OMBUDSMAN REPORT REVEALS BROKEN PROCESSES AND FLAWED USE OF AI IN ACT REVENUE OFFICE

Ed Cocks MLA

Shadow Treasurer

Media Release

20 May 2025

Shadow Treasurer Ed Cocks MLA has welcomed the ACT Ombudsman’s latest report, saying it shines a long-overdue light on the Territory’s problematic approach to debt recovery and revenue enforcement.

“This report highlights the deeply entrenched culture within the ACT Revenue Office – one that prioritises clawing back cash over treating Canberrans fairly,” Mr Cocks said.

The report raises serious questions about how the ACT Government manages and recovers historical debts, sometimes up to 17 years after the fact.

“It’s outrageous that people are being pursued for decade-old debts through the Revenue Office’s broken process, with little notice and limited opportunity to challenge them,” Mr Cocks said.

Mr Cocks called on the ACT Government to urgently reform its approach and implement the Ombudsman’s recommendations in full, including stronger communication, clearer timeframes, and fairer processes.

“Canberrans deserve a revenue system that is fair, timely, and compassionate, not one that waits 10 or 20 years to chase them down, with no explanation and no warning,” he said.

The report articulated that the increased use of AI and automation had led to the Revenue Office issuing significant numbers of assessment notices and then taking considerable amounts of time to respond to objections. 

The Ombudsman Report states that “With AI and automation, ACTRO has generated an extremely high demand for objections which are not being responded to in a timely manner.”.

The report also found that “ACTRO’s data matching algorithm may be causing avoidable stress for individuals who do not have a land tax debt but were required to comply with information-gathering.”

“This is not just a technical problem, it’s a human one. It impacts real people, many of whom are already in financial distress, or who had no idea a debt even existed.” says Mr Cocks.

The Ombudsman found that in many cases, the Government had not informed individuals of debts at the time they were incurred, and only initiated collection years later-creating stress, confusion and financial hardship.

Mr Cocks said this echoes the issues he has long raised in the Assembly regarding the Revenue Office’s conduct-particularly in relation to stamp duty and land tax reassessments, where residents have been hit with massive debts, interest, and penalties years after purchasing their homes.

“What this report reveals is not an isolated failing, it’s a systemic issue. Whether it’s land rates, fines, or stamp duty, the common thread is callous, delayed, and confusing debt collection practices,” Mr Cocks said.

“This report is a wake-up call. The Government must act now to restore integrity to our public institutions and rebuild trust with the community.”

ENDS

A list of findings from the ACT Ombudsman:

●      We found that ACTRO had no procedural guidance for its staff to address the sensitivities of recouping historical debt.

●      We found that ACTRO’s internal decision making for calculating penalty tax and interest did not always consider the above factors prior to issuing an assessment notice.We also found ACTRO staff require better guidance about circumstances that warrant a reduced penalty tax and interest rate. 

○      Above factors include:

■      Whether the person took steps to mitigate, or to mitigate the effects of, the circumstances that resulted in the liability for penalty tax 

■      Whether the circumstances that resulted in the liability for penalty tax were complex or exceptional 

■      The compliance history of the taxpayer 

■      Whether the ACT Revenue Office contributed to any delays, errors or omissions in assessing the tax default.

●      We found ACTRO lacked internal guidance to inform delegated officers of its expectations for responding to enquiries about record keeping, including what ACTRO may do if someone no longer holds records. 

●      We found that due dates on land tax assessments are being inconsistently applied.

●      We found ACTRO does not have a formal process outlining how to address requests for extensions of time to pay or how to determine due dates on assessment notices.

●      We found that ACTRO has room to improve, to ensure the way it levies historic debts is not further exacerbating stresses that come with delayed objection reviews.

●      We found there is a lack of information and procedural guidance about the use of section 35 of the Land Tax Act 2004 (ACT)

●      Ultimately, we found ACTRO lacks a fair and reasonable approach to addressing historical land tax.

The full report can be found here: https://www.ombudsman.act.gov.au/__data/assets/pdf_file/0020/318233/Whats-fair-Collecting-historical-debts.pdf