New Zealand IRD system may inspire immigration upgrade

As reported by Stuff, the Inland Revenue has warned the New Zealand government of a billion-dollar fee to replace its declining First mainframe computer system. As part of a briefing to Revenue Minister Peter Dunne, the Inland Revenue calculated the approximate cost at between $1 - $1.5 billion, saying the project could not be delayed.

It is not yet clear how much of the money would go to outside suppliers and how much would be used internally by Inland Revenue. The First system was established at a cost of $201 million in 1991, so replacing it would be by far the most ambitious information technology project funded by the public sector, overshadowing the failed $100 million police Incis and similar-sized projects now looking to replace "legacy" systems at Customs and Immigration in New Zealand.

Though it may be seen as a hefty IT bill, Dunne said it was no surprise considering the enormity of the task at hand and the bigger scope of Inland Revenue's tasks. The “spaghetti-like” First program was commissioned during a time when Microsoft was just a start-up and the Internet did not exist, said Inland Revenue.

The system underpins KiwiSaver, Working for Families and the management of child support and student loans payments, along with managing the nation’s tax system. The computer system has an effect on virtually everyone in New Zealand. The department has cautioned that until work was underway to replace First, it would have limited ability to effect reforms to the tax system and other services related to it.