IRD defends cost of consultants and conferences

Inland Revenue has defended spending $100,000 on workshops run by two foreign consultants and sending staff to three overseas Oracle software conferences as debate swirls over its plan to spend up to $1.5 billion revamping its main computer system.

Deputy commissioner Peter Mersi said 150 staff attended the twoday and three-day ‘‘Accelerated Solutions Environment’’ workshops in March and May. An industry critic said the latter course, at WestpacTrust stadium, was run by a charismatic Frenchman from consultancy firm Capgemini and questioned its value for money.

Mersi said between two and four officials had attended Oracle ‘‘Openworld’’ conferences in 2009, 2010 and 2011 in the United States, with Inland Revenue picking up the travel, accommodation and registration costs.

Inland Revenue shelved a project to replace its student loans system with Oracle software in 2010 after spending $21m on the work, but is still understood to be considering becoming the first tax authority in the world to implement Oracle’s Enterprise Tax Suite across its operations, to replace its ageing mainframe-based tax system, First. Commissioner Robert Russell told a select committee in 2010 that the Oracle purchase would be ‘‘breaking new ground’’.

Inland Revenue said in a briefing to Revenue Minister Peter Dunne in February that it expected replacing First would cost between $1b and $1.5b. It has selected Capgemini to provide advice but has refused to reveal the value of the consultancy contract. Xero founder Rod Drury told Internal Affairs Minister Chris Tremain at an industry meeting this month that the decision to hire overseas consultants for the job ‘‘really hurts’’.

Mersi said the Openworld conferences were an opportunity for its officials to ‘‘discuss information technology applications in a context of organisational change’’.

The benefit of the workshops was ‘‘helping Inland Revenue to construct its transformation programme ensuring that it has developed ways of future-proofing Inland Revenue’s current operating approach so that it remains fit for purpose for the ongoing collection of revenue and disbursement of entitlements in the order of $55b’’.

Chief executive of industry body NZICT Candace Kinser said Capgemini had a good reputation and the workshops and trips might be justifiable. ‘‘Getting Inland Revenue people exposed to technologies and what is going on outside Wellington is beneficial.’’

However, NZICT was concerned by the forecast $1b to $1.5b price tag for replacing First, she said. ‘‘There hasn’t been a lot of good information from within Inland Revenue.’’

Oracle chief executive Larry Ellison revealed on Thursday that he would use some of his US$36b fortune to buy 98 per cent of the 365-square kilometre Hawaiian island of Lanai. Kinser said she did not believe that would jar with the public if it came to judging public sector spending with the company in a time of austerity.