Aussie government splits on offshoring government IT jobs

Splits have appeared in the Australian government’s position of offshoring Australian public sector IT jobs. The Prime Minister’s office has refused to support comments made by the Trade Minister Mark Vaile and Communications and IT Minister Helen Coonan backing the practice.

The prospect of the government potentially offshoring thousands of public sector IT jobs arose following comments made by Trade Minister Vaile backing the practice at the launch of a research paper on India at foreign relations think tank the Lowy Institute on Friday August 13.

However, by Monday evening the line from the Prime Minister’s office on the prospect of public sector IT jobs heading offshore appeared distinctly frosty.

Asked whether the Prime Minister supported the position of Coonan and Vaile, a spokesman for Howard offered nothing more than a sustained silence followed by a “no comment”.

Vaile is reported to have said that he was sure government tenders were open to overseas competition, and that it was unrealistic for Australia to expect to compete for overseas tenders without opening its own doors.

The trade minister is also reported to have labelled objections to Telstra’s recent offshoring of over 450 applications development positions to India, via outsourcer IBM Global Services, as an attempt to hamstring competition.

Asked whether he could verify the offshoring comments, a spokesman for Vaile said IT services were not an area of intimate familiarity to the trade portfolio, adding he would prefer to check recordings of the Lowy Institute speech.

However, Helen Coonan’s office quickly bolstered Vaile’s comments, with a spokesperson saying “trying to somehow freeze Australia in time, locking out the rest of the world, is the worst kind of knee-jerk protectionism”.

“The government has to strike a balance between getting value for money and promoting local industry. Offshoring is not a one-way street. There are great opportunities for Australia to win jobs in the offshore outsourcing market, as shown by a recent KPMG 2004 Competitive Alternatives Study, which has ranked Australia as the best place in the developed world to base software development operations,” Coonan’s spokesperson said.

The spokesperson said there were no current laws or policy banning the offshoring of public sector IT jobs, except where concerns about security and privacy precluded it.

Coonan and Vaile’s comments on Australian government IT contracts jar sharply with comments made by Treasurer and then Acting Prime Minister Peter Costello in January about Telstra offshoring some 450 applications development jobs via outsourcer IBM Global Services.

“Telstra ought to look at that situation very carefully. It has to have a very good reason to show that it can’t find adequate Australian employment opportunities and Australians to fill them,” Costello said in January.