Former Queensland Premier Anna Bligh is being cross-examined about her government's dealings with IBM, which was contracted to roll out a new Queensland Health payroll system. The system, which went live in March 2010, resulted in thousands of pay errors.
Bligh told the inquiry on Monday that she was given legal advice in 2010 that the state had a case against IBM for breaching its contract. But she said she did not pursue it because there were risks.
"The legal advice is not clear cut," she said.
"It doesn't say, 'You have a 100 percent chance of success'; it's probably somewhere around 50-50 at best.
"And further advice says even if you pursue IBM, it's unlikely that you'll get satisfaction for a number of years.
"You'll spend a lot of money getting to that point, and the most likely outcome is (both parties will) settle it."
She said legal action would also have caused problems in trying to fix the system.
"I took the view that any risk, no matter how small to the payroll system, was a risk I simply could not knowingly take, given the difficulties so many people were experiencing."
Fate worse than death
Former IT minister Robert Schwarten took the stand after Anna Bligh.
He told the inquiry that he was not happy when the whole-of-government shared services initiative, which included the new health payroll system, was transferred from the treasury to his department's control in 2008.
"I welcomed it to the extent that a fowl would welcome a carpet snake," Schwarten said.
"IBM had more skin in the game than anybody else. They had their employees in the program.
"[If you break a contract with IBM] they may well down tools, and you'll end with a fate worse than death.
"By that I mean, you'll end up with a system where you're having to draw a couple of hundred million dollars out of banks all over Queensland, and send a car around to pay people."
He said the premier had told him that she had great concerns about the project.
"The premier had indicated to me that a lot of money had been allocated to it, [and] she wasn't happy with the way it was progressing," he said.
"She believed it needed a new set of eyes on it, that we [his department] ... would be a perfect fit."
IBM's initial quote for the contract soared from AU$550,000 to AU$926,000.
Ultimately, IBM's contract with the government grew from AU$6 million to AU$36 million during the life of the project.
The Liberal National Party government has estimated that the system, which continues to be labour intensive and flawed, will cost taxpayers AU$1.2 billion by 2017.