For New Zealand businesses and Government agencies to fully reap the potential benefits of SBR (Standard Business Reporting), sufficient money needs to be set aside in the Budget to ensure that the programme is fully operational by 2011 when Australia goes live with its SBR programme.
SBR aims to cut compliance costs for business by reducing the need to file the same financial information to multiple agencies, minimising duplicated and unnecessary data and automating the preparation and filing of statutory returns required to be filed with the SBR agencies – the Ministry of Economic Development, Inland Revenue, Statistics New Zealand and ACC.
The key ingredient that makes all this happen is XBRL (eXtensible Business Reporting Language) which, after some 10 years in the wilderness has at last gained some traction around the world – particularly with the Securities and Exchange Commission in the US.
Local studies carried out in 2008 suggested that if New Zealand spent between $18 million and $28 million on the SBR programme over the next three years, the estimated annual cost savings to business would be in the order of $55 million to $75 million per year once completed.
Australia is already a step ahead. Their Government has committed $230 million over a three year period to the programme, with anticipated cost reductions for business of up to $836 million per year from 2013.
It was disappointing last year when the New Zealand Government, in what was a very tough fiscal environment, determined that the scale of investment required to complete the SBR solution was simply not feasible and that a more modest, but targeted approach, was necessary. The result was $4 million to develop systems and taxonomy to harmonise and validate the processing of GST returns and eliminate GST data from statistics surveys.
We need to do better. When you consider the relatively small amount that needs to be put aside in the Budget to ensure that SBR is up and running against the size of the benefits that will accrue, then it is a very positive and quick return on investment.
It also needs to be taken in context with the other Government promises in last year’s Budget, in particular the $2.5 billion a year on ICT (information, communications and technology), an amount of spending that utterly overwhelms any section of the private sector.
The Government’s commitment in this area should be applauded, including the $1.5 billion on ultrafast broadband. However, only making $4 million available for SBR in comparison with these other levels of spend fails to recognise the enormous potential of SBR to boost productivity in both the public and private sector.
The Australians believe that an efficient and effective electronic business-to-government connection is essential for their future and have invested appropriately to ensure this will happen. We need to make sure we do likewise and the upcoming Budget is the perfect opportunity.