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 | Direct financial savings from outsourcing achievable by agencies were overstated; |
| The cost of implementing IT Outsourcing Program blew-out from $13 million to $40.38 million; |
| $25.78 million was paid to ‘advisers’ for fees and expenses; |
| Significant service delivery difficulties were experienced for extended periods by all agencies involved in outsourcing; |
| Agencies and tenderers underestimated the complexity involved in simultaneously transitioning to IT outsourcing; |
| Help desk services experienced the highest levels of service delivery disruption; |
| Financial penalties applied for contracted service levels that were not met totalled $4,660,000; |
| Weaknesses in applying proper privacy principles and privacy contractual arrangements. |
“With support from the cross-benches and an amendment by the Democrats, this inquiry will hopefully force the Coalition to account for their IT Outsourcing fiasco, Senator Lundy said.
The terms of reference for the Finance and Public Administration References Committee are:
(A) strategic oversight and evaluation across Commonwealth agencies,
(B) accountable management of IT contracts, including improved transparency and accountability of tender processes,
(C) adequate safeguards for privacy protection and security;
101/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
Senator Kate Lundy was told at a Senate Estimates hearing last night that Commonwealth departments and agencies are being effectively stripped of their information technology assets under the Coalition’s IT Outsourcing Program.
“At the conclusion of each contract between a Commonwealth department or agency and its IT Outsourcing vendor, the vendor owns all the IT assets, Senator Lundy said.
“This includes assets such as laptops, PCs, servers, mainframe computers, network hardware, in some cases telecommunication equipment such as handsets, and finally, even software and applications developed using taxpayers money.
“Officers from the Office of Asset Sales and Information Technology Outsourcing (OASITO) stated at Senate Estimates that the Coalition’s IT policy is designed to commit departments and agencies to outsourcing their IT permanently.
“This creates a situation where, at the end of the five year outsourcing contract, departments must continue with the contract or face the capital costs of completely replacing all their IT hardware.
“This is the issue at the heart of the dispute regarding the financial accounting methodologies that the Australian National Audit Office (ANAO) have with the Department of Finance and Administration (DoFA).
“The ANAO Report into Minister Fahey’s failed $5 billion IT Outsourcing Program found that direct financial savings from outsourcing achievable by Commonwealth departments and agencies were overstated, largely because of the way these assets were treated.
“It is clear that Mr Fahey is using this IT asset stripping to inflate his savings claims.
“The Minister has created a program that allows agencies and departments to be ‘captured’ by their outsourcing vendors, effectively committing them to a mandatory life sentence of IT outsourcing, “ Senator Lundy said.
The real beneficiaries of this policy are the vendors who secure these contracts. They are IBM $441 m, EDS $750 m, and CSC $160 m, who between them cover 14 Commonwealth agencies.
100/00. . Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
At a Senate Estimates hearing last night, Senator Kate Lundy was told by officials from the Office of Asset Sales and Information Technology Outsourcing (OASITO) that savings are not necessarily a mandatory prerequisite for outsourcing the IT functions of Commonwealth departments and agencies.
This admission directly contradicts Minister Fahey’s repeated assertions that the objective of IT Outsourcing is to produce savings for Australian taxpayers. On numerous occasions Minister Fahey claimed savings to taxpayers was a principal reason to outsource IT:
I inform the House that those stated objectives [of the IT Outsourcing Program] are, firstly, to provide savings to the Australian taxpayers in the hundreds of millions of dollars (Parliament 7/9/2000)
The Government has a commitment to…achieve significant savings, that is the principle which I operate as the Minister for Finance (Address to AEEMA, 25/6/1998)
According to the Australian National Audit Office Report, when Mr Fahey initiated his IT Outsourcing Program, the Department of Finance’s own evaluation concluded that:
…when fully implemented, consolidation and outsourcing could be expected to achieve aggregate net annual savings for agencies overall of at least 22 percent for mainframe data centres and 15 percent for midrange and desktop/network environments.
“The ANAO report disputed the cash-based accounting methodology used by OASITO to calculate Fahey’s claimed savings. So to find out now that savings aren’t the priority exposes the Coalition’s ideological agenda,” Senator Lundy said.
“It is now clear that savings are not the main reason outsourcing Commonwealth IT is continuing - it is an ideological obsession by John Fahey.
99/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
The ACT ‘Youth in the City’ youth services opened The Big Pig Internet Café today.
The retro-style Big Pig Internet Café, created with the assistance of federal funding, provides free access to eight networked computers, printers, free Internet usage and computer training support for young people up to 25 years of age.
"It is important to acknowledge that not all young people have access to the Internet and this is contributing to a division between the technological ‘haves’ and ‘have nots’. It is my belief that initiatives such as the Big Pig Internet Café will help to close this digital divide, Senator Lundy, Shadow Minister for Youth Affairs, said today.
"Young people are entitled to equitable access to the Internet and they need training on how to convert that information into useful knowledge.
"There are already many young IT entrepreneurs in the ACT and I think it is fantastic that more young people will have the opportunity to learn about computers and surfing the net through the Big Pig Café.
"The name ‘Big Pig’ was coined following discussions with a young person at the centre who said "Pigs Might Fly" as a broad expression of cynicism at the lack of resources directed towards youth.
"I think the young people involved in setting-up this initiative should be commended on their hard work and for following through on their vision for the centre," Senator Lundy said.
Youth in the City, managed by Anglicare, is an integrated youth service centre based in the city. Youth in the City also conducts ongoing education programs for school leavers, various workshops and seminars, recreational programs, an information and referral centre, and case management and family liaison services.
The Big Pig Café is open each weekday between three and six pm. In the mornings the café is used as an information technology training centre.
98/00. Contact: Simon Tatz on 02 6277 3334 or 0418 488295
The Office of Asset Sales and Information technology Outsourcing (OASITO) has prevented the release of crucial Industry Development reports, according to evidence heard at Senate estimates, Senator Kate Lundy said today.
The Industry Development reports must be provided annually to the Government by the IT outsourcing companies contracted by the Commonwealth Government.
These reports are used to measure industry development commitments against outcomes and must also be independently audited.
"The Coalition’s stated intention to provide a sanitised summary of these reports is unacceptable," Senator Lundy said.
"Labor rejects claims of ‘commercial confidentiality’ as a means to prevent the release of these critical reports.
"Labor calls upon Minister’s Alston and Fahey to release in full the Industry Development reports from each IT outsourcing contractor," Senator Lundy said.
97/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
Evidence presented at a Senate estimates hearing last week revealed that Advantra, a Telstra subsidiary contracted to deliver IT services to the ‘Group 5’ cluster of agencies, failed to meet the deadline for their industry development report.
Under their contract provisions, IT outsourcing vendors are required to furnish an independently audited report to the Government that measures their industry development achievements against their promised commitments.
Advantra’s report is two months overdue and follows an assessment by the Australian National Audit Office (ANAO) that indicates Advantra failed to meet their commitments.
"It appears that the industry development claims of the Coalition are as dodgy as the savings claims made by John Fahey," Senator Lundy said.
"Labor reiterates its grave concern that these crucial Industry Development reports will not be made public.
"This is further evidence that the Coalition’s Whole-of-Government IT Outsourcing Program has few positive outcomes for the Australian IT sector," Senator Lundy said.
96/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
The Minister for Youth Affairs, Dr Kemp, must make public the recommendations from the Youth Roundtable program, the Shadow Minister for Youth, Senator Kate Lundy, said today.
The 1999 Outcomes Package, a report of recommendations made by delegates at last year’s National Youth Roundtable program, was classified as a ‘departmental document’ and the Minister is refusing to make it available for public release.
The 1999 Outcomes Package contained more than 300 pages of youth policy initiatives, views, opinions and insights from Youth Roundtable delegates.
But the 2000 Outcomes Package is still on Minister Kemp’s desk.
"Given that Minister Kemp previously defunded AYPAC, the youth peak advisory body, the Outcomes Package represents the only detailed policy analysis on youth affairs compiled by young Australians," Senator Lundy said.
"By not releasing this report, Minister Kemp is bringing into question the integrity of the whole Roundtable process.
"The Roundtable outcomes are the result of months of research by delegates who entered into this process in good faith, with an expectation that their efforts would be circulated to a much wider audience.
"I have been contacted by some Youth Roundtable members who feel that Mr Kemp has misled them.
"Dr Kemp should make public the Youth Roundtable Outcomes Package, otherwise the Youth Roundtable will be seen as just another tokenistic measure by the Coalition," Senator Lundy said.
95/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
The 'Group 11' IT outsourcing contract will proceed despite the Coalition delaying the close of tenders until after the Humphry review into the Coalition’s failed IT outsourcing program is received by Minister Fahey, Senate Estimates heard this week.
The Group 11 contract comprises the Department of Education, Training and Youth Affairs; the Department of Employment, Workplace Relations and Small Business; the Department of Treasury; the National Library of Australia and the Australian Securities and Investment Commission.
The closing date for tenders for Group 11 has been delayed until the 31st January 2001.
However, during questioning at Senate estimates it was revealed that the decision on whether or not to proceed with IT outsourcing was out of the departments’ hands, and firmly in the hands of the Minister for Finance.
Officials from both the Department of Employment, Workplace Relations and Small Business (DEWRSB) and the Department of Education Training and Youth Affairs (DETYA) confirmed that the contract would proceed, regardless of the findings of the Humphry Review.
"Labor's fear that the Coalition is ideologically committed to outsourcing IT, even if the Humphry Review finds the IT outsourcing initiative is detrimental to the operations of Commonwealth departments and agencies, have been confirmed," Senator Lundy said .
"To date, the Coalition has arrogantly ignored the Australian National Audit Office Performance Audit of the IT Outsourcing Initiative's recommendations relating to how savings should be realistically calculated.
"This arrogance ensures that agencies and departments will continue to be swindled by the Minister's false claims of savings.
"Ultimately, it is the taxpayer that loses in the end as government service delivery is placed under a great deal of unnecessary pressure," Senator Lundy said.
94/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
Today the youth of Australia mourn the departure from youth radio network JJJ of The Sandman, one of Australia's most loved personalities.
The JJJ radio series, 204 Bell Street - a Sandman creation that has been running for more than two years - aired its final episode this morning.
Like its predecessor, Pleasant Avenue, 204 Bell Street has reflected the joys, the jokes, the despair and the occasional disappointments of young people living in shared accommodation - with The Sandman as the hub of all action.
To the youth of Australia, Bell Street mirrored much of their own experience - the fun, the personal relationships, the insecurities, and challenges facing young people today when they venture out into the community away from their families for the first time.
The Sandman is a true Australian youth icon. With Pleasant Avenue and Bell Street and his work on Good News Week - he used humour to put a focus on the many issues confronting the youth of today.
From teenage sexuality, moving away from home, shared households, peer pressure, studying for the HSC and even prospective parenthood, The Sandman dealt with the issues in his own inimitable way.
By celebrating the underdog and embracing the insecure, Bell Street achieved cult status amongst the young and the not so young.
To mark the end of 201 Bell Street, JJJ has made today National Sandy Day.
The Triple J web cam will also be focusing on The Sandman at various points throughout the day and can be accessed through the JJJ website, which can be found at www.abc.net.au/triplej
The Sandman will be missed as a JJJ regular. Like many others, I congratulate The Sandman, his alter ego Steve Abbott and JJJ and I look forward to his guest appearances on the youth network and in other media in the future.
Happy National Sandy Day!
93/00. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
The Coalition appears to be hedging on a promise by Prime Minister Howard to restore the funding base to Olympic sports cut in the last budget, the Shadow Minister for Sport, Senator Kate Lundy, said today.
Mr Howard, when asked on ABC radio on 2 October about his promise to increase funding to Olympic sport, pledged that:
There will be some more [funding] over and above what was allocated in the last Budget, yes.
However, at a senate estimates hearing today, the Government was unable to provide any details as to when this alleged restoration of funding will occur.
Senator Minchin, the Minister representing Sports Minister Jackie Kelly at senate estimates, said that a decision would be made "in due course" when "all will be revealed".
"It is apparent that the Coalition is in no hurry to honour the Prime Minister’s promise to restore certainty to the sporting community", Senator Lundy said.
"As the Coalition slashed $16 million from sport at the last budget, national sporting organisations and athletes were eagerly anticipating Mr Howard’s promise to restore funding.
"Mr Howard used the post-Olympic euphoria to make his announcement about funding increases, but it is now obvious that there was no substance behind his rhetoric.
"Once again, Mr Howard’s commitment is a ‘non-core’ promise," said Senator Lundy.
92/00. Media contact: Simon Tatz on 02-6277 3334 or 0418 488 295
Finance Minister Fahey’s ‘in-house’ review of the Coalition’s failed $5 billion IT Outsourcing Program is permitting just three weeks for submissions from interested parties, and just 20 days to deliver its finding, Senator Kate Lundy said today.
Mr Richard Humphry, who has been appointed to conduct the review into the controversial Commonwealth Whole-of-Government Information Technology Outsourcing Initiative, has called for submissions to be received by 4 p.m. on Monday 11 December - less than three weeks away.
The Coalition’s review, which is being overseen by a steering committee headed by Mr Max Moore-Wilton, will then have just 20 days from the close of submissions to produce its finding.
"The $5 billion Outsourcing Initiative encompasses over 50 Commonwealth departments and agencies, so this incredibly limited timeframe for submissions indicates that the Coalition is not interested in getting to the bottom of the outsourcing mess, Senator Lundy said.
"This review will be little more than a cover-up unless realistic deadlines are set for submissions and findings.
"The incredibly short time frame places Mr Humphry’s under unreasonable pressure to produce a considered and proper assessment.
"Given Mr Fahey’s vow to release the IT Outsourcing review findings ‘by the end of December’, I suspect that he will make the report available either on Christmas or New Year’s Eve", Senator Lundy said.
Submissions to the Review of the Whole of Government Information Technology Outsourcing Initiative cay be sent to:
91/00. Media contact: Simon Tatz 02-6277 3334 or 0418 488 295
The Skate Parks of Australia web site was developed by Matt Chamberlain and his brother who travelled around Australia collecting photographs and video footage of as many skate parks as possible. Their web site will enable both young people and tourists to find somewhere both fun and safe to skate. They currently have listed over 350 parks from all over the country with pictures, videos, maps and descriptions.
The web site complements the efforts of local and state governments, who have built parks for skateboarding but have not always provided details of where they are and what they offer.
This new web site will provide Australia's most reliable on-line skate park directory. It also features a calender of events, a for-sale section and a chat room.
90/00 Media contacts:
Simon Tatz (Kate Lundy’s Office) on 02 6277 3334 or 0418 488 295
Matthew Chamberlain: Sk8parx: 02 6205 0847(W), 02 6241 1975(H)
"The announcement by John Fahey of terms of reference to his IT Outsourcing Review reveal a minister under extreme pressure from the Opposition," Senator Kate Lundy said today.
"His further concession - full disclosure of the IT review - does not mean that this process is transparent. It is still a Coalition ‘in-house’ exercise.
"It is still not clear whether or not submissions will be invited from all stakeholders, including industry and individuals public servants and whether these submissions will be placed on the public record.
"The terms of reference Mr Fahey has announced still reek of a cover-up.
"Labor will move a to establish the Senate Finance and Public Sector Administration References Committee to undertake a broad ranging inquiry into the Coalition’s failed IT Outsourcing Program when Parliament resumes in two weeks time.
"The Parliament is entitled to examine issues relating to privacy and security, contract tender process, the unrealistic promises of savings, the budget cuts and associated impact on agencies and the damage caused to IT industry development.
"Labor’s proposed Senate inquiry is the only way to get to the bottom of Mr Fahey’s mess.
"Mr Fahey would support a senate inquiry if he is genuinely committed to solving the problems of IT outsourcing and restoring accountability in this crucial area of public policy.
"Finally Labor repeated the call to cease work on future contracts until the IT Outsourcing Program fully is investigated and a sensible path forward is established," Senator Lundy said.
89/00. Contact: Simon Tatz on 02 -6277 3334 or 0418 488 295
A report released yesterday by the St Vincent de Paul Society revealed that young people are being forced to turn to charities in increasing numbers.
The report, Working out of Welfare- where reform is needed, was launched yesterday by NSW Premier Bob Carr.
The St Vincent de Paul report affirmed that young Australians are increasingly dependent on non-government welfare agencies because of continually high levels of youth unemployment and low levels of social security benefits through the common youth allowance.
The report also revealed:
| 60,000 young people under 20 were jobless for 12 months or more. This is compounded by over 200,000 long term unemployed people in their twenties, representing 40% of the total long-term unemployed; |
| the need to create training and support opportunities for young people if they are to have "any chance of getting a job"; and |
| there is little evidence to suggest that the Coalition’s ‘work for the dole’ scheme genuinely assists young people into long-term permanent jobs. |
St Vincent de Paul were also critical of the Coalition’s ‘blame the victim’ philosophy, which assumes welfare recipients would prefer to survive on welfare payments rather than support themselves in well-paid, secure and meaningful employment.
"This Government has been continually crossing its arms, pointing fingers and labelling young people on welfare payments as ‘the problem’," said Senator Kate Lundy, Shadow Minister for Youth Affairs.
"When is the Government going to stop scapegoating young people and own up to their social responsibilities?
"The Coalition takes for granted the invaluable support that organisations, such as St Vincent de Paul, provide young Australians.
"This latest report lends further weight for the re-establishment of a national youth peak body solely focused on lobbying Government for a better deal", Senator Lundy said.
Copies of the Report can be obtained form the St Vincent de Paul Society on 02 - 9560 8666
88/00. Contact: Simon Tatz on 02 6277 3334 or 0418 488 295
The Senate Employment, Workplace Relations, Small Business and Education References Committee has confirmed what young people have been consistently saying: that they are subjected to an ad hoc and sub-standard vocational education and training (VET) sector.
The report, Aspiring to Excellence- Report into the Quality of Vocational Education and Training in Australia, was tabled on Thursday. It states that:
"The current state of vocational education and training in Australia is indicative of the failure of policy makers to come to grips with global integration in a way that ensures that all Australians are able to realise their full potential within a strong and healthy national community."
(p2 Overview and Recommendations)
"It is hard enough for young people to find meaningful employment in Australia without having to rely on an ad hoc and substandard VET system to support their successful transition to the workplace", Senator Lundy said today.
"Despite young people already experiencing continuing labour market disadvantage, this report has highlighted that VET places for 20-24 year olds have in fact decreased not increased. Furthermore, the number of young people actually completing their apprenticeship is only about 50 % in some areas.
"Young people should expect access to well-resourced, quality controlled and meaningful vocational training opportunities with uniform standards and procedures that are generically recognised.
"Unfortunately many young people have accepted apprenticeships in good faith only to find themselves victims of low pay, menial work and limited training opportunities by unscrupulous employers after ‘cheap labour’.
"They need protection from employers who have been rorting the system as well as protection from employer retaliation if they expose inappropriate and/or unethical behaviour.
"The report also supports claims made by this year’s National Youth Roundtable which stated that VET suffers from a negative community image and that VET is considered a ‘poor second’ in comparison with traditional education which favours academic, rather than the practical, achievement.
"It is the Commonwealth that controls the purse string of VET in Australia and I call on Minister Kemp to accept responsibility for his role in failing young Australians", Senator Lundy said.
87/00. Contact: Verity Newnham or Simon Tatz on 02-6277 3334
The ALP will move for a Senate inquiry into the Coalition’s Whole of Government Information Technology Outsourcing Program, Senator Kate Lundy said today.
"Labor is optimistic about securing cross-bench support for the Senate Finance and Public Administration Reference Committee to hold a full and open inquiry into the Coalition’s controversial IT Outsourcing Program", Senator Lundy said.
"The terms of reference are currently being finalised, however it is Labor’s intention that the Finance and Public Administration Reference Committee inquiry will focus on:
| All issues raised from the Australian National Audit Office Performance Audit into the Implementation of Whole of Government Information Technology Infrastructure Consolidation and Outsourcing Initiative; |
| The impact on Australia’s Information Technology industry development. |
"This Senate inquiry is necessary because the Coalition is refusing to guarantee that the findings of their review into IT Outsourcing, announced earlier this week, will be made public.
"Yesterday, the Joint Statutory Committee on Public Accounts and Audit (JCPAA) attempted to pursue an inquiry along similar lines, only to be thwarted by Coalition numbers on the Committee.
"It is clear that the Coalition is desperately trying to put a lid on the can of worms that the Audit Office uncovered in its report on the IT Outsourcing Program," Senator Lundy said.
86/00. Contact: Simon Tatz on 02 - 6277 3334 or 0418 488 295
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SENATOR LUNDY: I just wanted to say a few words about the Government’s IT out-sourcing program, and the first issue is that Labor has decided to pursue a Senate References Inquiry into IT out-sourcing because we’re not convinced – in any way, shape or form - that John Fahey’s initiative with respect to a review will serve the purpose of bringing to light and bringing to the public’s scrutiny the issues and problems associated with the IT out-sourcing program.
DR LAWRENCE: I think its very clear, if you listen to answers in the House today, that Mr Fahey has no real commitment to making this a public process. It’s very clear, too, that there are a lot of people who, given the opportunity, would want to comment on the failure of this process – it’s great expense, it’s blow-out in time, it’s increase in cost for many of the departments, and, from an industry perspective, a very serious lost opportunity, for small to medium sized enterprises in Australia. We’re very worried about the fact that the Governmetn is going to have a quick and dirty inquiry internally, and that no one will be in the position to judge what is already a scandalous waste of money.
JOURNALIST: it true that there was going to be a half-way review of this program anyway and what kind of review are you going to get if it has to be done by Christmas time?
SENATOR LUNDY: Well, at this stage, with the Government’s review, we’re not convinced it’s going to be an effective one if it has to be done by Christmas time, at all, and that’s one of the reasons why we’re pursuing the Senate Inquiry. The other about the review is that the process Minister Fahey has initiated involves what we know to be the chief proponents of the IT out-sourcing program in Dr Boxall from the Department of Finance and Maxmore Wilton from PM & C , both who actively supported the out-sourcing program, in the original Cabinet submission to the Coalition back in 1997.
JOURNALIST: Do you think Mr Humprey is an appropriate chair of the Review?
SENATOR LUNDY: I haven’t made any comment, and don’t believe it’s relevant to comment on the appropriateness of the actual Chair of the review. My concern is that that Chair is required to report to Dr Boxall and Max Moore-Wilton and that the process is not going to be public.
DR LAWRENCE: They’ve already made up their mind, too. If you listen to Mr Fahey in Question Time today, he was busy defending the blow-out in cost that been identified in the Audit Office and disputing the figures that have been provided out of that independent assessment. So I’m not confident at all that they would listen to even some dissenting advice from internal sources, but given the people they’ve appointed to the task, it’s not likely that they will dissent. This is designed to placate what little public opinion there is about this, despite the fact that it’s a scandalous waste of money and also to have some sort of response to the Auditor General, rather than solving the problem, which is what they should be doing because if they proceed down this path with the remaining areas; the remaining clusters for out-sourcing, it will be, you know, a monumental disaster. We’re part way their now and they’ve already got the feed-back. If it hadn’t been for Kate’s work in this area, frankly, I doubt that it would ever have come to serious public attention.
SENATOR LUNDY: I think one of the issues that is of grave concern to me is the timing of this review. Very clearly there are two major contracts on the drawing board at the moment – being Centrelink and a group of departments called "Group Eleven" . The Government is saying they’re going to continue with those contracts despite this review anyway so we’re very keen to see those contracts being put on ice as well, not only this review is completed, but the Senate has the opportunity to scrutinise it. Another point I’d like to make is about the Audit Office Report. The Department of Finance responded on behalf of all of the Government agencies to that Audit Office report, and we believe that the other agencies and departments were gagged. We know that Industry is very reticent about lodging complaints about the program because they’re fearful of losing contracts in the long run. These are pretty serious attempts on behalf of Minister Fahey to suppress criticism about a fundamentally flawed program and we’re hopeful that a Senate Inquiry into this matter will expose all of these issues and allow, particularly Australian IT companies who’ve been disenfranchised to have a platform and lodge a complaint with impunity.
JOURNALIST: Would Labor cancel the whole initiative?
SENATOR LUNDY: Labor’s approach to IT out-sourcing is yet to be seen, because until we know what’s in the contracts - the five contracts that are already left we don’t know the pathway forward is. I’m gravely concerned that there are no exit clauses, or here’s limited capacity to renegotiate those contracts and they’re all part of the challenge that Labor will face if we’re elected next time ‘round. I’m also concerned that in the meantime we don’t want to see any more of these massively clustered contracts left because that just means more implemental damage to information management in the public sector.
DR LAWRENCE: That’s right. It’s very it’s clear that there are enormous costs already. There are costs to industry, costs to the tax-payers. In some cases, with organisations such as CSIRO, there are bizarre propositions being made about how that should be out-sourced, so that’s a problem, too. There are privacy concerns that have been raised, which haven’t been dealt with by the Government. And as Kate said, the total picture is one that we will have to get. And if the Government’s not prepared to make it public then the Senate Inquiry’s the best way to go. Because you only need to talk to public servants who are trying to administer these programs for five minutes before they’ll draw you up a very long list of difficulties that they face, particularly in getting the new technology. Ironically, what’s happening is that they’re getting second-rate and run down opportunities rather than the cutting edge that there should be. And it’s costing them more. Every time they go to the helpdesk, every time they require some improvement, they’re having to pay for it out of these contracts. So we’d certainly be keen to cut the costs to the Government and to improve the performance of the public sector in information technology, but we’ll need to know the parameters of that before we can sensibly announce policy.
SENATOR LUNDY: One of the issues with the IT out-sourcing program has been the Government’s continued claim for one billion dollars worth of savings have been realised. What the Audit Office report shows is that they’ve only managed to find $70m and yet they’ve cut the departmental budgets by a far greater amount than the anticipation of savings.
I don’t believe the savings were there in the first place and there’s plenty of international evidence to show that those savings were never going to be achieved. So the premise of this IT out-sourcing program is false to start with and that’s one of the reasons why we think it should be stopped. There is no real justification. I don’t think the savings are there to be found so let’s, you know, we’re asking the Government to stop with the pretence – ditch the flawed program and let’s get back to basics and let’s start looking at effective, strategic ways to manage public information.
JOURNALIST: what about what Mr Fahey was saying in Parliament about how it can drive IT development to the private sector, they can get it out of Governmetn and try to get the whole private sector moving. Isn’t that a very good stimulus to turn that sort of funding into the private sector.
DR LAWRENCE: no it’s not because what has happened is that the work has gone to a few major, multi-national corporations. Very little of the work has gone to the small to medium enterprises in Australia and even when they’ve had commitments to give some of the work to local companies they haven’t met those commitments, according to the Auditor. So the real problem is that the benefits are not flowing to Australian companies, the technology is largely not new. The shape of the contracts hasn’t allowed smaller companies to get involved, and in any case the contacts are not being met. The big multi-nationals are not letting the work as they should, under the agreements and that’s a real problem.
SENATOR LUNDY: I think just to add a point to that about the relationship between these multi-national corporations who have got 70% of the work. Invariably the Australian compose that are involved with this, and there are quite a few,are relegated to the status of sub-contractor and are deprived of the opportunity of tendering as a prime contractor. And that’s one of the reasons why we think that there’s limited opportunity to actually grow some bigger businesses here in Australia with respect to IT. Under this program the Australian IT industry is kept small and it’s kept small because of the structure of this IT out-sourcing program. We believe that there is an opportunity to use Commonwealth procurement to grow local industry. Not by discriminating against foreign companies, but by creating a genuinely level playing field for opportunities to tender and contracts the size that out local companies can deal with, not lock them out by structuring these tenders so large that only the multi-nationals can fund the 1m or 1.5m bids to get this work.
85/00 Media Contacts: Patrick Bindon 0419 963 486 (Dr Lawrence)
Simon Tatz 0402 427 772 (Senator Lundy)
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The Minister for Finance has finally admitted that his IT Outsourcing Program is a debacle by calling for an independent review of the Whole of Government IT Outsourcing Initiative, Senator Kate Lundy said today.
"Labor’s call for a halt to the Coalition’s IT Outsourcing Initiative has now been vindicated," Senator Lundy said.
"The recently released ANAO Report and the OASITO annual report highlighted the major flaws in the IT Outsourcing Initiative, including massive payments to consultants, failure to achieve stated savings, delays in tendering schedules and service delivery difficulties.
"John Fahey has been under pressure from the Opposition and industry groups to acknowledge that his IT Outsourcing Initiative is a shambles.
"The Minister has now been forced to formally acknowledge that there are major structural flaws in the IT Outsourcing Initiative.
"This Review is long overdue, given that the Coalition’s IT Outsourcing Initiative has been embroiled in controversy from the very beginning.
"It is very disappointing, however, that despite Mr Fahey’s acknowledgment that a review is needed, he is still allowing the Group 1 and Group 11 tenders to continue.
"Mr Fahey should stop these tender processes from continuing in order to prevent further damage to Australia’s IT management capability and government service delivery.
"I call on Minister Fahey to make this Review a public inquiry, given the importance and interest in IT outsourcing.
"It is essential that the views of Commonwealth Agencies and Departments involved in IT outsourcing are made public as they have borne the brunt of Mr Fahey’s ham-fisted management. Up until now they have been gagged," Senator Lundy said.
For related media releases: Industry Development (and Government IT Outsourcing)
84/00. Contact: Simon Tatz on 02 -6277 3334 or 0418 488 295
The Paralympic Games is a celebration of achievement against adversity and represents something of far greater national and international significance than merely a sporting meet, said Shadow Sports Minister, Senator Kate Lundy.
"The Australian Paralympic Committee delivered the world’s best Paralympic event.
"The Sydney 2000 Paralympic Games involved 4,000 athletes from 125 countries. To put this is perspective: it was bigger than the 1956 Melbourne Olympics, the 1998 Commonwealth Games and the 1998 Soccer World Cup.
"The Sydney Paralympic Games also set a record for attendances. At Atlanta, just over 500,000 tickets were sold, whereas Sydney well and truly broke the million mark. In fact, the Paralympics actually exceeded the budgeted ticketing numbers, which shows just how popular and well supported the Paralympics are.
"Australian Paralympic Athletes set a new record of 149 medals; 63 Gold, 39 Silver and 47 Bronze medals.
"Equally worthy of celebration is the number of ‘personal bests’ achieved by our Paralympic athletes.
"I congratulate the Australian Paralympic Committee, President Greg Hartung, Chief Executive Brendon Flynn and Chef de Mission Paul Bird and all management and volunteers for their efforts.
"I hope that the Coalition fulfils its promise to the Paralympic community and delivers a funding package that will ensure that the Sydney Paralympic Games are seen as the foundation for our continued world-leadership in sport for people with disabilities.
"Kim Beazley has reiterated his bipartisan support for Paralympic sport at the official dinner held in Canberra last night.
"As the Coalition is yet to detail its funding plans, I call on the Government to remove the uncertainty for athletes, coaches, sports scientists and administrators by specifying the increase in funding the Prime Minister alluded to at the conclusion of the Olympics and the Paralympics," Senator Lundy said.
83/00. . Contact: Simon Tatz on 02-6277 3334 or 0418 488 295
Australian industry development in the information technology and communications sector is being stifled by the Coalition’s IT Outsourcing Program, Senator Kate Lundy and Dr Carmen Lawrence said today.
"The Office of Asset Sales and Information Technology Outsourcing (OASITO) Annual Report 1999-2000 reveals that only 30% of the outsourcing contracts went to Australian small to medium enterprises (SMEs)," Senator Lundy said.
"This means that 70% of the outsourcing contracts are going directly to US multinationals.
"These contracts cover everything from desktop computers to mainframe computers and their size and structure is designed so that smaller innovative Australian IT companies are effectively locked out from tendering," Senator Lundy said.
"Efforts by the Coalition to promote the industry development aspect of IT outsourcing were slammed by the Audit Office," Dr Lawrence said.
"The Australian National Audit Office (ANAO), in their report Implementation of Whole-of-Government Information Technology Infrastructure Consolidation and Outsourcing Initiative, confirmed that, in some cases, industry development benchmarks were not being met in the IT Outsourcing Program.
"The ANAO report, tested the performance of three outsourcing vendors (CSC, EDS and Advantra) and found that Advantra alone had failed to involve Australian SMEs to the specified levels.
"US multinationals have, to date, secured all of the largest outsourcing contracts.
"EDS, CSC and IBM were awarded contracts worth over $1 billion.
"Given that 70% of outsourcing contracts are going to US multinationals, Minister Fahey’s claim that the interests of the Australian IT industry are being pursued must be treated with contempt," Dr Lawrence said.
82/00 Contact: Simon Tatz on 02-6277 3334 or Patrick Bindon on 02-6277 4181
The Office of Asset Sales and IT Outsourcing (OASITO) paid a total of $91,638,121.70 to outsourcing consultants during 1999-2000, according to their annual report released today.
This figure is double the amount OASITO spend last year, when it paid out $46.4 million on consultants.
A total of 88 consultants were used by OASITO. This means that the average paid to each consultant was $1,041,342.
For the 2nd Tranche of Telstra, OASITO paid 18 consultants a total of $67,177,649.31, or $3,732,091 each.
Two consultants who advised on the outsourcing of Dasfleet were paid a total of $1,932,427.22.
The Coalition’s IT Outsourcing Initiative, which an Australian National Audit Office Report earlier this month found was beset by a range of major flaws, cost blow outs and unrealistic savings targets, paid 13 consultants $11,422,275.27.
"These consultants have been paid an obscene amount of money for advice, which in many cases has not resulted in savings benefits to the departments and agencies, nor has it improved client services," Senator Lundy said.
"Minister Fahey must now acknowledge the Coalition’s IT Outsourcing Program is out of control and he must put a halt to the Program immediately," Senator Lundy said.
81/00. Contact: Simon Tatz on 02-6277 3334 or 0418 488 295
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