Funding, resource shortages threaten TPB oversight
A growing workload from new obligations and the PwC probe strains the small regulator’s limited resources.
The Tax Practitioners Board is facing the prospect of budget constraints and stretched resources that could jeopardise its oversight of the country’s 80,000 tax practitioners.
The regulator’s latest corporate plan said inadequate “resources, including funding, capability, tools and systems” was a “key risk” as it implemented the government’s reform agenda and enforced an ever-expanding list of code items.
Chairman Peter de Cure said the intense public scrutiny of the tax profession challenged the TPB to “review, reset and improve our performance” in 2024-25.
“This year will bring continued improvements to professional standards arising from government reforms designed to strengthen the integrity of the profession,” he said.
“We are aware of the need to communicate and explain the changes and what they mean for the profession and the public, and we keep ourselves and our systems ready for the important changes.”
The sweeping reforms affecting the TPB stem from the government’s commitment to deliver “the biggest crackdown on tax adviser misconduct in Australian history” in response to the PwC tax leaks scandal.
The reforms would “further contribute to levelling the playing field for all tax practitioners and build public confidence and trust in the tax profession as well as the tax and regulatory systems”, de Cure said.
But the TPB’s corporate plan also noted there was a risk of the regulator being ill-prepared due to an increased workload but insufficient resources and funds.
As part of the government’s PwC response, the TPB received beefed-up sanction powers and its own budget, on top of an additional $30 million allocated in 2022–23.
The government also made a raft of changes to the Tax Agent Services Act 2009 that the TPB oversees.
These included new breach reporting (“dob-in”) obligations, banning the use of disqualified entities and making tax agent registration an annual requirement to ensure improved visibility and oversight of the profession.
A further eight obligations affecting practitioner’s client disclosure, reporting and record-keeping obligations were added in July by Assistant Treasurer Stephen Jones.
Experts have said increased TPB probes would be an “inevitable” outcome of the changes, with the prospect of a wave of “vexatious” breach reports another concern for the TPB.
The TPB has also faced criticism for failing to release guidance before new code items come into effect, with only a draft information sheet available to practitioners despite new dob-in obligations starting on 1 July.
It is still also investigating the PwC matter, with nine separate probes ongoing. De Cure has previously said these investigations, expected to continue into 2025, are consuming about a third of the board’s resources.
“We have a significant case load with PwC … we have a separate group working on the PwC matter,” de Cure told senators in October.
The TPB said the risk of inadequate resourcing would be managed “having regard to prioritisation, improving services and strategies targeting highest risks and opportunities”.
Other risks identified included “failing to implement legislative measures, including in a timely manner”, limited collaboration with co-regulators like the ATO, inadequate data management, cyber breaches and the risk of practitioner misconduct undermining public confidence.
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