users • Simpler electronic solutions • Can only deal with Australian

transactions • Face to face dialogue with tax

professionals • Implement innovations into

software – SBR • Consult with clients and

government to find opportunities • Scale products to advisor and client • IT infrastructure is a must • Market benefits to clients • Ensure affordability • Co-communicate and co-design • Make it ‘easy’ • Modulise offering • Provide ongoing support • Lack of integration with tax returns • Stop double input of data • Have to use new platform for

technology

ATO > • Business interchange • Mandate standards • Invest in SBR and recording • More tax evasion • Implement a system where a level of

compliance must be done • Withdraw from investments in the

portal • Scrap refund system • Penalties and sanctions • Collaborate with clients, software

providers and practitioners together • Reduce red tape • Reduce national boundaries • Address double taxes • Clamp down of companies shifting

profits overseas • International data exchange • Invest in and fix IT systems • Increase training and skills of its

people • Lead and encourage connectivity • More regulation about use of

technology • Educate community of global

opportunities • Continue to collaborate, push SBR • Engage public debate on journey • Use social media • Annual GST variations • Stop assuming you’re right

Big fish, small pond Clients > • Change procedures to have system

to match new technology • Need to be bought along to get

more connected • Establish connections to expand

potential client market • Already struggle with existing

technology • Adopt new technology • Provide information in timely

manner • Infrastructure • Moving too far ahead • Push for NBN • Give clients tools to embrace

technological progress • Learn self-management and

diagnosis • Awareness of issues and seek help • Software driven by clients and

providers isn’t coordinated • Engage with ATO and practitioners • Use technology – SBR • Business coaching in overseas

environment • Not fully embracing reporting

obligations • Connect with tax obligations • Have a go and learn • Invest • Lobby for removal of global

constraints

Tax professionals > • Improve internet • Get more knowledge • Get connected • Improve connectivity with clients • Need to be bought along to get

more connected • Help clients expand their business

opportunity • Will have difficulty with rapid

technological change • Provide timely report to clients • Too much attention on new

technology • Push for NBN • Add value or will become extinct • Embrace change • Client base demands us to work

beyond boarders • Understand how to use and

implement technology • Need to improve skills to meet

changing environment • Engage with ATO and taxpayers • Encourage client use of SBR • Use SBR when dealing with ATO • Associations advocate for IT

infrastructure • Build capability • Form relationships with larger firms • Acquire broader knowledge • Invest in own technology • Accept changes

Software providers > • More user friendly • Pricing • Communication with clients • Security of data • Explain and educate users better • Build software for clients, ATO and

practitioner • Software provides will have

problems implementing law changes

• Check in with users about cloud based software

• Effective help guidelines • Easy access to support teams • Infrastructure • Getting more of a monopoly • Push for NBN • Improve offering • Provide consistent messaging • Manage expectations • Scalability, personalisation,

customisation • Need IT infrastructure solution • Facilitate technology improvements • Keep up with international

developments • Technology good by hard to use • Educate and innovate • Deliver what they promise • Connectivity of software globally

ATO > • No appropriate communication with

practitioners • Reward taxpayers who get

connected • Ensure tax system doesn’t constrain

global growth • Lobby for better IT infrastructure • Support changes of law to support

use of technology • Work with other government

agencies • Improve website • Infrastructure • Consistent view of ATO service offer • ATO may not understand technology • Push NBN • Simplify tax law • Provide consistent advice on

expectations • Workshops to assist development of

practitioners skills • Can we get electronic mail • Opt out of paper correspondence • Implement infrastructure and

technology improvements • Encourage engagement with

practitioners and taxpayers • Improve infrastructure and systems • Reduce level of bureaucracy • Timely information and advice • Information overload • Improve relationships

Industry next steps

Next steps…

Outcomes to National Tax

Liaison Group

ATO Tax Practitioner Group: •Standard Business

Reporting •Scenarios

•Further collaboration

ATO – software developers -

practitioners- clients

collaboration

National IT infrastructure push

Associations lead further discussions

ATO lead co-design on reintervention

initiatives