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Opinion, Comment and Ideas
27 October 2008

[Click here for submitted discussion]


The recent Gershon Report into IT expenditure in the Federal Government says that the government should reduce contractor numbers by 50% (click here for an article from The Australian). An ICA member (Guy) who delivers IT services to the public service says the problem is poor management, not independent contractors, yet contractors are now being told they will be sacked if they don't become public service employees.

Read Guy's comments (below) and have your say. Send us your contributions and we'll include them on a dedicated discussion page. E-mail your thoughts to us at: ICTcontractors@contractworld.com.au.


Government slashing IT independent contractor numbers


The dramatic reduction in contractors is solely due to a government cost cutting measure.

A little bit of history is relevant. In 1998 the Federal (Liberal) government conducted a report into ICT expenditure and found it excessive. As a result they decided that outsourcing IT was the way to go. At the time there was an IT stream (ITO) in the APS. This was separate to the administrative stream so that the APS could attract suitably qualified skills. In the eminent wisdom of the government they thought they could obtain IT services for less money so the IT stream was abandoned and APS IT staff basically became outsource organisations IT staff. Most organisations didn't really want a bunch of public servants on the books so most were engaged as contractors. Outsourcing eventually backfired - poor service, high costs and no benefit. The APS found itself engaging more and more contractors simply because there was no IT stream. This year Sir Peter Gershon from the UK walked in to review IT in the Federal space - not a tough job to work out what was happening.

In the wisdom of the current government IT staff should now be insourced. It is the way that they are being insourced that is the issue. Right across the APS contractors are being told that if they want to keep their job (?) then they can either transition to full time APS (ie become a public servant) or their contract will be terminated. This is not conjecture but fact. I have heard, first hand, of this going on right across the APS. It is tantamount to blackmail - driven only by the APS needing to save money.

I find it amusing that the same government that has established a Ministry for Independent contractors will adopt a process to try and wipe out the concept across government. Isn't there an expression about practicing what you preach?

To this point I have agitated to have contractors rights recognised in vain. It would now seem that the very existence of independent contracting is under threat. If the government is able to do so and act with impunity then what will big business do?

Part of the issue remains that there is no status for independent contractors and no legislation to protect them. Government and business see contractors as a version of employee but without the obligations. It is astounding that there is legislation to prevent an employee from becoming a contractor yet an organisation can dictate that a contractor become an employee. Clearly there are no mechanisms in place to protect the rights of contractors and the current situation simply reinforces that we are anathema in the eyes of bean counters.

I ask yet again where is the leadership in relation to independent contracting? Where are contractor rights?

There will be some contactors in the federal space that will have no problem joining the APS. After all, the work is not that hard and you almost receive a third of the year off in leave. To those of us that have established companies and been running businesses we are now faced with being told that if we want work then to sign up as a public servant. A company, like any company, is not just some casual arrangement that can be altered at the whim of a client. Granted that not every IT person has to become a public servant but the problem with the APS is that they only see things in black and white. Given a mandate (akin to being given some new legislation) they see it as a means to go for broke. This is not just about saving money but about the animosity that is felt across the APS towards "high paid" contractors. Every job is under threat and the working conditions will become progressively worse.

In the end the government forced IT staff in the APS to become contractors and established the parameters for how IT works with government. Now that the mood has changed they want to revert to the previous arrangement. Neither saved money as both governments have found that either system is costly and does not deliver. Ten years ago the government believed that having IT departments in every agency was "not core business". They were right but they simply stuffed up the implementation of a different model. Given the opportunity they will simply stuff up the new model.

It is time to lobby government on this important matter to reinforce the nature of independent contracting.

I would suggest that the issue be raised to the Ministerial level and also the media. If independent contractors have any voice, and are interested in their future, then this new attack should be opposed.


Would you like to contribute to the discussion? E-mail your thoughts to us at: ICTcontractors@contractworld.com.au.