An update on the Australian Standard Business Reporting (SBR) Program
A few different documents and reports recently published by the Australian Government offer a wealth of information on the origin and history of the SBR program, on its current status, on its impact on the Australian business environment so far and on its future perspectives.
The Productivity Commission Report
On May 15, 2012 the Productivity Commission of the Australian Government — an independent research and advisory body on a range of economic, social and environmental issues — published a research report titled “Impacts of the Council of Australian Governments (COAG) Reforms: Business Regulations and Vocational Education and Training (VET)”. The SBR program is covered in this report because it is part of the “seamless national economy” reform stream in the current COAG reforms agenda.
Here are the key highlights on SBR from Chapter 6 of the report:
- In 2008, COAG agreed to support the standard business reporting (SBR) program as a mechanism to reduce the burden on business of reporting to government.
- SBR includes standardization of terms, removal of duplicate information requests, and a single online secure sign-on for participating government agencies.
- It has been operational since July 2010. Its development has cost the Australian Government approximately $170 million.
- To date, the take up rate of SBR by business has been very low. The benefits being achieved are small relative to the potential available.
- Greater commitment from participating government agencies could substantially improve the take up rate of SBR and the realization of benefits. In this regard:
- The Australian Taxation Office (ATO) has recently committed to adopt SBR technology across the reports lodged to the ATO by June 2015; and
- The Australian Securities and Investments Commission (ASIC) has also signaled its intention to expand the capabilities of its SBR platform, although no funding has been committed.
- Based on earlier business case analysis of SBR and consultations conducted during this study, the Commission assesses the potential benefits from the uptake of SBR are substantial — estimated to be in the order of $500 million per year.
- Further benefits may also be available from the wider application of SBR methodologies for reporting to government and in business reporting.
- However, wider applications by government should be subject to cost-benefit analysis.
The conclusions of the Productivity Commission are basically that while the benefits of SBR have so far been low and only a fraction of those envisioned in the original business case, this is primarily due to low take-up. The key reasons identified in the report are:
- The incomplete bundle of SBR-enabled forms made available so far – meaning that only a part of the total number of forms for each agency has been converted to SBR, while the rest can only be filed through the pre-existing filing channels, limiting the incentive for businesses and software developers to move away from reporting environments considered familiar, complete and fit for the purpose;
- The “tentative” marketing by participating agencies;
- The fact that in a fast changing regulatory environment a voluntary program is not a priority for any of the parties involved – Government, software developers and businesses.
This is why the fact that the ATO has announced its commitment to migrate all of its forms to SBR and the intention of ASIC to expand its SBR capabilities are quoted in the report as a key factor for an increased SBR take-up in the near future.
Another development that will significantly impact SBR take-up is the use of SBR as the platform for the development of the data standards and messages for use by the Superannuation industry for both data sharing within the industry and reporting to government.
SBR and the Stronger Super Reform
On 21 September 2011 the Assistant Treasurer Bill Shorten announced the Government’s Stronger Super measures. A key enabler for these measures is a series of initiatives called SuperStream, which includes the development and adoption of industry wide data and e-Commerce standards. SBR will be used as the platform for the development of the data standards and messages for use by the superannuation industry for both data sharing within the industry and reporting to government.
It is estimated that the Australian superannuation system processes more than 100 million transactions per year, at a cost of over $3.5 billion. This gives an idea of the significance of this development and its potential impact on the scope and take-up of SBR.
This also represents a major enhancement to the current design of SBR. For the first time SBR standards will be applied to the business-to-business environment as SBR-compatible XBRL taxonomies for superannuation Rollovers and Contributions are made available for use by the superannuation industry.
Another important aspect of the announcement is that the message standards will be mandated for use in superannuation transactions and reporting to government. The timeline surrounding this mandate is:
- Early 2012: Data standards published and available for use by funds (voluntary uptake).
- July 2013: Data standards and use of e-commerce becomes mandatory for APRA-regulated funds and SMSFs for processing rollovers and accepting contributions (provided by employers in the new format).
- July 2014: Data standards and use of e-commerce becomes mandatory for large and medium employers making contributions.
- July 2015: Proposed application of data standards and use of e-commerce to small employers subject to further consultation on impacts.
Some significant implications of this reform for the SBR Program include:
- SBR standards will be the basis for business to business messaging, extending the use of SBR standards beyond the current business-to-government framework;
- An increase in the number of forms in scope;
- The SBR architecture may need to be extended to include additional requirements to support SuperStream.
More information about the Stronger Super Reform can be found here and here.
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Gianluca,
Thanks for sharing this, we have been watching the developments of SBR as a major step in reducing complexity and compliance burdens to businesses. The other side of this coin is tracking and reporting government spending using standardized data (like the US DATA ACT). It seems that when you add up both of these, there is a huge benefit to al parties — government, businesses, and the public at large.
Tom Hood, CPA, CITP, CGMA