Government Technology World

Keynote Address

15th October 2007

National Convention Centre, Canberra.

 Of all of the experiences we share through our personal and professional loves, change is a constant. While a well worn cliché, this is felt in sharpest relief in relation to the ongoing pace of technological change.

Just think, only eleven years ago, when I was first elected to represent the ACT in the Senate, I had to organise a special phone line to my office in Parliament house just to get access to the internet.

There was a committed and growing proportion of the population who were on line and even back then very frustrated.  It was the basic service standards such as dial up speeds and drop outs.  For many small businesses the price of Telstra’s ISDN put faster, more reliable internet connections out of reach.

These days we are still fighting for faster, more reliable services. Sadly for most people the argument is around the base package of up to 256kbps ADSL broadband services. This is a mere dolly step as far as transition to broadband can be described.

For real transformation to broadband at speeds that usher in new, useful applications and content, there needed to be vision-driven public policy action.

Alas, we have observed the most appalling and negligent management of the information and communications technology portfolio in the developed world.

I say this with conviction and sadness because I genuinely believe that Australia could have been the world leader for best practice in ICT public policy.

I hang on to the belief that we still can. Not under the current government, though. They’ve had their chance and squandered it through a period of time that has proven transformational for many countries’ knowledge economies.

For Federal Labor, as a result of the lazy wasteful years of the Howard Government, we are having to start with the fundamental elements of what makes a society and economy strong: Infrastructure. 

ICT infrastructure is the obvious common necessity within all organisations to be able to function, be they public, private, business, personal, corporate, institutional or community based.

It stands to reason that the countries which have developed:

are the countries that best positioned every single sector of their economy for growth in the future.

And people with the skills to use information and communication technologies efficiently, innovate with it, enhance it is an equally essential component.

This is where Labor’s education revolution and commitment to skills comes into the picture that Kevin Rudd has articulated in his vision for Australia’s future.

Broadband

Before I focus on the role the public sector plays in our challenge to lift Australia’s performance in ICT I want to stress that nation building in the 21st century means building a National Broadband Network.

In an historic move, Federal Labor will revolutionise Australia’s internet infrastructure by creating a new world class National Broadband Network.  Over a five year period, Labor will invest $4.7 billion to establish the National Broadband Network in partnership with the private sector.

Together with Federal Labor’s Education Revolution, the National Broadband Network plan will provide a platform to build and expand Australian business.  It will boost productivity growth and build long-term economic prosperity once the mining boom is over.

It is appalling that Australia is 25th in the world in terms of available internet bandwidth. If we are to remain globally competitive, we must address this as an absolute priority.

It is estimated the new network would deliver national economic benefits including:

This network will open up vast fields of innovative online government services currently constrained through the inequities of access to the internet.

Labor’s National Broadband Network will connect 98 per cent of Australians to broadband internet services with speeds with a minimum of 12 megabits per second. The remaining two per cent of Australians in regional and remote areas not covered by this network will have improved broadband services.  This will resolve the socio-economic digital divide once and for all.

For all spheres of government in Australia, a National Broadband Network will usher in a new priority to ensure people have the skills needed to make the most of e-health and online education through to practical delivery of government services.

Since I have been in Parliament and even prior to that, I have seen how creative and innovative local, territory, state and, yes, even some federal agencies have been in trying new ideas and adopting new approaches using technology.

However at a federal level at least, I can’t give the credit for positive developments to the leadership of the Howard Government.  

Over the last eleven years, I have spent a fair proportion of my time in the federal parliament of Australia calling for more effective leadership and vision with respect to information and communication technologies in our society.

How fairly and effectively ICT is accessed and used is a determinant of a modern, civil and socially cohesive society.  For example, information and communication technologies have the potential to resolve many disadvantages faced by people living in geographic isolation and assisting people with limited mobility and/or living with some disability.

How proficient we are inventing, innovating and creating new services and products for the global market are key determinants in productivity and growth.  Strong ICT industry development will always be far more than the sum of its parts as ICT is the enabler of all business, commerce and underpins fast-growing tech sectors such as bio and nano-technology.

The sheer magnitude of the federal government’s purchase of technology makes it by definition a major influence on the ICT industry.  It stands to reason that when this federal government determined it would be a follower instead of a leader in terms of the products they use, the whole Australian ICT sector is diminished.

It is because so much of the market in Australia is driven by public procurement that it’s critical to drive a highly competitive tendering system that all players can access.  In this way new ideas are competing with old ideas.

The Howard Government has not handled IT outsourcing well.  The Whole of Government IT Outsourcing debacle under the auspices of the Minister for Finance and the now defunct Office of Asset Sales and IT Outsourcing was roundly criticised as a flawed model, incapable of delivering value for money or improved services and locking out smaller, innovative companies from the tendering process.

Bigger was always better for the Howard Government. There have been many features of the procurement system of this federal government which have favoured the incumbent suppliers at the expense of smaller, innovative providers, not least being the cluster approach to outsourcing. 

Ultimately, the Government was forced to change their approach as a result of political pressure bought to bear. 

Since then, they have modified some of the glaring features that prevented a competitive tender system from operating effectively.

But the Government has not followed through with ensuring compliance and cultural change within agencies and departments to improve outcomes. There is more work to be done and I hope that I will have the opportunity to work within a newly elected Rudd Labor Government to help effect these changes.

I would now like to run through a number of specific issues.

Smart Buyers

Governments also need to be smart enough buyers to ensure they understand the technology solutions on offer. If those in our procurement sections in agencies and departments are incapable of competently comparing competing technologies that claim to deliver the same outcomes using completely different approaches, procurement will always favour the old and the incumbent.

It is in the interest of government that the best and the most efficient ideas are tested through competitive tender.

But, if those making procurement decisions do not have suitable expertise, there is a greater vulnerability to choosing solutions that are perceived as being less "risk averse". This often results in the big multinational vendors being selected regardless of the merit and sometimes even cost of their solution.

Labor will encourage testing the technical merit of new ideas as a way of ensuring that new ideas can genuinely compete in the "bigger knows best" culture.

Best practising tendering

Best practice tendering has also proven elusive under the Howard Government.

Labor believes that well managed 'panels' will help reduce the cost of tendering for government contracts.

We need to make sure that innovative companies are not excluded and panels need to be tested regularly for competitiveness.

Labor will use best-practice models to reduce red tape for businesses doing business with a future Labor Government, including ensuring that all agencies and departments are engaged in a program of improvement. 

I am reminded of the folly of the Howard Government’s extreme version of whole-of –government IT outsourcing.  This debacle has the effect of stripping out knowledge and experience from where it was needed most and we have barely recovered.

Different spheres of Government as well as Agencies and Departments can learn from each other.  Labor believes there is room for improvement in building capacity for smarter decision making at the highest levels within agencies and departments.

Unlimited liability clauses

Tenders for low-value contracts often use ‘standardised’ terms, meant for large value, high risk projects and services.  One-size-fits-all standard conditions of contract are often used inappropriately for smaller value contracts.

Public sector departments and agencies can be inflexible in their dealings with business.  The solution is government departments and agencies creating simpler and easier contracts to comply with.

The effect of government contracts using unlimited liability clauses and other onerous terms is that SMEs will often not bid for low-value tenders.  This restricts competition and drives up prices ultimately paid by taxpayers.

The consequence of including onerous terms, where they are not needed, is higher costs in contract performance on business and a greater threat of unbearable liability for SMEs.

Labor has long recognised that unlimited liability clauses excluded many smaller companies from being eligible to tender for government ICT contracts. I recall making speeches about this issue years ago as a result of many local companies telling me they found this presented a real barrier to even participating in a tender.  In effect they never even got in the door, let alone compete on technological merit and value for money. 

Liability ought to be commensurate to the financial risk and that’s why Labor welcomed the winding back of the blanket requirement for unlimited liability clauses.

Labor is committed to ensuring that this is the consistent approach for government procurement.

Intellectual Property

Another issue that came up regularly was the strict way in which the Commonwealth controlled the IP created in the course of a government contract.  This prevented new, innovative services from subsequently being marketed and sold overseas, unnecessarily limiting or preventing new export opportunities by the companies involved.

Labor recognises that by allowing companies to hold onto some elements or modules of intellectual property, we can help companies to grow their businesses.

This has to be managed carefully but Labor wants to facilitate small and medium -sized companies with successful government contracts to expand their businesses.

Late payment of debts

Finally, one of the biggest problems facing small business is cash-flow from late payment of debts.

As you know, the Commonwealth is a prime offender here.  Small businesses often waste time badgering government for payment, taking them away from their business.

It is why, in government, Labor will legislate for faster Commonwealth bill-paying.  Labor will give small business the right to charge Commonwealth departments and agencies interest on bills not paid within 30 days.

Every year, government procurement is a $26 billion business and Labor believes small business should be encouraged to gain a greater share of it.

So, as I have outlined, a Rudd Labor government will start by simplifying Commonwealth tender contracts and reducing the commercial risks on businesses in performance of lower value government contracts.

Conclusion

In conclusion, if we win the forthcoming election, a future Rudd Labor Government is determined to see our innovative small and medium sized enterprises are able to compete fairly for government ICT contracts. 

Labor knows Australian government contracts provide a valuable reference site for companies operating in the global market place.  Ironically, many of our successful ICT exporters have expanded their businesses overseas without the benefit of Australian government contracts because the system has been biased against them.

In fact, many have been successful overseas before they get a look in here in Australia.  This is a poor reflection on the government’s capacity to assess good technology and a robust, competitive tender system.

The National ICT Industry Association wasted no time in articulating this point in the fourth point of their vision statement:

Innovation in Procurement Practices

Government as a model ICT purchaser of Australian innovation, recognising that as the largest single ICT customer in Australia, its procurement practices have a substantial impact on innovation in the ICT industry and provide reference sites to facilitate global market penetration.

There are also several additional challenges already such as sourcing green technology.  As a government determined to follow best practice, Labor understands our responsibility to lead by example.

Other issues I would like to nominate as deserving of some competent political leadership include ICT security, electronic record keeping standards and practices, open standards generally and improving the quality of online services to government clients, be they citizens, businesses and community organisations.

E-government services are deserving of a new, visual dimension. As bandwidth grows, the services that can be delivered can grow and evolve into far more accessible formats with even greater interactivity.

There is also plenty of room to improve navigation of the services provided by the different spheres of government online. I am very keen to draw on the best practices of online service delivery across all three spheres of government in Australia: Local, State and Territory and of course, Federal.

Central to this is a National Broadband Network. Labor already understands this, which is why we have committed to $4.7 billion for this network.

We also need:

Ladies and Gentlemen, we need the new leadership that only Kevin Rudd and Labor can provide.