AIIA wants small business breaks from new government

Following yesterday's submission by the Australian Computer Society, the Australian Information Industry Association (AIIA) has revealed its wish list for the new federal government. However, general manager of strategy and policy services, James McAdam, said "its nothing they haven't heard from us before".

Following yesterday's submission by the Australian Computer Society, the Australian Information Industry Association (AIIA) has revealed its wish list for the new federal government.

However, general manager of strategy and policy services, James McAdam, said "its nothing they haven't heard from us before".

The body said it will submit its requests to the major political parties - Liberal, Labor, Greens and Democrat parties - asking them to respond. The results of which, according to McAdam, will then be publicly released as a score card for voters to consider before voting.

The 2001 score card rated similar grades for the Liberal/National parties and the Labor party, with the coalition receiving a slightly higher grade (A- versus a B+) for "government ICT arrangements". The 2004 score card is due out sometime before the 9 October election.

McAdam said the principal concern that the AIIA will communicate to the government relates to procurement by small organisations of government agency contracts.

According to McAdam the issue of "unlimited liability" prevents small agencies from getting government tenders as they are rarely financially able to back up tenders or negotiate liability caps.

"In terms of how the government manages risk, liability is unlimited as a default. And if it's uncapped then the business venture is uninsurable and so in the case of a small company the whole business is put on the line if something should go wrong," he said.

"Capping liability in some form or coming to a commercial arrangement with the industry will lead to small business getting more work and contribute to a more competitive field."

McAdam adds that Shadow Minister for Information Technology Senator Kate Lundy has said Labor will look at this issue.

"What we have discovered through study is that in a large number of cases the government deals with the suppliers to cap the liability, but it costs a lot of money, so we say why not start with a cap giving small businesses a chance and save money on commercial allowances alone," said McAdam.

The commercialisation of intellectual property is another issue the AIIA will be pressing the government on, according to McAdam, as he said the governments current position of "we pay, we own" is doing nothing for the industry.

McAdam said that currently any intellectual property created under government tender is automatically owned by the government and could possibly remain unused and wasted on the "government shelf".

"Companies should be able to negotiate a licence so they can continue to build on the innovation and pay a royalty to the government agency, allowing the company to sell the product to other markets instead of it being wasted," he said.

The AIIA is about to release the second set of findings on offshore and outsourcing ICT projects, according to McAdam, which are based on the views of CIOs, developers and other industry influences such as politicians.

McAdam said the findings are qualitative but remains tight lipped about any details of the report.

According to McAdam the AIIA will "continue to say to the government that there is a real benefit from global sourcing for Australia."

"We have the potential to be a real beneficiary of outsourcing," he said. "We are not able to compete with India and China in terms of price but we have lower costs than others and we have a highly skilled multi-lingual work force with similar intellectual property laws to most countries, as well as the same security and privacy ethics."

"Australia stacks up favourably as a low risk destination for offshore work."

The AIIA would also like the government to look at the domestic Australian ICT industry, said McAdam, to "facilitate the development of local industry to compete on a global level".

"We need better tax regulations and more investment attractions to encourage small companies to grow and for people to invest in small companies," he said.

Currently, according to McAdam, investors are taxed at income rates instead of at capital gains tax levels, which apply after the shares have been realised.

"There are also issues around general capital raising. The government needs to look at the US's QSB [Qualified Small Business] and the UK's EIS [Enterprise Investment Scheme] systems as a guide," he said

"We are still waiting to see their policies, but our key wish for the new government is for small businesses to be given the opportunity to grow in Australia."

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