The old saying goes: nothing is more certain than death and taxes. In the contemporary Australian debate about taxation we can add that nothing is more certain than tax and complexity. The reasons for this are many, but the primary reason is the process by which taxation rules and regulation get designed and passed into law and administrative practice.

No tax law, however well drafted by parliamentary draftsmen, escapes the parliamentary process of amendment, with all the resultant legal and administrative complexity. This is the reality of most laws passed through a bicameral party-based system. One could argue that this is democracy at work, with all its attendant checks and balances. But checks and balances mean complexity in law and administration.

Much has been said, in the current debate and in the lead-up to the Henry review of taxation, about simplification of the system. In the face of the obvious and avoidable reasons for complexity this is worrying, as if attempts to simplify the law will necessarily lead to a simpler system. The complexity is there to stay in one form or another.

Thus the primary question should be: Who should manage the complexity? In the case of our current taxation system, the Australia Taxation Office (ATO) has outsourced the complexity: an army of accountants, book-keepers, tax consultants, the poor—who cannot afford these services—and a few DIY enthusiasts now manage the complexity and administration of the country’s tax system.

The ATO has always outsourced complexity, but since the introduction of what is euphemistically called ‘self assessment’ in the late 1980s, this outsourcing of complexity has become a positive policy. The Tax Pack was one of the earliest high profile public manifestations of ‘self assessment’, BAS statements are a more recent high profile example. The consequence of these and many other less obvious examples have progressively externalised the complexity of the system.

Some work could be done to simplify such things as the Tax Pack and BAS, but only at the margins. It is the fact of these instruments that constitutes the complexity; real reform can only occur by removing them. In other words, the complexity needs to be managed by the ATO on behalf of the taxpayers.

For this to happen, the ATO would have to be a much larger organisation, properly resourced to manage that complexity on our behalf. This would not only make life easier for taxpayers, it makes economic sense: the findings from our research suggest that for every extra dollar spent on the ATO, there could be a hundredfold reduction in external costs in running the system. This would free up a great deal of unproductive private sector tax consultants, accountants and book-keepers, giving them the time to do more productive work.

Will this happen? I don’t think so. Just prepare, as a taxpayer, to manage a new type of complexity.