The federal government has abandoned its ambitious plan to modernise the business registry system, which was expected to cost $2.3 billion and take four years to complete. The project, which aimed to consolidate 35 different registries into one platform and improve the user experience for businesses, was plagued by technical challenges, governance issues, and stakeholder resistance.
A vision for a simpler and faster business registry
The project was initiated in 2019, when the government announced its intention to create a single business registry service that would allow businesses to register, update, and maintain their information in one place. The service would also provide access to data and insights on the Australian business sector, and enable better coordination and collaboration among regulators.
The project was led by the Australian Securities and Investments Commission (ASIC), which was responsible for 31 of the 35 registries, including the Australian Business Register (ABR) and the Business Names Register. The other four registries were managed by the Australian Taxation Office (ATO), the Australian Charities and Not-for-profits Commission (ACNC), the National Industrial Chemicals Notification and Assessment Scheme (NICNAS), and the Australian Financial Security Authority (AFSA).
The government awarded a $1 billion contract to PwC Australia and its technology partner, Infosys, to design, build, and operate the new platform. The contract was based on a pay-per-use model, where the government would only pay for the services delivered by the vendor. The contract also included incentives for meeting performance targets and penalties for failing to do so.
The project was expected to deliver significant benefits for businesses, regulators, and the economy. According to a 2019 report by Deloitte Access Economics, the project would save businesses $300 million per year in compliance costs, reduce duplication and errors, increase data quality and security, and support innovation and growth.
A series of setbacks and challenges
However, the project soon encountered a series of setbacks and challenges that derailed its progress and increased its costs. Some of the major issues were:
- Technical complexity: The project involved migrating and integrating data from multiple legacy systems, some of which were decades old and incompatible with each other. The project also required developing new functionalities and features, such as digital identity verification, electronic signatures, and data analytics. The project team faced difficulties in testing, debugging, and deploying the new platform, resulting in delays and defects.
- Governance problems: The project lacked clear leadership and accountability from the government side. ASIC was nominally in charge of the project, but it did not have sufficient authority or resources to manage it effectively. The project also suffered from poor communication and coordination among the various stakeholders, including Treasury, ATO, ACNC, NICNAS, AFSA, PwC, Infosys, and other external consultants. The project governance structure was complex and cumbersome, with multiple layers of oversight and reporting.
- Stakeholder resistance: The project faced opposition from some of the existing registry operators, who feared losing control over their data and processes. ATO was particularly reluctant to share its data with ASIC, citing privacy and security concerns. ATO also had different priorities and timelines than ASIC, which created conflicts and delays. Some of the registry operators also had vested interests in maintaining their own systems and revenue streams.
- COVID-19 pandemic: The outbreak of the COVID-19 pandemic in 2020 added further pressure on the project team, as they had to adapt to remote working conditions and changing user needs. The pandemic also diverted attention and resources from the project to more urgent matters, such as providing economic relief and support to businesses affected by the crisis.
A decision to terminate the contract
In August 2023, after four years of work and spending $1.5 billion on the project, the government decided to terminate its contract with PwC and Infosys. The decision was based on a review by Ernst & Young (EY), which found that the project was unlikely to meet its objectives or deliver value for money.
According to EY’s report, the project had achieved only 10% of its functionality targets, while its costs had ballooned to $2.3 billion – more than double the original estimate. The report also highlighted several risks and issues that threatened the viability of the project, such as:
- Low user adoption: The report found that only 15% of businesses had registered or updated their information on the new platform since its launch in July 2022. The report attributed this to poor user experience design, lack of awareness, and lack of trust in the new system.
- High operational costs: The report estimated that the ongoing operational costs of the new platform would be $150 million per year – three times higher than the current costs of running the existing registries. The report attributed this to high vendor fees, complex system architecture, and frequent maintenance and support requirements.
- Low data quality: The report found that the data quality of the new platform was poor, with high rates of errors, inconsistencies, and duplicates. The report attributed this to inadequate data migration, validation, and cleansing processes.
- High security risks: The report found that the new platform was vulnerable to cyberattacks, fraud, and identity theft. The report attributed this to weak security controls, lack of encryption, and lack of compliance with privacy laws.
The report concluded that the project was not feasible or sustainable, and recommended that the government terminate the contract and explore alternative options for improving the business registry system.
A response from the government and the vendors
The government accepted EY’s recommendation and announced its decision to scrap the project on 31 August 2023. Assistant Treasurer and Minister for Financial Services Stephen Jones said that the government was “disappointed” by the outcome of the project, but it was “the right thing to do” to protect taxpayers’ money and businesses’ interests.
He said that the government would work with ASIC and other stakeholders to ensure a smooth transition back to the existing registries, and to provide continuity of service to businesses. He also said that the government would pursue legal action against PwC and Infosys to recover some of the costs incurred by the project.
PwC and Infosys issued a joint statement expressing their “surprise” and “regret” over the government’s decision. They said that they had delivered a “world-class” platform that met all the contractual requirements and performance standards. They also said that they had invested significant time, money, and resources into the project, and that they would defend their reputation and interests in court.
