Up to 20 per cent of jobs within the Information Technology Services (ITS) business unit of the Australian Taxation Office (ATO) will be slashed due to a combination of ongoing outsourcing costs and reduced funding across the ATO, due to the end of the introductory phase of the Goods and Services Tax (GST).
The impact of these cuts will affect the ITS' ability to implement changes to the electronic lodgement processes of the Business Activity Statement (BAS).
Computerworld has learnt that due to staff cuts and a lack of funding, the modification of in-house systems to facilitate electronic BAS changes may not go ahead.
Computerworld has also been told that while the official ATO reason for the staff cut is that it's due to a reduction of funding as the department moves out of the previous, and first GST, tax year, the ATO has been forced to prepare to cut staff because it does not have enough money to pay for its IT outsourcing agreement with EDS.
The Federal Government announced in March 1999 that EDS had secured a five-year contract worth more than $400 million for the provision of: more than 900Mips of mainframe capacity; distributed and desktop operations including some 18,000 desktop computers; about 500 file servers and 1200 printers; around 1.7Tbytes of DASD; support services and voice and data telecommunications services.
The outsourcing contract does not include applications development, IT&T security policy, or strategic planning.
The handover of the ATO's infrastructure to EDS occurred on July 1, 1999. At the time, Finance Minister John Fahey said: "Over a five-year term, this outsourcing contract will deliver savings in the order of $100 million."
An ATO spokesperson has put the number of staff to be redeployed or retrenched across the ATO at 400; however, sources claim this figure is closer to 1500.
Within the ITS, one of the business units to be hardest hit by cuts, 46 contractors on the books with salaries between $200,000 to $300,000 will be reduced to 13. The contractors are mainly programmers and a few business managers.
A spokesperson for the ATO said that due to the introduction of the GST, the department received more resources to cope with the changes and staff knew that reduced funding would occur after this period.