Latest news with #AngusGrigg
ABC News
a day ago
- Business
- ABC News
Scammers exploit tax office loophole
Nick Grimm: First tonight to a story short of rankle with all those law-abiding pay-as-you-go Australian taxpayers used to seeing a healthy slice of their income disappearing from their pay packets before it ever hits their bank account. An ABC Four Corners investigation has revealed a massive fraud that saw the Australian tax office pay out $2 billion to individuals using a loophole to falsely claim GST refunds for spending that was never made. Despite a crackdown, much of the money hasn't been recovered. For more on the story, I spoke to investigative reporter, Angus Grigg, a little earlier. So Angus, what exactly has been going on? How were people able to claim money from the ATO to which they weren't entitled? Angus Grigg: Yeah, you've got to go back a decade and look at the transformation, the digital transformation that happened at the ATO. Basically, they swapped out the people who were verifying GST claims for algorithms and computers. And while the system worked very, very well for those who were legitimately claiming GST refunds, what quickly emerged, and I should point out the ATO was warned about this, was that they didn't have a adequate fraud protection system. So basically, two years prior to this GST scam taking off, the Inspector General of Taxation explicitly warned that the fraud detection systems at the ATO were no better than random selection. Now that's a really damning thing to say, but it basically says that they did not have a fraud detection system. And this is how 57,000 people were able to claim $2 billion in fraudulent GST returns, because there was no humans in the loop to start with, but also the algorithm wasn't picking up fraud. So it didn't say, for example, that, oh, gee, here's a person, a single mother who is on welfare who would suddenly be claiming a $35,000 GST refund. That didn't trigger a red flag. The other thing, it didn't even beyond this, we've got an example of someone who claimed 820,000 in GST refunds, who backdated claims for a period over which they were largely in jail. And so, you've got to ask yourselves, really, the system has totally failed when there is no checking required and there's no fraud detection systems. Nick Grimm: So walk us through how people were able to do this. What exactly were they claiming that they were entitled to? Angus Grigg: Look, it's a very simple scam, really. All you have to do is you go onto your myGov account, you link your ABN for GST, and then you just plug in three numbers. How many sales have you made for the period? What GST you have paid? And what GST you are owed? So it's three numbers. And if you say, I'm owed $45,000, the ATO will say, okay, fine, I guess you are. Nick Grimm: And the numbers indicate this was pretty widespread. Was somebody promoting this sort of fraudulent behaviour? Angus Grigg: Look, the narrative that the ATO was putting out there was that this was a scam promoted on social media. I think there was a degree of that, but from our investigations, and we've sort of gone through and reconstructed this scam, it seems really that it was moving within groups and particularly lower socioeconomic groups in regional areas. It was being transmitted amongst themselves. They were telling each other how to do it. And that's when it really took off. And the thing that was really damning about this is that the ATO actually realised it was going on, but then for a four-month period, it just did absolutely nothing about it. And that's when it went from being, you know, a small number of people scamming a bit of money to a massive systemic risk on the tax system. Nick Grimm: And in the meantime, taxpayer dollars were just flowing straight out the door. Angus Grigg: Yeah, absolutely. And look, you know, the tax office would say that they cracked down, that they got on top of this. And that is true. Eventually they did get on top of it, but 57,000 people of which of those only 122 have been prosecuted, $2 billion went out the door of which they've only managed to regain about 160 million or 8%. And the other thing to say is that while this particular scam has been stopped, these things evolve. Now we're seeing scams around ID fraud, people stealing someone's ID and then using that to lodge a fake GST claim. We're also seeing much larger frauds around the GST where people are not claiming tens of thousands of dollars, they're actually claiming tens of millions of dollars. Nick Grimm: Yeah, I was gonna ask how confident can we be that something like this can't happen again? What does the ATO have to say on that score? Angus Grigg: Well, I mean, it's literally happening as we speak. We've got a case in the program tonight where someone had claimed $21 million in fake GST claims through setting up $2 companies, straw directors or fake directors if you like, and then lodging fake GST claims. $21 million was successfully claimed from the ATO. While the ATO was pursuing them for that $21 million, they were in the process of scamming a further $25 million from the ATO. So there is really no confidence that the ATO is on top of these scams. And this is really clear evidence that it just continues. Nick Grimm: Angus Grigg there, and there'll be more on that story tonight on Four Corners.
ABC News
3 days ago
- Business
- ABC News
ATO leaving tax money on the table
Rachel Mealey: The Tax Office is one of the biggest government agencies in the country and among the most secretive. But a Four Corners investigation has found the agency set up to protect our revenue is failing us badly, with more than $50 billion in taxes uncollected. Angus Grigg reports. Angus Grigg: There's one number the ATO does not like to talk about. It's called collectible debt. Karen Payne: Around the time we were looking it was about $34 billion. Angus Grigg: Karen Payne is a former Inspector General of Taxation. The figure she mentioned has now grown to almost $53 billion. That's undisputed money owed to the ATO, which it has failed to collect. Karen Payne: It's a big number and if you bring that number back into the revenue then that means hopefully less taxes that everybody else has to pay. It's in all of our interests that the debts get collected. Angus Grigg: More worrying for Karen Payne is that this number has more than doubled over six years. Karen Payne: The fact that it keeps rising is troubling. Angus Grigg: The ATO collects hundreds of billions of dollars of our taxes every year, but despite its scale is subject to little oversight. This is a long held frustration for Senator Barbara Pocock. Barbara Pocock: There's a lot that happens behind the closed door of the ATO that isn't open to scrutiny for us as average citizens and taxpayers. Angus Grigg: The ATO tells us it's doing a stellar job, even as the scandals mount and evolve. Two years ago the ATO reported $2 billion was stolen in a GST scam that became known as the TikTok fraud. News report: The ATO is blaming influencers on TikTok for promoting the scam. Angus Grigg: New details uncovered by Four Corners show the ATO was warned its fraud detection systems were badly lacking. Ali Noroozi is a former Inspector General of Taxation. Ali Noroozi: There have certainly been on notice that their risk assessment tools could do better. Angus Grigg: Not only did the ATO fail to heed this warning, just two months before the GST scam blew up in mid-2021, it downgraded the fraud risk from severe to low. Ali Noroozi: So given any kind of fraud really, you need to take it seriously. You need to act on those early warning signs. Angus Grigg: Of the $2 billion stolen in the TikTok scam, just 8%, or $160 million, has been recovered. And of the 57,000 people who took advantage of it, just 122 have been convicted. The ATO says GST fraud is not widespread and the majority of businesses are doing the right thing. Karen Payne says we should all care about tax administration because it funds essential services. Karen Payne: That allows the government to fund the services that we all benefit from. So health, defence, security, infrastructure. So it's a pretty key part of our democracy. Rachel Mealey: The former Inspector General of Taxation, Karen Payne, ending Angus Grigg's report. And you can catch Four Corners tonight at 8.30 on ABC1.
ABC News
3 days ago
- Business
- ABC News
How easy is it to trick the Australian Taxation Office?
Sam Hawley: How easy is it to trick the Australian Tax Office? Well, for fraudsters it's not hard at all and plenty have done it costing taxpayers billions of dollars that have never been recovered. Today, Angus Grigg on his Four Corners investigation into the biggest GST scam in history and how the ATO dropped the ball. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Sam Hawley: Angus, you've been hard at work looking into what's going on at the Australian Tax Office. And you've really been having a deep look into this huge GST scam. Now, this unfolded in no other than Mildura in north-west Victoria. So, take me there and tell me about local resident Sarah. Angus Grigg: Yeah. Mildura is a really beautiful town, an irrigation town on the Murray in North West Victoria. And this GST scam really took off in Mildura. And it really was circulating within a sort of population that you might say is low socioeconomic groups, people on welfare, people with addiction issues. And we went to interview one person called Sarah. She was going through quite a bit of financial hardship at the time. I think she'd separated from her partner who was facing pretty serious charges at the time as well. And she was short of money because she needed to have some dental work done. So one of her friends showed her how to use a business that had been registered and an ABN linked to GST to claim GST refunds fraudulently. 'Sarah': The people that I was associating with at that time, they had done it and told me how easy it was to get a large amount of money quickly. And I just thought at the time it was a good idea because I was in a bit of financial trouble. Angus Grigg: She pretended, if you like, to be a hairdresser, despite the fact that she had no hairdressing qualifications. She'd never worked in a hairdresser, hadn't hired premises, had no equipment. And so she logged into her myGov account and first of all, claimed $15,000 and then did it a second time and got another $15,000. 'Sarah': I don't even really still understand how it went through. I was a single parent and then all of a sudden I'm a hairdresser that's getting this return put into my account with no other payments from clients or anything like that to balance it was needed. Like no proof. Angus Grigg: Now, bear in mind, the money went into the same account as her welfare payments and the money went within about 10 days without any verification, without any checks, without anyone from the tax office ringing and saying, what did you spend this money on? Do you have hairdressing qualifications? Have you hired premises? You know, she just absolutely couldn't believe how easy it was. 'Sarah': Yeah, I just couldn't believe it that it was just sitting there on my everyday access debit bank card. Angus Grigg: Now, the other thing to bear in mind, to receive a GST refund of $30,000, she would have needed to have capital expenditure or bought stock and other items for her hairdressing business of about $300,000. Now, surely a single mother living on welfare, getting family tax benefits, that should have been a red flag for the tax office. Sam Hawley: Wow. Okay. So Sarah, which is not her real name, just by the way, you've changed that for this story to keep her anonymous. She just tells the ATO she's a hairdresser and then the tax office falls for it. That's extraordinary. Angus Grigg: It is. And the fact that you don't need a receipt, you don't need any proof of the line of work you're in is extraordinary. And that's because the tax office basically fired most of the humans in the loop and started relying on algorithms or computers, if you like, to make these payments. They wanted to ensure the timely payment of GST refunds to businesses. But in doing that, they really opened the door up to fraud. Sam Hawley: Right. Sure. So the tax office wants to streamline things. But in the meantime, people like Sarah are all of a sudden dabbling in fraud. And as we've mentioned, she's not the only one. There's a lot of other people doing a very similar thing. Tell me about Linden Phillips. What was he up to? Angus Grigg: Linden Phillips, once again from Mildura, for us, he was like patient zero. It looks like he was the really one of the very, very early people in this scam. So what happens is that Linden Phillips gets out of jail in August 2021. And he already has a company registered. And so he reactivates his GST registration through his ABN and his MyGov account. And then within a couple of weeks of getting out of jail, he does what I'd sort of call a test run. And he claims $13,000 in GST refunds from the tax office. Once again, no documents, no receipts, no verification required. He gets that money within a couple of weeks and clearly then thinks, OK, I'm going to go for the big one. And so what he does is he lodges 46 backdated GST claims for an amount of $821,000 in GST. And the real kicker here is that for most of the period those GST claims are lodged, he's actually in jail. Sam Hawley: Oh my gosh. Angus Grigg: I know. He just couldn't make it up. Sam Hawley: What does he do with all that money? Angus Grigg: Well, of course, he spends it, right? Within a couple of weeks, the money's completely gone. He buys himself a second-hand Porsche. Somewhat endearingly, he buys his mother a house. But the really damning thing here is that the tax office notice it. Finally, someone, there's a human in the loop and they pick up the fact that, hey, maybe something's a bit wrong here. And so they ring him up and he says, oh yeah, no, it's all legitimate. I'll get my accountant to call you. The accountant never calls. They send him some emails. They write him some letters. He ignores them all. And the really damning thing here is the tax office does nothing for four months. And in that four month period, this scam absolutely explodes. So what we did is we went back and we deconstructed, if you like, the tax office's narrative. And the narrative was that this fraud took off on social media. The tax office noticed it. They cracked down really hard, really quickly, and they brought it under control. Now we sort about testing that idea. Sam Hawley: So the ATO says it did this great job. It cracked down on this fraud. But what actually happened? Because you actually had a look at that and discovered, in fact, the ATO didn't do much at all. Angus Grigg: No, exactly. So Linden Phillips does finally get caught, but it has absolutely nothing to do with the ATO. It all comes down to the smarts of a local detective in Mildura named Vanessa Power. Now, she is attending Phillips's house on a drugs and gun charge, and she searches his premises, his house, and she confiscates a phone. And using the sort of smarts that the ATO should be employing, she sees that on his phone there appears to be a pretty elaborate GST scam. And in fact, it looks as though that Linden Phillips had helped 60 other people perpetrate this scam. Linden Phillips is arrested. And then a few weeks later, the ATO finally launch what they call Operation Protego, which is to crack down on this GST scam. Sam Hawley: Wow. Okay. And at that point, of course, Sarah, who we spoke about earlier, she was also arrested back in December 2022. But the thing is, the money, it's sort of gone, right? 'Sarah': I can't pay it back. It's not even an option at the moment. Or it probably never will be. Sam Hawley: Is there any way the tax office can actually get these funds back? Angus Grigg: Well, this is the point, right? In the end, $2 billion was stolen from the tax system by 56,000 people. Now, the ATO tell us that of those 56,000 people who perpetrated this scam, just 120, I think it might be 122 now, have been convicted. Secondly, of the $2 billion stolen, the ATO tells us that only 160 million, or around 8% of that, has been recovered. Sam Hawley: And, Angus, that money, it really is just a drop in the ocean, right? Because you've also looked at all the other funds that the ATO hasn't managed to collect, and you've spoken to Karen Payne. Now, she's a former Inspector General of Taxation. She basically says if the ATO had collected what it was owed, then we would all be paying less tax. Angus Grigg: Yeah. Karen Payne, she really focused on what's called collectible debt. And that is this sort of giant number that the ATO doesn't like to talk about. And when she started looking at it, it was about $30 billion. Then it rose to about $50 billion. The figure is now $53 billion. And that is the amount of money or taxes that the ATO has levied, if you like, but not collected. Karen Payne, Inspector General of Taxation, 2019-24: The large percentage of the debts that were due were in fact owned by a very small number of taxpayers or they're related to a small number of taxpayer accounts. So you'd kind of think it's a small number of people you need to be chasing. Angus Grigg: And the point that Karen Payne was making is that if we collected all that tax, perhaps we would not have to pay as much tax, all of us, but also we'd have more money to spend on really basic things like schools, roads and hospitals. Karen Payne, Inspector General of Taxation, 2019-24: The fact that it keeps rising is troubling. So it's fundamental, I think, that we've got good administration of the tax system because the integrity of the tax system is fundamentally important to all of us. It pays for all of the services that we benefit from. Sam Hawley: Angus, despite everything that you have said, which is frankly really concerning, the ATO itself thinks it's doing a pretty good job, right? Because Chris Jordan, who was the tax commissioner up until 2024, he's been putting a rather positive spin on the ATO's work. Angus Grigg: Yeah. This is the really extraordinary thing. Despite all these scandals, the ATO tells us they are doing a great job. Just before Chris Jordan stepped down as tax commissioner, he did a victory lap, if you like, at the National Press Club, and he pointed out all the great, terrific things that the ATO has done. Chris Jordan, Tax Commissioner, 2013-24: We've successfully charted a massive program of transformation. We've cut red tape and we've modernised our administration of the tax system as part of the digital revolution to make tax just happen.
ABC News
7 days ago
- Business
- ABC News
No Return: Australia's Missing Billions
The ATO is one of the most powerful and secretive institutions in the country, but for years, it's operated without effective scrutiny. In this major Four Corners investigation, award-winning financial journalists Neil Chenoweth and Angus Grigg reveal how inaction and flawed systems have allowed more than $50 billion in tax to go uncollected. They unpick how a simple scam, supercharged on social media, saw tens of thousands of Australians fraudulently claim at least $2 billion in GST refunds. They also show how corporate operators extracted millions more through fake invoices and phantom construction projects, often without triggering even basic checks. And they expose how deep cuts, digital automation and a lack of independent oversight has left one of Australia's most powerful institutions wide open to exploitation. Born of years of forensic reporting by two of Australia's most respected financial journalists in collaboration with the ABC's investigations team, No Return exposes systemic failures inside one of the nation's most opaque institutions. It demonstrates why every taxpayer should demand accountability from the very agency entrusted to uphold it. No Return, reported by Angus Grigg and Neil Chenoweth, and produced by Kyle Taylor, goes to air on Monday 28 July at 8:30pm on ABC TV and ABC iview.
RNZ News
12-05-2025
- Business
- RNZ News
Bunnings boasts about its price-beating guarantee but for 9000 products in Australia there is a catch
By Angus Grigg , the Business Reporting Team's Emilia Terzon , Elise Potaka and Ben Schneiders , ABC A Citeco ladder with a sign that says" "Where you find a competitor's lower price on the same in-stock item we'll beat it by 10%." Photo: ABC Four Corners It's the Bunnings slogan everyone's heard - a promise to beat a competitor's price on the same stocked item by 10 per cent. But there's a catch to the hardware giant's famous price guarantee. While Coles and Woolworths have been under intense scrutiny, Bunnings - which has a much higher profit margin than either of them - has mostly escaped attention. With its massive reach, how Bunnings sets prices and competes matters to millions of Australians. But are customers actually getting the deal they think they are? Say you wanted to buy a ladder. A Citeco 0.9-metre, three-step Industrial platform ladder. Photo: ABC Four Corners / Nick Wiggins On TV, Bunnings advertised a Citeco 0.9-metre, three-step ladder alongside its promise: "Where you find a competitor's lower price on the same stocked item, we'll beat it by 10 per cent." In-store, a 0.9m Citeco ladder sits behind a large red sign with the same commitment: Find a competitor with the same in-stock item - 10 per cent off. But there is no competitor that stocks the Citeco 0.9m ladder. That's because Citeco is a Bunnings home brand. Not only is it manufactured for Bunnings, the hardware giant also owns the Citeco trademark. It's far from the only item. Through the trademark register and questions to Bunnings, Four Corners has found the hardware giant has more than 9000 home-brand products. In Bunnings aisles around the country, many of these home-brand products are sold alongside signs with its 10 per cent promise. Products like a Jumbuck spit roaster or a Trojan rake, a Bastion roof vent or an Eśtilo toilet - even a Bunnings bucket. If you can find these Bunnings buckets cheaper elsewhere, Bunnings says it will beat the price. Photo: ABC Four Corners You can't find these products cheaper anywhere else because they're made for Bunnings. "I think it's misleading," says John Dahlsen, a competition lawyer and former chairman of Woolworths, who now chairs his family's hardware store and building business. "The 10 per cent beat thing is illusionary," he says. Working out what is a Bunnings home brand isn't simple. Its ownership of Citeco (the brand behind the ladder) isn't clearly disclosed on the packaging, the products themselves or in-store. And on the Bunnings website they are sold like any other brands. You have to search Australia's trade mark register or read parent company Wesfarmers' annual report before Bunnings's ownership becomes apparent. Bunnings's brands include everything from Jumbuck barbecues and Craftright toolboxes to Marquee outdoor furniture, Mondella toilets and Happy Tails pet supplies. Some home brands, such as Trojan tools, even have their own website. Competition regulator, the ACCC, told Four Corners retailers were not legally required to identify home-brand products but, if an item was marketed as though it was produced by a third party, it might amount to misleading or deceptive conduct. Bunnings says it complies with all legal and regulatory requirements for product labelling. The company says it "empowers" staff to take a "common sense approach" and will price match on similar items. It makes no mention of this in the "Price policy" on its website. "We reduce prices on our exclusive products to respond to competition in the market if the similarities of the relevant product are strong," Bunnings told a Senate inquiry last year. For John Dahlsen, that's a meagre promise and one that is highly subjective. He says if a consumer was to find a similar item, which is not always easy, and then is successful in convincing a Bunnings staff member to apply the price guarantee, then the hardware giant still only has to reduce the price on one item. Matt Steen, from consumer advocacy group Choice, says Bunnings should be more transparent about how shoppers can realistically get its 10 per cent price guarantee. "Incorporation of some kind of labelling [that it is a home brand] into their packaging and products would be really useful," he says. Bunnings said it uses "a mix of owned brands and exclusive brands to differentiate our offer and give customers choice". Branding expert Camey O'Keefe says she believes the price guarantee is more about Bunnings wanting to shape customers' perceptions. "What I think it does do is add a layer of reassurance that perhaps subconsciously people are like, 'Oh, I can trust that Bunnings will offer me the best price in the market for any given product.'" Building big profits Bunnings's ability to promote itself as the cheapest has helped the hardware giant grow rapidly over the past 25 years. In 2000-01, Bunnings had 47 stores generating sales of $1.4 billion. In 2025, the Bunnings Group has 310 stores under its famed hardware brand in Australia, plus other chains such as Tool Kit Depot and Beaumont Tiles. Together, they bring in almost $19 billion in revenue a year for its parent company, ASX-listed Wesfarmers. And while the big two supermarkets, Coles and Woolworths, have been criticised for being among the most profitable in the world, their margins are dwarfed by Bunnings's. Bunnings has a profit margin of 16.8 per cent, compared to 9.9 per cent for Woolworths and 8.9 per cent for Coles. Politicians have talked tough on supermarkets. The prime minister promised to make price gouging illegal. The Coalition wanted to go even further and break up the duopoly. On Bunnings, though, Treasurer Jim Chalmers is hedging his bets. "I'm aware that people have raised concerns about Bunnings," he said. "Our primary focus is supermarkets, but we've given the ACCC the resources that they need and the ability to recommend to us a broader focus, if that's warranted." Sydney University's Clinton Free did his doctorate at Oxford University on market power. He says while there's been great attention on the supermarkets, Bunnings has flown under the radar. "Having a very trusted brand, having a CEO without an enormous public profile, it meant that it's not been subject to scrutiny in the same way that, for example, Coles and Woolworths have." Bunnings's healthy margins have led some to question just how cheap it really can be and if a lack of competition helps it control prices. Lowest prices? Bunnings's rivals claim that despite its size and buying power, the big box retailer is not much cheaper. There's no data to independently verify this claim, so Four Corners ran its own limited survey over 95 basic hardware items. It's a rough basket of goods, and by no means a complete analysis, but what we found surprised us. The difference between Bunnings and its local rivals is literally small change. When we compared: "The savings barely cover a snag. Given Bunnings's towering market share, buying power, ruthless supplier negotiations, and healthy margins, 'lowest prices are just the beginning' looks more like marketing spin than a meaningful promise," Professor Free says. But just how much "market power" Bunnings has is difficult to pin down. The company claims its market share is just 17 per cent. This figure is impossible to verify as Bunnings won't release detailed data. It's able to claim to have such a small share of the market because it says it competes against almost every major retailer in the country. Bunnings says its rivals include Coles, Woolworths, Kmart, Myer, JB Hi-Fi, Amazon, eBay, Kogan, PetStock, Petbarn and Aldi. It even lists Spotlight, which is best known for selling fabric, curtains, and craft supplies. Market-research firm IBISWorld puts the retail hardware market share of Bunnings's parent company Wesfarmers at 33 per cent, while noting it's "far and away the leading player in the hardware retailing space". John Dahlsen claims its market power is closer to 70 per cent - a figure Bunnings disputes. That would be equivalent to Coles and Woolworths combined. Dahlsen says while the Australian supermarket sector is often criticised for its lack of competition, cashed-up international players such as Costco and Aldi are at least present in the market. For the hardware sector, he says, Bunnings has no such rivals. "To be brutal, I think they [Bunnings] are a quasi-monopoly," he says. Professor Free says when one company comes to dominate a market, consumers suffer. "A company with 30 per cent market share exercises substantial market power. At 60 or 70 per cent market share, you can dictate prices, you can dominate suppliers, and you can really repel new entrants and make it very difficult for others to compete," he says. Bunnings said in a statement that it was committed to delivering low prices. "Bunnings is also committed to working with suppliers and taking a rational approach to volume and price fluctuations, in order to support suppliers and their costs," it said. "We make significant investments in training our team members and operating our business to deliver lowest prices to our customers." - ABC Four Corners investigation
