Part II: Lundy vs. Williams

LUNDY: I answer this question with a question: "Will the Howard Government support Australian companies to gain unprecedented access to the Australian Government procurement market?" The answer is no, because the current system is still structurally biased towards large multinationals winning the contracts at the expense of local companies in our domestic market.

This is relevant because whilst this continues to be the case, Australian companies will be hampered in their ability to develop the scale and experience needed to present a credential to the US government. One of the first questions asked is "Do you work for your own government?"
While relationships with multinationals are important to Australian IT exporters, the fact is that unless we have a market that can help develop and grow Australian SMEs' capability, we won't have companies of the size and focus to take these opportunities up.

And until we have the Senate inquiry, we do not really know what the AUSFTA means anyway. Call us cautious but this is yet another issue where the Howard Government spin is not to be trusted!

About Kate Lundy Kate Lundy was elected Labor Senator for the Australian Capital Territory in March 1996, at age 28. Following the 1998 federal election, she was appointed Shadow Minister for Sport and Youth Affairs as well as Shadow Minister Assisting on Information Technology, becoming Shadow Minister for Information Technology and Sport after the 2001 federal election. Kate is an Internet enthusiast and has been recognised by the Australian Computer Society as the "Most Computer Literate Politician". In 2001, she made the Australian Financial Review's top five Power List in the IT&T industry. More information can be found on Lundy's web site.

LUNDY: Why is the government so sympathetic -- to the point of defending -- the latest "fad" in cost-cutting: offshore outsourcing?

WILLIAMS: It is not a question of either defending or opposing offshoring. Rather, it is a case of accepting that offshoring is a reality, not a fad, and determining the best way for Australia to respond to this development.

Offshoring is a global phenomenon that needs to be kept in perspective. Research by technology analyst Gartner indicates that less that two percent of Australia's market in 2002 for outsourced development and integration services was captured by Indian software companies.

The Government encourages companies to properly consider their offshore outsourcing decisions. It appears that this is already happening. Recent media reports of a survey by UK tech services firm LogicaCMG suggest that Australian businesses are more hesitant to offshore outsource than businesses in Europe.

Given the potential productivity and trade opportunities presented by offshoring, the Government does not believe it is appropriate to impose protectionist measures that limit offshoring.

Such measures would only constrain the ability of companies to effectively compete in the international environment and would impose far greater long-term cost than any short-term gain, both in terms of jobs and economic growth.

Offshoring is not a one-way street and there are significant opportunities for the local industry from this global trend.

Australia's ICT sector is already benefiting from increased international trade flows in services. Over the past three years, exports of Australian computer and information services have risen by 52 percent and Australia achieved a trade surplus on computer and information services of $125 million in 2002-03.

The Australian Government is working with the ICT industry to enhance Australia's ability to capture an increased share of the growing global market for offshored services.

Areas where joint action may be appropriate include ICT skills development, ICT research, investment attraction, international collaboration and partnering, and software quality and accreditation.

LUNDY: Labor has yet to announce our policies. The concept of creating critical mass in research through centres of excellence is a sound one and I have said many times that the ability of NICTA to establish strong relationships across the public and private sectors, commercialise its research and engage with SMEs all represent important measures of its success for Labor. It will be interesting, as always, to explore NICTA's progress at the next round of Senate estimates.

I note that the Minister mentions NICTA and not the BITS Incubators, another element of their Backing Australia's Ability. The incubators run out of funds in June and have been hanging out for an announcement from the Government to determine their future. They are all still waiting.

LUNDY: Why did you announce at an IIA function that the Government would not agree to the US demand for an ISP "takedown notice" regime in relation to copyright and then agree to it as part of the Free Trade Agreement with the US?

About Daryl Williams On October 5, 1997, Prime Minister John Howard appointed Williams to Cabinet. He retained the responsibilities of Attorney-General following the re-election of the Howard Government in 1998 and again in 2001. One of his achievements in the portfolio was the coordination of Australia's national security arrangements. On October 7, 2003, Williams was appointed the Minister for Communications, Information Technology, and the Arts. In April, Williams announced that he will not be re-contesting for his seat in the next Federal election, forfeiting his ministerial position. He cited family reasons for this decision. More information can be found on Williams' web site.

WILLIAMS: My comments at the IIA function were as follows:
"Contrary to speculation, the agreement does not require Australia to implement a system where copyright owners can issue subpoenas to ISPs for subscriber details without court approval. The FTA's provisions will also allow Australia sufficient flexibility to introduce a notice and takedown system that incorporates procedural fairness. The interests of the Internet industry were considered during the negotiations of the Free Trade Agreement and will continue to be taken into account in developing legislation to implement the agreement." This is as true today as it was when I made the statement.

WILLIAMS: Will Labor commit to maintaining venture capital reforms for maintaining influx of investment capital into Australian innovative start-ups?

LUNDY: Labor has yet to announce our policies. It is worth having a look at recent history on this matter however. I have observed the slowness of the Howard Government to adapt to the needs of an innovation economy and remind the Minister that it was a Labor policy initiative that originally led to pressure on the Howard Government to reform capital gains tax to make Australia competitive for overseas investment funds. However, the Howard Government messed it up first time round and the changes only led to one AU$10 million investment during the tail-end of the boom.

Since then, the second round of legislative amendment, the VC Limited Partnerships, was also supported in Parliament by Labor. However, given the state of the market and the fact that so many funds are yet to close, the impact of this change is unlikely to be able to be measured for a number of years. In other words, the Howard Government moved too slowly to be able to derive an economic benefit when the market was in a state to provide it.

WILLIAMS: During the passage of the Digital Agenda Act (DAA), amendments in 2000 the Government undertook to review the amendments in light of their policy objectives. This review is currently being undertaken by the Government.

One part of this review was independent research and analysis on the DAA amendments by Phillips Fox. Phillips Fox produced a number of issues papers for public consideration and also held a number of public fora to discuss the effect of the DAA amendments.

Phillips Fox reported the results of their research and analysis to the Attorney-General's Department in February 2004. The report contained a number of recommendations for the Government to consider as part of its broader review of the reforms. The Government is considering releasing this report to the public.

The review of the DAA amendments has not yet been completed. Some areas covered by the review are affected by the AUSFTA such as ISP liability and technological protection measures.

The Government is using the submissions to Phillips Fox and its subsequent recommendations, in addition to other stakeholder consultations, to inform the form of legislation to implement the AUSFTA.

WILLIAMS: Given the Labor Party is seeking to abolish Invest Australia, how will Labor progress the ICT Investment Attraction Strategy under the Technology Australia brand?

LUNDY: Labor has yet to announce our policies. The general view of the private sector, from the findings of the impressive Australian Computer Society's Pearcey Foundation Colloquiums to the Government's own weak Framework for the Future, is that Australia does not have an international "brand" for our impressive tech capability. It is one of our problems. The Howard Government has been in power for eight years. Invest Australia didn't do its job.

LUNDY: Is it true that the government is contemplating "head-end" filtering of Internet content, ie mandating that ISPs filter content and only provide opt-out for users?

WILLIAMS: It has never been Government policy to mandate "head end" or server-level filtering. In fact, at the last election, the Government's election platform included the commitment to not impose blocking, filtering devices or monitoring requirements on Internet service providers (ISPs).

However, section 95 of Schedule 5 of the Broadcasting Services Act (BSA) required the Government to undertake a review of the operation of the schedule, including the general development of Internet content filtering technologies and their use to prevent end-users from accessing R-rated information hosted outside Australia and not subject to a restricted access system.

As part of the review, DCITA commissioned work (by Ovum) on the technical capabilities of commercially available PC and server level filters. The Government is currently finalising the report of the review and anticipates releasing it in the near future.

WILLIAMS: Are you still updating your Web site personally?

LUNDY: Yes -- whenever I have the time. I certainly don't want to try and compete with DoCITA's AU$4.8 million Vignette-powered monstrosity. Speaking of which, it would be great if my Web site could be included in the (very expensive) search engine on DoCITA's Web site. That way citizens looking up the Minister's press releases and issues would also get mine! In the meantime, see www.katelundy.com.au (never miss an opportunity!).

LUNDY: You're known to play the piano at parties. What's your signature song?

WILLIAMS: I have found over the years that people like to sing at parties but most only know the words to well-known songs like Waltzing Matilda and Wild Colonial Boy. I try to play songs that people can sing.

This concludes our two-part presentatiton of the question-and-answer session between Senator Kate Lundy and Minister Daryl Williams. And, by the way, Daryl Williams' Web site can be found at This concludes our two-part presentatiton of the question-and-answer session between Senator Kate Lundy and Minister Daryl Williams. And, by the way, Daryl Williams' Web site can be found at www.darylwilliams.dcita.gov.au.

This article was first published in Technology & Business magazine.
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