Go to top of page

Financial performance

The ATO is responsible for the management of substantial Commonwealth funds and must demonstrate effective and efficient management of resources in accordance with the Australian Government’s policies and the requirements of other agencies, such as the Australian National Audit Office (ANAO).

For our financial statements (as required by subsection 43(4) of the PGPA Act), see Part 5 - Financial statements.

For details on how we have performed against our financial performance measures in our corporate plan, see Strategic objective: F1 Financial in the annual performance statement.

In this section

Operating expense budget

The ATO actively manages its budget through governance and assurance processes, including oversight by senior management committees. These committees provide an integrated approach to effective resource management and prioritisation of significant investment decisions.

The ATO’s operating expense budget for 2020–21 (excluding depreciation) was $3.9 billion.

The ATO’s 2020–21 financial result was an operating surplus of $49 million or 1.2% under budget. This result includes lease principal repayments under Australian Accounting Standards Board 16 leasing standards and excludes non-cash financial accounting adjustments, such as write-off expenses, depreciation, amortisation, finance lease and revaluation adjustments made for our financial statements.

Operating expenditure, 2020–21  labour 50.8%; consultants and contractors 14.9%; technology 14.6%; depreciation 9.6%; printing, postage and office operations 2.9%; other 2.4%; property and operating lease rentals 1.5%; legal costs 1.5%; payment to the Department of Home Affairs for tax administration services 1.4%; bank fees and collection charges 0.3%; travel 0.1%.

Capital budget

The ATO’s approach to capital management includes a capital management plan that contains information about our proposed capital expenditure from all funding sources.

The ATO commenced 2020–21 with a capital budget of $156.3 million, which comprised:

  • departmental capital budget of $133.7 million
  • equity funding of $22.6 million.

During the year, the capital budget increased by $113.6 million as a result of both government and ATO decisions.

The ATO’s 2020–21 capital expenditure was $140.3 million. The ATO is seeking approval to carry forward 2020–21 capital underspends to support government priorities and legislative projects in future years.

Capital expenditure, 2018–19 to 2020–21(a)

Capital item

2018–19
$m

2019–20
$m

2020–21
$m

Building improvements

0.7

10.7

17.9

Internally developed software

134.1

123.1

102.1

IT infrastructure and hardware

7.4

9.0

15.0

Purchased software

0.6

7.3

5.3

TOTAL

142.7

150.2

140.3

Note

(a) Totals may differ from the sum of components due to rounding.

Administering GST

The ATO administers the goods and services tax (GST) on behalf of the Australian states and territories. The states and territories reimburse the Commonwealth for the ATO’s cost of administering GST. Our obligations to the states and territories are set out in the GST Administration Performance Agreement between the ATO and the Council on Federal Financial Relations (as per the Intergovernmental Agreement on Federal Financial Relations).

The agreed estimate for administering GST in 2020–21 was $621.5 million. The final cost of GST administration is subject to a special purpose audit by the ANAO. The final audited cost is reported against the agreed estimate and presented to the states and territories at the conclusion of the audit.

GST administration outcomes and performance are published annually in the GST administration annual performance report, which is available at ato.gov.au/GSTadministration.

Agency resource statement

Agency resource statement, 2020–21

Agency resources

Actual available appropriations for 2020–21

$’000

Payments made

2020–21

$’000

Balance remaining

$’000

Ordinary annual services(a)

Departmental appropriation

Prior-year departmental appropriation

403,081

403,081

Departmental appropriation(b)

4,003,821

3,457,454

546,367

Appropriation reductions

−58,467

−58,467

Section 74 receipts

132,809

132,809

Section 75 transfer

9,192

9,192

Total

4,490,436

3,993,344

497,092

Administered expenses

Current-year’s appropriation used for current-year’s payments

7,915

41

7,874

Total

7,915

41

7,874

TOTAL ORDINARY ANNUAL SERVICES

4,498,351

3,993,385

504,966

Other services(c)

Departmental non-operating

Prior-year departmental appropriation

41,456

13,320

28,136

Equity injections

126,249

42,084

84,165

Appropriation reductions

−31,358

−31,358

Total

136,347

55,404

80,943

TOTAL OTHER SERVICES

136,347

55,404

80,943

Special appropriations

Special appropriations limited by criteria/entitlement

Product Grants and Benefits Administration Act‍ 2000 – product stewardship for oil program

94,923

Public Governance, Performance and Accountability Act 2013 – section 77 (Repayments by the Commonwealth)

93,965

Small Superannuation Accounts Act 1995 – section 76(9)

268

Superannuation Guarantee (Administration) Act 1992

942,396

Taxation Administration Act 1953 – section 16 (Cash Flow Boost for employers)

20,901,500

Taxation Administration Act 1953 – section 16 (JobKeeper payment)

68,217,051

Taxation Administration Act 1953 – section 16 (JobMaker hiring credit)

6,613

Taxation Administration Act 1953 – section 16 (non-‍refund items)

11,861,269

Taxation Administration Act 1953 – section 16 (tax‍ refunds)

102,545,427

TOTAL SPECIAL APPROPRIATIONS

204,663,412

Special accounts

Opening balance

298,115

Receipts to special accounts

4,655,331

Payments made

4,659,257

Closing balance

294,190

TOTAL RESOURCING AND PAYMENTS

9,588,144

213,371,458

Notes

(a) Supply Act (No.1) 2020–21 and Appropriation Act (No.1) 2020–21. This includes prior-year departmental appropriations, PGPA Act section 74 agency receipts and PGPA Act section 75 transfer.

(b) Includes $118.6 million in 2020–21 for the Departmental Capital Budget. For accounting purposes, this amount has been designated as ‘contributions by owners’.

(c) Supply Act (No.2) 2020–21 and Appropriation Act (No. 2) 2020–21.

Budgeted expenses and resources

Budgeted expenses and resources for Outcome 1, 2020–21(a)

Budgeted expenses and resources

Budget(b)

2020–21

$’000

Actual expenses

2020–21

$’000

Variation

2020–21

$’000

Program 1.1: Australian Taxation Office

Administered expenses

Ordinary Annual Services (Appropriation Bills No. 1)

7,915

22

7,893

Departmental expenses

Departmental items

3,939,078

3,907,832

31,246

Total for Program 1.1

3,946,993

3,907,854

39,139

Program 1.2: Tax Practitioners Board

Departmental expenses

Departmental items

22,954

21,398

1,556

Total for Program 1.2

22,954

21,398

1,556

Program 1.3: Australian Business Registry Services

Departmental expenses

Departmental items

122,852

77,226

45,626

Total for Program 1.3

122,852

77,226

45,626

Program 1.4: Australian Charities and Not-for-profits Commission

Departmental expenses

Special account

19,766

14,543

5,223

Total for Program 1.4

19,766

14,543

5,223

Program 1.5: Australian Screen and Digital Game Production Incentive

Administered expenses

Special appropriations

397,000

336,590

60,410

Total for Program 1.5

397,000

336,590

60,410

Program 1.6: Junior Minerals Exploration Incentive

Administered expenses

Special appropriations

27,200

14,852

12,348

Total for Program 1.6

27,200

14,852

12,348

Program 1.7: Fuel Tax Credits Scheme

Administered expenses

Special appropriations

7,623,130

7,520,460

102,670

Total for Program 1.7

7,623,130

7,520,460

102,670

Program 1.8: National Rental Affordability Scheme

Administered expenses

Special appropriations

199,897

185,815

14,082

Total for Program 1.8

199,897

185,815

14,082

Program 1.9: Product Stewardship for Oil

Administered expenses

Special appropriations

84,800

86,696

−1,896

Total for Program 1.9

84,800

86,696

−1,896

Program 1.10: Research and Development Tax Incentive

Administered expenses

Special appropriations

3,084,572

3,231,865

−147,293

Total for Program 1.10

3,084,572

3,231,865

−147,293

Program 1.11: Low Income Superannuation Tax Offset

Administered expenses

Special appropriations

605,000

607,637

−2,637

Total for Program 1.11

605,000

607,637

−2,637

Program 1.12: Private Health Insurance Rebate

Administered expenses

Special appropriations

240,000

239,188

812

Total for Program 1.12

240,000

239,188

812

Program 1.13: Superannuation Co-contribution Scheme

Administered expenses

Special appropriations

127,000

160,929

−33,929

Total for Program 1.13

127,000

160,929

−33,929

Program 1.14: Superannuation Guarantee Scheme

Administered expenses

Special appropriations

951,840

878,614

73,226

Total for Program 1.14

951,840

878,614

73,226

Program 1.15: Targeted Assistance Through the Taxation System

Administered expenses

Special appropriations

22,000

26,476

−4,476

Total for Program 1.15

22,000

26,476

−4,476

Program 1.16: Interest on Overpayment and Early Payments of Tax

Administered expenses

Special appropriations

80,000

55,261

24,739

Total for Program 1.16

80,000

55,261

24,739

Program 1.17: Bad and Doubtful Debts and Remissions

Administered expenses

Special appropriations

4,335,000

9,187,246

−4,852,246

Total for Program 1.17

4,335,000

9,187,246

−4,852,246

Program 1.18: Seafarer Tax Offset

Administered expenses

Special appropriations

9,000

9,303

−303

Total for Program 1.18

9,000

9,303

−303

Program 1.19: Economic Response to the Coronavirus

Administered expenses

Special appropriations

Cash Flow Boost for employers

12,159,218

12,340,195

−180,977

JobMaker hiring credit

34,000

16,933

17,067

JobKeeper payment

57,241,113

57,042,415

198,698

Total for Program 1.19

69,434,331

69,399,543

34,788

Outcome 1 Totals by appropriation type

Administered expenses

Ordinary Annual Services (Appropriation Bill No. 1)

7,915

22

7,893

Special appropriations

82,885,770

82,753,229

132,541

Expenses not requiring appropriation in budget year

4,335,000

9,187,246

−4,852,246

Departmental expenses

Departmental appropriation

3,866,687

3,827,612

39,075

Special accounts

19,766

14,543

5,223

Expenses not requiring appropriation in budget year(c)

218,197

178,844

39,353

TOTAL EXPENSES FOR OUTCOME 1

91,333,335

95,961,496

−4,628,161

Notes

(a) This table is prepared on the basis of accrued expense amounts, while the administered payments table provided in the Performance results overview for the Administered Programs is prepared on a cash basis.

(b) Budget 2020–21 relates to Revised estimated expenses published in the 2021–22 Portfolio Budget Statements, and includes any subsequent adjustments made to the original 2020–21 Budget.

(c) Expenses not requiring appropriation in the Budget year includes depreciation, resources received free of charge and write-down and impairment of assets.

Efficient administrative practices

Along with agency budgets that provide funding to deliver specific programs, government expenditure is guided by legislation that provides direction and sets minimum requirements, including reporting obligations. The ATO complies with the PGPA Act, PGPA Rule, ANAO requirements, and the Environment Protection and Biodiversity Conservation Act 1999.

Asset management

The ATO has an asset management framework in place which outlines how we plan and maintain the optimal asset mix for effective delivery of our programs.

The ATO’s approach to asset management includes:

  • detailed procedures and guidance on asset management
  • an asset register, which is subject to a regular stocktake.

Procurement

Procurement refers to the whole process of acquiring goods or services – from identifying a need, through to obtaining and paying for the goods or services. If relevant, it also includes the ongoing contract management and disposal of goods.

The ATO’s approach to procuring goods and services – including consultancies – is consistent with, and reflects the principles of, the Commonwealth procurement rules and various procurement‑related legislation and government policies. To ensure this, the ATO has a range of system-based and other controls in place and conducts regular assurance processes.

Standard ATO contracts include a clause requiring suppliers to comply with all legislative and government policy obligations, including those relating to taxation and workplace health and safety. In addition, we have worked closely with our suppliers throughout the COVID-19 pandemic to ensure there are adequate COVID-19 safety measures in place for their employees and we have made working from home available to labour hire personnel wherever possible throughout the pandemic.

This section includes procurement information for the ATO, ACNC and TPB, unless noted otherwise.

Contracting

All ATO contracts of $100,000 or more provide for the Auditor-General to have access to the contractor’s premises.

The ATO had no contracts in excess of $10,000 that were exempted by the Accountable Authority from being published on AusTender because it would disclose exempt matters under the FOI Act.

Consultancy contracts

The ATO uses consultancy services to obtain independent advice, often of a specialised nature, to assist with decision-making at the agency level.

Consultants are engaged through a procurement process, using open tender, limited tender or an established panel arrangement. All consultants who require unsupervised access to ATO premises or ATO information are required to complete mandatory training on security, as well as work, health and safety.

During 2020–21, the ATO entered into 113 new reportable consultancy contracts, involving total actual expenditure of $8.4 million. In addition, 52 ongoing reportable consultancy contracts were active during 2020–21, involving total actual expenditure of $4.8 million. Prior-year contracts accounted for 36% of total consultancy expenditure.

Number of and expenditure on reportable consultancy contracts, 2018–19 to 2020–21(a)

Reportable consultancy contracts

2018–19

2019–20

2020–21

Number of new contracts engaging consultants

164

126

113

New contracts expenditure

$10.1m

$5.6m

$8.4m

Number of ongoing contracts engaging consultants

87

82

52

Ongoing contracts expenditure

$5.8m

$5.7m

$4.8m

Note

(a) Amounts are GST inclusive.

Significant reportable consultancy contracts expenditure, 2020–21(a)(b)(c)

Organisation

Expenditure

$

Proportion of total expenditure

%

Boston Consulting Group

3,058,000

23.1

KPMG

1,368,898

10.3

Ernst & Young

1,017,869

7.7

PricewaterhouseCoopers

822,368

6.2

PricewaterhouseCoopers Consulting (Australia)

741,077

5.6

TOTAL

7,008,212

53.0

Notes

(a) Amounts are GST inclusive.

(b) Provides information on those organisations that received the five largest shares of an entity’s expenditure on such contracts, and those organisations that received 5% or more of an entity’s expenditure.

(c) Totals may differ from the sum of components due to rounding.

Annual reports contain information about actual expenditure on reportable consultancy contracts. Information on the value of reportable consultancy contracts is available on the AusTender website at tenders.gov.au.

Non-consultancy contracts

Non-consultancy services are engaged through a procurement process, using open tender, limited tender or an established panel arrangement. Suppliers’ employees and contractors who require unsupervised access to ATO premises or ATO information are required to complete mandatory training on security, as well as work, health and safety.

During 2020–21, the ATO entered into 1,485 new reportable non-consultancy contracts, involving total actual expenditure of $304.7 million. In addition, 1,512 ongoing reportable non-consultancy contracts were active during 2020–21, involving total actual expenditure of $1,656.0 million.

Number of and expenditure on reportable non-consultancy contracts, 2020–21(a)(b)

Reportable non-consultancy contracts

2020–21

Number of new non-consultancy contracts

1,485

New non-consultancy contracts expenditure

$304.7m

Number of ongoing non-consultancy contracts

1,512

Ongoing non-consultancy contracts expenditure

$1,656.0m

Notes

(a) Amounts are GST inclusive.

(b) This is the first year we have been required to publish data on reportable non-consultancy contracts.

Significant reportable non-consultancy contracts expenditure, 2020–21 (a)(b)

Organisation

Expenditure

$

Proportion of total expenditure

%

Accenture Australia Pty Ltd

220,905,689

11.3

DXC Enterprise Australia Pty Ltd

220,138,637

11.2

Optus Networks Pty Ltd

162,563,290

8.3

Leidos Australia Pty Ltd

116,311,058

5.9

IBM Australia Limited

79,006,252

4.0

TOTAL

798,924,925

40.7

Notes

(a) Amounts are GST inclusive.

(b) Provides information on those organisations that received the five largest shares of an entity’s expenditure on such contracts, and those organisations that received 5% or more of an entity’s expenditure.

Annual reports contain information about actual expenditure on reportable non-consultancy contracts. Information on the reportable non-consultancy contracts’ value is available on the AusTender website at tenders.gov.au.

Small and medium enterprises

The ATO supports small and medium business participation in the Commonwealth Government procurement market. Our support focuses on removing barriers to their participation and includes:

  • streamlined tender requirements for lower value and less complex contracts
  • adhering to the principles of the Commonwealth Government’s Digital Sourcing Framework, which includes structuring procurements in a way that enables small and medium enterprises to compete fairly to provide components of large ICT projects
  • actively seeking opportunities to engage Aboriginal and Torres Strait Islander businesses.

Small-to-medium enterprises and small enterprise participation statistics are available on the Department of Finance website at finance.gov.au/procurement. The Australian Government has set two targets for contracts awarded to businesses with less than 200 employees:

  • 10% of all contracts (by value)
  • at least 35% of contracts valued up to $20 million (by value).

The ATO exceeded both targets in 2020–21.

The ATO recognises the importance of ensuring small businesses are paid on time. The ATO achieved 96% compliance in 2020–21. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website at treasury.gov.au.

Indigenous procurement policy

In 2020–21, we spent over $22.9 million with Aboriginal and Torres Strait Islander businesses. This expenditure relates to both new contracts entered into during 2020–21 (82 with a total value of $15.2 million) and contracts entered into during previous years.

Grants

The ATO provides a small number of discretionary grants, including funding for legal institutes, and to encourage community participation in the tax and superannuation systems through sponsorship and mentoring arrangements.

The ATO’s grant activities meet the requirements and principles of grants administration contained in the Commonwealth grants rules and guidelines 2017, including reporting and publishing of all grants provided throughout the year.

During 2020–21, the ATO awarded 13 grants of which 10 were to support the National Tax Clinic program.

Information about the National Tax Clinic program is available on our website at ato.gov.au/nationaltaxclinic. All grants awarded are published on grants.gov.au.

Compliance with finance law

The PGPA Act requires that agencies provide a statement of significant issues reported to the minister under paragraph 19(1)(e) of the Act, which relates to non-compliance with finance law and action taken to remedy non-compliance.

The ATO reported one such issue to the responsible Minister for 2020–21 concerning the implications of the decision of the High Court in Commissioner of Taxation v Travelex Limited [2021] HCA 8, which was handed down on 10 March 2021.

The High Court’s decision means that the ATO’s historical practice of revising a taxpayer’s business activity statement (BAS) to amend net amounts (including GST, wine equalisation tax and luxury car tax) and net fuel amounts without issuing an assessment had no legal effect. The decision impacts all revisions of net amounts and net fuel amounts for tax periods between 1 July 2000 and 30 June 2012 where no assessment was issued.

As a result of the High Court’s decision, such refunds paid between 1 July 2000 and 29 June 2012 were paid out of the consolidated revenue fund without an appropriation made by law‍5. The underlying correctness of the amounts refunded is not in question. The issue is a technical one that, due to the ATO’s BAS revision practice, such amounts were refunded without the support of an assessment.

The ATO has reviewed its BAS revision practice to ensure that taxpayers are only paid refunds following the revision of a net amount or net fuel amount where an assessment has been issued.

The ATO has reported this issue in its financial statements for the year ending 30 June 2021.

___________________________

Footnote

5 Section 15C of the Taxation Administration Act 1953 commenced on 28 June 2012 and provides appropriation for such refunds paid on or after that date.

Ecologically sustainable development and environmental performance

Section 516A of the Environment Protection and Biodiversity Conservation Act 1999 requires all Commonwealth agencies to report on certain aspects of ecologically sustainable development and environmental performance.

Appropriations - Departmental funding for ecologically sustainable development

The ATO does not receive departmental funding for work that specifically contributes to ecologically sustainable development. However, in making decisions on expenditure, we apply the Commonwealth procurement rules and guidance from the Department of Finance on informed decision-making processes.

The Commonwealth procurement rules include the need to consider the environmental aspects of the purchase and, where the procurement is via tender, a tenderer’s practices regarding environmental impacts.

In April 2021, we established the 2024 ATO environmental sustainability strategy. The ATO’s 2024 targets are to reduce:

  • our greenhouse gas emissions by at least 10% from 2019–20 levels
  • the amount of waste from ATO offices going to landfill by at least 5% from 2019–20 levels.

In 2020–21, the ATO minimised our environmental impact by meeting the requirements of the Energy Efficiency in Government Operations (EEGO) policy for ‘Tenant light and power’ and ‘Central services’ performance ratings.

Energy intensity ratings and EEGO targets, 2020–21

Category (and unit of measure)

EEGO target

ATO performance

Tenant light and power (MJ per person per annum)

7,500

4,181

Central services (MJ per m2 per annum)

400

119

Additionally, 90% of the ATO’s eligible tenancies that qualify for a rating have achieved or exceeded the minimum National Australian Built Environment Rating System (NABERS) rating of 4.5 stars.

Appropriations - Administered funding

In 2020–21, the ATO administered appropriations for two energy and fuel schemes that provide credits and grants to reduce the costs of some fuels, or to provide a benefit to encourage recycling of waste oils. These were:

More information about fuel schemes is available at ato.gov.au/business/fuel-schemes.