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Cupidity or stupidity?

In 1991, the government developed the Intra Government Communications Network (ICON) as a temporary fix for the Department of Foreign Affairs linking two of its buildings in the capital. Over time, the system grew to link 88 government agencies and 400 buildings in the Canberra area through 150,000 fibre kilometres.

This strategic asset, which provides low-cost high-volume bandwidth, is a secure point-to-point fibre connection between buildings in Canberra. Current estimates indicate the network carries up to 2 terabits per second over its pathways.

In 1997, Peter Costello, as part of his obscene $72 billion fire sale of our assets, investigated outsourcing the communications network but could not make a business case stack up.

A typical commercial carrier’s quote for just the first year to link two government buildings 80 metres apart with high speed services was $120,000. ICON could do the same for less than $45,000 and no further payments.

Former public servants who worked in the 1990s on developing ICON said they were astonished at how much cheaper the technology could be supplied by keeping the work within the Australian Public Service.

The Department of Finance’s own website states that ICON provides “significant cost-saving solutions compared to commercial carriers.”

So why would Mathias Cormann go through the same pointless exercise of considering outsourcing again?

In February last year, the Minister appointed accounting giant KPMG as business adviser and King & Wood Mallesons as legal advisers for a study on a possible sale of ICON.

As part of the “smaller government” reforms aimed at eliminating waste and duplication in the public sector, Senator Cormann said “In addition to considering options for the future management, operations and ownership of Intra Government Communications Network, the scoping study will assess the likely sale environment for this business operation. The advisers will provide independent advice to allow the government to make fully informed decisions on the optimal method and timing of any sale or change to governance arrangements.”

According to Government security guidelines the “protected” security classification of ICON means its compromise “could be expected to cause damage to the national interest, organisations or individuals”.

Dimension Data, a South African firm which is a wholly-owned subsidiary of Nippon Telegraph and Telephone (NTT), made a $400 million pitch directly to Finance Minister Mathias Cormann. The company already operates a secure network in the Department of Defence.

But by November, Cormann had changed his tune, issuing a statement saying “The scoping study found that ICON provides significant value to the Government as a strategic asset and is highly valued by Government agencies for its low-cost and high-volume bandwidth. ICON could also potentially play a central role in enabling broader whole-of-government technology solutions in the future, such as cloud-based services.”

To excuse this expensive waste of time, Cormann said “We were not going into this process with a desperation to sell. We went into this process with a commitment to ensure that the way this network is currently managed is still the most appropriate way.”

This whole debacle exemplifies the short term wasteful thinking of Coalition governments.

The public service has been effectively neutered. Department heads with proven expertise and vast experience are replaced with political appointments while public servants are sacked in their thousands. Those that remain are threatened with punitive action should they express views critical of the government. Their advice is not sought as private consulting firms are paid enormous sums and provided with very narrow specific terms of reference to give the required answers.

We have Treasury, the Department of Finance, the Parliamentary Budget Office, the Productivity Commission, the RBA, the ATO and legal battalions to advise us but instead, we go to the big four or the various industry groups for “independent” advice. We appoint temporary hand-picked commissioners/consultants who are paid enormous amounts of money to express their own opinions.

Previous studies are ignored, their recommendations forgotten, their goals abandoned, as we reinvent the wheel over and over and over.

Why must the rest of the country endure a substandard broadband when everyone knows the huge productivity gains to be had by universal access to the same speeds our politicians enjoy? Why did Howard block Telstra’s 2005 bid to start laying fibre? Why is Turnbull continuing his sabotage?

Why are we handing over aspects of our security to foreign companies?

Why are we selling our air and sea ports?

Why are we selling profitable businesses that would provide ongoing revenue to the government ?

Why are we privatising government agencies, invariably leading to higher costs, a deterioration of services, and job losses?

Why are we selling government buildings and then leasing them back again?

Why are we contracting out jobs to middlemen when the public service could do them cheaper and more efficiently?

The overriding goals are “small government” and “no debt”. The reasons for, and consequences of, these goals are never made clear. They are goals without a purpose and represent false economies.

So is it stupidity or cupidity… or is that just conservative politics?

 

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16 comments

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  1. Sir ScotchMistery

    The base tenet, of a “conservative” mindset, is that government needs to “not be in our bedrooms”.

    So, here we have a government. led by a billionaire, declaring we can’t be recognised as a couple, unless one of us has a dick and the other doesn’t. It appears to me that government is well and truly in the bedroom.

    The sales of nest eggs among we fool voters is frowned upon, including by government, so let’s without looking things up, chuck a few examples in the ring:

    Port of Darwin – sold to the Chinese by a conservative government
    Cubbie Station – allowed to be sold to the Chinese by a conservative government
    Kidman & Co – almost sold to the Chinese – conservative government – will still go ahead, written differently
    Huawei – considered to provide all infrastructure in the Fraudband Network of M Turnbull- stopped at the last moment by an accident

    In the last 12 months, we have seen the ChAFTA signed – it allows Chinese workers with a particular visa designed for the purpose to come to Australia and work for Chinese companies, with no oversight of wages etc. More here

    In the past 2 years, how many Federal and State MPs have travelled to China at Chinese expense? This list actually includes Abbott, who travelled on the purse of a Chinese businesswoman, Helen Liu, often described a “wealthy heiress”, as did Joel Fitzgibbon.

    So, we sell the farm, to the Chinese, folks squeal racist if anyone says anything, which is unfair, as they are the racists (try buying a block of land in China or damn near anywhere else in Asia for that matter – you’ll be laughed out of the land office).

    The Chinese companies bring in their “Australian obligated workers” that is they are supposed to be paid Australian rates, but the 457 visas are adapted for them. No English test. Perhaps someone could tell us how 50 inspectors Australia wide are going to go into every property and check wages?

    We have been sold out, sold a pup and sold down the drain, by both sides of Federal Politics. Which is just another way of saying “we’re f*cked”.

  2. Sen Nearly Ile

    This could be a ‘heart starter’ for the oopsasition economic/IT spokesperson. Labor has 46 pollies drawing extra pay for opposing maybe one of them could read your little piece and take up cudgels against matthias?
    Dear Sir,
    the robb erring let unlimited visas(nz 1800 and only 100 per sector) and no checks on qualifications for Automotive Electrician Cabinetmaker Carpenter Carpenter and Joiner, Diesel Motor Mechanic Electrician (General) Electrician (Special Class) Joiner Motor Mechanic (General) Motorcycle Mechanic
    ps there are not quite 1.5 billion to choose from?

  3. Jennifer Gregory

    Peter Costello should be behind bars for crimes against Australia. Just a few years ago, he advised the Newman Govt. to sell everything, as fast as possible, as if determined to bring about the ruination of Queensland for future generations. The people stood up against the Newman Govt. and threw them out. I don’t have confidence that the rest of the Australian voters will do the same thing with this treasonous government at the next election.

  4. billshaw2013ill Shaw

    It is so frustrating that you Kaye, can so simply and intelligently articulate what damage the conservatives inflict on Australia yet they still get the support from mainly those that suffer the most. Beats me! Must be lots of Aussies who can’t think for themselves.

  5. Dave

    Good luck trying to get any of your questions answered Kaye!…But the most important question of all is why the hell do we put up with this crap?

  6. Julian

    I think its all part of their secret New World Order. Sell the peoples assets, encourage mass immigration (Turnbull’s policies will see Australia’s population 100 million by 2100) by the rich investing (buy a house/property/farm) and undermine our sovereignty with TTPs, GATTs, and FTAs. That way we become dependent on TNCs and unable to be independent. And the new business immigrants will naturally vote LNP. And so the cycle continues..

  7. David

    Another in depth informative post Kaye Lee….An answer quickly came to me re this para from your article…’We have Treasury, the Department of Finance, the Parliamentary Budget Office, the Productivity Commission, the RBA, the ATO and legal battalions to advise us but instead, we go to the big four or the various industry groups for “independent” advice. We appoint temporary hand-picked commissioners/consultants who are paid enormous amounts of money to express their own opinions….Previous studies are ignored, their recommendations forgotten, their goals abandoned, as we reinvent the wheel over and over and over.’

    The major recipients are as always when this Govt enter these mindless wasteful fishing trips, their mates in and associated with their benefactors, the big end of town, the real power behind Tory Govts.
    Labor are not entirely blameless when waste of taxpayers money is in question, never though, never to the extremes of their opponents, rarely at the behest or dictates of the wealthy.

    I will post yours to Twitter, it deserves wider coverage.

  8. Kaye Lee

    I wish we could get rid of the Jobs Network people and go back to the CES who actually helped people get jobs. I wish we could get rid of the contractors using the Green Army as free labour and either give the auspice over to Landcare or, better still, make it part of a trade certificate. I wish we could hook up our young unemployed with seasonal work like fruit picking rather than give the jobs to backpackers

    I want more government, not less. I want someone regulating the rapacious greed of the financial elite rather than facilitating it. I want someone ensuring that our common wealth is used/invested in our best interests rather than the best interests of those who seek to profit from it. I want someone protecting the rights of minorities and providing a safety net for the disadvantaged. I want someone training our people in the skills we need rather than importing labour from overseas. Isn’t that what government is for?

  9. Margaret McMillan

    That last comment sums up beautifully what most of us wish for, Kaye. Every wish of yours would return us to the kind of government we should have – but which Howard so viciously and cynically took from us. He started the rot. And although I still think Labor is preferable to the Coalition, I have sadly to admit that they have fallen for Howard’s scheming, allowed the Libs to frame all arguments and no longer have the courage of a Whitlam or a Keating to say: “This would be the best thing for the country, so I am going to do everything in my power to make it happen.”
    As I type this, I am thinking of course about the horrors of offshore detention. So……I wish that politicians had the courage to say that what we are doing to innocent people is wrong, and it must be changed.

  10. JohnB

    The LNP are following the tried and true US neoliberal methodology – they don’t win elections by doing ‘good things’ for the electors, they ensure opposing political/social movements are denigrated, demonised, neutralised or disabled.
    Through overwhelming control of mainstream media, insidious propaganda misinforms/misleads and selectively informs the population. Complicit media allows them to lie and mislead safe in the knowledge that news coverage of even the worst blunder is usually restricted to one day’s mention – then buried as tame journalists conveniently ‘move on’.

    Their privatisation of already efficient public service providers has many benefits for neoliberals:
    – it enriches their corporate financiers/sponsors,
    – it ingratiates politicians to powerful corporatists resulting in sly offers of lucrative sinecures,
    – it enables those in the know to make ‘shrewd’ speculative investments,
    – it diminishes union membership in the public service – a major remaining power base of unions,
    – it thus diminishes the ability of the union movement to financially support their major political opponent – the ALP.

    Serving the best interest of citizens and our nation is bottom of their treasonous list of priorities.

  11. diannaart

    Serving the best interest of citizens and our nation is bottom of their treasonous list of priorities

    The really stupid part of it all is the goal of doing the best for a nation, the environment, small business – just doing good for as many as possible does not send the greedy fools into poverty – they still have wealth and power – OK maybe not as much… this idea that one can never be too wealthy is a pathological disorder. Just look at Murdoch, the antics of Rinehart or Clive Palmer, these people are not healthy people and they dominate our lives.

    These people ARE different – owning just their own home is not enough, whereas for most people and I can speak of my own experience of finally getting back into a home of my own which put an end to the regular dreams I had of searching through homes (all kinds of homes) those dreams stopped. My home is very modest, I still have a mortgage but feel far more secure than I did renting.

    Yet these sickos aren’t satisfied with even a luxury lifestyle they want more and they want it at the expense of everyone else and they will lie and do and say anything to continue their mad ride on our backs.

  12. Bronte ALLAN

    After reading of this latest liberal party “blunder”–cleverly disguised with huge amounts of government double speak or gobbledy gook–I am wondering is there ANYONE in this inept, lying, obscenely overpaid liberal party with any brains, compassion or even basic understanding? Isn’t it just marvelous, after wasting more of the taxpayers money, time, resources etc, this inept excuse for a “proper” politician has decided that the ICON system will (again!!) stay! Another great piece Kaye! Keep up the good work!

  13. diannaart

    Bronte

    Not since Petro Georgio resigned… or, if there are any Liberal politicians who exhibit any sign of moral fibre/intelligence/humanity, they are probably isolated, bound and gagged, in a dungeon in the old government house or maybe an off-shore island…

  14. Anonymous One

    The NSW ALP were almost as bad under the 00’s Right such as Obeid.

    Every time a gov employ consultants to do a job we used to do you can expect economic treachery to occur one way or another.

    Where I work a major consultancy firm did a restructure review. The result was position upgradings at lower levels that were simply not warranted for the basic type of work involved.

    My view is that it is part of a strategic LNP plan to provide profit to the buyer when the activity is eventually outsourced. It allows the outside providers to quote higher than they otherwise would to enable profits – say initially 20% lower than present costs – and they can restructure to remove the inane restructure. This also allows the government to call the outsourcing a success.

    We saw similar activity with electricity pricing under the State ALP’s where they used IPART to lift charges to make the future profits for those who purchase electricity assets. Not sure yet if they are doing the same with Opal charges, but quite probable.

  15. Anonymous One

    [Yet these sickos aren’t satisfied with even a luxury lifestyle they want more and they want it at the expense of everyone else and they will lie and do and say anything to continue their mad ride on our backs]

    Yep, and the sad part is that they are just playing the modern form of the Game of Thrones – it is just about status competition among those they see as peers. Its about a few ego thrills of a few at the cost of unhappiness, hardship and sometimes death for many, played under the outright lie of trickle down economics. Palmers activities of late are a prime example.

    For our acceptance as pawns in this game – blame the US banks and multinationals who set up the political and educational systems (to spread economics propaganda) so that all economic policy is what they want.

  16. Christine Farmer

    Can anyone explain how it can be cheaper and more efficient for private enterprise to do the exact same job as the public sector? By definition the private sector exists to make a profit. Having been one most of my working life I don’t believe the rubbish about “lazy layabout public servants”. That is simply untrue as a generalisation.
    Therefore, if profits must be add to a job’s costs, and the quality of the work is the same, the private sector job simply cannot be cheaper. We’re being fed nonsense.

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