News
Confidential documents show already delayed aged-care reforms are set back by months due to cost blowouts with a series of contractors and system failures that have been rolling for years. By Jason Koutsoukis.
Exclusive: Landmark aged-care reforms derailed by IT failures
The Albanese government’s overhaul of the IT system underpinning its landmark aged-care reforms is veering off course, plagued by cost blowouts, missed deadlines and growing doubts that key systems will be ready in time.
On June 4, the federal minister for health and ageing, Mark Butler, pushed back the start date for the new Aged Care Act from July 1 to November 1, an implicit admission that the digital infrastructure central to the reform is not yet ready.
Even that revised timeline is now in doubt, with a confidential brief to Butler, seen by The Saturday Paper, warning that the complex digital infrastructure underpinning the new Aged Care Act – including the flagship Government Provider Management System (GPMS) – remains mired in delays.
“The department has worked closely with [the Digital Transformation Agency] and has reached a level of mutual alignment on key issues,” the secretary of the Department of Health, Disability and Ageing, Blair Comley, wrote in the incoming government brief that was prepared following the May 3 election. “The latest assurance advice is that delivery confidence remains medium-low as significant risks in some areas remain. This is not unexpected in a program of reform of this size.”
At the centre of those risks is the GPMS – a Salesforce-based platform designed to replace the 20-year-old National Approved Provider System and act as the “single source of truth” for aged-care provider registration, compliance and oversight.
The 2024-25 federal budget allocated more than $1.4 billion in funding for the aged-care IT uplift that was a key recommendation of the 2021 final report of the Royal Commission into Aged Care Quality and Safety. Nevertheless, industry sources say the full delivery of the new IT system will now likely stretch into April next year, well past the scheduled November start date.
With system complexity, integration challenges and provider readiness yet to be fully resolved, the government’s aged-care reforms risk being undermined not by policy failure but by technology that can’t keep up.
“The Albanese government’s embarrassing backflip on the start date of the reforms was only necessary because they refused to listen to the concerns of the aged-care sector,” opposition health spokeswoman Anne Ruston tells The Saturday Paper. “The government was warned. We put forward a responsible, measured amendment to ensure that their reforms could be rolled out safely and effectively, and Labor opposed it.
“This created months of unnecessary stress and uncertainty for older Australians and the aged-care providers who care for them. Quite frankly, the government did not do the work to ensure their plan could be implemented on time,” says Ruston. “The government must learn from this mistake and work closely with the sector on the support they need to ensure these reforms can be implemented without serious negative consequences for older Australians.”
What was once billed as a streamlined digital transformation is now a sprawling, multi-vendor operation marked by ballooning costs and fragmented accountability, with the GPMS becoming a case study in poor planning, shifting requirements and escalating expenditure.
In February, as the system neared its original go-live date, the federal government quietly shifted from everything being fully operational by July 1 to a phased rollout with only the “critical elements” to be in place within that time.
This change in approach blindsided many providers, some of whom had already invested heavily in upgrading their internal systems in anticipation of a deadline that federal government officials had insisted was firm.
In the meantime, IT contractor costs have surged.
US software firm Salesforce, which began work on the GPMS with a relatively modest $13.5 million contract in 2022, has now inked deals worth more than $41 million, with additional tenders raising its total engagements to about $50 million.
Salesforce’s role in a procurement scandal at the National Disability Insurance Agency – where a $27 million contract later rose to more than $120 million – prompted a Senate inquiry that last year uncovered undisclosed meetings and thousands of dollars in undeclared gifts to NDIA officials.
Despite the controversy, the company has continued to collect new contracts at other agencies, including Veterans’ Affairs and Export Finance Australia.
As part of the Commonwealth’s response to the Senate inquiry, the then secretary of the Department of Finance, Jenny Wilkinson, issued an executive minute calling for stronger gift and benefit disclosure rules across the public service and directing the Digital Transformation Agency to begin analysing disclosures from major ICT suppliers to Commonwealth agencies over a 12-month period from April 1 this year.
Meanwhile, system integration work for the new Aged Care Act, handled by multinational consulting firm Accenture, has proved even more volatile than Salesforce’s contract variations.
Its original 2023 development contract was listed at $18 million but ballooned to $157 million before being hastily corrected this year to $139 million – an adjustment made six months after the work was completed, in what is now one of the largest corrections recorded on the federal government’s AusTender platform.
In parallel, Accenture secured a separate $289 million contract for IT contractor provision across the broader aged-care tech uplift – suggesting the real cost of the GPMS and associated platforms may far exceed headline figures.
French consulting giant Capgemini – another key vendor supporting the Salesforce-based GPMS – has seen its contract double to $73.4 million. US-based Kyndryl, the world’s largest IT infrastructure services provider, which was spun off from IBM in 2021, is also delivering professional services under a contract that has grown from $13 million to $28 million in March.
Indian IT firm Wipro, originally engaged by the department in 2023 on a contract worth less than $6 million, has likewise had its agreement significantly amended and extended, with its total value now reaching more than $29 million.
The digital rollout has also been hampered by a lack of readiness in the sector itself.
In early 2025, the Department of Health and Aged Care commissioned a $500,000 digital transformation impact assessment, led by Canberra consultancy Reason Group, to assess whether providers – especially smaller, rural and Indigenous-focused organisations – were aligned with the GPMS and its new application programming interfaces.
In March this year, the Australian Aged Care Data Landscape Report, a collaboration between the Digital Health Cooperative Research Centre and the CSIRO’s Australian e-Health Research Centre, found the reforms to the sector, though significant, have “not explicitly followed a logical path in terms of the digital journey”.
Minister for Aged Care and Seniors Sam Rae says the upgrades of the digital systems are to ensure they are “fit-for-purpose for many years to come”.
“The start of the new Aged Care Act has been deferred from 1 July to 1 November, allowing more time for key operational, digital and legislative pieces to be finalised before the rollout starts,” Rae tells The Saturday Paper.
“We are also working closely with the Aged Care Transition Taskforce to support the sector’s digital readiness and manage issues as they arise. The government has established rules and governance processes in place to manage risk and ensure value for taxpayer money.”
According to a department spokesperson, “The Government Provider Management System is live and operational and can be used by Aged Care Providers to access and report information to government.
“Incoming government briefs are point-in-time documents and reflect the state of affairs at the time. GPMS is one of the critical systems in the overall digital solution supporting the Aged Care Act 2024 and Support at Home program is included in the DTA independent assurance.”
Still, with key vendor contracts in flux and more work to do on critical components such as the Business to Government (B2G) Gateway – designed to enable real-time data exchange between providers and government – fears are mounting that November 1 will be just another soft deadline, rather than a turning point for Australia’s aged-care system.
Long before the Albanese government delayed the start of the new Aged Care Act, internal warnings about the fragility of its digital foundations had already begun to accumulate.
Two “gateway reviews” – internal assurance processes used to assess the progress of major projects – painted a picture of a reform effort plagued by missed milestones, shaky planning and heavy reliance on expensive external contractors.
The first review, conducted under the Morrison government’s tenure and completed in May 2022, found that the foundational work for both the GPMS and the B2G Gateway was already off-track.
By March 2023, the second gateway review showed that many of those risks had materialised. The GPMS had failed multiple go-live attempts and the B2G system had not made it to beta testing.
Crucially, while the department had still not delivered on the core deliverables of the first tranche of digital reforms, an additional $151 million was secured in Labor’s October 2022 budget to push ahead with the next tranche.
The consequences of these early failures were already being felt.
In the absence of a functioning GPMS, the department was forced to shift its new star ratings system, which was intended to help families compare aged-care homes, to a temporary email-based workaround that remains in place.
Industry sources say much of the dysfunction traces back to the project’s technical architecture and procurement strategy and the decision to use a Salesforce platform as the foundation of the GPMS requiring extensive customisation.
“If you get software with a high degree of capability, such as the customer relationship management product from Salesforce – the biggest CRM company in the world – and you customise it, which is what Australian governments tend to do, then it adds massive complexity and cost to the project,” Simon Bush, chief executive of the Australian Information Industry Association, Australia’s peak representative body for the digital ecosystem, tells The Saturday Paper.
“If you’re just implementing a CRM product, and you’re implementing it for government, with multiple stakeholders and lots of moving parts, then that’s already a big project,” says Bush. “But then you change your scope and requirements as you’re implementing and building it – that’s the heavy customisation I was talking about – that is a recipe for disaster, regardless of whether you have got the best software in the world or not, and this is where IT projects like this come unstuck.”
A Canberra-based IT contractor who is familiar with the problems associated with department’s digital build-out says that even more troubling is the fact that “during this period of confusion and commercial churn, the department had still not updated its business case or clarified core requirements”.
The department continues to insist the project has stabilised, citing improved delivery confidence and ongoing oversight from the Digital Transformation Agency. Yet the bureaucracy is struggling to dispel the perception that a critical national reform underpinned by digital infrastructure was poorly planned, loosely governed and overloaded from the outset – a burden now falling to aged-care providers, many of whom remain uncertain about what will be required of them when the Aged Care Act comes into force.
What was intended as a digital reset for a sector in crisis has become a cautionary tale in public service delivery, the consequences of which stretch beyond bureaucratic confusion. Families seeking guidance on residential care are still relying on a flawed star ratings system that was meant to be replaced. Real-time oversight and data sharing – key promises of the new Aged Care Act – remain out of reach.
As the November 1 deadline nears, many in the sector are again preparing for another delay. The Albanese government’s biggest aged-care reforms now depend not on policy or legislation but on whether its sprawling, contractor-led IT overhaul can finally deliver.
This article was first published in the print edition of The Saturday Paper on July 5, 2025 as "Exclusive: Landmark aged-care reforms derailed by IT failures".
For almost a decade, The Saturday Paper has published Australia’s leading writers and thinkers. We have pursued stories that are ignored elsewhere, covering them with sensitivity and depth. We have done this on refugee policy, on government integrity, on robo-debt, on aged care, on climate change, on the pandemic.
All our journalism is fiercely independent. It relies on the support of readers. By subscribing to The Saturday Paper, you are ensuring that we can continue to produce essential, issue-defining coverage, to dig out stories that take time, to doggedly hold to account politicians and the political class.
There are very few titles that have the freedom and the space to produce journalism like this. In a country with a concentration of media ownership unlike anything else in the world, it is vitally important. Your subscription helps make it possible.
Subscriber exclusive
Send this article to a friend for free.
Share this subscriber exclusive article with a friend or family member using share credits.
