June 23rd, 2012
Former policeman Chris Jordan is well-versed in dealing with conflict, writes Clancy Yeates.
Before playing key roles in some of the biggest tax battles of recent decades, Chris Jordan dealt with conflicts of a different kind.
Jordan chairs the Board of Taxation and yesterday stepped down as KPMG's chairman in NSW. He's been a top adviser to successive governments of both stripes. But decades ago, he was a policeman stationed on the north shore, in Chatswood.
"I used to go to these big mansions in Castlecrag, and I'd never been to a place that was so nice," says Jordan, who grew up in Maroubra, then a working-class area.
"I always found it odd that there were people there with domestic issues. I could never understand if they had such lovely houses why they were unhappy."
Jordan now lives on the north shore - "I went to the dark side," he jokes - but his previous work as a cop is surely rare among the top brass of big accounting firms.
However, it is also a fitting introduction to handling disputes between people. What better preparation for tax - an area where business and government have been coming to blows for years?
From these early days as a policeman in the 1970s, Jordan has gone on to become one of the country's most respected tax experts, appointed to deal with changes ranging from the GST in the 1990s to the softened mining tax of late 2010.
Now he is chairing a group that the Treasurer, Wayne Swan, has asked to investigate company tax cuts, which were controversially scrapped in the budget. So how does a cop end up in tax?
After a year in the police force, Jordan - who had planned to be a police prosecutor - decided things were not working out as expected. So he took advantage of Whitlam government policies of free university education and enrolled in law in 1974. But unlike many law graduates, he decided against working for a law firm after university - he says law "didn't seem to be a good cultural fit" and firms were "predominantly populated by taking on people from the private schools". Instead, he ended up at the accounting firm Arthur Andersen in 1979 (which later merged with Ernst & Young), followed by a stint at the University of Technology, Sydney, and a move to KPMG in the mid 1980s - a firm he has stayed at until stepping down yesterday.
Within months of moving to KPMG, Jordan was given a surprise call-up to work for John Howard, then opposition leader during the Hawke government. This put him into contact with other young advisers who would later become public policy heavyweights in their own right.
"When I was working on John Howard's staff writing questions on fringe benefits tax to ask when Keating was the treasurer, Ken Henry was Keating's economic adviser on secondment from Treasury, and Michael Carmody, who became the Commissioner of Tax, was the Parliamentary Liaison Officer from the Tax Office," Jordan says.
"Many years later all three of us were sitting on the Board of Tax."
When Howard lost the 1987 election to Bob Hawke, Jordan returned to KPMG. Since the '80s, Jordan has been called on by Coalition and Labor governments to deal with some of their thorniest tax issues.
Under Howard's years as prime minister, Jordan chaired a group responsible for the massive upheaval of implementing the GST. After the Rudd government's bruising battle with BHP Billiton, Rio Tinto and Xstrata in 2010 over the mining tax, Jordan also sat on the Don Argus-chaired group that consulted with the industry about Swan's softened version of the resource rent tax.
But despite working with both sides of politics, it has not always been such smooth sailing. Indeed, when Howard appointed Jordan to the Board of Taxation in 2000, Labor senators were highly sceptical, due to Jordan's previous time in Howard's office.
Under parliamentary privilege, the current Communications Minister, Stephen Conroy, asked: "Isn't it the case that the Howard government has insisted on portraying Mr Jordan as a so-called independent tax expert from KPMG, when it is clear that he is far from independent?"
The fact that the Labor government has since sought Jordan's counsel on key tax matters suggests they no longer have these concerns, and Jordan says he is impartial.
"I've been interested in policy, I was never involved in politics, I've never been a member of a political party. I was quite surprised when I was seconded to John Howard's office," Jordan says.
People who have worked with Jordan also single out this impartiality as a key trait that's served him well. Howard, a personal friend, says Jordan helped the Coalition with "ammunition" in the '80s but says this would not affect Jordan's current role.
"He was very bright, he knew his stuff, and he had a capacity to explain technical things in a fairly straight forward manner," Howard says. "He was obviously sympathetic to us ... in the '80s, but he's very professional and I'm quite sure he gives very professional and impartial advice to the current government."
The general manager of policy at the Institute of Chartered Accountants in Australia, Yasser El-Ansary, also singles out Jordan's knack for steering clear of politics.
"It's a very difficult line to walk sometimes, but Chris has a very strong radar for navigating some of the challenges of policy versus politics," El-Ansary says.
Despite this impartiality, however, his peers say Jordan is unafraid to speak his mind independently of what government and business groups think.
This independence is clear in Jordan's criticism of simplistic calls for tax cuts dressed up as "reform" - though he concedes there is "understandable frustration" over the government's decision not to cut company taxes from 30 per cent to 29 per cent.
"I keep seeing business and other people calling for tax reform, but I'm not quite sure what they mean," he says. "Is tax reform just a rate cut? That's not really reform, that's just reducing rates."
While business groups predictably attacked the cancellation of a 1 percentage-point company tax cut in this year's budget, Jordan says this just might help businesses engage constructively in figuring out what they are prepared to give up in exchange for tax cuts.
"I think with a 30 per cent starting point rather than a 29 per cent starting point, it focuses the attention a bit more," he says.
The politicians aren't let off the hook either, with Jordan criticising the "dogma" around refusing to examine changes to the GST.
"I think it is a shame that it's something that we just can't even have as a debate, like increasing the tax on consumption was ruled out of the Henry review," he says.
Tax is a topic many find dull, but Jordan says it's given him an opportunity to work in a diverse range across the spectrum of politics and business. He says this has been a great way to stay interested in work.
Outside tax, he sits on the boards of the Sydney Children's Hospital Foundation and the Bell Shakespeare Company, and runs a committee trying to resurrect Sydney's reputation as a global city.
"One of the great things I appreciate from my time here is the ability to have been able to do so many different things within the one career," he says.