From a political perspective, the product of a Government is the standard of living that they deliver to their constituents.  A significant measure in the qualitative assessment of that standard of living can be measured in the nature and level of services provided to citizens by the Government.

Those services are taxpayer funded, so there is inherent public accountability attached to their expenditure, and hence well established parliamentary processes for scrutinising how, why and what for, this money is spent.

In this way, political or administrative challenges can be raised at a political level, and a from a citizens perspective, via a series of statutory offices established specifically for this purpose, for example the Commonwealth Ombudsman

The nature of the privates sector corporate relationships is scrutinised not through a public parliamentary process, but through the courts, whose references extend beyond just relevant legislation and into common law.

Outsourcing government services brings these two domains together in an as yet ill-defined relationship.

The Commonwealth Ombudsman's report of 1997 makes this point:

""The ‘contracting out’ of services previously delivered by government to provide operators brings a new dimension to the chain of accountability. The insertion of an intermediary between government and citizen can confuse responsibility and allow buck-passing if the service is unsatisfactory or a person is harmed or disadvantaged by the contractor’s actions."

Experience has shown that there are many cases of the contractual relationship being ill-defined, and as a result, disputes often end in litigation. Contractual law between the Government and the private sector is an imperfect science. When there are no absolutes, it is often the party with the most leverage and the deepest pockets that prevails in any dispute.

It is a fair comment in my experience that the corporate culture tends to clash with the highly accountable processes that are second nature to public servants. Indeed, this contractual barrier has been identified as a major hindrance to public accountability -most often expressed through claims of 'commercial in confidence'- in parliamentary estimates and other comparable forums.

This in turn has led to simplistic measures of success such as the dollar bottom line, with service quality, accessibility and other hard-to-quantify effects being excluded from the assessment.

This whole debate is not new, in fact it dates back more than 150 years. Many of the same issues emerged last century, including accountability of public expenditure and quality of services, however they tended to relate to specialist services for which expenditure on necessary equipment etc could not be justified.

The recent motivations for outsourcing are, however, not limited to the demand for specialist services. They related more specifically to economic rationalism, where the fiscal outcomes of an administration or Government, take precedence over the service to the citizenry.

The political motivation for such an agenda must be analysed. Is it about reducing accountability, about shedding risk at senior management levels? Is it about fiscal savings and efficiencies? Is it about succumbing to private sector pressure to access new markets and therefore grow?

The Coalition Government's public justification for outsourcing hang off the claim that massive savings will emerge if services are delivered by the private sector. This is a convenient message as their philosophical rejection of the role of the public sector is served.

This argument ignores issues of substance, including the role of the public sector in our community and how services funded by the Government can be most effectively delivered to citizens.

For example, even information management, which was once thought of as being the fundamental role of many agencies, is being outsourced. I question whether the need to outsource this role exists, but while private companies are creating products that seek to establish new markets, any where they is money expended, there seems to be a private sector company to do it 'faster, better and cheaper.'

With respect to records management, the information technologies that underpin the service, are a major budget item and therefore attract attention of fiscal managers.

Information Technology (IT) outsourcing provides a fascinating case study into current policy challenges of outsourcing facing Governments of all persuasions. Outsourcing IT is not beholden only to the public sector, private sector trends also indicate a growth.

I find the definition of IT hard to grapple with. It is difficult because information technologies are an enabling service for some agencies, and for others it's what they do - they manage information. The distinction is not clear.

An analysis of the massive impact that strategic management of IT can have on the improvement in the quality, efficiency and innovative nature of a service demonstrates very clearly its importance.

Even in the application of economics arguments to the outsourcing agenda, the Government fails. This Government intends to race ahead and lock in early contracts despite little global evidence of consistent public savings. In fact evidence has shown a tendency for the fiscal savings to occur only in the first few years (if at all) and then the contractual variations stemming from administrative restructuring or technological progression not only eat into any long term projected savings, they cost government a lot of money.

Introduce the negative effect of locking out Australia's innovative small business IT sector and its dangerous policy. Australia's information technology trade imbalance blow out from $8 billion deficit in IT to $40 billion by 2010. This nation cannot afford to further disenfranchise our own export potential - which is our only hope of altering this alarming trend.

Therefore how we manage our IT sector, both private and public, is absolutely critical to our overall economic position in the global economy.

However, one the most under-reported aspects of outsourcing is the cost to employment and the social impact of such a fundamental change to the way many people earn their livelihoods.

This outsourcing agenda ignores the fact that many people choose to apply their skills and knowledge for the benefit of the social collective - through the public service.

The cultural difference between public and private sector workplaces may vary remarkably, but underlying the private sector is always the profit motivation for private benefit. The public sector on the other hand has a perpetual commitment to the benefit of all. These differences manifest themselves in different ways with different individuals and workplaces, but they have the potential to affect some people quite profoundly.

The potential for loss of employment is one of the most devastating prospects facing any individual and their family. The personal upheaval that arrives when your job is to 'be abolished', or you are told that you might have an opportunity to transfer to the new private company, if they like you, can potentially destroy people. This is strong language, but I don't believe I am overstating the impact.

Invariably, jobs are lost in the transfer from public to private, and sadly, often it is the savings from the wages bill that fleshes out the Government's evidence that a saving was achieved in the process. Never do you see a correlating set of costings detailing social security benefits, legal aid, health expenses and other costs incurred by the Government as a result of job loss and stress. Remarkably, even redundancy costs are not factored into the cost benefit analyses used to justify outsourcing.

The change in employment tenure can completely throw a families life-time financial planning, the education of their children, their retirement savings, their mortgage. The move from permanent employment to contract is not just a simple transfer. It brings with a Pandora's box of personal considerations that are completely ignored, both politically and economically.

Contract labour creates a transient, flexible workforce where experience and corporate knowledge are not recompensed with employment security. Rather the reward is (hopefully) increased remuneration. Skills are not nurtured, they are exploited when needed, discarded when no longer required.

Subsequent effects on a community can emerge in the form of an unstable base to the regional economy, making future employment prospects for younger member of the community uncertain. Government are forced to woo business, expending critically needed health dollars on incentives for the corporations just to keep the current jobs there.

Where is the public interest consideration in this current debate? It must be found, or we will all pay a price.

I want to thank the Records Management Association for the opportunity to talk about these issues. I know I have traversed a lot of ground, and I thank you for you patience and time.

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