ATO watchdog to investigate how interest is applied on unpaid taxes
Sarah Basford Canales
The watchdog for the Australian Taxation Office will investigate how it charges interest on tax debts, warning it believes the agency could take a more “compassionate approach” in certain cases.
The tax ombudsman said it will look into the “hot topic” among the community where those owing the ATO money attempt to reduce or remove the 11% interest rate applied to the tax debt.
The ombudsman said it had received 134 complaints from taxpayers and tax professionals about a general lack of consistency and transparency in how interest is applied to debts.
Attempts to reduce or remove tax debt interest are determined by the ATO and can only be reviewed in the federal court.
From July 2025, tax debt interest is no longer tax deductible, placing additional pressure on taxpayers and small businesses already under financial stress, the watchdog said.
The ombudsman, Ruth Owen, said:
Taxpayers have an obligation to pay their tax bills, and we know most people are trying to do the right thing, but there are certain circumstances where we think the ATO could take a more compassionate approach to debt collection.
Although [applying debt interest] is an important element of the tax system, to ensure that those who deliberately avoid paying tax are not given an unfair advantage, it should not punish those trying to do the right thing.
Key events
Hanson-Young says health concerns are mounting for people near SA algal bloom
Hanson-Young said she remained concerned about the health impacts on people related to the algal bloom, saying “anecdotally, health concerns and symptoms are mounting every day from people who live, work, and play along our coastline”.
She told RN Breakfast:
We need a much better and robust health advice regime. The anecdotal evidence now that people who are down living by the sea, where the foam and the sea mist, where the bloom has been, are getting sick, that the irritations, the cold-like symptoms, the respiratory systems, the rashes, you know, the government advises that this goes away in a few days.
We’re finding that people who live down in these areas are being impacted every day and they feel like the government is just not responding with the full force of resources that’s needed.
The SA government says the algal bloom does not produce toxins harmful to humans or one that could cause long-term effects. But officials say exposure could cause skin and eye irritation and symptoms such as shortness of breath or coughing. The symptoms usually resolve within a few hours of leaving the beach or nearby areas.
Sarah Hanson-Young says government response to SA’s algal bloom ‘doesn’t touch the side of what’s needed’
The Greens senator Sarah Hanson-Young has been up and down the South Australia coastline this week looking at the impacts of the state’s devastating algal bloom, saying the government response thus far is a long way from what’s needed to address a major environmental crisis.
Hanson-Young spoke to RN Breakfast about the scope of the response so far:
It’s clear that the scale of the government response just doesn’t match the scale of the disaster that we have here, whether it’s the economic impacts, the loss of fishing, the loss of jobs, the loss of tourism, the health impacts … And then, of course, the huge job that is needed to restore the local environment to make it more resilient to this toxic algae.
Hanson-Young said the government should be investigating a jobseeker-like program to help support those who rely on the gulf, saying the $14m pledged by the Albanese government wasn’t nearly enough to help deal with the crisis (the state government has matched that funding for a total of $28m):
The money from the federal government, 14 million bucks, It doesn’t touch the side of what’s needed.
The government, frankly, if I’m really honest, has been floundering in their response to this environmental, social and health disaster.
Good morning, and thanks to Martin Farrer for getting the blog rolling. Nick Visser here to take the reins. Let’s dive in.
NSW wild weather ‘just the beginning’, says SES chief
People in New South Wales should prepare for more wild weather as they clean up after this week’s heavy rain and tornadoes.
Crews responded to more than 700 incidents between Wednesday and Thursday, including 36 flood rescues. The rain has slowly eased with sunny conditions predicted for Friday.
Hazardous surf conditions caused by a large and powerful swell are expected to continue today and decrease gradually on Friday.
However, SES assistant commissioner Dean Storey urged NSW residents to remain vigilant, with storm season brewing.
“This is just the beginning of what we are expecting to be a very busy storm season and it’s important people take simple steps to prepare,” he said.
ATO watchdog to investigate how interest is applied on unpaid taxes
Sarah Basford Canales
The watchdog for the Australian Taxation Office will investigate how it charges interest on tax debts, warning it believes the agency could take a more “compassionate approach” in certain cases.
The tax ombudsman said it will look into the “hot topic” among the community where those owing the ATO money attempt to reduce or remove the 11% interest rate applied to the tax debt.
The ombudsman said it had received 134 complaints from taxpayers and tax professionals about a general lack of consistency and transparency in how interest is applied to debts.
Attempts to reduce or remove tax debt interest are determined by the ATO and can only be reviewed in the federal court.
From July 2025, tax debt interest is no longer tax deductible, placing additional pressure on taxpayers and small businesses already under financial stress, the watchdog said.
The ombudsman, Ruth Owen, said:
Taxpayers have an obligation to pay their tax bills, and we know most people are trying to do the right thing, but there are certain circumstances where we think the ATO could take a more compassionate approach to debt collection.
Although [applying debt interest] is an important element of the tax system, to ensure that those who deliberately avoid paying tax are not given an unfair advantage, it should not punish those trying to do the right thing.
North West Shelf gas decision looms over Pacific climate talks
An expected call on the future of a major Australian gas project could cast a shadow over the final days of a climate change-heavy Pacific leader talks, Australian Associated Press reports.
The final go-ahead for the Woodside North West Shelf gas hub to continue operating until 2070 could be granted by the federal environment minister, Murray Watt, today, following years in approvals limbo.
Australia’s fossil fuel exports have long been a source of tension for climate-vulnerable Pacific islands on the front line of rising seas and severe weather, a point reiterated by the Vanuatu climate change adaptation minister, Ralph Regenvanu, in Honiara on Wednesday.
Regenvanu said Australia’s long-held argument that it was only responsible for cutting the greenhouse gases it emitted within its borders “is no longer tenable” following a landmark world court advisory opinion in July.
“We want Australia to start seriously talking about its fossil fuel production pipeline,” Regenvanu said at a Pacific Island Forum side event on Wednesday.
Anthony Albanese said he would “act in Australia’s interests but also in the interests of engaging in action on climate change” when queried on the Pacific reaction to the looming North West Shelf decision.
“We know that gas has an important role to play in the transition,” he told reporters from the leaders-only retreat in the Solomon Islands yesterday.
You can read more on Regenvanu’s previous criticisms of the North West Shelf project here:
Welcome
Good morning and welcome to our live news blog. I’m Martin Farrer with the breaking overnight stories and then my colleague Nick Visser will be driving the news bus.
Anthony Albanese faces tough talks on climate action at the Pacific Islands Forum in Solomon Islands today – and they will be even tougher if his environment minister, Murray Watt, gives the final go-ahead today for Woodside to extend the life of its North West Shelf gas project as has been suggested by reports this week. More coming up.
And the watchdog for the Australian Taxation Office will investigate how it charges interest on tax debts, warning it believes the agency could take a more “compassionate approach” in certain cases. More details in a moment.
