[LINK] Date: Mon, 15 Jan 2001 10:12:58 +1100

[Wilson, Bruce]

I note the contribution from Richard Chirgwin arguing that the deal between
worldschool and Curriculum Corporation involves the contribution of
government money to a loss-making dot.com. It might be worth correcting the
record. 

What is really happening here is that a government owned organisation is
able to run an internet business dramatically more cheaply and efficiently
than a dot.com. The cost of running the service will not be subsidised by
government, but fully covered by subscriptions and/or the outsourcing fee
paid by worldschool. The service will therefore be fully self-funding.
Curriculum Corporation, a government owned company, is gaining access at no
capital cost to intellectual property which has been developed at a cost of
millions of dollars in the private sector, and to cash flow from selling
that service. 

To gain a sense of the significance of this transaction, imagine that it
were reversed. If a government owned company had spent millions of dollars
developing intellectual property, and announced that it was outsourcing it
to a private company at no capital cost and paying that company to manage
it, how would Richard feel? There are often complaints when valuable public
property is outsourced or sold to the private sector, because it is claimed
that this represents a value shift from public to private. Why is it that
the same complaint is made when the shift is in the other direction?  

It might also be worth noting that Curriculum Corporation is not a
'taxpayer-funded company' in quite the sense that is implied in Richard's
posting. The company now receives no government core grant: all revenue is
generated by project work or product sales. It has produced a surplus in
recent years, while adding value to the public sector. So while the company
is owned by government, it does not compete for government support funding
with universities or other agencies. 

Bruce Wilson


Curriculum Corporation
PO Box 177, Carlton Sth, Victoria, 3053, Australia  
Email: Bruce.Wilson@curriculum.edu.au 
Tel: 61 3 92079600  Fax: 61 3 96391616
WWW: http://www.curriculum.edu.au
A.C.N. 007 342 421