Each big-company audit costs the tax office about $250,000 a year. The investigations take about two years to complete.
Cortese says the conciliatoto approach does not mean the tax office is getting soft. "Only four years ago the tax office was being accused of being unreasonable in its approach towards settling issues -- that we didn't understand the commercial realities.
"More recently, peopleople saying that we have a better grip on things, that we are more practical and pragmatic. We recognise that in grey areas, it can be better to compromise than head to the High Court." He is keen to see an end to uneconomic cases, such as the recent one in which his office spent about $25,000 taking a case to the Administrative Appeals Tribunal to collect$11,000 in tax.
Cortese says that despite some teething problems, the first year of electronic tax lodgment has been a success. He expects 43% of returns to be lodged electronically at the Sydney office by the end of tax collection this year -- well above its aim of 30%. Most of those returns came from about 220 agents.
Next year's stated aim is 45% but Cortese expects more. Other offices will get up to 60% electronic lodgment. This year the Sydney office was aiming to issue 80% of tax refunds within 14 days of receipt of electronic returns. It achieved 94%.
Cortese wants to make it easier for business and individuals to comply with tax laws, and he has a team working on simplifying the statutes. As a reminder of this aim, three books sit on his desk: the 1922-25 Tax Act, which runs to about 50 pages; the 1936 Tax Act, which has about 250 pages; and the 1982 Consolidated Tax Act, which has more than 1250 pages.
"It's a reflection of changes in the Australian business community," he says. "Pre-war life was fairly simple, but life in the 1960s and 1970s became more sophisticated. We are now part of the world community. Maybe we'll have two tax acts some day -- a 50-page one for ordinary people and a larger one for the rest."
Cortese, 53, likens his job to that of a juggler. The balls he must keep in the air are taxpayers, tax professionals (including tax agents and solicitors who practice tax law), his staff and the expectations of government. Of these, he says staff are the most important. "If you look after staff, they will look after the taxpayers," he says. "If you don't look after your staff, then taxpayers will suffer."
Changes to the way the tax office administers collections can mean personnel headaches for Cortese. For instance, if the office goes ahead with plans to decentralise its administration unit for PAYE, prescribed payments tax and fringe benfits tax, Cortese will have about 170 people with nothing to do. "It's important that we address that problem earlier so we can ease the difficulties of retraining staff and finding them other tasks to do," he says. "During the past two years we have looked at every area of the organisation and looked at the jobs that people have, redesigning those jobs where necessary."
He says the office's returns-processing unit is a good example. Not long ago, tax returns would arrive at the office, be opened and then bundled off to the data processing area so their details could be keyed into a computer. Someone would then check the codes on the returns before they were sent back to the data processing area for processing. They would then be sent to another area, where they were checked again before notices were despatched.
"It was like a Henry Ford production line," Cortese says. "Today the returns come in, the mail is opened and sorted, and then a team of people do all those things. They have control over their own work and are responsible for making sure things are right at the end of the day."
Cortese's office has a budget this year of $52 million (down from last year's $57 million). It will spend almost $3 million, or 6% of its salary budget of $45 million, on training, including professional development, and honing skills,,leadership and team-building.
"Nearly everybody in the organisation has, is, or will be going through some form of keyboard training and computer literacy training," he says. "There's also a need to equip more people in the organisation with technical tax and legal skills. That's not just teaching them tax law, but research skills and interpretation of law."
Last year Cortese's office had trouble keeping up with demand in its personal enquiries section, so in March this year an officer development program was introduced there. "We trained about 100 people (including tax commissioner Trevor Boucher in a learning and publicity exercise) and they are available to us as a continuing resource when demand becomes too much," he says.
Cortese's emphasis on service may well stem from his previous jobs. In 1952 he sold shoes in Leichhardt before working for a wholesale grocer. He joined the Public Service in 1954 as a telegram boy and later moved to the repatriation division (now Veterans' Affairs) to work with former prisoners of war and sick ex-servicemen.
This is Cortese's 30th year in the tax office, for which he has worked in Canberra, Hobart and Sydney. He took up his position as deputy commissioner in 1984. He lives in Belrose, on Sydney's North Shore, and arriies at work each day about 7.45am.
Cortese says his office is trying to lift its game in its dealings with tax agents and tax professionals, who play a significant part in tax collection. "We are trying to develop a closer one-to-one relationship with them, especially those with large clientele, be that in terms of tax paid by their clients or the number of returns they lodge."
Cortese has about 12 people (and plans for more) knocking on agents' doors and introducing themselves, drawing the agents' attention to issues and offering the office's services when problems arise. "Agents must know that if they have problems there are people at the tax office who will listen," he says.
He is pleased that not as many of his employees are being lured by big accounting firms and companies. This year he lost only three professionals. "It was a problem some years ago and it's still happening, but the employment market has changed drastically," he says. "Many firms are simply not recruiting, and because there are now people without jobs there is more competition."
Cortese says it "really hurts" whenever an employee leaves. Generally, those that do are top operators. "Many people comment that there is a lack of expertise in the tax office, and yet our staff are always in demand.
"Our salaries are around $35,000 to $40,000, but employees can get another$15,000 to $20,000 extra if they move. One fellow who left told me he didn't really want to leave because he enjoyed the work, but at the end of the day he had a mortgage and three children. It's pretty hard to counter that."
What makes it difficult for Cortese is that tax office employees, being part of the Public Service, have their pay scales tied to those of other public servants. "Maybe the tax office should be a separatt employment market and be dealt with separately," he says.
