Problems with the roll-out of the Australian Tax Office's (ATO) Change Program income tax processing system lead to 17,000 complaints in the last few months compared to just 2500 in the same period last year, according to ATO second commissioner David Butler. Yet he also said that the saga was ending, with the Change Program now drawing to a close.
The Change Program began in 2004 with a budget of $445 million. This figure had increased to $879 million by last year. The aim of the program was to overhaul the 30-year-old systems being used by the ATO. The income tax component overhaul was tackled in January, but problems with the system led to long delays in processing tax assessments.
These delays led to six times the number of complaints from taxpayers, and some tax agents even threatened to sue over the delays.
"We are now up to 17,000 complaints," Butler told Senate Estimates last week.
"We were around the 2500 mark in the same period last year, compared with 17,000," he added. "But it is 17,000 out of 3.4 million returns."
According to Butler, the ATO is now on schedule with all tax returns now, but admitted the number of complaints highlighted an issue with the new system.
"Undoubtedly, there is an issue," he said. "There were lots of complaints, there was lots of concern, because we had unfortunately two glitches that caused delays for some people for their refunds."
"We did our absolute best to avoid that happening, but we had two particular things that went wrong."
The two problems were glitches in the system in March that led to a two-week delay in processing returns and another problem that caused return notices to be sent out without cheques included.
Although Butler could not guarantee that there would not be any further system glitches, he said CPT Global were reviewing the implementation.
"We have separately asked another person, who is our IT expert, Peter Wright, who works for CPT Global, to do a quick review of our governance, the way we approach things, and he is going to produce a report for us which will give us an indication of what more we could do in addition to what we have already been doing to govern this," he said.
Butler clarified that this review didn't indicate that there was any concern with IT firm Accenture's handling of the implementation of the new system.
"It is not to do with Accenture at all," he said. "This is actually an independent person looking at our governance and practices."
"Capgemini have been involved since 2004, so we wanted someone else to give us another 'belt and braces', in a sense, to check that there are not any other practices that we could put in place to better govern this going forward," he said. "It is just a three-week period of work he is looking at."
Butler informed the estimates hearing that the six-year Change Program was close to completion.
"We have also — and the commissioner has announced this internally — drawn a close to the Change Program contract with Accenture, and that finishes on 30 June this year," he said.
Contrary to media reports, Accenture's contract has not been terminated by the ATO but just completed with the finishing of the program and Accenture could possibly be brought back in for further changes to the system.
"We are saying that we have negotiated with Accenture a completion to the current contract and any further work we do with Accenture will be on the basis of the new contract," Butler said.
Butler also said original plans in 2004 to bring the 10-year-old business activities statements system onto the new platform were shelved pending government taxation reviews.
"The decision made some months ago to not proceed with business activity statements was based on giving us the space to pick up any recommendations that the government agrees to around a review of the tax system, the Cooper review of superannuation and whatever else might come out of that," he said.
Questions about the Change Program were put to Butler by Independent Senator Nick Xenophon, who has previously called for an inquiry into the problems with the system.