CPA Australia says the decision to bin the Modernising Business Registers Program leaves Australia trailing global best practice.
Business registers ‘unfit for purpose without reform’
A decision to bin the Modernising Business Registers Program due to cost overruns leaves Australia with a system that is unfit for purpose and overdue for reform, CPA Australia says.
Senior manager business and investment policy Gavan Ord said the body had been a strong proponent of the MBR and was disappointed the government had cancelled the project due to “unacceptable” cost blow-outs.
He said the ASIC company registry provided basic information but search fees were an “unnecessary barrier” to access and out of step with countries such as the US, UK and New Zealand.
“Business registers are a fundamental part of Australia’s economic infrastructure and unfortunately ours aren’t fit for purpose,” he said.
“Although the possibility of transformational change is now off the table, reform to Australia’s business registers remains essential.”
The government said yesterday it would halt the MBR project after an independent review found it would cost five times the original estimate of $480 million and run five years over the deadline.
The review, led by Better as Usual founder Damon Rees, found that the program would require an additional $1.8-$2.2 billion, increasing the total cost to $2.8 billion. It concluded the MBR program should be stopped as its economic benefits “did not justify the level of additional expenditure required”.
“It is recognised that it can be difficult to cease a program with significant sunk expenditure and limited useable outcomes to date. However, this review concludes that this is the responsible and best available option for government,” the final report said.
It also identified significant timeline blowouts with the first significant deliverable under the MBR program not expected until March 2026 and closure not until November 2029.
The MBR program began in 2019 to transform company, business and professional registry services of the government and was initially due to be completed this financial year. The Director ID system typified some of the issues facing the MBR after it was forced to extend compliance deadlines and half a million directors still failed to sign up.
The report found some progress had been made – including the Australian Business Registry Services website and Director IDs – but only limited analysis on what was required to transfer the Core Business Registers, professional registers and historical registries. Most of the delivery, costs and risks still lay ahead.
Assistant Treasurer Stephen Jones said the overarching conclusion of the review, announced in February, was that “bigger is not better”.
“The temptation to load programs up with greater scope than necessary reduces the likelihood of success,” he said. “The Albanese Government will look to apply the lessons from the MBR review to other digital and IT projects, including future projects,” said Mr Jones.
Mr Jones said the government remained committed to making it easy for businesses to register their details and would prioritise the stabilisation of existing registers.
“Business-as-usual registry operations will continue under the ASIC Director ID,” he said. “The government will consider options to uplift registries following further analysis.”
The review recommended that the government revert back to the previous operating model for registry services and undertake an additional targeted investment of approximately $105 million to improve data integrity and quality.
This would come on top of the cost of ceasing the program to take total additional spending to about $515 million.
“While the review recognises that this approach will have its own challenges – particularly the need to support the rebuild of capability within ASIC – the prospect of delivering some of the key economic benefits of the MBR program at substantially lower cost means that it is by some distance the best of the options for the program,” the final report said.
CPA Australia questioned whether the funding allocated to ASIC would be sufficient and said business deserved better than “patches”.
“Fundamental reforms like free searches, better user interface and more robust data integrity must continue,” Mr Ord said.
“Australia can’t afford to keep patching over the problems with our registry services. Australian businesses deserve better.”