Thursday, December 07, 2023

Rob Heferen The New Commissioner of Taxation

Insightful blogger, Professor John Quiggin must have a crystal ball

7 December 2023

New Commissioner of Taxation

The Albanese Government will appoint Rob Heferen as the Commissioner of Taxation to lead the Australian Taxation Office (ATO) for a period of seven years.

Mr Heferen is an outstanding leader and one of the nation’s most experienced tax experts.

He is currently the Chief Executive Officer of the Australian Institute of Health and Welfare, a role he has held since 2021. He has over 30 years’ experience in the Australian Public Service, including over ten years in senior leadership roles.

Mr Heferen has previously worked at the ATO and served as the Deputy Secretary of Revenue Group at the Treasury between 2011 and 2016, where he had responsibility for tax policy, tax legislation and revenue forecasting.

His diverse experience across policy development and program delivery in a range of portfolios, as well as representing Australia in international forums, including the UN and OECD, will position Mr Heferen well as Commissioner of Taxation.

The appointment comes after a thorough, methodical and considered selection process.

We sincerely thank Chris Jordan for his outstanding contribution to the ATO over the past decade.

His leadership and expertise have helped the ATO manage and shape the tax, excise and superannuation systems through a period of great change for our economy.

Among the important initiatives during his time as Commissioner were improved tax compliance efforts targeting multinationals and large corporations, particularly the success of the ATO’s Tax Avoidance Taskforce.

Mr Jordan’s term concludes on 29 February. Mr Heferen will commence in the role on 1 March.

The appointment continues the Albanese Government’s commitment to ensuring our nation’s key institutions remain world‑class with the right leadership in place to meet current and future challenges.

2020: Shaping the new normal: Insights from Deputy Secretary Rob Heferen

Rob Heferen was appointed AIHW Chief Executive Officer in July 2021.

Prior to this, Mr Heferen was Deputy Secretary Higher Education, Research and International in the Department of Education, Skills and Employment. He has also served as Deputy Secretary, Energy at the Department of the Environment and Energy and had responsibility for energy policy including electricity and gas markets, and fuel security. Mr Heferen was also Australia’s representative on the International Energy Agency’s Governing Board.

In April 2016 Mr Heferen was Deputy Secretary with the Department of Industry, Innovation and Science with responsibilities for Energy, Resources and the Office of Northern Australia. Before joining the Department of Industry, Innovation and Science, Rob was the Deputy Secretary, Revenue Group at the Treasury from March 2011 to April 2016, with responsibility for tax policy, tax legislation and revenue forecasting. Mr Heferen was first promoted to Deputy Secretary in 2010 to the Department Families, Housing, Community Services and Indigenous Affairs, with responsibility for Indigenous Affairs.

Mr Heferen joined the Australian Public Service in 1989 as a graduate in the Australian Customs Service, worked at the Australian Taxation Office, and then had a number of years at the Treasury working on tax policy, Commonwealth/State financial relations and social policy.

Multinationals in cross hairs of next tax office head

Treasury does not know how much revenue Australia is losing to multinational profit-shifting

A senior Treasury official has warned that Australia could be losing billions of dollars in potential revenue from global profit-shifting overseas but has admitted that Treasury does not know how much.
Rob Heferen, a Deputy Secretary at the Federal Treasury, has also defended Treasury's controversial secondment program that finds employees from Australia's big four accountancy firms working inside Treasury and advising on tax policy that directly affects their business.
Illustration: Matt Golding.
Illustration: Matt Golding.
Day two of the senate estimates committee on tax avoidance was held in Canberra on Thursday, with officials appearing from Treasury, the Australian Securities and Investments Commission, KPMG, Ernst and Young, and the Business Council of Australia, among others.
Treasury's Mr Heferen said the Commonwealth government should be concerned about controversial tax avoidance strategies used by corporations in Australia because the country had such a heavy reliance on corporate tax revenue. He said Australia was at the forefront of the global push to plug loopholes in the international tax regime and had been working through the G20 and OECD to achieve that goal. 
But he also admitted that Treasury did not know how much Australia was losing in potential revenue saying it was almost impossible to verify.

Labor senator Sam Dastyari asked Mr Heferen if he could put figure on the amount of money being lost from Australia from multinational tax avoidance, to which Mr Heferen replied: "We really don't know."

Mr Dastyari said an ATO report found in 2011-12 over $60 billion was moved from intra-party transfers to related entities in tax havens.

"Are you saying we have no idea what this is costing us?": Labor senator Sam Dastyari.

"Are you saying we have no idea what this is costing us?": Labor senator Sam Dastyari. CREDIT: CHRISTOPHER PEARCE "You're saying we have no idea what this is costing us, but we know it's a lot?" Mr Dastyari said,

Mr Heferen replied that, since Australia has such a high dependence on corporate tax, "this probably matters more to us than almost any other country," Mr Heferen said.

"[But] how big an issue, putting a figure on it, we just don't know," Mr Heferen said.

Greens Leader Christine Milne asked Mr Heferen about Treasury's secondment program, saying she was concerned that employees from big accountancy firms such as KPMG were advising Treasury on laws that directly affected their own operations, and which they later advised clients on how to avoid.

"I'd have to take issue with that last bit of that ... I know that's not the case," Mr Heferen said.

"There is no circumstance under which we would have any secondee in the organisation that in any way would bring a personal or a firm-based approach to the development of tax policy.

"We have a number of secondments, we have them from the Tax Office ... [and] from professional firms ... and never have I ever heard of any occasion where there's any talk from any one that feels anything inappropriate from what those people have been done."

Mr Heferen said Treasury had roughly 24 secondments from the Australia Tax Office and seven or eight secondments from Australia's big four firms at the moment.

Treasury officials have told a Senate Estimates hearing that the full calculation of mining tax revenue won't be completed until 2014. The Opposition has questioned whether the $126 million raised in the first two quarters by the tax is an accurate reflection of the actual revenue raised because credits owed to the liable companies haven't yet been calculated.

14 Feb 2013 Final mining tax figures not known till next year

Unlike most people I actually deep dive into hansards of legislatures. I blame my former boss Dr Cope who made us read and absorb many parliamentary and government reports.

This brings me to St Valentines On 14 February 2013 AD Economics Legislation Committee in Estimates Treasury portfolio - the day was a maiden  exposure for Chris Jordan to Senate hearings the following light exchange took place which Tony and another Chris remember well:

Mr Heferen: I am not sure. I think that, whether I say I am surprised or not surprised, you might lead me down a particular path, but I am not sure whether I want to go down that path, so I think is usually the case, I would have absolutely no emotion whatsoever. 

“Senator Cormann: You could be in the tax office!

Mr Heferen: I used to work there!

Senator Cormann: How could I tell?

Mr Heferen: I got too emotional! They moved me on!”

Treasury’s top tax official has made a public offer to resign if the budget measure to catch multi-­national tax cheats causes any job losses in Australia.
However, the same official, deputy secretary Rob Heferen, said he had provided “unequivocal” advice to Joe Hockey that Labor’s plans for a multinational tax crackdown, announced by Bill Shorten in March, would cost jobs.
Mr Heferen said he was summoned the Treasurer’s office after the Opposition Leader released his policy. 
“I was asked to go up and speak to the Treasurer, Mr Heferen said. “He said, “Are you saying it would cost jobs?’ I was saying, ‘Yes’.”
Mr Heferen said Labor’s proposal went a lot further than legislation which was proposed in Wayne Swan’s final 2013-14 budget and then implemented by the Coalition last year which requires that multinationals limit borrowings from their head-office for their local operations to no more than 40 per cent of their funding.
Companies could borrow more than this provided the loans were at commercial rates and concluded at an “arm’s length”.
Labor’s plan would limit local subsidiaries of multinationals from claiming tax deductions for interest costs if their parent company’s debts were greater than 30 per cent of their worldwide assets. The Parliamentary Budget Office estimated this would raise $1.9bn in revenue over three years.
Mr Heferen said the measure would have the effect of raising the cost of capital for foreign companies operating in Australia. It would be equivalent to an increase in the company tax rate. “Putting up the corporate rate reduces the attractiveness so that activity wouldn’t expand and may not proceed. It would in the short term result in fewer people being employed.”
Labor’s assistant Treasury spokesman, Andrew Leigh, who has charge of the multinational tax policy, responded that multi-­nationals should pay a fair amount of tax on their real profits in Australia. “We can and should win investment from the world because big firms believe it’s worth buying into Australia, not because we have a tax system that sells our community out,” he said.
Challenged by Queensland Labor Senator Chris Ketter over the employment effects of the government’s multinational tax crackdown announced in the budget, Mr Heferen said it was targeted at 30 multinationals that were avoiding a permanent establishment in Australia through contrived arrangements.
“I’d be very surprised if there’s any flow-on effect to real economic activity in Australia. I should be resigning my commission if I’m wrong on this one,” he said.
Mr Heferen was quizzed over why there was no estimate in the budget for the revenue which this measure — an extension of the anti-avoidance provisions in the tax act — would raise. He said it was hoped the new legislation would create a change in corporate behaviour without the need for enforcement activity. 
Finance Minister Mathias Cormann said the government had not costed the measure because it did not have the information to do so credibly. Dr Leigh said it was “astonishing” that the government would propose significant change to the tax law without any idea of its implications.