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Savings? Did we say savings?



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Savings? Did We Say Savings?

OASITO Admits Savings Not Mandatory For IT Outsourcing

Kate Lundy - Shadow Minister Assisting on Information Technology

Media Statement - 29 November 2000

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At a Senate Estimates hearing last night, Senator Kate Lundy was told by officials from the Office of Asset Sales and Information Technology Outsourcing (OASITO) that savings are not necessarily a mandatory prerequisite for outsourcing the IT functions of Commonwealth departments and agencies.

This admission directly contradicts Minister Fahey's repeated assertions that the objective of IT Outsourcing is to produce savings for Australian taxpayers. On numerous occasions Minister Fahey claimed savings to taxpayers was a principal reason to outsource IT:

I inform the House that those stated objectives [of the IT Outsourcing Program] are, firstly, to provide savings to the Australian taxpayers in the hundreds of millions of dollars (Parliament 7/9/2000)

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The Government has a commitment to…achieve significant savings, that is the principle which I operate as the Minister for Finance (Address to AEEMA, 25/6/1998) ●

According to the Australian National Audit Office Report, when Mr Fahey initiated his IT Outsourcing Program, the Department of Finance's own evaluation concluded that:

…when fully implemented, consolidation and outsourcing could be expected to achieve aggregate net annual savings for agencies overall of at least 22 percent for mainframe data centres and 15 percent for midrange and desktop/network environments.

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"The ANAO report disputed the cash-based accounting methodology used by OASITO to calculate Fahey's claimed savings. So to find out now that savings aren't the priority exposes the Coalition's ideological agenda," Senator Lundy said.

"It is now clear that savings are not the main reason outsourcing Commonwealth IT is continuing - it is an ideological obsession by John Fahey.

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.