The crisis in the Australian Tax Office is deepening. Those who administer our tax system want to massively cut the number of full time permanent ATO staff and privatise essential operations. Why?

First, they want to recoup their losses on the Change Program, an overblown record keeping system that is supposed to deliver efficiencies. There has been a cost blowout so far of over $350 million, not to mention delays and loss of productivity of staff.

Secondly, Rudd’s ‘efficiency’ dividend (i.e. funding cut) of 3.25% is wreaking havoc. On top of Howard’s 1.25% yearly cuts, the latest Rudd cuts mean for the ATO a reduction in real terms of about $90 million. (Applying a 10-to-one ratio of collections to dollars spent, that could mean $900 million less in revenue collected. That’s efficient!)

This, plus the ongoing overspending on the Change Program black hole white elephant — a lovely image if a clumsy phrase — sees the ATO $140 million over budget this financial year and likely to be more so next year. Couple that with an explosion in senior staff with a conservative world view and their ‘logical’ response is to outsource and cut staff numbers.

“Make labour pay” is the catch cry of bosses across the globe to address the problems of capitalism. The bosses in the ATO have embraced that message with gusto.

The ATO has already sacked 133 contractors. One union official estimates 3000 staff will go in Operations alone if the ATO leadership gets its way with its plan. That’s not quite 15% of the Tax Office’s workforce and almost 40% of the Operations workforce.

The ATO, supposedly committed to transparency, is so cranky with this union official telling his membership via the media about their secret squirrel plans, that they have banned him from future wage negotiations. This is stupid and possibly discriminates against someone for their union activities.

Maybe the ATO leadership don’t get it, but there was an election in 2007. Labor won.

Someone should let the Commissioner know this, because crapping on union leaders is probably a no-no now. What you have to do under Labor is pretend you are consulting with unions before doing exactly what you were going to do anyway.

Often you can convince the union leadership to support you, and guess what? They’ll sell the the dog-sh-t sandwich to staff and their declining membership for you. A wage freeze proposal comes to mind here for the main union, the Community and Public Sector Union or CPSU, to willingly force down ATO staff throats in the name of ‘saving jobs’.

So what are these ‘secret’ ATO plans?

The Tax Office has an area called Operations. It employs 8000 people and does important work, like processing returns, collecting debt and providing phone advice (through ATO call centres.) Here is part of what the CPSU said on Friday:

Members in Operations have been aware for some months that ATO management is planning significant changes to workforce structures into the future. According to the ATO, the reasons for the changes include:

  • the need to make Operations more ‘flexible’
  • the need to reduce labour costs
  • difficulty with existing Government Budget allocations

All of these reasons — flexibility, the ‘efficiency’ dividend and labour costs — could easily apply across the ATO, not just in Operations. That makes me think this Operations attack is the first wave of restructurings, i.e. job losses, in the ATO as a whole. The union goes on to say:

As part of recent agency agreement negotiations, CPSU representatives were given a briefing on future staffing and workforce issues. The briefing revealed that ATO wants to massively reduce the number of ongoing full time jobs (from 82.5% to 35%) in Operations – and massively increase the number of part time, non-ongoing and outsourced/labour hire/contract staff. [The proposed increase in permanent part-time staff is to be from 9 per cent to 25 per cent in Operations. JP] ATO management indicated that while their proposal was ‘estimates only’ of a workforce mix, they were determined to make significant changes and “moving to this model is not a choice.

Remember, this is for Operations only. The same job cutting job cutting logic applies to all areas of the ATO — another 15,000 or so staff.

Moving from 82.5% full time employment to 35% (and offsetting part time “gains”) for an Operations workforce of 6500 equivalent full time employees means full time job losses of almost 3000 in Operations alone. Operations makes up almost one third of ATO staff numbers.

Operations — because a lot of it is basic and repetitive work — contains many lower level staff. Women dominate these levels. The Chief Operations Officer is Raelene Vivian and the Second Commissioner Compliance is Jennie Granger.

So much for the sisterhood. A boss is boss is a boss and is driven by the logic of the system to attack her workers.

If this plan is a stalking horse for the whole of the ATO, then the impact of this job loss plus outsourcing approach will be massive.