ATO scales back computer system

The ATO has scaled back its new $820 million supercomputer system after only five months because of over 17,000 public complaints and the delay of one million tax returns.

The bungled system also sent out return letters without cheques, sent unintelligible data to Centrelink and failed to integrate with other computer systems due to a numbers glitch, a senate estimates hearing was told.

It also required more than 500 bug fixes since its introduction in January and received five times as many complaints as normal, with the ATO handing out 5233 hardship payments.

The TAX Office has terminated its contract with Accenture, the company commissioned to introduce the system and will work with a consulting company for advice for upcoming tax time.

The ATO has hired over 300 staff in preparation for June 30.