Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

IT acquisition and procurement is a major and difficult exercise for anyone in the corporate sector or the public sector. There are instances every day of the corporate sector facing the sorts of difficulties which both state and federal governments face in major and complex IT acquisition projects. I neither confirm nor deny the sorts of figures that Senator Forshaw is putting on the table; I do not have those figures in front of me. I am not denying that those are accurate reports of difficulties that have occurred in various IT projects.

As finance minister, I must confess that one of the headaches one has is in relation to various departmental acquisition projects with IT is that you know that, under our structure, acquisition of this kind is the responsibility of each department. The heads of these departments do have that authority. Obviously, they must seek cabinet approval for the acquisition, but the responsibility for the acquisition is then a matter for the agency head, and they should do that in accordance with their responsibility in terms of value for money for the management of their department’s resources.

The process is extensively and exhaustively overseen through ANAO audits, and many of the issues that arise are brought to light by the ANAO, so there is certainly the requisite degree of transparency. It must be said that we are always seeking ways to ensure that we improve the management of these projects. It comes down to the skill of the personnel involved in each department that is responsible for the management of the acquisition itself. I am as disturbed as anyone else when these projects blow out, do not meet their deadlines or prove to be more expensive than was originally thought.

But we are not unique in having that difficulty. We have, which I think we formally announced recently, the introduction of a major new review mechanism called the ‘gateway process’, which we took from Victoria—and I accept and appreciate that the Victorian government has been a leader in this process; we all have the same problems at the state and federal level. Victoria, I think, brought to bear this gateway process from its experience of studying what the UK Labour government was doing. We have introduced that new review mechanism. It is quite a sophisticated mechanism by which each stage of a major acquisition project is reviewed. The smartcard, to which Senator Forshaw referred, is subject to that gateway review process and indeed the first such step in that has occurred.

The smartcard is an outstandingly important project for the government to embark on, but it is a complex one. It is one that Minister Hockey is turning his attention to with great rigour, and he knows that he has an enormous responsibility to ensure its delivery. My department, in taking responsibility for ensuring that each department in an acquisition process uses the gateway process, is actively involved in implementing the gateway process to oversee smartcard. Smartcard is important but it must subject itself to that rigour and, of course, it will be subject to full ANAO audit.

I accept, Senator Forshaw, that there have been the sorts of difficulties to which you refer. I suspect they are impossible to eliminate; they are not unique to the federal government, but we are doing our utmost to ensure they are minimised. If you have any additional suggestions for additional procedures, we would be happy to hear them. (Time expired)