Opinion: Sighs of relief in ATO IT department?

Tax agency dodges a potentially deadly bullet as reforms could have created considerable pressure on embattled Change Program

No doubt sighs of relief escaped from cubicles in the tax office's IT department this morning as the Federal Government decided not to introduce several complex changes to the tax system and with it additional obligations on the ATO.

Components of Ken Henry’s tax reforms, should they have been accepted by Federal Government, would have been a malady for the ATO’s late, over-budget change management program - which is a wide-ranging IT reform program which aims to migrate the agency away from more than 180 legacy and paper-based systems to a single, integrated core IT system.

Considering the government called for the Inspector-General of Taxation to review the Australian Tax Office's (ATO) income tax IT system upgrade in the wake of public complaints over processing delays recently, the ATO commissioner had previously acknowledged the program was under "extraordinary pressure", and in October last year the ATO accepted the recommendations from the Australian National Audit Office (ANAO) after the latter conducted a performance audit of the Change Program, any major reforms to the tax system could have been the proverbial straw breaking the camel's back.

No doubt it would have made bureaucrats rather queasy at the possibility of further delays and costs to the Change Program.

The $800-odd million change program, which should have been completed in 2007 for about $450 million, is meant to be put to bed this year. And while Henry’s IT revamps are still on the table, a government nod could have introduced a new spate of complexity.

Consider Henry’s prodigious recommendation 133. It asks the ATO to “systematically collect data on aspects of existing taxes and transfers — including compliance cost data” for more number crunching. No doubt meaning new systems, new toolkits and new budgets.

Recommendation 131 implores the government to build a private-public taskforce to improve the tax-payer experience with the ATO, with a sleuth of reporting and feedback mechanisms. Number 130 asks for an integrated single taxpayer account for tax and finance, including systems interoperability between government agencies and third parties.

The review also pushes for the compulsory use of electronic tax records and the creation of a one-stop shop in which taxpayers can access each income source, and a facility to test “hypothetical changes in circumstance”.

The ATO second commissioner, David Butler, has already told the Senate the faults of the change program, are at least in part, down to “the increase in time and scope as the result of law changes”.

So with the Federal Government deciding to push back any extensive reform to the system - instead going for more palatable wins - the ATO may have just escaped a deadly IT bullet.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags ATOchange programHenry Tax review

More about Australian National Audit OfficeAustralian National Audit OfficeFederal GovernmentNational Audit Office

Show Comments
[]