Considering the circumstances the Australian Taxation Office's (ATO) Change Program has been operating in over the last few years, it really hasn't been going too badly.
Yes, there have been budget run-overs to the extent that the new
Change Program spend is
expected to be around double the planned costs from
2004. Yes, it should have been finished in 2008 not 2011. But the office has also had to deal with the government changing the
taxation rules every single year, which has had the agency bouncing on its toes trying to keep up-to-date — with quite
legitimate funding increases to pay for it.
Of course, there were also budget increases where there were no
direct lines to the legislation costs, which is easy to
criticise. Yet to really be able to stick it to the agency for these increases, there
needs to be some horrendous error on its part which occasioned the
budget inflation. I can't see what that is.
Others might say it was the fault of bad governance. But I don't
get the feeling there's a lack of oversight on the project. The
Change Program's steering committee was scheduled to meet today and will meet
again later this month, all to make sure the next release — set to be the
income tax upgrade, the big one — won't go ahead unless the office
is ready for it.
David Butler (Credit: ATO)
The agency is also very aware that everything it is doing on the
Business Activity Statements release might be changed by the
government's response to the Ken Henry review and not rushing the
design so as to try and minimise what it has to do twice.
I'd say the problem causing the delays and cost hikes is more likely the scope of what the office
has been doing and the myriad of other jobs it has on its plate, as
mentioned in the ATO's annual report for 2007-2008:
Post-budget assessments indicate that we will continue to
experience considerable pressure on the delivery of our information
technology systems in 2008/2009. This reflects our significant work
program, including implementing the government's tax policy
changes, our own internal business process improvement program (the
Change Program) and our contribution to whole-of-government
improvement initiatives... Software
developers face similar pressures to update products that support
taxpayers and their agents to meet their obligations or to access
If the Australian Taxation Office has been guilty of anything,
it's been a surfeit of optimism. Certainly when it set its original timetable
and costing it was "ambitious" as the audit office said in its recently
released review of the program.
Yet the auditors seemed to find it a tough ask to find things to
criticise about the program, only releasing four fairly general
recommendations, most of which, if you listen to the ATO, were either already implemented or weren't really applicable.
The audit office has also admitted that although delayed, benefits
had been realised from the part of the Change Program which has been done.
Maybe, as the audit office
says, the ATO does need to count its costs more carefully and make sure the
lines are clearly drawn where Accenture is concerned.
But my opinion is that the ATO's transgressions are fairly minor and that, despite
the costs, the Change Program will have been worth it.
The ATO employed 22,429 people at 30 June 2009. It had an operating
expenditure of $3 billion. It collected $264.5 billion in net cash,
provided over $17 billion in transfers and payments, and collected
around $41 billion in GST for state and territory governments.
All this was being put at risk by out-of-date IT systems. An excerpt from the
audit report said:
By 2000 it was clear to the Tax Office its ICT systems were
unsustainable. It was taking too long to respond to government policy
initiatives, the community was getting less efficient service and Tax Office staff
were finding reduced capability in the Information Technology (IT) platform.
In addition, the Tax Office had been aware for some time of inefficiencies in
the ICT systems on which the administration of Australia's taxation and
superannuation systems depended.
If the ATO's tax systems fall in a legacy heap, the whole country will
stumble. Yes, the project being late will cost us money and delay
benefits. But, considering that it doesn't seem the ATO has been guilty of gross
incompetence, how much would it have cost Australia's tax system if
it had done nothing?