The time has come for Australia to catch up with the rest of the world and start naming and shaming our worst tax cheats. The issue was raised on this week’s Four Corners program “Tax me if you can” with the Assistant Treasurer Chris Bowen saying:

I can see the attraction of naming and shaming. If the Commissioner came to me and said he wanted to do it, it’s something I’d be open to but at the end of the day it’s a matter for the Tax Commissioner as to whether to do that.

Since then we have had the predictable outcry from the tax lobby groups wanting to protect the privacy of their clients’ settlements with the Australian Taxation Office. Frank Drenth, executive director of the Corporate Tax Association, which represents Australia’s biggest corporates, was quoted this week in the Australian Financial Review:

I realise that when business says we prefer to keep it confidential, it feeds the conspiracy theorists who talk about cosy deals between big business and the tax office.

You’re right Mr Drenth — it does. Good reason too. We have seen controversial tax settlements come to light in the last 10 years that have damaged the reputation of the tax office. We also have the disgraceful situation that continues unabated today where the tax office grants tax cheats quasi indemnity from prosecution.

This happens when a tax cheat who has committed serious tax evasion settles the case with the ATO behind closed doors and in the process coughs up the dough to pay the big tax bill. Those cases never get seen by the Commonwealth DPP because the tax office never refers them. If the DPP did get to view those cases they would undoubtedly be prosecuted and the cheat’s tax foibles would be exposed to the community.

We do need to have guidelines to ensure only the most deserving of cases are made public. In the spirit of raising community awareness of serious tax cheating I will be the first to proffer a set of guidelines to ensure that the little old lady that forgets to declare her interest from her savings accounts does not get caught up in this.

Under the ATO’s penalty regime, audit cases that involve intentional disregard of a taxation law and attract a 75% penalty of any shortfall amount should be named and shamed. Any false or misleading statements made to a taxation officer, keeping false records with the intention of deceiving the Commissioner, hindering a tax officer in the performance of his duties and any cases involving fraud should be exposed to the community.

From personal experience working in the tax office I can tell you that there are politicians, industry barons, lawyers and judges who have dark tax secrets that if they were exposed to the general public they would be likely unemployed. They have been protected by antiquated ATO secrecy laws.

The American lawyer Jack Blum who represents rogue Liechtenstein whistle blower Heinrich Kieber put things into perspective in the Four Corners program. He said:

Settlements in these situations must be made public. And they must be made public for two reasons, first to ensure that there isn’t a cosy deal between the government and some very rich politically influential people, on one side. And on the other side as a deterrent to anyone else who might be thinking of doing this. Because as you can imagine if someone is out there cheating on taxes and he’s been publicly exposed he won’t become a knight.

He won’t exactly be an honoured citizen who’s given awards. He won’t be appointed to State business and State Commissions. And that’s very important.

Shaming them in their own community. And that is how it should be, because paying taxes is an essential civic responsibility. And the rest of us are the ones who pay for what these people don’t pay.