This is the first part of a question-and-answer session between Kate Lundy, Shadow Minister for the Arts, Sport, and Information Technology, and Daryl Williams, Minister for Communications, Information Technology, and the Arts. Look for the second and final installment to this debate next month.
WILLIAMS: Having announced your intention to slash $140 million out of the IT budget dedicated to the National Office for the Information Economy (NOIE), how does Labor propose to continue the Government's valuable work on e-security, broadband, spam, e-business, and ICT productivity growth?
LUNDY: The Howard Government's decision to also scrap NOIE is a vindication of Labor's earlier decision to do it. It was embarrassing for the Government to follow Labor's initiative. NOIE has been largely ineffectual and wasteful and the Howard Government knew it. Why else would they still ditch it after Labor made our announcement? Surely the stronger political ground for the Government would have been to keep it?
By the way, Labor has not yet announced what we believe will be a better way to manage Government IT-related issues.
LUNDY: In your handover brief to your successor, what will you list as the three most pressing issues in order of priority?
WILLIAMS: It's pretty hard to pick just three areas across a portfolio as wide-ranging as this so I'll keep it to ICT, in keeping with the theme of this exercise.
I would say the three most pressing issues in ICT are:
• Making sure the Australian ICT sector continues to be competitive, attract investment, create jobs and capitalise on our export opportunities, including those arising after the AUSFTA, consistent with the strategic plan for Australia's ICT industry, Framework for the Future (F3);
• Continuing to support innovation in the ICT sector and commercialisation of ICT innovation through initiatives such as the National ICT Centre of Excellence (NICTA) and the BITS Incubators as well as other Backing Australia's Ability initiatives; and
• Ensuring that the ICT sector continues to enjoy world-class infrastructure at competitive prices, in all parts of Australia, including maintaining the significant benefits that telecommunications competition has brought to the Australian economy and consumers, through lower prices and improved services.
WILLIAMS: Is Labor content to slash the 160 jobs associated with those valuable programs, now at the Australian Government Information Management Office (AGIMO) and the Office for the Information Economy (OIE), or have you managed to change the savings measure announced by your party?
LUNDY: As I have said, Labor has not yet announced what we believe will be a better way to manage Government IT-related issues. And anyway, since when has the Howard Government given two hoots about public service jobs? What about the thousands of public sector jobs lost in Canberra over the years?
What about the lost opportunities for local IT companies when the ill-fated IT outsourcing program was introduced? What about the contraction in local ICT manufacturing during the IT boom? And wasn't it NOIE that was charged with preparing and selling the Howard Government's gospel that it was enough to be a user of ICT, not a producer?
LUNDY: Given the relatively poor state of broadband penetration in Australia, how does the Government intend to stimulate investment and the building of networks capable of providing real broadband (10Mbps plus)?
WILLIAMS: The signs are that the market in Australia is responding to the broadband needs and demands of Australian consumers and wherever possible, it is better to leave it to the market rather than have the government intervene.
There is also no clear sign that all Australians want a 10Mbps connection. Rather, different consumers have different requirements. For example, for some, the always-on facility is more important than the connection speed. We now have in the Australian market multiple broadband service providers offering a broad range of products over a variety of technologies to meet these consumer needs.
There are, however, a range of sectors where all levels of government have a role to play in stimulating investment in broadband networks and services. These are areas of traditional Government responsibility such as health, education, research, and security.
In these areas, the Government has done much to stimulate investment in high-end broadband networks through programs such as the Advanced Networks Program and the National Communications Fund. Under the Australian Research and Education Network, most Australian universities are now connected to multi-gigabit capacity networks and Australia’s research links to the US, Canada, and Europe are now in excess of 10Gbps.
While broadband services are available throughout the country, the Government has recognised a need to address some inequities in broadband pricing. As a result, the Government has launched the Higher Bandwidth Incentive Scheme (HiBIS) to make sure that regional consumers have access to broadband services at similar prices to metropolitan consumers. WILLIAMS: Given that many commentators have suggested the offshore phenomenon and its impact on Australian ICT is over-hyped, will Labor be rejecting the unions’ proposal to introduce old-style protectionist policies to prevent Government enterprises from offshoring?
LUNDY: It is the Howard Government that has so poorly managed the opportunity to develop the ICT sector in recent years that the prospect of offshoring presents such a threat to local employment. Typically the Howard Government characterises any challenge to the latest global business fad as "old-style protectionism" when in fact the case for offshoring is not only unproven but economic studies seem to fall about equally for and against, presumably depending on who commissions them!
The Howard Government has form as a dumb purchaser of technology. In 1996, it is rumoured that it was IBM that sold them the pup of "$1 billion savings if you outsource your IT this way". Taxpayers will continue to pay for that one for years to come.
So it is not surprising that IBM are in the thick of the proposals for some of the bigger offshoring exercises (eg, Telstra) with promises of bottom-line technology savings.
Regardless of the legitimacy of the unions' views on the subject -- views that Labor will always take into account -- I have been around long enough to see how promises for economies of scale delivering savings actually add, not subtract cost from the bottom line.
LUNDY: Why does the Government ignore the obvious and continued flouting of competition regulations by Telstra, especially given Telstra's "spin" that they responded to the ACCC competition notice on broadband?
WILLIAMS: In Australia, the Australian Competition and Consumer Commission (ACCC) is responsible for investigating and, where necessary, taking action in relation to breaches of competition law. It is not the Government's role to take action against Telstra. The Government's role is to set the regulatory framework and to ensure that there is an effective independent regulator.
The ACCC has taken tough action with respect to Telstra's broadband pricing by issuing a competition notice. The competition notice is still in force. It is up to Telstra to put in place arrangements that satisfy the ACCC's concerns, and then for the ACCC to withdraw the competition notice.
WILLIAMS: Does Labor still believe that the Internet should be a regulation-free zone?
LUNDY: In contrast to the Howard Government, Labor has at least an understanding of the operation of the Internet that will ensure our content policies are relevant, useful, and meaningful to Internet users, not divisive, fear-mongering, and irresponsible.
For example, Labor has always argued that the best approach to Internet content management is empowering end-users by helping them aquire the skills and confidence for using the Net, supervising their children, and installing content and spam filters at the desktop as they see fit. Where is the support for this from the Howard Government? All I see is a funds-starved "Netalert" and lack of investment in fostering Internet skills and confidence in the community generally.
During the debate on the Interactive Gambling Act, Labor advocated strong regulation of Australian-based Web sites so that punters could be protected. Instead the Howard Government merely pushed all online wagering operators offshore.
Finally, Labor has to pressure the Howard Government into legislating at all for spam -- the one area that desperately and belatedly needed regulatory attention. However, this was one area that the Howard Government (via NOIE) advocated that no legislative action was needed! LUNDY: Why is the government allowing the last remnant of industry development policy associated with IT outsourcing -- local SME involvement for jobs worth over $20 million -- to be ignored by departments and agencies, let alone the outsourcing vendors?
WILLIAMS: It is wrong to suggest the Government's policy that Government agencies ensure minimum SME involvement for ICT contracts over $20 million is the "last remnant" of industry development policy associated with IT outsourcing. It is also wrong to suggest that this policy is being ignored by departments and agencies. These SME participation levels are mandatory under the Financial Management and Accountability Regulations 1997.
The Government's ICT industry development policy is aimed at delivering the economic fundamentals necessary to support business growth and to support the development of an Australian ICT industry that is internationally competitive.
The Australian economy remains healthy and the ICT sector is in a period of growth. Specific policies to support the development of Australia's ICT industry include Backing Australia's Ability, which is delivering nearly $3 billion in funding over five years to improve research, accelerate commercialisation of ideas, and to develop and retain Australian skills.
NICTA was provided with $129 million to support world-class research and research training to take Australia ability to create and exploit information and communications technology to a new level.
The BITS Incubator program supports start-up ICT firms. The Government is supporting private sector research and development, providing tax concessions of up to 175 percent in certain circumstances and has a range of programs to assist Australian firms.
These programs include R&D Start, the Innovation Access Program, the Innovation Investment Fund, and the Commercialising Emerging Technologies program. The Government has also improved funding for public sector research and provided for additional university places for ICT, maths, and science.
I also note that, SMEs are enjoying a significant percentage of Government IT outsourcing. For example, in 2002-03, SMEs received $168 million for services provided under the five original outsourcing cluster contracts, 40 percent of total expenditure. In addition, one of the original principal contractors, Ipex, is an SME which has benefited under these arrangements.
WILLIAMS: Does Labor support the Government's National Broadband Strategy as agreed with the majority of Labor State governments or does it propose to overturn this unprecedented agreement?
LUNDY: Labor is yet to announce our policies in this area but notes that the Howard Government keeps re-announcing their so-called "National Broadband Strategy" and has re-cycled money previously allocated to other telecommunications initiatives to fund it. Also, the only arguable substance in it is what the states have been doing for years, like aggregating demand, and the Howard Government, forever behind the eight-ball, now claims this to be a part of their so-called "National Broadband Strategy".
The fact is that the states are so far ahead in helping their communities prepare for the 21st century that the Howard Government was prepared to do just about anything to associate with state initiatives in this area.
LUNDY: On what basis does the Government claim there is currently "competitive neutrality" for open source projects competing against proprietary software giants for government work?
WILLIAMS: Competitive neutrality requires that -- where governments choose to provide services through market-based mechanisms that allow actual or potential competition from a private sector provider -- competition should be fair.
The concept of competitive neutrality is not relevant to consideration of the use of open source or proprietary software for government work. The decision regarding the use of open source or propriety software is a procurement matter.
The Commonwealth Procurement Guide-lines & Best Practice Guidance issued by the Minister for Finance and Administration states that "Value for Money is the core principle governing Commonwealth procurement". They also state that "Officials buying goods and services need to be satisfied that the best possible outcome has been achieved taking into account all relevant costs and benefits over the whole of the procurement cycle."
In the context of ICT procurement, agencies are therefore encouraged to consider possible solutions to their needs, including open source software, on their merits.
Agencies are increasingly aware of the need to frame their approaches to the market in terms that are as transparent as possible. In making strategic decisions about ICT procurement, individual agencies are subject to public scrutiny in a range of fora and aware of the need to be able to justify these decisions. The Australian Government Information Management Office (AGIMO) and its predecessor, the National Office for the Information Economy (NOIE) have been actively working with Government agencies to ensure they are well informed in making these decisions. This ensures that the Government has a position of informed neutrality rather than the "competitive neutrality" you appear to be confusing it with.
In our e-Government strategy, "Better Services, Better Government", announced in December 2002, the Government acknowledged that the main issue is to determine the cost, benefits and risks of using either open source or proprietary software in a given situation, and that it encourages trials of open source software within the framework of fit-for-purpose and value-for-money. A number of agencies including Centrelink and the Bureau of Meteorology have determined that open source meets this criteria for certain applications.
This article was first published in Technology & Business magazine.
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