‘Burning $12m-a-month’: Govt scraps business register overhaul

The Albanese government has scrapped a major upgrade of the country’s business registers after an independent review found it would cost up to $2.2 billion to complete the project – five times what had been budgeted by the previous government.

But the government will still be forced to spend at least $400 million at a later date to stabilise existing legacy systems, in addition to the $430 million that has already been sunk into the troubled program designed to consolidate 30-odd business registers.

Assistant Treasurer Stephen Jones revealed the government’s decision on the modernising business register (MBR) program on Monday, following a six-month review led by former Service NSW chief executive Damon Rees.

Assistant Treasurer Stephen Jones

The MBR program began in 2018 to replace the 30-year-old Australian Business Register and 31 other registers operated by the Australian Securities and Investments Commission with a single platform operated by a new one-stop service called Australian Business Registry Services.

Around $480 million was allocated to the program by the former Coalition government, with a further $80 million pitched in by the Albanese government after Treasury revealed the project would likely come in at $1.5 billion and take years longer to complete, bringing total funding to $578 million.

But the final report from the review commissioned in February found that the MBR program was on track to cost up to $2.8 billion, requiring at least a further $1.8 billion and another five years to complete, and recommended it be stopped.

“The review concludes that the MBR program should be stopped, as the economic benefits from the program do not justify the level of additional expenditure required,” the 530-page report, released on Monday, said.

“It is recognised that it can be difficult to cease a program with significant sunk expenditure and limited useable outcomes to date. However, this review concludes that this is the responsible and best available option for government.”

The report also said the government should take the decision to cease the MBR program as “quickly as possible to limit further expenditure on significant program overheads and expenses”, estimated at at least $12 million a month.

It said approximately $430 million of the $578 million budget had been spent between November 2019 and March 2023, with several deliverables more than double the planned cost in the original business case.

For the companies/ABN registers, originally costed at $128 million, the report put the actual cost to date at $270 million despite only 18 per cent of the platform having been built. To complete the build, the report said up to $1.11 billion would be needed, according to revised costings.

The report cites the “significantly greater than planned use of contractors” as contributing to the “exhaustion of allocated funding and the continuation of high cost of delays”, with a workforce of 500 full-time staff costing $12 million a month mobilised before necessary law changes.

As previously reported by InnovationAus.com, at least $200 million of this was hoovered by consulting giant Accenture, which had initially been brought in for high-level design work under a $3 million contract that subsequently grew to $109.7 million.

Program complexity was also significantly underestimated, while issues emerging from the previous government’s decision to expand the program before it was delivered, the transfer responsibilities to the Australian Taxation Office and the pandemic also contributed to the blowout.

The chosen registry platform from New Zealand-based firm Foster Moore was called out as a “key limiting factor in the delivery of the program”, with integration with the “broader ATO technology ecosystem … more difficult than anticipated”.

In assessing the program, the review provided five options to the government – three of which involved stopping the program – to move forward, with an uplift of existing systems and data integrity, costing $515 million, the preferred approach.

It is unclear from the report whether the government has taken up the preferred approach, with the Mr Jones only saying the government “remains committed to making it easier for businesses to register their details and will prioritise the stabilisation of existing registers”.

Mr Jones said business as usual registry operations will continue under the Australian Securities and Investments Commission, while the government considers “options to uplift registries following further analysis”.

Speaking on ABC Radio National on Monday morning, Mr Jones criticised the former Morrison government’s management of the MBR program, describing it as a “story of negligence and incompetence”.

“No serious government could countenance burning $12 million a month on a program with uncertain parameters and uncertain delivery dates. We simply cannot do it,” he said of the “out of control” project.

“We want to ensure we have a stable, quality business registry system. But what the previous government has done is fit Australian businesses up with a dream that could never be delivered.”

“One of the first things that I was told when I came back into government was that there were significant blowouts with this platform. The previous government either knew this or were so incompetent that they didn’t ask basis questions.”

Mr Jones said that one “silver lining” of the program was the introduction of Director ID, a unique 15-digit identifier that leverages the myGovID credential which became mandatory for all directors in December last year.

Shadow minister for government services Paul Fletcher said the decision looked like “another excuse [from the government] to kick things down the road” but would not comment on the specifics of the Coalition-era program.

“We’ve seen a pattern from this government when it comes to technology… and the benefits it can deliver,” he told InnovationAus.com.

“They seem pretty consistently to be looking at ways of not pushing forward, finding excuses to go slow, and there just does not seem to be any great passion for the productivity benefits and the end users benefits that technology can deliver.”

Do you know more? Contact James Riley via Email.

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