A GST fraud wave costing Treasury at least $4.6 billion has been perpetrated by thousands of greedy people falsely asserting they own & trade as a business

 

Financial Review, 14 August 2023:

An explosive wave of fraud that has shaken the Tax Office’s GST system had been building for months before accountants began to notice early last year. By then it was everywhere and no one wanted to talk about it.

“I started seeing it through the office about March of 2022, a few people came in with business files with the ATO – these really large credits going out, big, big credits, unusual credits,” a western Sydney accountant told The Australian Financial Review.

“It didn’t prick my attention. Then I saw a few more, and a few more, and a few more. It kept growing. Tax time came [from July 2022] and it was rampant, absolutely rampant.”

By then, accountants around Australia were realising that the country was in the thick of a multibillion-dollar explosion of GST fraud that had gone viral. It’s the crime wave the Tax Office didn’t see coming.

How big a crime wave? “The inside word among tax officers is $4.6 billion – that is insane,” says the accountant, who like others spoke to the Financial Review on condition of anonymity. “Everyone’s too scared to go up against the ATO.”

The Tax Office has confirmed the $4.6 billion figure, which seems likely to be an underestimate.

It was “the biggest tax revenue fraud against the community in the history of the ATO”, deputy commissioner John Ford said in a speech in May.

The fraud is a simple one that involves individuals using their MyGov account to claim refunds on GST payments that were never made.

While the fraud may be simple, piecing together this invisible crime wave raises questions about why the Tax Office took so long to catch on.

And now it’s tax time again. While the Tax Office insists it has the fraud under control, accountants in western Sydney are painting a darker picture.

“They keep changing [the scam],” an accountant says. “I saw more clients today that [the ATO] didn’t pick up. One guy got $50,000, then another $35,000, then another $25,000.

“He hasn’t had to pay it back. He got this at the end of 2022. This isn’t being picked up as fraudulent activity.

“I’ve seen two more already this morning. One has a debt of $18,000. He tried to get more but was stopped eventually by the ATO.”

A client received $130,000 from fraudulent claims in July 2022 and was not picked up until December. Another client was paid $60,000 last September. How did it get to this?

Banks had been warning the Tax Office about a rising pattern of GST fraud – and freezing suspect accounts – from late 2020. They became increasingly frustrated by the apparent lack of action by the ATO, as they were faced with the decision of what to do with the frozen accounts…..

By mid-2021 the fraud was exploding as social media – in particular TikTok – was full of explainers how to get a “loan” from the government.

In one example cited to the Financial Review a man claimed a $50,000 GST refund in August 2021, then raised another $50,000 several months later. It was only when he tried it again last May that the Tax Office caught up with him.

Read the full article here.

New Minister for Government Services Bill Shorten announces user service audit of "myGov" website and a robodebt royal commission

The Sydney Morning Herald, 4 June 2022:

Labor wants to end the “digital workhouse” approach to people trying to get government payments, with new minister Bill Shorten planning to turn using myGov from an often-frustrating experience into a seamless one.

Shorten is taking briefings on his new government services portfolio but wants to get moving immediately on a user service audit of myGov, the online entry portal into services such as Centrelink, Medicare and the Australian Taxation Office.

His ultimate aim is to make it “a much more seamless exercise” that doesn’t force people to spend hours of their own time applying for payments or updating details, the new minister said in an exclusive interview.

“They’ve created digital workhouses, basically. You know, workhouses were a 19th century place where the kind-hearted burghers of Victorian England and Australia said, ‘Well, if we’ve got to pay you for three meals a day, you can go and work in a workhouse,’” he said.

“And I think that we’ve used, in some cases, digital technology to create two classes of Australians.

“We haven’t privatised the service. We just privatise your time. You spend hours on it. I’m amazed there’s not more rage out there.”…..

Services Australia is effectively the delivery shop for a huge range of other portfolio areas, administering payments for everything from childcare subsidies and Medicare rebates to disaster relief and paid parental leave, along with the more traditional welfare payments such as pensions and JobSeeker…..

However, it has come under pressure in recent years for increasingly forcing people online to make those claims, with nearly 30 Centrelink or Services Australia shopfronts closing around the country, leaving 318 dedicated outlets. Shorten has previously said people seeking support and services must have the option to speak with real people, not merely be pushed onto a website or sit in an automated phone queue.

Another top priority for Shorten in his new role is launching a royal commission into robodebt as soon as possible…... 

As new Minister for the National Disability Insurance Scheme Bill Shorten is looking to reform those elements of the scheme which are shortchanging people with disabilities

Brisbane Times, 3 June 2022:

Labor has vowed to crack down on providers overcharging for services claimed on the National Disability Insurance Scheme and to clear the backlog of thousands of legal appeals for funding, while delivering COVID-19 booster shots to people with disabilities.

NDIS Minister Bill Shorten said he was disturbed by the "twin pricing system" for services to people with disabilities and says restoring trust between scheme participants and senior bureaucrats was vital.

The National Disability Insurance Agency has come under fire for cutting the funding packages of disabled people as it faces rising costs. Shorten said it was an obscenity that there were 5000 appeals on NDIS packages before the Administrative Appeals Tribunal…..

"Under the last regime, we're spending more money on the process of fighting people for amounts which are less than the amount we're spending in the fight. How did we end up in that parallel universe?"

The number of appeals on NDIA decisions that make it to the AAT has more than doubled over the past year and legal costs are running at tens of millions of dollars.

The NDIS will cost almost $36 billion in 2022-23 and costs are forecast to keep increasing.

Shorten acknowledged the need to tackle the pricing of services charged to NDIS packages, saying it seemed to be a "black box" where providers come up with fees but "you don't know the magic of how they're coming to it".

"I'm disturbed at the twin-rate system or the dual system where if you don't have a package, you pay X dollars, if you do have an NDIS package, you get charged X plus $100. The scheme can't cross-subsidise everyone else," he said.

Making sure people with disabilities - both NDIS participants and those on disability support pensions - have quick access to their third and fourth COVID boosters is also a priority for the new minister…..

Shorten's longer-term goals include working with the states to improve support in schools, community mental health services, housing and bed block in hospitals as a way of tamping down NDIS costs.

But he said he was wary of any approach to the rising NDIS costs that suggested people with disabilities were the problem.

"I think there's been a level of incompetence and wastage. I think there's a breakdown in trust," Shorten said.