SENATOR KATE LUNDY: SHADOW MINISTER FOR INFORMATION TECHNOLOGY
Brisbane
15 September 2004

Labor's ICT Industry Development Policy
And
E-AUSTRALIA: Labor's National Information Policy

Information and Communication Technologies (ICT) provide the raw materials for growth: new social, cultural and economic services, applications and infrastructure. As such, ICT continues to play a crucial role in bringing people and their communities together, giving new expression to cultural identity, providing public and commercial services, sharing ideas in research and innovation and driving productivity growth.

Labor's ICT and related policies address these roles. While today’s announcement represents the heart of ICT policy, there are more yet to be released.

I will turn first to ICT Industry Development.

Labor understands that it is a strong Australian ICT sector that will create the enabling technologies that impact upon all aspects of community and business life, as well as providing high-skilled, high-wage employment opportunities.

ICT is a foundation of nation-building in the 21st century. The quality and dynamism of innovation in ICT will factor significantly in the capacity of Australian industry to increase exports and compete in a global economy.

This is why Australia’s ICT industry has been identified by Labor as central to achieving Labor’s vision for traditional and emerging industries in an innovative Australia.

Labor will create a new emphasis and a new administration for ICT industry-related policy and programs within a stronger and more enterprise-oriented Industry Department. ICT will take its proper place at the heart of Industry policy in a new ICT section. This will help ICT enterprises gaining integrated and efficient access to industry programs. For the first time, all programs relating to ICT industry development will be in one place.

Labor's vision for Australia is to become a leader in ICT innovation. Given our relatively small size in the global economy, Labor believes it is sensible to focus this effort on our established strengths.

Labor will promote Australia’s ICT capability internationally to increase exports, improve market access and encourage investment.

A Latham Labor Government will use $8 million of existing resources over four years to harness the common interest of all Australian Governments: State, Territory and local and work together to promote Australian ICT capability in international markets.

During the Howard Government's reign, manufacturing in ICT actually shrank in Australia. The rapid growth of the ICT trade deficit is now the graphic symbol of the Howard Government's indifference to the importance of a local, exporting ICT industry. Australia’s deficit on ICT trade in 2001-02 was almost $14.4 billion. This is equivalent to 65% of the Current Account Deficit.

Manufacturing is central to a modern, advanced economy. All State and Territory Labor Governments recognise the importance of this sector, and support a national manufacturing strategy. This strategy includes the establishment of a National Manufacturing Council. ICT will be represented on this Council.

This is good news for hi-tech ICT and electronic component manufacturing in Australia. Australia is highly competitive in this sector and for the first time in eight years, a Latham Labor Government will pay it some attention.

Education and industry policy go hand in hand. Labor believes that Australia's university system needs vision, investment and long-term reform—not just a short-term revenue measure to increase student contributions. Labor's Aim Higher will create 20,000 new commencing university places and 20,000 new commencing TAFE places each year by 2008/09 to be distributed throughout Australia.

Labor will also establish a competitive $450 million fund to encourage universities' transition to twenty-first century learning institutions. This will assist universities themselves to make the most of ICT innovation in education. Overall, Labor's Aim Higher will provide $2.34 billion over four years for Australian tertiary education.

In addition, in yesterday’s announcement for Labor’s Great Australian Schools Policy, Labor has provided $100 million to lift general capital ICT infrastructure in schools. Labor will also provide increased capital and ICT funding through its targeted programs. This will bring the total increase in general and targeted funding for capital and ICT infrsatructure in government schools to over $440 million.

Labor's New Agenda for Manufacturing, Great Australian Schools and Aim Higher packages underpin our commitment to ICT.

Labor is yet to release our policies relating to research and development. They are not far away and they too will serve to complement Labor's Plan for ICT Industry Development.

Labor's approach includes building on existing efforts that we believe are heading in the right direction.

Australian researchers and innovators have demonstrated that they are world class, gaining recognition in many fields in science and technology around the globe. But this success has not translated into Australia being a place where ideas are readily commercialised. That's why Labor will continue to support and fund the Commercialising Emerging Technologies (COMET) program.

Turning good ideas into successful businesses requires smart investment, entrepreneurial skills, clever technologists and a range of professional services. Rarely does one person have all these talents. Accessing experience where gaps exist can make all the difference for start-ups.

Labor believes the ongoing presence of technology incubators is an essential part of Australia's innovation landscape. That's why Labor will continue to fund the Building IT Strengths (BITS) incubator program and is committed to the current funding levels as provided for in the last Federal budget.

Labor also believes that if these incubators are to have any hope of becoming sustainable in the long term, less reliant on and ultimately independent of, public funds, that it is necessary to allow them to expand of the types of incubatee companies eligible.

Labor strongly supports the National ICT Centre of Excellence as a way to focus research effort and create 'critical mass'. Labor will continue to encourage NICTA to develop strong commercialisation strategies and to strengthen ties with Australian small and medium-sized enterprises (SMEs).

Labor believes that the development of nodes in a number of States and Territories is important as it will assist NICTA to collaborate rather than compete with the existing research effort. For example, the focus on e-security in NICTA's Queensland node should complement the efforts of a pre-existing e-security cluster and strong research presence in academia.

Labor will foster stronger relationships and improved communication, co-operation and collaboration between NICTA, ICT related CRC’s, CSIRO, DSTO, ARC grant recipients in ICT-related fields, universities faculties, incubators and industry, particularly SME's. Labor also believes there is greater potential to focus the efforts of these institutions.

McKinsey & Company’s final report to the Coalition’s dismal Framework for the Future Report supports Labor’s view that it is necessary to distil the focus of public policy onto areas of industry that can be described as ‘winning sectors’: sectors in which Australia already performs and has greater potential to develop.

The Opportunities for Australia’s ICT Industry

Australia’s challenge is to facilitate the development of the ICT industry – to the benefit of all participants – whole focussing on the most attractive opportunities.

Focus will provide a number of benefits. It will clarify aspirations. It will improve performance. It will facilitate the achievement of scale in an industry where scale is increasingly important. It will encourage the allocation of scarce resources, such as talent and investment, to the areas of greatest return and will simplify this process, thus conserving resources. Focus is also the foundation of specialisation. We believe specialisation is key to the long term development of the Australian ICT Industry.

The sectoral strengths Labor believes are worthy of a particular focus include software, digital content, spatial information, e-security and in ICT manufacturing, photonics. While there are many others, these five sub-sectors of ICT complement much of the Australian ICT research effort, business success and State Government priorities.

Labor will create a 10-year Industry Strategy for software and digital content. The global market for software and applications is enormous. It was worth US$182 billion in 2001, with an expected to growth rate to 2005 of 11%. Despite the strong performance of the local software industry, Australia has a comparatively small share relative to our size. A Labor Government will focus on growing this share.

Open Source Software represents a particularly dynamic area of software and applications development, with Australia uniquely placed having higher proportion of open source software developers per capita than any other country.

Labor will develop the Industry Strategy in partnership with SMEs and it will include support for Australian software companies to fast track some level of CMM accreditation to ensure their ongoing competitiveness.

The Australian Interactive Multimedia Industry Association (AIMIA) estimates that there are more than 3000 companies operating in the digital content industry in Australia. Labor will build on the recently released Digital Content Action Plan to become a fully-fledged strategy for the digital content sector. The Australian market for the interactive computer games industry alone was worth $825 million in 2002 – a figure which is estimated to grow to $1.4 billion by 2006.

Labor has also announced a $70 million investment in Australia's film and television industry. Labor's Blueprint for Growth in Australian Film and Television will be linked with the Software and Digital Content Industry Strategy through a $10 million allocation specifically to the Australian Film Commission (AFC) for an Interactive Digital Content fund. This cross-portfolio approach to the digital content industry will maximise the synergies within public policy.

The Film Industry Broadband Resources Enterprise (FIBRE) estimates that the US Film and Television Post Production industry spends about $3 billion overseas each year. Competing with Canada, the UK, Ireland and New Zealand, Australia only grabs 6% of this market. FIBRE believes that 10% is achievable.

In yet another related portfolio, Education, a Federal Labor Government will provide $9 million to establish a new Multimedia Design and Technology Centre in Wollongong by 2008 as part of Labor's Aim Higher package, further complementing this focus.

Spatial Information has a strong relationship with software and digital content. That’s why Labor will review the existing Spatial Information Action Plan with a view to strengthening Government commitment to implementation.

Labor will support ICT skills development and will provide funding of $200,000 for the research necessary to determine the ICT skills requirements for the medium to long term in Australia.

Labor will ensure the ICT Skills Hub continues to play an important role in not only advising on ICT skills outlooks, but the tackling the challenges of upgrading the ICT skills of the community in general. Unemployment among Australian ICT workers in 2003 was – at 4 per cent – double that of all professionals. This is unacceptably high.

Fostering opportunities for re-training our ICT professionals is consistent with Labor's commitment to lifelong learning and Labor looks forward to working with unions and professional associations to achieve better outcomes.

Labor is committed to encouraging a more entrepreneurial culture. Australian scientists and researchers have demonstrated that they are world class, gaining recognition in many fields in science and technology around the globe. But this success has not translated into Australia being a place where research excellence is readily commercialised.

Labor will work with Australian education and research institutions with the aim of including more business administration-oriented units in ICT courses. This will have the effect of arming students with an understanding of the business skills needed to commercialise ideas and intellectual property created in Australia.

The ability to turn good ideas into commercially successful, sustainable businesses is an important credential in a global economy.

Labor will support and promote ICT careers for women because we are concerned that only about 20% of people studying in ICT and related studies are women, and that this percentage is decreasing. Labor looks forward to working with State and Territory Governments, unions and professional associations to improve the representation of women in this important field. In addition, Labor will provide $100,000 per annum to support awards and scholarships designed to create opportunities for women undertaking tertiary study in ICT.

Looking as the skills issue from another perspective, it is a reasonable assumption that the expansive use of ICT workers from overseas here on temporary work visas (457 Visa sub-class) over the last few years, has contributed to the ongoing, higher-than-average levels of unemployment in the ICT sector.

That's why Labor believes that the sensitive and timely management of Australia's temporary skilled migration program is necessary. This program inevitably impacts on the employment opportunities for unemployed or under-employed skilled ICT professionals. It also impacts on the pressure being bought to bear, or not, as the case may be, on education institutions which supply the skilled professionals to the Australian market.

Skilled migration programs, particularly the permanent residency program, are essential for Australia to keep pace with industry growth. It is also important to ensure that temporary visa programs are not undermining the prospects of Australian University ICT graduates, which will become the entrepreneurs and technology leaders of the future.

That's why Labor will review the ICT skilled migration program and its impact on the ICT labour market in Australia to ensure that Australia's best long term interests are being served.

I would now like to turn to an issue of major importance: ICT Government Purchasing policy.

Labor believes that the best industry development outcome through government purchasing is a government contract. However, under the Howard Government many barriers have been created which prevent small ICT companies from participating in the tender process.

As part of Labor’s broader Government Purchasing policy – which is being released today by Senator Kim Carr, Shadow Minister for Industry – a Latham Labor Government will ensure that Australian ICT SMEs can participate competitively in government contracts. Amongst other things, this policy will:

Labor believes there are specific barriers in place confronting small ICT companies that must be removed. The removal of these barriers sits at the top of Labor's priorities in for ICT government purchasing.

First and foremost is the size of contracts. Labor believes a strategic sourcing model that identifies outcomes at each major stage of the project will be an effective way to ensure contracts are of a size and shape to encourage SMEs to participate in the tendering process.

Labor will work across the necessary portfolios to ensure that reasonable tender response times are provided for ICT tenders. Labor recognises that tight response times favour those companies with the resources to respond at extremely short notice or the incumbent contractor.

One way of streamlining the tender process is to create a new ICT ‘panel’ to pre-qualify contractors. Labor will do this and work with the SME Barriers to Government Contracts Working Group to refine tender processes and ensure fairness and genuine competition. This Working Group is due to publish its final report later this year.

Another cross portfolio is issue is the over-specification of the tenders themselves. This requires co-operation between the Attorney Generals Department and agencies that are preparing the tenders to resolve. Over-specification has anti-competitive effects because only the largest companies have the scope and resources to satisfy the tender requirements. Smaller contracts with clearly defined outcomes will help solve this problem.

Another problem is unreasonable and inconsistent professional indemnity and public liability insurance requirements. Anecdotally, smaller companies face more onerous conditions and have less capacity to satisfy them. Labor will ensure these insurances are commensurate with contract requirements.

Labor believes there is an urgent need for stronger industry development requirements to be a part of all ICT purchasing. To aim for 50% Australian SME participation is not unreasonable in the medium to long term. As a secondary layer of purchasing policy, Labor will aim for 50% SME participation at sub-contractor level where large enterprises secure a contract or contracts collectively valued at over $10 million. Local R&D commitments will also be encouraged.

Labor acknowledges the role that multinationals play in providing channels for SME exports, and looks forward to creating more meaningful dialogue with them than “multipliers” currently provides.

Labor believes that Australian companies are strongly competitive in the domestic and global market and that if subjected to a rigorous assessment of whole of life cost, they would come out in a very competitive position. Labor believes that the 10 year Industry Strategy for Software will assist local businesses to build on their success as well as strongly position Australia as a desirable place for long term investment.

To increase Australia's exports it will be necessary to tackle challenges like ill-considered off-shoring head-on. That's why Labor will adopt a test before off-shore outsourcing can be considered . This 'test' will determine if Australian capability has been exhausted, and that security, privacy and other concerns are addressed.

Labor supports the Australian Computer Society checklist as a first step in preventing ill-informed decisions to off-shore Australian ICT jobs. Labor believes that, if given the opportunity, Australian IT professionals will be able to satisfy the skill demands of companies in Australia operating in a globally competitive environment.

The Checklist comprises of six key areas under the headings of: Identify Outputs or Benefits and Costs; Considering Corporate Reputation; Accountability and Final Decision Making; Apply a National Security Test; Identify Risks; Monitor and Review Performance.

An important issue in the debate about off-shoring ICT is security. It is currently incumbent upon an agency or department to complete a full risk assessment in relation to when planning any IT outsourcing. Custom of practice for Federal agencies and departments in the event of outsourcing to date is to require that all data remains on-shore for processing and storage, so it is reasonable to assume that the same rules would apply for off-shore outsourcing. The concern is that when work is outsourced to another country, the client in Australia has little control over how intellectual property and personal information will be treated.

Not only is there the possibility that the legal requirements of the overseas jurisdiction may be less stringent than Australians would expect, it would also be harder for the client to maintain an ongoing observation of the operator’s privacy and security standards, to investigate an alleged breach of those standards or to apply sanctions.

This will have the effect of limiting what work can be performed offshore. Labor will be making a separate policy announcement in relation to E-security in the Federal Government.

Open Source Software represents one of the greatest opportunities to re-invigorate an innovative climate within the public sector. Many agencies and departments have already led the way in the absence of any policy direction from the Howard Government.

Labor believes that there is a genuine opportunity to achieve some cost reductions through the increased use of Open Source Software within the Federal Government. Open Source Victoria, the industry body that has been successfully articulating the benefits of Open Source in the Australian market identifies "long-term expense reduction" as one of a number of positive outcomes. In addition, Gartner has suggested that cost reductions in proprietary products may well be an outcome as a result of the competitive pressure brought to bear by Open Source.

However, experience has shown that it is extremely difficult to assess the overall expenditure by the Commonwealth in relation to ICT in general, let alone break the expenditure down to ICT operating costs. One of the important tasks ahead for a Labor Government is to collect accurate data about the use and expenditure on ICT within Government.

Labor believes there also needs to be a close link with ICT purchasing and industry development and the ICT policies issues that are appropriately approached in a whole-of–government way. Labor will ensure there is robust and formal link to the agency responsible for setting generic government ICT requirements such as open standards, interoperability, security, privacy, accessible web services and other related matters.

This takes me to the issue of Information Management within the Federal Government. Labor announced in January this year that we would be abolishing the National Office of the Information Economy. We said then that we would find a better way to manage policy and programs relating to Australia's participation in the Information Economy.

I am pleased to announce that Labor's better way is to create a new initiative that embraces all the critical ICT social policy challenges. It is E-Australia. E-AUSTRALIA will be funded through the existing resources allocated to AGIMO and the Office of Information Economy. Labor will still derive some savings from the transfer of former AGIMO and OIE (NOIE) to Labor’s new E-Australia initiative.

E-Australia is Labor's National Information Policy.

A Latham Labor Government will work hard to help everyone have the opportunity to access information via the internet. Labor will take a holistic approach to managing public information and providing online services as well target specific challenges and opportunities. This new approach is called E-Australia and represents an investment of $69.3 million over four years, starting in January 2005.

E-Australia will address many of the important social aspects of Information Technology, including using the internet to enhance democratic participation, closing the digital divide, providing government services online, supporting small business adoption of IT and e-commerce and helping people use the internet safely.

E-Australia includes Australia Online, Citizenship Online, Government IT and Online, Small Business Online and Safety Online.

E-Australia's Australia Online will address the economic, social and cultural challenges of business and community engagement and participation through the internet. Australia Online will administer other E-Australia initiatives that will be announced later in the election campaign.

One E-Australia policy has already been released: SafetyOnline, which was announced on the 8th September. Labor’s SafetyOnline policy combines effective regulation with a strong and practical Industry Code. Labor is providing an additional $2 million to fund a strategy that assists parents, students, teachers and the community protect themselves from unwanted content .

Australia Online will also support information economy-related roles such as Australia's representation and participation in international affairs relating to the global social, cultural and economic challenges Australia faces in the information age.

Labor will work with the small business sector to refocus the existing small business online grants program ITOL, including renaming it to Small Business Online, to ensure it is meeting expectations. Small business is a crucial sector and Labor will increase grant funding from $2.5 million to $3 million per annum. Small Business Online will be administered by Australia Online.

E-Australia's Citizens Online will provide $10.5 million over four years to support public spaces created in the world wide web, where communities of common interest share ideas for the public good and the advancement of society. Citizens Online will also provide funding to pilot programs that explore greater democratic participation using the internet, create an annual forum to exchange ideas about the internet and democracy as well as fund a representative internet users advocacy group to ensure they have an effective consumer voice. Citizens Online will also fund research into the information and connectivity needs of Australian communities. 

E-Australia: Government IT and Online (GITO) will replace the Howard Government's Australian Government Information Management Office (AGIMO). Labor will ensure that timely and useful advice is supplied to Agencies and Departments, and where ICT issues are appropriately tackled from a whole of government perspective, provide the strong policy leadership necessary to achieve better quality security, privacy, interoperability and open standards. Labor will also finally appoint a Government CIO.

Labor will ensure that internet-based government services do not make life harder and more complex for people, rather, accessing government services should be easier and red-tape removed. Labor is particularly keen to work more closely with Local and State Governments to provide useful online services to communities at the grassroots level. Many local governments are innovative leaders already in this area. Labor will build on these strengths.

In conclusion, Labor is proud to announce this comprehensive IT Policy as we believe this blend of social policy and industry policy is necessary to ensure that the benefits that technological development brings are entitled to be shared by all Australians. A Latham Government believes in opportunity and this is a policy that will deliver.