ATO offshoring precedent still on horizon

The Australian Taxation Office (ATO) may have opted against a recent proposal to offshore but it seems the writing is on the wall following May's federal budget.

As I spoke to ATO second commissioner Greg Farr by phone last Thursday for an update on the Change Program, I was slightly surprised to hear him again bring up the issue of skills shortages.

The ATO attracted plenty of attention recently when it decided not to follow vendor partner Accenture's proposal to offshore some development work to the Philippines or India.

At the time, Farr reasoned doing so would have slowed the Change Program and forced it to alter the organisations style of development.

But yesterday Farr seemed to suggest the landscape had shifted following changes to superannuation tax as announced in federal budget.

The ATO will have to implement new systems for the altered tax program, which Farr said would be "a really major task".

This would be compounded by "the scarcity of resources in the Australian IT landscape", he said.

Farr stressed the ATO was not about to reverse its recent offshoring decision but he did not shy away from explaining the magnitude of the problem in staff retention and finding skill sets.

If the ATO was already finding skills hard to come by for the Change Program, it was going to be even harder with the superannuation tax work on top of it, he reasoned.

The Change Program still has 18 months left to run, too.

Could this be part of a "softening up" approach by the government organisation as it sees offshoring as inevitable and prepares for future political controversy? Watch this space.