Australian Taxation Office (ATO) staff are considering taking their pay dispute to the Fair Work Commission.

The Commonwealth’s current pay offer of an 11.2 per cent increase with a starting bonus has reportedly been declared “inadequate” by the Taxation Officers’ Branch of the Australian Services Union (ASU). 

A significant majority of ASU members voted against accepting the offer, with 71 per cent supporting a campaign for a ‘NO’ vote to trigger an arbitration process on pay for ATO staff by the Fair Work Commission.

Despite the ATO resisting attempts to erode conditions in the past, there has been no offer of catch-up pay to compensate for withheld pay rises due to the ASU's refusal to trade away conditions. 

“We will need your support throughout this campaign to give us the best chance of success in our goal of getting a fair pay outcome for all ATO staff,” ASU Taxation Officers’ branch secretary Jeff Lapidos said in an email, according to reports. 

The vote results showed that 67 per cent of ASU’s Tax Branch members participated, and 71 per cent voted for the "NO" option, while only 29 per cent favoured accepting the Commonwealth's pay proposal. 

The ASU Tax Branch, though smaller than the Community and Public Sector Union, has strong coverage within the ATO and can pursue its goals independently.

A growing pay gap between the private sector and ATO staff with taxation expertise is becoming a challenge in hiring and retaining ATO employees. Mismatched labour pricing estimates could also pose issues for the agency. 

This dispute comes at a time when the ATO's workforce is becoming more efficient, driven by technology like data matching and artificial intelligence.

Unless there is a breakthrough in negotiations, the dispute is expected to continue and may be one of the first challenges for incoming Commissioner Rob Heferen, starting on March 1. 

The ASU's expertise in pay comparisons and union power could help the ATO address potential labour shortages and rising contractor costs in the future.