Should the Aussies promote e-invoicing?

E-invoicing providers urged the Australian federal Government to explore the introduction of mandatory electronic invoicing to avoid a carbon tax bill of up to $24 million a year. Despite its ambition the recent draft “Strategic Vision for the Australian Government’s use of ICT” doesn’t speak of invoicing or even of e-invoicing for that matter.  So what is going on down under?

Approval by over 100 public agencies and 16.000 supplier
Action item 2.4 of the draft vision states the Government should "increase the automation of services  - Automate processes to improve the interactions between people, business and government" from 2011.

So vendors like Basware said that this action as well as the new carbon tax, could open the door to e-invoicing. The Australian government states that they are "always open to considering the adoption of new technologies, such as electronic invoicing, where it improves productivity and efficiency.”

Continuing:  “when undertaking such consideration, the operational needs of over 100 agencies and over 16,000 suppliers to the Commonwealth have to be taken into account”.

Expert’s view: Paul Turner
Paul Turner, consultant at Basware, states that there is no question that they (Australia) are a long way behind Europe and elsewhere with thinking on e-invoicing. He puzzled over why this is and suspects that there are several factors.

First: tax compliance
The first is related to tax compliance. Australia has an extremely high level of compliance and so the Australian Federal Government has not been drawn to e-invoicing to 'solve' a problem that doesn't exist.

Second: “the tyranny of distance”
A second factor has to do with our (relative) geographical remoteness and that “We do not have international trading partners on our doorstep like our European friends do”, Paul Turner says.

He continuous:  “A very important historical work (written in 1966) entitled "The Tyranny of Distance" argues that Australia's relative distance from the 'old world' had significant and long-lasting impacts on our history. In a way, Blainey's thesis still holds true today. We don't have other countries 'next door' (in the sense of shared borders) and so issues of streamlining 'international trade' in this context is not there. In more recent times, Australia's trading 'future' is seen resting with our Asian neighbours. Neighbours who of course are also lagging in the adoption of e-invoicing (with notable exceptions).”

Third: extremely low corruption
A third factor involves the extremely low incidence of corruption in public administration. According to Paul Turner fraud remains low due a highly professional (and professionalized) base of public servants (civil service) and a robust compliance regime.  Thus another potential driver for e-invoicing is removed.

U-turn approach
Nonetheless he believes that Australia will very quickly get on board, because of  massive 'nation-building' projects that point to the speedy adoption of e-invoicing:

• the National Broadband Network (NBN) roll-out, motivating to use the huge bandwidth becoming available by government and industry;
• implementing a carbon trading scheme/carbon tax on large emitters in Australia committing Australia to 'cleaning up their act';
• apply an efficiency dividend to public entities: budgets are cut every year at a set rate in order to promote efficiency in government administration.