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Legislative Assembly for the ACT: 1996 Week 12 Hansard (19 November) . . Page.. 3785 ..

MR MOORE (continuing):

One of the things that concern me is that there is sometimes a propensity amongst governments to just read the recommendations and say, "Yes. We have to respond to that recommendation", without trying to understand the thinking of the committee behind it. To illustrate that, Mr Speaker, I will take first the example from recommendation 23, dealing with InTACT. The committee was particularly concerned, and in fact asked quite a range of questions, about outsourcing involved with InTACT. I must say, Mr Speaker, although the recommendation agreed to in the committee was that "InTACT, in its general purchasing policy, apply the Community Benefits section of the RFO to ACT and region small business in respect of all its direct purchasing", there are still huge doubts in my mind as to whether this is the best way to go about purchasing.

I recognise that this is an administrative function of government, and so there is a general thrust, when we are dealing with administrative arrangements, to be reluctant to interfere with the way government does its business and carries out its administration. In the end, it was that reluctance that probably weighted the balance for me, anyway, in not seeking to overturn the process that InTACT is involved in. Mr Speaker, I still believe that InTACT - which I must say has already received widespread respect in the community - is quite capable of carrying out its purchasing process itself. I believe that that is the case, and I still believe that it would be of more assistance to more small businesses in the Territory if that were the case.

On the flip side is an issue that I know Mr Wood and Mr McMullan from the Federal Parliament have touched on. That is the approach to outsourcing. Perhaps if we can find this halfway approach to outsourcing and can illustrate in Canberra that it can work, there is just a possibility that the Federal Government, instead of going full-on for its outsourcing program, with an expectation of the same sorts of failures that they have experienced in South Australia as far as small business is concerned, will be able to pick up some lessons from the ACT. That, in turn, may assist in protecting small businesses. In an outsourcing arrangement where the whole of a department's purchasing is outsourced - or, in this case, the whole of the ACT Government's purchasing of information technology in a prime set of areas, in the four areas that InTACT deals with, is handed to one company or a consortium - that basically eliminates, for a long time, all other players in the market.

For the taxpayer, of course, that brings about other risks. Information technology does not go up in price, like almost every other commodity. It almost invariably comes down in price. Therefore, a long-term purchasing agreement is likely to be of disadvantage to the taxpaying community. Similarly, the competition in information technology is so great that going to one purchaser or one consortium effectively eliminates the competitive edge. So, I think there is a whole series of doubts that have been raised, and InTACT will be monitored carefully by members.

We also dealt with the issue of sale and lease-back in recommendations around recommendation 10. It seems to me, Mr Speaker, after a series of questions, that the crunch is that sale and lease-back is simply a different form of borrowing. The money stream is tapped into. The rental stream, in this case, is tapped into, and that becomes

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