Centrelink IT system replacement gets government go-ahead

Multi-year project will cost $1 billion

The federal government has confirmed that it will replace Centrelink's welfare payments system, which dates back to 1983, with a new platform at a cost of $1 billion.

Minister for Social Services Scott Morrison today announced the long-term investment will allow the government to properly address the challenges facing Australia’s welfare system and reduce the costs of administering the system for taxpayers.

"This 30-year-old system consisting of 30 million lines of code and undertaking more than 50 million daily transactions is responsible for delivering around $100 billion in payments to 7.3 million people every year,” said Morrison.

Treasurer Joe Hockey last year said that Centrelink's mainframe-based platform needed replacing and will cost Australia “billions".

“The mainframe for Centrelink, which provides services to millions of Australians is ageing and in bad shape. Centrelink and the Pentagon in the United States are the only two customers in the world of this one company that maintains the Centrelink mainframe, which is extraordinary,” Hockey told Neil Mitchell of 3AW.

Investing in a new system will boost efficiencies and help advance welfare reforms, Morrison said today.

"You can't fix the system if you can't change the engine which drives the system and makes it work. The efficiencies it creates will also mean the new system will pay for itself over time.”

Minister for Human Services, Marise Payne, said that the project will be carried out in multiple tranches, with customers beginning to see benefits of the upgrade at the end of 2016.

“The 1980s technology propping up the current system was built for an era of paper records. It is costly to maintain and incapable of taking full advantage of the digital age. Much of the complexity people associate with claiming government assistance is a result of the red tape created by the ageing system.”

An advisory group comprised of leaders from the public and private sectors will be established to oversee the early stages of the project, followed by engagement with IT industry partners.

Follow Hamish Barwick on Twitter: @HamishBarwick

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