NOIE in political crosshairs?

IT&T has become a political football in the lead up to the Federal election, with Telstra and NOIE's future put into question.

The Federal Government has drawn a heavy veil around its future plans for the National Office of Information Economy (NOIE) after Labor's promise to disband the office, if it won the election.

Labor's promise that it could cut costs by more than $1 billion, which includes a saving of up to $750 million in consultants fees by not proceeding with the full Telstra sale and shutting down the NOIE for further savings, has sparked a political stoush.
A statement from the Minister for IT, Daryl Williams' office accused Labor of "short-term thinking" and abandoning the ICT sector regarding its promise to disband NOIE.

"Despite the broad platitudes that Senator Lundy is so practised at delivering, we now know that Labor has little commitment to the ICT sector," said the statement.

But on the question of whether NOIE would continue in its current form, a spokeswoman for the minister said "we remain committee to all our programs - including those currently run by NOIE - designed to grow the ICT sector in Australia."
The spokeswoman could not be drawn to elaborate further on future plans for NOIE.

"There has been a lot of speculation regarding NOIE and we don't comment on speculation," she said.

A NOIE spokesperson simply said, "we can't comment whether we will exist or not".

In a statement Senator Lundy said the decision to shut down NOIE as a savings measure is justified because "the Howard Government has never been able to deliver an effective and efficient role for [NOIE] despite the dramatic changes and challenges associated with the information economy".

"[NOIE] has had a controversial existence since its inception. It has drifted in and out of the Department of Communications, Information Technology and the Arts through-out the period of the Howard Government," said Lundy, adding this demonstrates a lack of leadership and direction from both Williams and his predecessor Senator Richard Alston.

Lundy could not be contacted for comment.

The latest row follows a public accounting debate between Treasurer Peter Costello and Shadow treasurer Simon Crean on the exact savings if Labor was to not proceed with the full sale of Telstra.

While the Opposition claims its cost savings plan cuts down on Government "waste", the DCITA spokeswoman said Labor will "rip [money] out of the ICT sector".

"We oppose the privatisation of Telstra," said Opposition leader Mark Latham according to transcripts of a doorstop interview.

"One of the worst things about the Government's policy is that it costs a huge amount of money, hundreds of millions of dollars just in consultancies and it's almost a gift for the lawyers and the consultants."

"We have identified a $1 billion saving in the Commonwealth Budget... We're actually cutting out Government waste and mismanagement so we can responsibly fund all of our important commitments to the Australian people," he said.

However Treasurer Peter Costello said that saving could not be achieved, and the ALP had a $2.4 billion hole in its savings plans.

He told ABC Radio the money saved on consultants by not selling Telstra did not take into account the benefits of retiring government debt.

"That consultant cost is offset by the interest payments you save from the proceeds," Costello said. "What they forget is that by selling Telstra and using the money to retire debt, doesn't cost you, it saves the taxpayer money... They have just left the other side of the equation out."