Coalition, Labor focus on SME vote

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Smaller IT suppliers stand to benefit from the next government, with both Labor and Coalition pledging to make it easier to win government IT business.

Smaller IT suppliers stand to benefit from the next government, with both Labor and Coalition pledging to make it easier to win government IT business.

However, with an election well dry on funding announcements, both major parties still clash on the issue of companies outsourcing offshore.

Federal Minister for Communications, IT and the Arts, Helen Coonan, promised to amend standard contracting frameworks for IT and communications services to give SMEs in the ICT sector greater confidence in working with Government, if the Coalition was to win the October 9 poll.

Coonan's opposite, Kate Lundy proclaimed a similar initiative at Labor's ICT policy launch last week.

Coonan confirmed a re-elected Coalition would look at ways to reduce the burden of indemnity insurance from SMEs.

A re-elected coalition government would "amend the General Information Technology and Communications (GITC) contracting framework to make clear that unlimited liability is only required [for] the largest, riskiest and most complex of Government IT contracts,” Coonan said the statement.

The GITC dictates mandatory guidelines for the way in which the government decides how it purchases ICT.

The coalition would “work with the industry and the Australian Computer Society … with the initial aim of improving the affordability and availability of professional indemnity insurance for the ICT industry,” said Coonan in a statement.

Both parties referenced industry group Australian Computer Society (ACS) in policy speeches. Edward Mandla, president of ACS, welcomed the ICT policies of both parties.

Mandla said he believed Coonan's comments on professional standards for the ICT industry was the most significant part of her policy, as it raised the importance of the ICT industry.

Mandla likened ICT professional standards to the medical industry, where patients can sue doctors for malpractice. “Government and businesses alike need to have assurance that IT professionals have firstly qualifications, secondly certification, thirdly work to an ethical framework, and finally follow the industry guidelines,” he said.

Outsourcing is another contentious issue in the election warm-up. In contrast to Labor is the Liberal party's attitude towards companies outsourcing IT work to overseas workers.

While Lundy has pushed for government to not offshore IT jobs, Coonan reiterated her government would not regulate this. Again both parties cited ACS's published guidelines on outsourcing.

“I don't think their positions [on outsourcing] are that far apart,” Mandla said.

”It's a glass half full and a glass half empty difference in attitude. Government work is already offshored today as a result of long standing outsourcing contracts and a need to reduce costs.

“Those large IT outsourcing contracts that were jumped into in the 1990s as a cure-all, did not deliver promised cost savings,” said Mandla.

He added that outsourcers, in a desperate bid to cut costs, would offer to send work to code factories in India.

“We've been offshoring to big American companies for 20 years and no-one has ever complained once,” he added.

In a recent interview with InformationWeek, Coonan was asked whether the government should keep jobs within Australia to drive local industry, or should agencies consider other factors such as price when considering outsourcing, regardless of whether the job would stay on these shores.

“I believe that agencies should be doing a pretty thorough analysis of all of their options before making the move offshore and I think the ACS offshoring guidelines will probably prove useful in that regard,” she said.

“However offshoring is not a one-way street,” she added. “Over the past year alone at least 27 offshore companies have invested more than $580 million in ICT operations in Australia that are forecast to generate approximately 1750 jobs for Australian workers.”

“Trying to somehow freeze Australia in time, locking out the rest of the world will not promote Australia's IT sector and it will not save Australian jobs,” she said.

New funding announcements from either party were few and far between. The coalition will invest $20 million to help Australia's ICT companies tap the $76 billion US government market.

A Labor government would ensure everyone has the opportunity to access the internet in the 21st Century, under an initiative called E-Australia, which is slated to receive $69.3 million over four years.

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