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Millennium bug (Y2K): Government not disclosing costs and risks.



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Media Release

 

BOB MCMULLAN MP

SHADOW MINISTER FOR INDUSTRIAL RELATIONS, FINANCE AND THE ARTS

MEMBER FOR CANBERRA

 

FINO5/98

24 April 1998

 

MILLENNIUM BUG (Y2K):  GOVERNMENT NOT DISCLOSING

COSTS AND RISKS

 

The Government is keeping the Australian public i n the dark about the costs expected from the Year 2000 computer problem and about the risks of failure of Government computers, the Shadow Minister for Finance, Bob McMullan, said today.

 

“Newspaper reports (eg. Robert Gottliebsen, SMH , 18 April 1998)suggest that although the millennium bug is a bigger problem for departments and agencies than for leading private companies, so far the Government has announced it will spend proportionately less,” Mr McMullan said.

 

“There are ominous warning signs that the c osts of the millennium bug to government departments and agencies are blowing out, and at the same time that they will not be compliant by the due date.

 

“The Government has announced increased funding to address the problem, but that it is only for essential remedial work to ensure that key services are fully operational.

 

“The ‘key services’ do not appear to include veterans payments, transport, statistical collections, Treasury, customs or immigration.

 

“Will these services be fully operational on 1 Janu ary 2000?”

 

Mr McMullan said that Government failure on this issue will go far beyond a blow-out in costs to departments and agencies and the risk of a loss of public services.

 

“There are likely to be significant effects across the economy.

 

“The accounta ncy firm Coopers & Lybrand has estimated the total Australian bill at $5 billion.

 

“Even more disturbing, Maurice Newman, Chairman of the Government’s own Year 2000 National Strategy Committee, is reported ( BRW , 23 March 1998) as saying that there is likely to be a world recession as a result of many company failures caused by the millennium bug.

 

“Despite this pessimistic outlook, the Treasurer’s Mid-Year Economic and Fiscal Outlook 1997-98 does not even refer to the millennium bug and its implications as a risk to the forward estimates.

 

“Neither the Minister for Finance nor the Treasurer has made any public statements on the blow-out in spending by departments and agencies, the prospects of non-compliance and its consequences, the massive diversion of com pany spending to repair the bug or the risk of recession.

 

“The Australian Stock Exchange has required all listed companies to report on their state of preparedness by 30 June 1998.

 

“Surely the Government should do no less.

 

“The Government should tell th e Australian people immediately about the costs and risks that the Year 2000 computer problem poses to Government services and future Budgets.”

 

Further information:  David Fredericks  02 6277 4428