Coonan, Lundy target SMEs

Federal ICT Minister Helen Coonan yesterday confirmed that a re-elected coalition government would take steps to make it less risky for businesses to take on government contracts -- an initiative that was also heralded by her shadow, Kate Lundy, at Labor's ICT policy launch last week.

Both the coalition and the opposition have promised to find ways to make professional indemnity more accessible to SMEs.

Labor and the coalition government have pledged to limit professional liability attached to government IT contracts according to the size of the enterprises bidding for the work.

Anecdotal evidence suggests smaller companies face more onerous conditions and have less capacity to satisfy them. Labor will ensure contract insurance is commensurate with contract requirements, said Lundy last week.

Coonan yesterday took a very similar line on the issue, declaring that the coalition would explore how to make cheaper professional indemnity insurance available to the ICT industry.

Plainly the cost of appropriate cover even if available is prohibitive and a huge cost to business, said Coonan.

However, under a coalition government, capped liability will be conditional on businesses improving their risk management profiles through professional standards schemes.

The schemes would encourage businesses to improve their risk management skills to "put downward pressure" on insurance premiums.

According to analyst group Gartner, many Australian SMEs won't take the risks involved with government work because they can't afford professional indemnity insurance and don't have the scale to cover themselves independently.

Gartner principal analyst Rolf Jester believes the policy would go along way toward reducing costs for SMEs of bidding for government work.

"Most of these businesses don't want a handout, they just want a fair go," said Jester.