Second Commissioner of Taxation David Butler today said that the increased $879 million budget for the Australian Taxation Office's (ATO) Change Program quoted in an audit report released yesterday was a worst-case scenario.
Yesterday a report by the Australian National Audit Office revealed that the amount the tax office expected to spend on the Change Program had increased by $105 million.
According to Butler, the tax office had included extra amounts such as the costs of possible months of support after the Business Activity Statement release goes live.
The $105 million was made up by $44 million in extra mainframe costs as well as around $60 million worth of extra ATO costs, Butler said, with main ticket items being hardware, personnel and software.
"We've almost built into our budget a worst-case scenario — the maximum we could possibly spend," he said.
Yet this budget could change in the future, up or down, Butler admitted. The Ken Henry taxation review due to go to government at the end of this year could mean changes for the Change Program's Business Activity Statements release, scheduled for technical implementation mid next year, he said. "We can only plan on what we know," he said.
The team is into the detailed design phase for the BAS release, according to Butler. He wasn't going to push the team to rush it because of the review. "I don't think it would be sensible to drive that very hard and turn around and change everything."
The next release to go live is the income tax component of the program, which is due to be implemented in January. Even that isn't set at this point, however. There will be meetings held on 2 and 24 November, and 22 December to decide if the tax office is ready to implement the release.
"It's a very significant release, it's very big. It's high risk," Butler said. "It affects every tax payer in Australia."
If the team isn't ready for the January date, being the Australia day long weekend, it will need to be pushed back.
"The real challenge is the conversion of the data. We need to shut the whole thing down for four days," he said. "Easter's another opportunity. But do we have enough time between Easter and July [when the tax season starts] to stabilise it?"
One thing was certain, according to Butler. The ATO staff was working hard. "People have been literally working seven days a week for months," he said.
Accenture is the external systems integrator which the ATO chose to work with on the program. The audit office report had raised concerns about responsibilities being blurred between the organisations. Butler believed that might be the case lower down where Accenture and ATO were working side by side, but that at higher levels, responsibilities were set. "Where it should be clear it is clear," he said. He believed the relationship with Accenture was strong and positive.
The audit office also believed that the tax office could better use its assurance framework. Butler said the ATO had already met that recommendation and that he thought the audit office's concerns might have been based on historical information. The concerns the audit office had with testing had also been addressed, Butler said.
He pointed out that the tax office was already seeing benefits from the work which had already been completed since the project had started.
Staff had been using the implemented customer relationship management system since 2005, he said. The core platform for the integrated core processing system had also been implemented, which improved how the office managed fringe benefits tax and superannuation products. Surveys showed that the community believed the ATO's service was improving, he said.
"This complex program of work has thrown us many challenges, but it will inevitably put us in a good position to respond quickly and efficiently to the community's needs and any new policy initiatives coming our way," he said.