Microsoft software deal to offset carbon tax's premature end

Microsoft software deal to offset carbon tax's premature end

Summary: A renegotiated deal with Microsoft over software licence sourcing will help the Australian government offset the cost of ending the carbon tax a year early.


A renegotiation of the Australian government's volume-sourcing arrangement with Microsoft will help offset some of the cost of the government's decision to scrap the carbon tax one year earlier than planned.

The Australian government, under former Prime Minister Julia Gillard, introduced a carbon tax in 2012, aimed at reducing the carbon emissions produced by 370 of Australia's biggest polluters. The government set a fixed price for the tax for three years from 2012, after which it would be replaced with a market-based emissions trading scheme with a floating price.

The tax was a major cause of controversy for the government led by Gillard, and returned Prime Minister Kevin Rudd has long been expected to scrap the tax. Today, he announced that the carbon tax will be replaced by an emissions trading scheme, with a floating carbon price from July 2014.

The move will cost the budget around AU$3.8 billion over the next four years through lost revenue, with the floating price expected to be substantially lower than the current tax, which sits at AU$24.15 per tonne, and is scheduled to go up to AU$25.40 in 2014. The government has estimated that it will be around AU$6 per tonne.

In order to offset the impact on the budget, Rudd announced a number of savings. Among the savings, he highlighted that the government would look to save around AU$248 million through an overhaul of the Australian Public Service, with an aim of reducing the number of executives and senior executives in the public service by up to 800, and through more efficient procurement of agency software.

ZDNet was told by the Department of Finance and Deregulation today that the Australian government had just signed a three-year deal last month with Microsoft for software licences, services, and maintenance that had "significantly greater discounts, resulting in closer alignment with the benchmark pricing paid in the United States".

"The government has put considerable effort into improving whole-of-government procurement processes and around AU$100 million in savings will be found through more effective procurement of Microsoft software licences," the department spokeswoman said.

The Federal Government has had a volume-sourcing arrangement in place with Microsoft since 2009 to cover some 250,000 users and 290,000 devices. This was expected to save the government AU$60 million over four years, but the government has already managed to save AU$82 million since it began.

The Department of Finance and Deregulation told ZDNet that it will not be able to reveal how much it was expecting to spend before the new deal or how much it will now spend until July 2014.

According to former government CIO Ann Steward, the Microsoft volume-sourcing agreement was believed to be costing the Australian government more than it should, as the software came from Australian reseller Data #3 rather than directly from Microsoft.

Topics: Government, Government AU, Microsoft


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • They should maybe also consider switching to FOSS...

    In Europe, several departments have already switched to Linux+OpenOffice instead paying expensive Microsoft license fees or moving their data to insecure Cloud-services.
    FOSS in governmental agencies is especially common in Spain, but also in Germany, where the "LiMux"-project was started and certified by the city of Munich and eventually led to huge saving in administration costs and licensing fees.
    • No savings in FOSS

      In europe several conversions to FOSS software have not proved to provide any savings but have even provided extra cost.

      The limux conversion you discuss in munich has claimed some savings over a ten year period but has listed very arbitrary savings like for instance savings on hardware even though the ubuntu distro used requires similar hardware to a windows solution. If anything it is cheaper in wholesale to get hardware that is guaranteed to work with windows than with ubuntu.
      • Of course there were savings - and they will be huge in the future!

        The hardware issue does virtually not exist nowadays, while it was a bigger problems 10 years ago, I agree.
        But what makes you think any Linux distro would require similar hardware specs like Windows? You could still run linux smoothly on a first generation Pentium, if you choose a light DE.
        There where some savings during the time of the transition already. That might not be that significant, yet, since the migration costed some money as well. However, there WILL be huge savings in the future, since no more licesing fees are to come and the migration is almost finished, while companies using Windows still have to renew their licenses whenever Microsoft decides to ditch a release, like, currently, they do with XP. And, a nice side effect from dropping Microsoft ist that there is far higher security, since there is nothing like build-in PRISM in Linux as it is in Microsoft365, for instance.
      • No savings in FOSS

        Please cite your sources.
  • There are huge savings by moving to FOSS or Apple

    There are huge savings by moving to FOSS or Apple as there are no recurrent software rental fees. This is just the tip of the iceberg. Many studies and practical installations have shown that you start making substantial savings from year 3 and beyond but you must use native linux directory services and kick Microsoft to the curb.

    A good place to start is here

    The link lists conversions and savings and I am sure you can obtain some information from their corporate reporting. The Munich figures are extremely telling and have been externally reviewed unlike the Microsoft counter study funded by HP...(oops).

    Paying top RECURRENT dollar for software is just not on these days. Im a tax payer and don't want to be paying Microsoft when I know my government could get their software for free.
    Richard Romanov
  • The Munich Figures

    Yes, I think the French Police and the French parliament have also gone over.... I know the Munich figures can be located here, they have a comparison of all options.

    Its just a matter of breaking your users addictions. Like all good drugs M$is hard to shake but once you do you open yourself to a better life full of possibility and no addiction.

    Live free !