Contractors brought in to fix major IT issues delaying 9500 SA land tax bills from 2020-21

The state government has hired extra contractors, including staff from Fujitsu, to fix major IT issues delaying about 9500 land tax bills.

About 9500 land tax bills for last financial year are still yet to be issued – and extra contractors have been hired to work through significant IT issues plaguing the system.

The state government has an $18.6m shortfall in land tax revenue because bills for the 2020-21 financial year – the first to include controversial aggregate changes – have not yet been sent to landowners.

Treasurer Rob Lucas confirmed in May that 13,500 assessments had been delayed due to system “complexities”.

In a budget estimates hearing on Wednesday, Mr Lucas revealed extra contractors, including some from Japanese tech giant Fujitsu, had to be hired to fix ongoing IT issues.

A consultant from accounting and professional services firm PwC also had been brought in to provide a “fresh set of eyes as to what the challenges are in terms of trying to solve the system problems that have created this sort of delay”.

Treasurer Rob Lucas revealed 9500 land tax bill are yet to be sent out, and that extra staff had been brought in to sort out ongoing IT issues. Picture: Kelly Barnes/Getty Images

Mr Lucas said as many as 46 staff had been working on processing the bills. This includes 10 reallocated staff from within Revenue SA and the Treasury and Finance Department.

“That does not include, obviously, the additional resources, which I think is only one or two people from Fujitsu,” Mr Lucas said.

Fujitsu supplies some of the computer hardware and software for the IT system. Mr Lucas said the department had used five short-term consultants with IT expertise.

Opposition treasury spokesman Stephen Mullighan asked how much the extra staff had cost the government.

“At the end of the process, we will be happy to account for it in terms of what the cost has been,” Mr Lucas responded.

“But at this stage my instructions … have been that we need to resolve this issue as quickly, as expeditiously, as we can.”

Mr Mullighan said the process was a “debacle”.

“Rob Lucas’s mismanagement of these land tax changes now means the government is having to call in private contractors to help send these bills out at even more taxpayer expense,” he said.

Mr Lucas would not commit to a deadline for issuing the bills but said the process would be “smoother” in future years once the IT issues were fixed.

Opposition treasury spokesman Stephen Mullighan probed the issue in a Budget Estimates Committee hearing on Wednesday. Picture: Matt Loxton

In relation to the $18.6m in missing revenue, Mr Lucas said there was always significant debt yet to be collected in any given year. 

The 2021-22 land tax bills are due to be sent out by early November, possibly leaving property owners with two bills in quick succession. Mr Lucas said “sensible payment arrangements” were available for landlords experiencing cash flow issues.

Controversial reforms that passed parliament in late 2019 mean people who own multiple properties must pay an aggregate rate of land tax on all their holdings, boosting many to the top rate of tax.

Previously, landlords could own numerous properties in separate legal entities and potentially pay land tax at a lower rate.

The move was partially offset by slashing the top rate of tax from 3.7 per cent to 2.4 per cent.

Mr Lucas said landlords who ended up with a larger 2020-21 bill as a result of the reforms, between $2500 and $102,500, could get a 100 per cent rebate.

As part of Covid-19 relief, the rebate for the 2021-22 bills increased from 30 per cent to 70 per cent.

[e-mail]