[LINK] Fahey's computer plan a $1billion fizzer
Sun, 8 Oct 100 17:18:26 GMT
For those of you who watched The Games, the last quote is
just magnificent. It was used in the context of how not to
answer questions in front of a Senate enquiry.
Fahey's computer plan a $1billion fizzer
Sydney Morning Herald
By LAURA TINGLE, Political Correspondent
The Federal Finance Minister, Mr Fahey, ignored advice from his own expert
panel and went ahead with a scheme to save $1 billion on government
computer costs that has so far saved just $30 million. After Mr Fahey
backed the information technology outsourcing scheme, government
departments had their funding slashed in the May 1997 Budget ahead of the
expected huge savings.
But the Herald has learnt that the Information Technology and
Telecommunications Advisory Committee - established in 1996 by Mr Fahey -
had refused in early 1997 to endorse his estimate of $1 billion in savings
over seven years. The minister continued to insist as late as November 1997
that the savings could be achieved as Labor publicly questioned the
Last month, the Auditor-General estimated that the scheme had achieved raw
savings so far of closer to $70 million, before deducting $40 million in
costs for advisers.
The outsourcing plan involves letting contracts to the private sector to
service the information technology needs of departments instead of them
buying and running their own systems.
In early 1997, the advisory committee - comprising government officials and
private sector members - was asked by the Government's then chief
information officer, Dr Andy Macdonald, to approve a letter endorsing the
$1 billion savings estimate as achievable, but declined.
At a subsequent meeting with Mr Fahey and his then chief of staff, Mr Greg
Barns, committee members expressed concern about the $1 billion estimate
and about possible perceptions that they had endorsed the figure. Mr Fahey
dismissed their concerns, saying he believed the $1 billion savings were
achievable. In November 1997, he said the Government "has at no stage
revised or downgraded its initial savings estimates. They remain exactly
the same as those stated in Parliament and the Budget documents. The
Government estimates it will save taxpayers approximately $1 billion over
seven years of outsourcing."
Meanwhile, the outsourcing has taken much longer than expected, leaving
even those departments which have made savings severely short of funds for
some years. As well, the pressure imposed on the project by the
Government's early announcement of Budget cuts also meant that the expected
standardising of computer systems before they were outsourced did not
happen, complicating the process for both the Government and the tendering
On Friday, in response to Herald questions, a spokesman for Mr Fahey
suggested that the committee had been appointed by the previous Labor
government and that the Office of Asset Sales and Information Technology
Outsourcing was not aware of any dealings with it. When the Herald pointed
out that Mr Fahey had announced the establishment of the committee in 1996,
the spokesman said that the committee had had "absolutely no responsibility
for developing or implementing the IT outsourcing initiative at any stage.
It was [the bureaucracy] that was responsible for the development of the
initiative and who prepared the study in 1997 that estimated the initiative
would save approximately $1 billion over seven years."
On the question of whether committee members had raised their concerns with
Mr Fahey, the spokesman quoted the minister as saying: "Not that I recall."
A flood of words over a desert of thought.