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Channel accuses Vic Govt of pork barrelling

Channel accuses Vic Govt of pork barrelling

A rash of information and communication technology (ICT)-themed Victorian Government press releases in recent weeks has all the hallmarks of electioneering, according to industry players in the state.

Firstly, Marsha Thomson, the Minister for ICT, announced that more money from the state coffers was forthcoming for the industry through a second round of the Next Wave funding initiative.

This was rapidly followed by a self-congratulatory "Information Technology Report" from the Bracks Labor Government about its performance in the ICT sector in its three years in office. Again Thomson was the presenter of what was described as the "achievements" of a "forward-looking Government working in partnership with industry, education providers and the community".

Other Victorian Government press releases in the last two weeks include its Skills.net and eGaps initiatives, its New Realities school education program, and generic releases describing how IT can drive small business.

The flood of positive media spin comes at a very sensitive time for the Bracks administration, which copped flak earlier this month from the Opposition, following an announcement from telecommunications company Ericsson that it would close its Asia-Pacific R&D facilities. This will see more than 200 jobs eliminated from the IT industry, most of which were based in Victoria.

Some senior private-sector ICT personnel were a little at odds with the grandstanding from the ICT department. While it is heavy on talking the talk, it seems the Victorian Government is not always as good at walking the walk.

"When you read between the lines of these announcements, it sounds to me like there is an election coming up," said Bill Votsaris, managing director of Paragon Systems. "I think we [Victoria] are due for an election in November or December.

"In my experience, government funding tends not to be worth our while. You get caught up in the red tape and it can end up costing you more than what it is actually worth."

Frank Sheu, managing director of white-box components distributor Synnex, said he has never received any financial support from the Government in the 11 years he has built up his Victorian-based business. Synnex employs more than 200 staff and will go close to turning over $300 million this year.

Sheu doesn't expect a handout but he does have strong opinions about the lack of support for the local white-box industry in government contracts. He sees other states and territories doing much more for the local assembly community than Victoria.

"All the big PC orders seem to go to interstate or international companies," Sheu said. "Compared to the other state governments, my impression is that the Victorian Government is not supporting the white-box industry nearly as much as it should.

"We saw that with the recent DEET deal with Acer," he added in reference to a $35 million, 21,000-PC deal in February this year, which went to the NSW-based, Taiwan-owned vendor.

"Not only does such a large deal see lots of money going interstate but it also takes away crucial sales from the regional IT companies that used to supply the government offices and schools in their local area."

Meanwhile, Phil Sykes, CEO of Victorian-based broadband wholesaler Request DSL, said it is only now starting to dawn on the State Government that "90 per cent of the broadband spend is going to tier-one players". As a result, "they are not getting the appropriate levels of innovation and service", he said.

"The Government needs to share the business around more," Sykes said. "They may not get the lowest price but that minor discrepancy would be more than compensated by better service and innovation as well as focusing the spend back into Victoria."

For more information, see this week's issue of ARN.


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