Purpose

The ATO contributes to the economic and social wellbeing of Australians through governing a range of programs that result in transfers and benefits back to the community.

Performance results overview

All deliverables are achieved through making payments to eligible recipients in accordance with relevant laws.

We paid $102.0 billion in administered payments in 2020–21, $54.8 billion higher than 2019–20. The large increase was due to JobKeeper and cash flow boost payments.

Performance results – programs 1.5 to 1.13 and 1.15 to 1.19

The way the ATO measures the performance of administered programs and the achievement of their purpose is set out on pages 212–222 of the Australian Taxation Office Budget Statements (in the Treasury PBS), and pages 17–19 of the ATO corporate plan 2020–21.

Results analysis

We use our systems, processes and controls to establish and maintain confidence that the correct level of payments and transfers delivered through the tax and superannuation systems are paid to eligible recipients in accordance with relevant laws, thus meeting our performance target for many of our administered program measures.

In many instances, small annual fluctuations in the value of benefits arise due to minor changes in economic conditions or the circumstances of our clients. However, there are some programs where a more substantial change in the value of benefits was observed in 2020–21. There is considerable interest in the Superannuation Guarantee scheme and changes in the number and value of liabilities raised by the ATO. Further discussion of these cases is provided below.

Administered program 1.16: Interest on Overpayments and Early Payments of Tax

The amount of interest paid on overpayments was $61.5 million in 2020–21, compared to $121 million in the previous year. Factors contributing to this year’s decrease include:

• a lower rate of interest on client credits – an average of 0.06% (compared to 1.08% in 2019–‍20) – which also resulted in more credit amounts falling below the $0.50 threshold for payment
• system improvements and enhanced automation, leading to faster processing of refunds and notices of assessment.

Administered program 1.17: Bad and Doubtful Debts and Remissions

The provision for bad and doubtful debts as a proportion of total tax receivables at 30 June 2021 was 43%. This does not achieve the target of below 35%.

The Impairment allowance (asset item) increased by $5.7 billion from the 2020 result. This is largely due to the older proportion of debts being impaired at a higher rate using a revised methodology. The higher rate of impairment has been driven by:

• the impacts of COVID-19 increasing the proportion of older debts
• revisions to the methodology to use more recent data, including periods impacted by COVID-19.

Administered program 1.19: Economic Response to the Coronavirus

A total of $89.1 billion was paid in JobKeeper and cash flow boost payments in 2020–21, compared to $35.1 billion in 2019–20.

The JobKeeper Payment was a stimulus measure paid as a subsidy to businesses affected by the COVID-19 pandemic, to keep more Australians in jobs, and to maintain the connection between employers and their employees. From April 2020 to September 2020, employers received a payment of $1,500 per fortnight for each eligible employee. The payments were also made to other entities, such as eligible sole traders. JobKeeper was extended until March 2021, with tiered payments per employee dependant on hours worked; at a rate of $1,200 or $750 per fortnight, which reduced to $1,000 or $650 per fortnight from January 2021.

The Cash Flow Boost stimulus measure supported businesses during the economic downturn associated with COVID-19. Eligible small-to-medium businesses and not-for-profit organisations that employ staff received between $20,000 and $100,000 in cash flow boost amounts by lodging their activity statements, commencing with the March 2020 monthly or quarterly period and concluding with their September 2020 monthly or quarterly period.

Payments under the JobKeeper and Cash Flow Boost stimulus measures ceased in the 2020–‍21 year.

The value of JobMaker Hiring Credit paid in 2020–21 was $6.6 million. The JobMaker Hiring Credit scheme was an incentive for businesses for each eligible additional employee they hired between 7‍ October 2020 and 6 October 2021. Eligible employers may receive payments of up to $200 a week for each eligible additional employee aged 16 to 29 years (inclusive); or $100 a week for each eligible additional employee aged 30 to 35 years (inclusive).

Performance results – program 1.14

Administered program 1.14: Superannuation Guarantee Scheme

This year, the value of superannuation guarantee liabilities raised totalled nearly $1.7 billion, an increase of over 60% on the previous year’s result. The increase is mainly attributable to:

• an influx of voluntary disclosures under the superannuation guarantee amnesty, which closed in September 2020
• completion of a backlog of compliance activity following the return of staff who had previously been redeployed to assist with stimulus activities, as well as additional staffing.

This also led to an increase in superannuation guarantee collections and the value of entitlements distributed to individuals or superannuation funds.

We estimate a net superannuation guarantee gap of 3.8% ($2.45 billion) for the 2018–19 year. Overall, we estimate that employers are paying around 95% of the super guarantee they are required to pay without intervention from the ATO.

Across the estimation period of 2013–14 to 2018–19, net gap estimates have trended downwards in the first four years and then stabilised. Overall, the superannuation guarantee gap population is considered to be highly compliant, with strong growth in ATO compliance activity outcomes since 2015–16 contributing to reducing the gap over time.

A similar decline in the gross gap estimates suggests that voluntary compliance has also increased over this period. This increase in compliance activity outcomes may partly be due to the greater visibility of individual’s superannuation account balances and employer contributions paid through ATO online, and the regular reporting of employer payroll information, including SG liabilities, through STP enabled software.