ATO gets more time to deliver single business register amid $1bn blowout

The Australian Taxation Office has been given another four years to complete the country’s business register overhaul after it emerged the project will cost the government $1 billion more than first anticipated.

Late last month, assistant treasurer and financial services minister Stephen Jones accused the former government of hiding the significant cost overrun in the modernising business registers (MBR) program, which is now expected to come in at $1.5 billion.

The project, which is replacing the 30-year-old Australian Business Register and 31 other registers with a single platform operated by a new one-stop service called Australian Business Registry Services, has been underway for the past three years.

It was initially funded to the tune of $19.3 million in the 2018-19 budget, with additional funding injections of $60.6 million and $419.9 million provided in 2019-20 and 2020-21, bringing the total current budget to around $500 million.

In announcing the blowout, Jones introduced legislation into parliament to retrospectively delay the transfer of registry functions from the Australian Securities and Investments Commission to the new register from 22 June 2022 to 1 July 2026, which passed on Friday.

“The previous automatic commencement date … was based on information known at the time and prior to detailed design work being completed to support the build of IT systems to deliver the MBR program,” the bill’s explanatory memorandum states.

“It was not possible to complete the build of these systems by 22 June 2022 and the delay of the automatic commencement date … is intended to allow sufficient time so that the supporting legislation aligns with the IT delivery schedule.”

Before the legislation passed, Labor senator Jana Stewart said that with the program “significantly delayed” and likely to be “well over budget”, the “billion-dollar stuff-up is now for the new federal government to fix, and we are in the early days of assessing options”.

“The MBR program was supposed to cost just under half a billion dollars and be completed in full by 2024,” she said.

“Early estimates suggest that the full delivery of the program may cost up to $1.5 billion and the full transfer of functions will no longer be able to occur until 2026.”

The opposition has previously rejected claims of a blowout, with shadow treasurer Angus Taylor telling parliament last week that all decisions taken were included in the 2022-23 budget and independently confirmed at the 2022 pre-election economic and fiscal outlook.

“While we welcome the government’s commitment to continue the program, it is astounding that they have delayed the measure until next year or the year after or the year after that,” he said last Tuesday.

A spokesperson for the Australian Taxation Office declined to answer questions on the delays or detail how work is progressing on the build, with work “underway with Treasury, the ATO, and the ASIC to review the timing, cost and delivery of future stages”.

The spokesperson added that the first stage of the program, a 15-digit identifier service that company directors will have for life, had been delivered, which “helps protect the community against fraudulent director behaviour and phoenixing activity”.

Accenture has been heavily involved in the MBR since work kicked off in 2019, having been brought in to conduct high-level design work under a $3 million contract that subsequently grew to $109.7 million.

Since then, Accenture has picked up additional contracts for “pipeline and delivery” and “business design and delivery contract”, which will see it provide integration and UX/UI design, bringing its total contract value to more than $200 million.

New Zealand-based registry software specialist Foster Moore is providing the registry solution that will serve as the main ABRS registry platform under a $40 million deal that started life as a $764,158 contract.