The Australian Taxation Office’s (ATO) recent decision to stop accepting credit card payments for outstanding tax debts has sparked criticism from a former agency auditor, who describes the move as lacking consultation and fairness toward small businesses. While other government bodies continue to allow credit card payments for various fees, the ATO’s policy has been viewed as creating additional barriers for taxpayers amid a challenging economic environment.

Liam Malone, who retired from the ATO earlier this year after a lengthy career auditing complex tax compliance cases, argued that the decision demonstrates a broader issue within the agency, including inconsistent enforcement, inadequate staff training, and a lack of commitment to addressing ongoing tax non-compliance, particularly in the property, building, and construction sectors. Malone described the ATO’s culture as exhibiting double standards and tone-deafness, despite repeated claims from the ATO Commissioner that the agency is “high performing.”

Malone highlighted that the total outstanding debt owed to the ATO reached approximately AUD 105 billion as of June 30, 2025, with the construction industry identified as a major contributor to this growing liability. He pointed to structural and cultural factors within the industry—such as the use of multiple linked companies, complex contracting arrangements, intense competition, and a prevalent attitude of tax avoidance—that have fostered long-standing issues of tax evasion.

A particularly serious concern is the widespread non-payment of pay-as-you-go withholding (PAYGW) taxes. Malone explained that some companies establish separate entities to employ workers, with no intention of remitting withheld taxes to the ATO. This practice enables them to offer artificially low bids for contracts by factoring non-payment of taxes into their pricing, effectively constituting fraud. Numerous high-profile court cases and insolvency proceedings in recent years have exposed such schemes, resulting in hundreds of millions of dollars in lost revenue.

Malone criticized the ATO for its uneven enforcement response to these compliance issues, describing it as sometimes slow and reactive rather than proactive. He attributed the shortcomings to inconsistent staff standards, inadequate corporate knowledge, and shifting priorities within the agency. Malone also suggested that the ATO Commissioner’s reluctance to engage with the media and broader public undermines confidence in the agency’s transparency and accountability.

The commissioner, whose reported salary exceeds AUD 1 million annually, has previously declined media requests to comment on tax compliance challenges, describing such inquiries as “rather rude.” Malone questioned the basis for the commissioner’s claim of the ATO’s high performance, inviting proof of effective outcomes given the persistent and significant problems.

Observers note that while the ATO operates within a complex regulatory environment, the ongoing issues in the construction sector highlight the difficulties in balancing enforcement with supporting struggling businesses. The agency’s recent policy change on payment methods adds to the debate over whether its approach effectively serves taxpayers and protects public revenue.