MYEFO: Government details shared services savings

The government is aiming to save money with shared services consolidation and rake in more revenue by boosting the Australian Taxation Office’s (ATO) data analytics capabilities, the Mid-year Economic and Fiscal Outlook has revealed.

The federal government is hoping to achieve net savings of $40.9 million over three years from 2016-17 by consolidating the provision of transactional and other common services “to a small number of shared service centres within Australian government agencies.”

The Department of Finance is overseeing the program, which has a three to five year implementation timeframe.

The MYEFO was released today by Treasurer Scott Morrison and finance minister Mathias Cormann.

The government earlier this month began seeking private sector input on the move to consolidate shared and common service delivery, including ICT.

The Department of Finance released a discussion paper that seeks to “further frame the future Australian Public Service (APS) strategy for the Shared and Common Services Programme (the Programme) through engagement with the private sector”.

The first phase of the program will involve the consolidation of core transactional services, such as accounts payable/receivable, credit card management, ledger management, pay and conditions and payroll administration.

Value-add transactional services, which include the majority of ICT services as well as asset management, learning and development, recruitment, will be the basis of a potential second phase of consolidation.

The public service spends $3.5 billion to $4 billion annually on corporate services, according to the paper.

Biometrics platform upgrade scrapped

The government will scrap scoping design and scoping work on a new biometrics platform for the Department of Immigration and Border Protection, the MYEFO reveals.

The decision to dump the scoping study will save $8.9 million in 2015-16.

“The Department of Immigration and Border Protection is undertaking further analysis of the current biometric platform and exploring opportunities for future solution designs,” the MYEFO states.

The document also revealed it would earmark $61.9 million over four years to boost the data analytics capabilities of the Australian Taxation Office.

“Improved data analysis capability will help the ATO in better detecting and deterring non-compliance,” the document states.

The government is expecting the measure to rake in additional revenue of $222 million through 2018-19.

Introducing a new electronic document management system at the Department of Social Services will save $7.8 million over four years, the MYEFO reveals.

National innovation agenda

The MYEFO included details on a number of components of the government’s $1.1 billion ‘innovation agenda’.

Policy decisions taken since the 2015-16 budget that are part of the agenda include allowing taxpayers to self-assess the tax effective life of some IP assets (which is expected to cost $80 million in revenue over the forward estimates period through 2018-19) and changes to the tax treatment of early state venture capital limited partnerships (ESVCLPs) and venture capital limited partnerships (VCLPs).

“Investments in new ESVCLPs will be eligible for a tax offset of 10 per cent of the value of new capital invested during the income year, and the maximum fund size for new ESVCLPs will be increased to $200 million from $100 million,” the MYEFO states.

“Changes will also be made to both new and existing ESVCLPs and VCLPs to clarify existing arrangements and allow a wider range of investment activities.”

The revenue impact of the changes over the forward estimates is unquantifiable, the document states.

The government is estimating a tax incentive for angel investors in startups, which was also announced as part of the innovation agenda, will have a cost to revenue of $100 million through 2018-19.

The tax incentive changes include a 20 per cent non-refundable tax offset based on the investment amount (capped at $200,000 per investor) and an exemption from capital gains tax on the investment (if a minimum three-year holding period is met).

The MYEFO also notes the government’s moves to alter bankruptcy and insolvency laws and changes to the treatment of employee share schemes.

As part of the agenda, the government will provide $21.8 million over three years from 2016-17 (with $8.8 million in 2019-20) for establishing the ‘Cyber Security Growth Centre’.

The government has previously said the centre will be operational by mid-2016.

“The Growth Centre will bring together industry, researchers and governments to develop a national cyber security strategy and coordinate research to reduce overlap and maximise impact,” said a statement issued by Prime Minister Malcolm Turnbull’s office as part of the innovation agenda announcement.

Other measures linked to the innovation agenda include:

• $250 million for the Biomedical Translation Fund (drawn from the Medical Research Future Fund)

• $2.3 billion over 10 years ($458.6 million over three years from 2016-17) for a research infrastructure funding. That funding includes Funding includes $294 million for the international Square Kilometre Array (SKA) radio telescope, $520 million for the Australian Synchrotron, and $1.5 billion on National Collaborative Research Infrastructure Strategy (NCRIS).

• $5.2 million over three years from 2016-17 on changes to ARC Linkage Grants changes.

• $127.3 million over three years from 2016-17 to boost research collaboration between universities and the private sector.

• $9.4 million over four years from 2015-16 to “assess the engagement of university researchers with end-users”.

• $1 million over two years from 2015-16 for a program linked to “entrepreneur visas”.

• $18.7 million over three years from 2016-17 to establish the “Business Research and Innovation Initiative” which will “encourage businesses to find solutions to otherwise intractable problems in public policy and service delivery”.

• $90.1 million over 10 years from 2016-17 for a CSIRO innovation fund. The fund is expected to manage investments worth around $200 million over a 15 year period. The innovation fund is an off-budget investment. The government will provide $15 million for a CSIRO accelerator program.

• $74.6 million over three years from 2016-17 for the CSIRO’s Data61 division (which incorporated NICTA). Funding will be earmarked for projects in areas including open data platforms, cyber security, a ‘digital innovation marketplace’ for skills sharing, and data analytics education programs. The funding measure also includes $1.5 million for the Department of Prime Minister and Cabinet to boost data skills in the public services.

• $17.7 million over three years from 2016-17 for ‘Innovation Connections (a relaunch of the Research Connections component of the government’s Entrepreneurs Program).

• $26.0 million over three years from 2016-17 for the government’s ‘Global Innovation Strategy (including the establishment of five international “innovation launch pads”.

• $8.1 million over four years from 2015-16 to establish Innovation and Science Australia.

• $112.1 million over three years from 2016-17 on promoting STEM education.

• $25.8 million over six years from 2016-17 to UNSW’s Centre for Quantum Computation and Communications Technology (CQC²T). UNSW has committed $25 to the CQC²T project, and Telstra and the Commonwealth Bank of Australia have also announced plans to invest in the centre.

• $8.1 million over three years from 2016-17 on support for business incubators (including $1 million to establish an “Australian Innovation Network”.

• $18.8 million over five years on the ‘Digital Marketplace’ for Commonwealth procurement. The Digital Marketplace will be built by the government’s Digital Transformation Office. The aim is for it to go live in January 2017, with a prototype to be unveiled next year.

• $29.2 million over four years to make the Geocoded National Address File (G-NAF) publicly available through the government’s open data repository, data.gov.au.

Data held by the federal government is a “strategic national resource”, according to a new policy statement. The policy commits the government to an approach of open by default for non-sensitive data sets.

The MYEFO also states that the government will launch a review into data sharing restrictions across Commonwealth, state and territory agencies.

“The review will ensure that data sharing arrangements are fit-for-purpose and able to evolve with technological developments and changing community expectations,” the MEYFO sates.

“The review could lead to further improvements in individuals’ interactions with government, and better targeting of government programmes.”

No additional funding was earmarked for the initiative.