IT consultants blamed for outage of Australian tax systems

16 July 2019 Consultancy.com.au

The Australian Government has come under further pressure to justify its outsourcing policy, following a major IT outage hitting the country’s tax body. The Australian Taxation Office’s online services and the Department of Human Services both saw systems go down, forcing them to extend the deadline for income reporting, and leading opposition figures to slate the performance of the IT consultants involved.

The consulting industry of Australia has increasingly been buoyed by public sector spending in recent years. Last year, an estimated 18% of the consulting market consists of public sector expenditure, something which was largely attributed to then-Prime Minister Malcolm Turnbull and his Liberal Government’s reform agenda. Under the Turnbull Government, spending on external expertise ramped unp by over 8% to a total value of $845 million in 2017 alone.

Turnbull was ultimately ousted, and his replacement Scott Morrison has come under increasing pressure to mark himself out as different from his predecessor. Despite this, the Government’s policy on outsourcing to consulting firms seems broadly unchanged – something that continues to cause friction for Morrison’s freshly re-elected Government. This has been exemplified by the recent melt-down regarding Australia’s online taxation services, which blacked out just days into the new financial year.

IT consultants blamed for outage of Australian tax systems

In a tweet, the Australian Taxation Office (ATO) said some of its online services were “currently unavailable or experiencing slowness” via myGov, the federal government's online service portal. The portal had been touted as a secure way to access government services digitally with one login and one password, but the outage constituted the second in two months, after early June also saw online services become unavailable to citizens.

At the same time, the Department of Human Services also saw its systems hit by the outage. The Department insisted that people should wait until systems are fully restored before attempting to use its online services unless it is for urgent business. This led to the office having to extend its deadline for Centrelink income reporting.

A Human Services spokesperson explained, "While we've seen significant improvements in our services, if you don't have urgent business, we encourage you to wait until services are fully restored to complete this to allow those with urgent business to access the services they need.”

Public spending on consultants

The outage has caused the political furore regarding public sector consulting spending to rear its head once more, meanwhile. Shadow Treasurer Jim Chalmers used the “monumental stuff up” to attack the Australian Government’s outsourcing policy, while urging Morrison’s cabinet to “take responsibility” directly so people can lodge their tax returns.

The Labor Party MP argued, "The Government is responsible for this monumental stuff up today with the MyGov portal… It's the fault of the Government, which has been hollowing out the public service and replacing people with contractors and consultants; paying more for those contractors and consultants and getting worse outcomes for it.”

The outages comes as the latest in a long line of ATO IT failures. The tax office spent 12 months dealing with IT issues that started in late 2016, including "one-of-a-kind" SAN outages. The department claimed the issues had been fixed only for more service disruptions to occur, forcing the government to turn its mainframe off and switch it back on again in July 2017 when a disruption occurred five days into the new financial year. The department since issued promises of "smooth operating" IT, as well as the assurance of a more "connected and bulletproof" system than ever before, promises which seem once again to have fallen short.


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