Senator MURPHY(3.18 p.m.) —I am very interested in Senator Watson's comment with regard to Senator Kemp being a very competent minister. Senator Kemp cannot come in here and represent the Minister for Finance and Administration (Mr Fahey), which he is supposed to do.

Senator Watson —He doesn't have to; he only has to take note.

Senator MURPHY —That is what he is supposed to do, Senator Watson. He is supposed to be able to come in here and answer questions. That is what he is supposed to do, but he cannot.

In regard to the whole outsourcing issue, what a shemozzle the government has turned this into; what a cock-up. The government could not have gotten itself into a worse position if it had tried. This is what is really interesting: it proceeded down the path of the philosophy of competitiveness, openness and allowing the private sector to openly compete for tenders and government contracts in a fair and equitable way. But what has it done?

Let me quote a few statements from the minister in respect of that—that is, the real minister, not the minister who comes in here and pretends to represent the minister. On 25 April this year, the Minister for Finance and Administration, Mr Fahey, announced the government's decision to outsource its information technology infrastructure. Statements made in that announcement and since have clearly shown that this government continues, true to form, to say one thing and do another.

Senator Watson —It's an open and competitive process.

Senator MURPHY —I will quote for Senator Watson's benefit in particular some of the things the minister said. On the issue of privacy, in referring to the government's decision to outsource its IT infrastructure, Minister Fahey said in a press statement on 25 April:

. . . this initiative will address two other priority matters. First, to ensure the privacy of personal and other sensitive information through stringent contractual conditions—

Senator Watson —Correct. Exactly what I said.

Senator MURPHY —We will get to that in a minute, Senator Watson. On the transparent competitive tendering matter, the minister said:

The move to more open, competitive processes for delivery of IT infrastructure services is in keeping with the Government's election commitment to streamline the administration . . .

On competitive neutrality, the minister said:

The Government is determined that for outsourced projects, the private sector will compete with the public sector on an equal footing.

That is what competitive neutrality is all about.

Those are very interesting statements from the minister. But what have we seen? I have to say it is all here in the Commonwealth Procurement Guidelines . This is the guide that agency and departmental heads are supposed to use when they let contracts. What does it say with regard to open and effective competition? Let us just have a little read. In the preamble it says:

Open and effective competition is the central operating principle of Commonwealth procurement . . .

I do not know how IBM Global Services got $30 million worth of government business when a tender was not even called for. It was not even gazetted. With respect to that, section 6 of the government's own Commonwealth Procurement Guidelines under the heading `Contracts arranged' says:

Finance Regulation 43B requires that agencies notify in the (Purchasing and Disposals) Gazette details of any contract arranged for supplies to be procured or used in Australia where the total estimated liability is $2,000 or more.

Why did they not advertise the $30 million department of finance arrangements instead of piggybacking them and handing them over to IBM Global Services? More importantly, a subsidiary company of that company has secured a contract for the servicing of the IT infrastructure in the Department of Finance and Administration, as it now is.

How does that leave the security? How does that not open up the way for those companies to have access to inside information? Why is that not the case? What is the government going to do about that? I would suggest it is going to do nothing other than continue to make a cock-up of this whole process, as you have done to date, Senator Watson. You ought to have a very clear think about it.

The minister that you say cannot come in here and represent the minister for finance ought to have a very clear think about what the government is doing in terms of IT outsourcing because, to date, all it has done is create another nursing home fracas, and it is going to be a total disaster for the IT industry in this country.

Question resolved in the affirmative.