ATO targets $31.9m reduction in IT and analytics outsourcing

The Australian Taxation Office (ATO) will cut back on its technology outsourcing to the tune of $31.9 million this financial year.

The commitment is contained within the ATO’s latest corporate plan, which was launched to employees by commissioner of taxation Rob Heferen.

“In 2024–25, the ATO will reduce outsourcing of core work,” the corporate plan states. 

“Our targets for 2024–25 focus on reduced outsourcing of information technology, service delivery and data analytics work, with an expected reduction of $31.9 million in 2024–25 in outsourcing expenditure.”

Across the federal government, there are efforts to reduce contractor numbers, insource key works and rebuild internal capabilities.

The corporate plan identifies a continuation of existing programs of work within the ATO, particularly around data and analytics, cyber security, and technology and digital services.

The ATO said it would “strengthen [its] data and analytics foundations and capabilities Improve how we manage, use, and share data and analytics, to deliver better services, improve tax performance and reduce administration costs” over the financial year.

It will measure these efforts on the “proportion of pre-filled items accepted without change”, and on the “proportion of data items matched to client identifiers.”

The ATO’s data efforts in recent years have focused on streamlining processes for taxpayers, with as much of the end-of-financial-year documentation as possible being pre-filled from sources such as employment and banking data.

“Enhanced data and improved analytics capability” will also have a role to play in helping the ATO to “better identify the drivers for non-payment and refine our strategies to drive on time payment” of taxes owed.