Behavioural insights
Behavioural insights help better understand why, when and how people make decisions.
We use behavioural insights principles to make it as easy as possible for people to meet their tax and super obligations.
The behavioural insights approach builds on the understanding, depicted in our compliance model, that the vast majority of people and organisations have a positive attitude to meeting their obligations.
We aim to implement best practice approaches and look to the experiences of like-minded tax agencies domestically and around the world.
Key behavioural insights principles
Some of the key behavioural insights principles we regularly use include:
- make it easy – design processes, systems and engagement approaches that minimise taxpayers’ effort to meet their obligations
- provide certainty about our processes, timeframes and how to fulfil obligations
- target our approach and personalise our messages
- provide transparency about what we know and what we are doing
- emphasise the cost of not taking action
- provide planning prompts and limit content length to manage cognitive limits
- use social norms and rankings to encourage the right behaviours
- emphasise the contribution paying tax and super makes to the community
- use better layouts, design and colours to highlight key messages.
We have been applying behavioural insights for a number of years. This includes helping people to:
- pay debts, lodge on time and report accurately
- shift from paper to digital interactions
- adopt new policies/obligations.
Examples of the ATO’s use of behavioural insights
Examples of how we use behavioural insights include:
- We make it easier for people to complete their tax return by pre-filling income, salary, dividend and private health insurance details in myTax.
- We help people get their work-related expense claims right with real-time pop-up messages in myTax, letting them know when their claims appear out of step with their peers.
- We provide greater certainty to individuals using myTax about the progress of processing their return, by sending personalised emails and text messages.
- We help taxpayers to pay their debts on time. For example, in 2016–17 we sent 560,000 text message reminders resulting in $800 million collected on time.
Compliance model
The compliance model is a structured way of understanding and improving client compliance. It helps us to understand the factors that influence client behaviour and to apply the most appropriate compliance strategy.
Client behaviour is influenced by business, industry, technology and data, sociological, economic and psychological factors.
The compliance model shows a continuum of client attitudes towards compliance. At the base of the continuum, clients have the desired attitude of being 'willing to do the right thing'. At the other extreme, clients have decided not to comply – choosing to evade or opt out of the tax system.
The compliance model also summarises the different sorts of support and intervention that we may need to provide to collect the required revenue. The model suggests that the ATO has the ability to influence client behaviour through our response and interaction.