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Important message from the Ombudsman - TIO Budget for 2013-2014

21 June 2013

I recently recommended a budget for 2013-14 to the TIO’s Board and Council, and it has now been approved. I am taking this opportunity to set out, for the information of TIO Members, some of the key features of the budget.

A new strategy

Recent reviews of the TIO have emphasised increased expectations about the quality and responsiveness of our services, and how we can increase our contribution to improving the telecommunications industry. These have informed a wholesale review of TIO strategy, which was finalised in 2012. The strategy focuses us on delivering an exceptional dispute resolution service and contributing to better customer service and complaint handling in the telecommunications industry. The 2013-14 budget invests in training, development, systems and processes to deliver on the strategy.

Resolving disputes

Resolving disputes between consumers and service providers remains the first and primary role of the TIO. One of our aims is to maximise the quality of our dispute resolution services through better training and increased subject matter expertise. The 2013-14 budget will fund the time and effort required to develop and deliver an dispute resolution qualification purpose built for our officers. We will also invest in improved guidelines for technical and expert areas, an approach we have already deployed to increase the quality of our handling for credit default complaints. This includes specific guidelines and training to deal with unreasonable conduct.

Improving telecommunications services

One area telcos and others have asked for an increased TIO role is to provide better information and targeted assistance to industry. We aim to use our information holdings responsively and effectively, and to build the capacity of TIO members to effectively respond to consumer complaints. This year, we have committed to a review of the way in which information relevant to service providers is collected, analysed and acted upon – including a review of our conduct of systemic investigations. We are also developing new resources to inform members about the TIO, and promote good complaint handling practices.

Complaint charge increase – effective 1 July 2013

The TIO’s funding arrangements are provided for in the TIO Ltd Articles of Association. Information about these can be found on the TIO’s website: TIO’s Funding Arrangements. Information is also available on the TIO Member Portal.

The new budget will increase both Volume and Operating fees. The new charges will meet annual salary increases (including additional superannuation costs) for TIO staff – salary costs make up some 70 per cent of TIO expenses. They will also meet other running costs, and new investments including those outlined above.

The most substantial percentage increases are for the Volume fees, which includes much of the investment for enhanced dispute resolution training. Overall, the price increase per complaint is approximately 7 per cent, as summarised in the table below: Fee per Complaint.

Fee per Complaint Classification

 2012 / 13 - Forecast /Estimate2013 / 14 - BudgetForecast vs Budget
 *Fixed Volume Fee^Average Operating FeeTotal Fee (Excl GST)*Fixed Volume Fee^Average Operating FeeTotal Fee(Excl GST)Ave Total Fee Increase
Level 1 (Referral)$32$63$95$37$65$1027%
Level 2 (Conciliation)$300$591$891$345$606$9517%
Level 3 (Investigation)$530$1,044$1,574$620$1,090$1,7109%
Level 4 (Investigation)$2,400$4,729$7,129$2,600$4,569$7,1691%
Land Access Objection$2,900$6,025$8,925$2,900$6,025$8,9250%
Systemic Investigation$530$1,044$1,574$620$1,090$1,7109%

* Volume Fees are generally set, per complaint classification, at the start of each financial year.

^ Operating/Capital Fees change each month:

Service providers are charged operating and capital expenses on a proportional basis, based on the value of complaints charged to the service provider (i.e. volume fees) as a percentage of the total value of volume fees charged to all. Thus, if a service provider incurs 6% of the total volume fees in a billing period (calendar month), it pays 6% of the TIO's actual total operating and capital expenditure costs for the same billing period.

New charges will apply from 1 July 2013. Referrals, Conciliations or Investigations commenced by the TIO from 1 July 2013 will see the price changes reflected on their July invoices and statements, provided in early August 2013.

If you would like to ask about the changes and how they may affect you, please contact Industry Engagement at or at 03 8680 8424.

Simon Cohen


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