Government rules out curbs for offshoring

Six months after Treasurer Peter Costello publicly reprimanded Telstra Corp. Ltd. for sending 400 IT jobs to India, Minister for Communications, IT and the Arts Daryl Williams has flatly ruled out the introduction of any curbs on IT offshoring.

Williams warned any attempts to outlaw IT offshoring would cause long-term economic damage to the country.

“It is clear to the government that banning offshoring will do long-term damage to our international reputation, our economy and our ICT industry.

“Australia’s challenge is to make sure that we benefit from offshoring and take advantage of all opportunities to develop and grow our ICT industry, particularly in the high-value end of the market. A backward-looking, protectionist approach will only stifle development of the ICT sector and block valuable foreign investment,” Williams said.

Williams went on to criticize parts of the Australian ICT industry, saying when it came to competing at the high end of the software market many Australian software companies may fail to accredit themselves with global quality standards.

“I have been told that Australian software development is generally recognized as being of high quality, but Australian companies are not realizing the potential benefits of having the quality of their software development processes accredited to the highest international standards.

This may be affecting the ability of Australian software developers to win work from customers that demand quality assurance,” Williams said — without referring to who had informed him of the problem.

To solve the accreditation problem, Williams said an industry working party had been formed, which would report its results by October this year.

Australian Computer Society president Edward Mandla, whose organization recently estimated as many 11,000 Australian jobs could be lost through offshoring, said he hoped to work more closely with the government to help displaced ICT workers re-skill in areas that would either keep them in, or allow them to re-enter the workforce.

“I’m hoping we can come up with something. With this industry at the end of the five-year cycle, you wake up and realize your skills are no longer in demand. You have to be able to map skills that are being displaced (against) hot skills. A hot skills course is A$5,000 (US$3,600). If you are unemployed you don’t have A$5,000,” Mandla said.

Opposition IT spokesperson Kate Lundy said Williams’ speech showed the government had neglected ICT skills for the last eight years, was “completely captured by multinational interests” and had ignored genuine security concerns that may justify keeping sensitive work in Australia .

Conceding there was not yet a formal Labor policy stance on offshoring, Lundy said any short-term benefits of sending work away had to be measured against the long-term costs of losing ICT skills locally.

“If we strip ourselves of the ability to perform those (ICT) skills in the future, that’s a huge step backwards, not a huge step forward,” Lundy said.

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