Gov writes off Centrelink calculation engine project after $191m spent

The government has written off a $191 million investment sunk into building a new entitlements calculation engine for Centrelink, with “nothing to show for it" in terms of a working system.

Government services minister Bill Shorten made the announcement at an AFR government services summit.

Shorten said that the previous government had put $23 million into the project in 2019-20, followed by injections of $44 million, $67 million and $57 million in the next three years - “$191 million all up.”

“We still have nothing to show for it,” Shorten said.

“I can announce today that Services Australia has taken the decision to write off the calculator as an asset.

“It was a decision not taken lightly but the agency could not keep throwing good money after bad.”

The entitlement calculator engine (ECE) was to be used “to determine eligibility for welfare recipients and how much to pay them”, Shorten said.

Infosys was awarded the massive deal back in 2019, beating out IBM and Accenture at the time, though some of the work would later be brought back in-house.

Based on technology from Pega, the ECE was intended to replace an existing solution embedded in Centrelink’s legacy income security integrated system (ISIS), and formed part of the broader welfare payments infrastructure transformation or WPIT.

Services Australia’s chief information and digital officer Charles McHardie told a senate estimates hearing earlier this year that the ECE moved into production in October 2022 before being used in a "shadow mode" from November.

However, a piece on Canberra-based platform Riotact around the same time questioned whether the government could ever be confident enough to switch ISIS off, given its complexity and lack of documentation over the years.

Sources had also told iTnews over several months that the project had effectively been cancelled because the ECE did not work as intended, but this could not be independently verified at the time.

The project had also been caught up in a scandal on how the contracts were awarded, which had invited further scrutiny from Shorten over the first part of the year.