Gershon contractor cuts the right approach: Tanner

Minister for Finance and Deregulation, Lindsay Tanner, has defended the decision to proceed with a 50 per cent cut in government ICT contractors as part of the Federal Government’s acceptance in full of the Gershon review recommendations.

Tanner told ARN he disagreed with recruiters and the Australian Information Industry Association (AIIA), which raised concerns the cull could push contractors to the private sector and intensify the skills shortage affecting the industry.

“We don’t believe it is misguided, in fact, as a result of consulting with agencies we have made what is the only change, and a very minor one, to the Gershon recommendations, and that is to have the reductions occur over three years rather than two to make it a slightly more generous time scale,” Tanner said. “We believe this is a sensible recommendation. Sir Peter Gershon advised that the extensive use of contractors, rather than employees, was excessive in his view and that there were instances where it was essentially being done not because there was a need to have contractors, but because of inertia.”

As part of Gershon’s recommendations, a new Ministerial ICT Committee to provide a broader vision for ICT in government policies and programs will also be created. The committee will sit underneath the government’s Expenditure Review Committee (ERC).

“There will be a couple of ministers co-opted and it will function effectively as a sub-committee of the ERC,” Tanner said. “I can’t give you a specific time scale of when it would commence deliberations but clearly it is meant to deal with essentially larger projects and major IT spending decisions and they don’t happen every second day. I would expect it would be commencing reasonably soon.”

The committee also will have control of a fund to be set-up to re-investment the expected $400 million annual savings from Gershon’s recommended cuts to “business as usual” budgets.

Tanner said the poor economic climate had no influence on the timing of the announcement or its decision to accept the Gershon review recommendations and stated the committee would continue to consult with industry during the implementation phase. He would not rule out, however, further action by the razor gang.

“For the time being, I don’t anticipate having put a new framework in place that we would be revisiting the issue in a big hurry,” he said. “But you never know with government spending in any area when you will need to re-think how it is being done. I can’t guarantee there won’t be further examination but certainly the whole purpose of this is to put in place a new framework for an extended period of time and that is what I would expect to eventuate.”

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