The transformation programme sought to reduce customer effort and cost, improve compliance levels, make policy changes faster and more cost-effectively, improve systems resilience and make IR more efficient.
The capabilities delivered are reducing effort for customers, enabling them to do far more for themselves, and providing them with certainty sooner. Third parties are playing a much greater role in the tax and social policy system, and we are increasingly partnering with others to deliver services.
In just over 5 years, IR successfully transformed the tax and social policy system. From 2017 to 2021, we progressively moved products to new systems and processes and significantly improved the services available to customers. As products were moved, policy changes were made at the same time to help simplify things for customers and improve how we administer the tax and social policy system. The programme was delivered on time, under budget and has achieved the intended outcomes, with improvements delivered across all the indicators we use to track progress.
Read more about the results in our 2022 Annual Report and at:
We also share lessons at the close-out of our transformation at:
While the transformation programme closed on 30 June 2022, we committed to continuing to track and report against its benefit commitments until 2023–24. This is the final year of reporting against these commitments.
We deliberately set ourselves aspirational targets in return for the investment made in transformation. We did not achieve all the benefits we set out to. However, improvements were delivered across all benefit measures. We recognise there is more work to do to reduce effort for smaller businesses and we are continuing to focus on making it easier for businesses.
We achieved 7 out of the 10 quantitative indicators in this final year of reporting. The measures achieved relate to digital uptake, system availability, system resilience, additional Crown revenue and administrative savings. Digital uptake is well above target at 99% and a significant contributor to agility, our systems are highly resilient and available 99.9% of the time, we have delivered more than $500 million in administrative savings and achieved the increases in Crown revenue we committed to.
- The percentage of customers who find it easy to comply increased to 84% in 2023–24. This measure remained relatively stable during the period from 2016–17 to 2021–22 when changes resulting from the transformation programme were being implemented. It has now returned to the level it was at in the 2015–16 year, the last full year before transformation began. We always expected that customers would take time to become familiar with the changes made.
- Results from our 2024 survey of SMEs show the target reduction in compliance effort was not achieved. SMEs reported saving 4 hours compared to a target of 18 hours. The value of the time saved by SMEs was also behind target. SMEs say the things that make it hard for them include keeping up with changes to the tax and social policy system, getting timely responses to queries, meeting filing and information requirements and increased costs for professional advice and software.
The transformation programme closed on 30 June 2022, and we committed to continuing to track and report against its benefit commitments until 2023–24. This is the final year of reporting against these commitments.
Transformation programme outcome indicators
| Indicator | 2022–23 | 2023–24 target | 2023–24 actual |
|---|---|---|---|
| Easier for customers | |||
| Digital uptake by customers | 99% | 85% | 99% (achieved) |
| Customers who find it easy to comply | 82% | 90% | 84% (not achieved) |
| Reduction in compliance time for SME customers | 0 hours indicative1 | 18 hours | 4 hours (not achieved) |
| System availability for customer facing e-channels | 99.6% | 99.5% | 99.9% (achieved) |
| Customer outcomes from information sharing and security of information | Read the case study here and information here. | ||
| Cumulative reduction in compliance costs for SME customers | $500 million indicative1 | $1,330 million | $650 million (not achieved)2 |
| Cumulative additional Crown revenue to the Government3 | Target achieved3 | $2,880 million | Target achieved |
| Reduced time and cost to implement policy | |||
| Reduction in the time and cost to implement policy | Read a case study on implementing FamilyBoost below. | ||
| Increased revenue system resilience as assessed by IR | High | High | High (achieved) |
| IR is more efficient | |||
| Digital uptake by customers | 99% | 85% | 99% (achieved) |
| Annual reduction in our administration costs | $110 million | $100 million | $100 million (achieved) |
| Cumulative reduction in our administration costs | $419 million | $495 million | $519 million (achieved) |
1The 2020–21 SME compliance cost survey has been used as an indicative result. Note the result has been updated to reflect corrections for 2 errors: incorrect filing frequencies for some respondents and the treatment of partial responses where no time estimates were provided that were incorrectly included as 0 rather than being excluded.
2The value of the time saved is calculated using the number of SMEs and hours saved multiplied by the percentage of customers filing returns electronically and the dollar value of an hour spent by SMEs on tax. The number of SMEs, hours saved and the value of an hour are obtained from SME compliance cost survey results.
3Achievement of additional Crown revenue is measured through case studies and proxy measures given the difficulty of direct attribution .
Performance indicator: target achieved
The Coalition Government committed to implement a new FamilyBoost payment by 1 July 2024. The timeframe was tight, with FamilyBoost to be delivered at the same time as other significant changes to personal tax thresholds and other tax credits. We needed to identify feasible system and process options that could be delivered within the timeframe, and what trade-offs would be required to the preferred policy and process settings to make this happen.
Options were prepared for Ministers’ direction, building off standard design patterns and principles, established tax administration settings and reusing existing technology from similar products, namely Working for Families Tax Credits and donation tax credits. The design was kept as simple as possible with a focus on reusing existing data and working within existing business models as much as possible, whether within IR or the private sector. These approaches meant we could deliver a solution quickly. While the customer experience will not be as smooth and low effort as desired, we will improve it over time.
Because FamilyBoost was developed as part of Budget 2024, there was limited ability to consult with customers early in the process, requiring reliance on our knowledge and understanding of customer behaviour and preferences, and the understanding of the early childhood education (ECE) sector by the Ministry of Education. Experience with policy frameworks for the design of family-based payments was used.
On 25 March 2024 the Government announced it was introducing FamilyBoost. The design quickly shifted to testing with ECE service providers and software vendors that supply invoicing technology. This ran alongside a communication and public education plan. Policy settings were finalised and legislation was drafted in May 2024, introduced on 30 May and enacted on 4 June 2024, with payment eligibility commencing from 1 July 2024. People are able to claim at the end of each quarter so the first payments are expected to be issued in October 2024.
Customer outcomes from information-sharing and security of information
Performance indicator: target achieved
Read about our information sharing case studies here: