12 Jul 2013

Talent2 to lose $20m on Novopay contract

10:24 pm on 12 July 2013

The company responsible for the Novopay school payroll system says it will lose $20 million setting up and running the troubled system.

Talent2 New Zealand has included the loss in its 2011 accounts, which have been filed with the Companies Office.

The Government is paying the Australian-based company $100 million to set up Novopay and run it for eight years.

But Talent2 New Zealand has told the Companies Office that money will not be enough to cover its expenses.

The papers say the cost of going live with the system and a reassessment of the cost of running it have led it to calculate a loss of $20 million over the term of the contract.

Talent2 New Zealand's 2011 accounts now show a net loss of $16 million.

Novopay has been dogged by errors since it was introduced in August 2012 and there are still problems with the system that need to be fixed.