Labor calls on Commonwealth to disclose AU$484m IBM contract details

The Federal Opposition has called on the government to disclose the details of the AU$484 million, five-year contract the Department of Human Services signed with IBM last week.
Written by Asha Barbaschow, Contributor

The Australian Labor party has called on the Minister for Human Services Alan Tudge to release the details of the AU$484 million IT contract it recently signed with computer giant IBM.

Shadow Minister for Human Services Senator Doug Cameron said on Wednesday that he had written to Tudge seeking an urgent briefing on the details of the IBM contract, the status of Medicare IT and payments systems changes, and the progress on the implementation of Centrelink's Welfare Payment Infrastructure Transformation (WPIT) program.

"The minister cannot seriously expect us to accept a one page media release is enough to explain where half a billion dollars is being spent," Cameron said.

"This money isn't part of the WPIT program. So what is it? What are the taxpayers getting for this enormous amount of money? Will it solve the host of problems at the Department of Human Services (DHS)?"

On Friday, Tudge announced that his department had signed a five-year contract with IBM in a bid to improve online services for Australians.

"The innovative agreement will see the delivery of next generation technology that will deliver access to new products, services, and expertise," he said. "The contract will enable the government to realign hardware, software, and services to critical areas of need."

According to Tudge, the spending of nearly half a million dollars would ultimately achieve savings for the taxpayer whilst apparently delivering better outcomes for Centrelink, Medicare, and Child Support recipients.

The minister disclosed that IBM's technology and related services would underpin and support a range of internal and external government platforms and programs, including: The myGov online interface to the Australian Taxation Office, Centrelink, Medicare and Child Support systems, and the Personally Controlled Electronic Health Record.

Tudge said that in 2014-15, DHS managed 123.9 million self-service transactions and delivered AU$165.8 billion in payments to customers and providers.

"To continue to progress in the digital age the government needs integrated and cognitive technology that enables quick transformation, streamlined services, and constant adaption to customer needs," he said. "This will also ensure the government is prepared to transition to new infrastructure with more dynamic capability to support future programs."

The government released a discussion paper in December to gauge the most effective way to consolidate its shared and common service delivery, highlighting its interest in private sector collaboration.

The Department of Finance was tasked with overseeing the project which forms part of the Australian Public Service (APS) strategy for the Shared and Common Services Programme, which it said aims to create a more responsive, agile, and efficient public sector.

"Australia is changing rapidly economically and socially, with the government facing increasing financial challenges," the discussion paper says. "In the face of this rapid change, the APS must become modern and agile so that it can more quickly respond to the expectations of government and the Australian community."

Despite payments falling under the first tranche of the whole-of-government transformation, DHS published a Request for Expressions of Interest (REOI) in September to help with the design and construction of a new welfare payment system to replace the current 30-year-old system Income Security Integrated System (ISIS).

The National Commission of Audit said previously the ISIS payment system posed a "significant risk to a core function of government", and called for a simpler payment structure and a redesign that would involve expertise from both the public and private sector.

Whilst outsourcing the assessment of entitlements was not supported by the commission, it suggested that the market be tested for delivering other parts of the payment system.

In 2012, DHS ended its outsourcing arrangements with HP and IBM, with CIO Gary Sterrenberg saying at the time that the move was about "value creation".

Labor last called out DHS a month ago, when Opposition Leader Bill Shorten responded to reports claiming the federal government could be planning to send the responsibility of Medicare, pharmaceutical, and aged-care benefits to the private sector.

"When the Liberals start dabbling with Medicare, it means the cost of medicine gets more expensive for sick people," Shorten told reporters.

At the time, Cameron said he feared the private health information of Australians could be kept by multinational companies overseas without the required security.

"This is another example of a government desperate to please its big-business backers," he said. "Big business funds the government's election campaign, and that is why they are going to hand over billions of dollars of work to the private sector."

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