This is the second part of our Q&A series between IT Minister Daryl Williams and his political foe, Kate Lundy. Part One was published last month.
WILLIAMS: Will Labor support the Free Trade Agreement to give Australian companies unprecedented access to the United States procurement market?
LUNDY: I answer this question with a question: "Will the Howard Government support Australian companies to gain unprecedented access to the Australian Government procurement market?" The answer is no, because the current system is still structurally biased towards large multinationals winning the contracts at the expense of local companies in our domestic market.
This is relevant because whilst this continues to be the case, Australian companies will be hampered in their ability to develop the scale and experience needed to present a credential to the US government. One of the first questions asked is "Do you work for your own government?"
While relationships with multinationals are important to Australian IT exporters, the fact is that unless we have a market that can help develop and grow Australian SMEs' capability, we won't have companies of the size and focus to take these opportunities up.
And until we have the Senate inquiry, we do not really know what the AUSFTA means anyway. Call us cautious but this is yet another issue where the Howard Government spin is not to be trusted!
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LUNDY: Why is the government so sympathetic -- to the point of defending -- the latest "fad" in cost-cutting: offshore outsourcing?
WILLIAMS: It is not a question of either defending or opposing offshoring. Rather, it is a case of accepting that offshoring is a reality, not a fad, and determining the best way for Australia to respond to this development.
Offshoring is a global phenomenon that needs to be kept in perspective. Research by technology analyst Gartner indicates that less that two percent of Australia's market in 2002 for outsourced development and integration services was captured by Indian software companies.
The Government encourages companies to properly consider their offshore outsourcing decisions. It appears that this is already happening. Recent media reports of a survey by UK tech services firm LogicaCMG suggest that Australian businesses are more hesitant to offshore outsource than businesses in Europe.
Given the potential productivity and trade opportunities presented by offshoring, the Government does not believe it is appropriate to impose protectionist measures that limit offshoring.
Such measures would only constrain the ability of companies to effectively compete in the international environment and would impose far greater long-term cost than any short-term gain, both in terms of jobs and economic growth.
Offshoring is not a one-way street and there are significant opportunities for the local industry from this global trend.
Australia's ICT sector is already benefiting from increased international trade flows in services. Over the past three years, exports of Australian computer and information services have risen by 52 percent and Australia achieved a trade surplus on computer and information services of $125 million in 2002-03.
The Australian Government is working with the ICT industry to enhance Australia's ability to capture an increased share of the growing global market for offshored services.
Areas where joint action may be appropriate include ICT skills development, ICT research, investment attraction, international collaboration and partnering, and software quality and accreditation.
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