The cost of not measuring benefits performance: when 2% is worth millions

For Finance and Procurement leaders, compliance is only part of the picture. An employee benefits program also needs to show, clearly and consistently, what value it is delivering. At Defence scale, that becomes particularly important.

Salary packaging and novated leasing involve significant volumes of transactions, detailed tax and FBT requirements and multiple measures of performance. Alongside sound compliance, there is the question of how effectively the program is performing and whether the value available through it is being realised.

Relatively small differences in performance can translate into significant financial outcomes. At the same time, the way a program is governed and implemented can have financial and operational consequences of its own that impact program value.

At Defence scale, even modest movements can matter

Participation provides one useful example of why performance visibility matters. An increase of around two percentage points in program participation could generate approximately $3.5 million in additional annual tax savings for Defence employees and members.

At Defence scale, a relatively small movement in participation can therefore represent significant additional value. Participation is one part of a broader performance picture. Measures such as participation growth, employee tax savings, new participants and program engagement can help show how much of the available value is being realised and where there may be further opportunity.

Reporting creates accountability

Benchmarking provides useful context, allowing current performance to be considered against comparable programs and tracked over time. Comparing results with similar organisations or relevant government programs provides context for assessing current performance and identifying where there may be scope for improvement.

Regular reporting allows performance to be considered against agreed measures and emerging trends to be identified. Benchmarking adds another dimension. This creates an ongoing view of program performance rather than a point-in-time assessment. It gives an organisation a stronger evidence base for assessing whether value is being maintained, where it is increasing and where closer attention may be warranted.

Implementation can have a cost of its own

Value can also be affected by the way regulatory and policy changes are implemented across a benefit programs. Salary packaging and novated leasing operate within detailed tax and FBT settings, where even relatively targeted changes can flow through systems, reporting and administrative processes.

Changes to the FBT treatment of electric vehicle novated leases provides a useful example. The policy itself is just the starting point. The practicalities of which arrangements are affected, when does a changed treatment take effect and how reporting logic, systems and workflows should be adjusted without opening control gaps or producing inconsistent outcomes is critical information.

Across a large program, inconsistent interpretation or implementation can create additional administration, reporting issues and control weaknesses. Strong governance, reliable records and coordinated execution become particularly important when tax settings change or individual arrangements require different treatment.

Specialist tax expertise can play an important role here, helping translate policy changes into clear treatment and consistent implementation across the program. Done well, that supports compliance and auditability while reducing the risk of errors, rework and disruption.

A stronger view of value

In the context of finance and procurement, value has two core dimensions. There is the value the program delivers through participation and financial savings, and the governance and expertise that help protect that value from avoidable risk.

Maxxia is vetted onto the Federal Government panel and operates in full adherence with Defence's compliance protocols. Its in-house tax expertise supports the compliance and governance foundations of the program, while its benchmarking and reporting capability provides greater visibility of performance.

For Defence, that brings the two sides of the equation together: maximising the financial value delivered through the program while maintaining the governance, compliance and operational controls needed to protect it.

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