Hockey flags billion-dollar Centrelink mainframe replacement

The federal government has "no choice" but to modernise the critical systems underpinning Centrelink's 30-year old mainframe, despite the likelihood of the project costing in excess of a billion dollars, Treasurer Joe Hockey said today. 

Treasurer Joe Hockey

Hockey, who served as Human Services Minister in the Howard Government, was quizzed about whether the Government could afford the expense of upgrading the ageing IT infrastructure this morning by 3AW radio’s Neil Mitchell.

“We have to do it,” he answered. “The question is how we will do it and how we will ensure that we improve service delivery into the future.”

He did not offer any indication of if and when a funding commitment might be forthcoming.

Centrelink's Model 204 database management system was set up in 1983 and is currently licensed to the agency by Computer Corporation of America (CCA) under a ten year, $98.5 million contract.

Hockey said the system, which supports Centrelink’s core Income Support Integrated System (ISIS), is “ageing and it is in bad shape”.

“My overwhelming concern is that it is inhibiting the capacity of the government, to some degree, to roll out policy that properly addresses problems in the economy and in the budget.

“Centrelink and the Pentagon in the US are the only two customers in the world of this one company that maintains the Centrelink mainframe, which is extraordinary."

iTnews understands the Treasuer’s billion-dollar price tag is more or less in keeping with departmental estimates of the cost of the project, which some anticipate would reach slightly over $1 billion.

The debate over what to do about Model 204 has raged within the public service for many years, and is centred around the complexities involved with the upgrade and the vast volumes of code that underpin the dozens of welfare programs the system supports.

Last November, Human Services CIO Gary Sterrenberg told iTnews he was well aware of the problems, but was in no rush to migrate off a system he called a “soldier”.

Eventually, he said, DHS would have to reassess what was available on the market but would not rule out moving to a newer version on Model 204 if CCA was to offer it.

Sources suggest DHS is acutely aware of the potentially lengthy period of time any replacement would take, and the need to start early.

Small scale migrations of peripheral systems to ISIS onto SAP are understood to already be taking place within DHS.

The complexity involved in such a task is also overwhelming – similar to changing the engines on a plane while it is still flying, according to one insider – and would almost certainly result in disruptions to welfare services.

The Department of Human Services declined to comment.