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House of Assembly - Fifty-First Parliament, Third Session (51-3)
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Answers to Questions

RISTEC TAXATION SYSTEM

62 Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (30 September 2008). How much has been budgeted and spent on capital works for the RISTEC taxation revenue management system in each year of its operation?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations): The budgeted and actual expenditure for the taxation revenue management system project is listed in the table below. Consistent with the budget papers, the table breaks expenditure into investing and operating expenditure as required by accounting standards.

BUDGET ACTUALNote: Due to the procurement timeframe extensions, yearly comparisons between budget and actuals is misleading.
Capital($m) Operating($m) Total($m) Capital($m) Operating($m) Total($m)
2002-03 1.10 0.00 1.10 0.39 0.39 0.78
2003-04 7.00 0.00 7.00 0.87 0.41 1.28
2004-05 2.70 0.68 3.38 1.01 0.64 1.65
2005-06 8.60 1.27 9.87 0.00 1.23 1.23
2006-07 1.32 1.30 2.62 0.00 1.18 1.18
2007-08 7.31 1.75 9.06 0.00 1.32 1.32


During the earlier stages an initial extension of the RISTEC timeframe was associated with ensuring a sound procurement strategy for sourcing a replacement tax system. It involved significant market analysis:

Following appointment of the Project Director in September 2003, investigation of the technology strategies adopted by other Australian tax offices indicated opportunities to reduce the risks associated with a project of this size and complexity.

To take advantage of these opportunities time not included in the initial proposal needed to be allocated for detailed investigation and consideration.

The investigation included assessment of interstate projects similar to RISTEC that were already underway at the time. It was important to allow time for these projects to progress to the point where they could deliver, and where their deliverables could be assessed. This time also allowed the project team to investigate the lessons learnt during the interstate projects and devise strategies to mitigate those that presented risks.

During the procurement process a second extension occurred:

To ensure the procurement resulted in a highly reliable cost and timeframe estimate for implementation, it was necessary to develop an extensive set of business requirements for the Request for Proposal (RFP). The end result was approximately 250 functional requirements, each with multiple sub-requirements. It took 10 months to prepare the requirements and obtain all necessary approvals before going to market.

Due to the size and complexity of the responses to the RFP, it took 10 months to complete a thorough evaluation of the proposed solutions.

The negotiation stage took a further 14 months, which involved negotiating with multiple bidders and using the competitive environment to achieve the best outcome possible for the state.

During the market analysis and procurement periods three independent reviews were undertaken to assess the validity of the direction being taken. All reviews confirmed that the direction was appropriate.

The additional procurement time has been successfully used to:

identify and procure a technology solution that offers significant benefits to the State in terms of additional revenue and reduced operational costs; and

secure contracts that provide a high degree of certainty in regard to the cost and time to complete the implementation of the new tax system.

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