Cost blowout sees government scrap business registers program

Assistant Treasurer Stephen Jones announced today that the Albanese government will stop the Modernising Business Registers (MBR) program after an independent review found the program would take a further five years to deliver the full benefits.

The review, led by Better as Usual founder Damon Rees, found that the program would require additional investment between $1.8 billion and $2.2 billion, increasing the total cost of the program to $2.8 billion, more than five times the original estimate.

The review concluded that the MBR program should be stopped as the economic benefits from the program “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 of the review stated.

The final report also identified significant timeline blowouts with the first significant deliverable under the MBR program not expected until March 2026. The MBR Program would then progressively deliver through to March 2029, with final decommissioning and program closure expected in November 2029.

The MBR program was first initiated in 2019 to transform the company, business and professional registry services of the Australian government and was initially projected to be completed by the 2023–24 financial year.

While the report found that some progress has been made in relation to the MBR program, the program is still relatively early in its lifecycle with most of the delivery, costs and risk still ahead.

To date, the underlying legislation supporting the MBR program has been passed, the Commissioner of Taxation has been appointed as the Registrar, the Machinery of Government (MoG) changes progressed, the Australian Business Registry Services website introduced and Director IDs delivered.

Some progress has been made on the new Companies Register but there has been limited analysis on what is required to transfer the Core Business Registers, professional registers and historical registries, the report said.

The Assistant Treasurer said the overarching conclusion of the review was that “bigger is not better”.

“The temptation to load programs up with greater scope than necessary reduces the likelihood of success. 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 remains committed to making it easy for businesses to register their details and will prioritise the stabilisation of existing registers.

“This will deliver greater stability and cyber protection outcomes, providing immediate benefits to Australian businesses,” he said.

“Business as usual registry operations will continue under the Australian Securities and Investments Commission. DirectorID, which is already helping regulators target illegal anti‑phoenixing behaviour, will also be unaffected.”

The independent review also found that additional targeted investments could deliver improvements to the current registries.

“The government will consider options to uplift registries following further analysis,” said Mr Jones.

The final report of the review stated that a decision by the government to case the MBR program will need to be made as quickly as possible in order to limit further expenditure on significant program overheads and expenses.

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 in uplifting data integrity and quality on top of the costs of ceasing the program, with a total additional cost of approximately $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 'disappointed' by move to end MBR program

Commenting on the decision to cease the MBR program, CPA Australia said it was disappointed the program won’t proceed but acknowledged the price tag had blown out unacceptably.

“Although the possibility of transformational change is now off the table, reform to Australia’s business registers remains essential,” said CPA Australia senior manager, business and investment policy Gavan Ord.

“Business registers are a fundamental part of Australia’s economic infrastructure and unfortunately ours aren’t fit for purpose.”

CPA Australia also called on the government to review ASIC’s search fees for its company registers.

“ASIC’s company registry provides basic information that can help businesses determine which companies they work with. We have long maintained that ASIC’s current search fees are an unnecessary barrier to accessing this important information,” said Mr Ord.

“This approach is out of step with other countries such as the US, UK and New Zealand that don’t charge for searches of their company registries.

“Fundamental reforms like free searches, better user interface and more robust data integrity must continue.”