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  • 2 Our performance

    Administration expenditure

    GST administration expenditure is calculated by applying the ATO’s strategic costing framework (SCF). This is a cost attribution model consistent with the Australian Government’s accrual-based outcomes and programs costing framework. It calculates the proportion of our total operating expenses that relate to GST administration activities on a full cost basis. The cost drivers are monitored monthly and are subject to review by the ATO Chief Finance Officer, the ATO GST Product Committee chaired by the Deputy Commissioner of Indirect Tax, and other ATO senior executives. The costs of administering GST are subject to an annual independent audit by the ANAO.

    In May 2015, we commenced a review of the SCF and engaged The Synergy Group to assist us with considering alternative costing options with improved automated data processes. The new model will increase the level of precision, efficiency and timeliness of our administration of the GST and will be run in parallel during 2015–16.

    Testing of the new SCF model and methodology is currently underway using 2015–16 annualised costs. Outputs of the new SCF will be examined against the current SCF model, with a view to refine and mature the model across 2016–17. Some unexpected and clearly incorrect results in calculating and allocating GST Administration costs using the new SCF model were discovered in early 2016 and investigations are continuing to determine the cause. The ATO therefore had no choice but to continue to base the actual 2015–16 GST administration costs on the schedule B estimates, while the new SCF model is being developed, tested and proven to be reasonable. The 2015–16 scheduled B estimates were established using sound methodology and annually reviewed by the ANAO. The new SCF model may be used to revise the schedule B estimates for 2017–18 GST administration costs. This will be dependent on the outcomes of testing and maturity of the new model during 2016–17. Costs for 2015–16 aligned to our reinvention program, where we invested in technology and digital services, as well as impacts following finalisation of the Organisational Realignment Program. The full costs produced for 2015–16 will still be subject to review under the ANAOs Special Purpose Audit of GST administration costs.

    In 2015–16, the GST Voluntary Compliance Program represented an additional $98.1 million in funding.

    Figure 3: Comparison of GST administration costs

    Figure 3 – Comparison of GST administration costs This graph shows a trend over time for the full year GST administration costs by financial year from 2009–10 to the current 2015–16 year. A second line also shows what the GST administration costs would have been for the period 2010–11 to 2015–16 without the additional funding provided in the Budget measure GST Voluntary Compliance Program.

      Last modified: 20 Apr 2017QC 51810