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Costello Report considers privatisation of CITEC, Queensland Shared Services

by Paris Cowan •
Free resource

The interim report of the Queensland Commission of Audit, chaired by former Federal Treasurer Peter Costello, has suggested that Government ICT business units CITEC and Queensland Shared Services could be sold off as part of a revenue drive to bring the State’s economy back into the black.

CITEC is Queensland’s whole-of-government ICT infrastructure provider. It manages programs such as data centre consolidation and an identity management platform on a user-pays basis for State Government agencies.

Queensland Shared Services (QSS) is the shared corporate services provider to the Queensland Government, covering corporate ICT functions such as finance and payroll systems. It was formed on 1 July 2011 from the integration of ICT shared services agency CorpTech and the non-ICT Shared Service Agency (SSA).

The Costello Report, commissioned by the Campbell Newman Government upon entering power, paints a dire picture for the future of the State’s finances, finding that debt will hit $100 billion by 2018-19 if no action is taken.

“That’s an interest bill of $115 million a week or $685,000 per hour that all Queenslanders will have to pay,” said Queensland Treasurer Tim Nicholls in a statement.

CITEC and QSS have been included in a list of State assets and underperforming commercial units that could be privatised under a push to reduce this deficit.

The report says that CITEC is expected to register an operating deficit of around $26.4 million in 2011-12, with more annual deficits to follow.

“These financial difficulties relate to changes in its business model, and difficulties in the implementation of whole-of-government information technology initiatives,” it adds.

The report authors complain that commercial business units are duplicating a service that could potentially be better sourced directly from the market.

“The Queensland Government continues to operate commercial business operations in direct competition with private businesses operating in open and competitive private markets. These government businesses are providing services principally to internal government clients, and there is no justification as to why these services cannot be sourced directly from commercial private operators,” says the report.

“Where the use of services is mandated, there is no opportunity to compare prices in the open market, and hence any scope to achieve cost savings is lost.

“Internal overheads associated with user charging regimes also add significant cost to overall service delivery costs. For example, the service providers need to have detailed costing, invoicing and receivable processes and systems in place,” it adds.

The Commission has advised that the Newman Government review these business units with an eye to the achieving of optimum efficiency, however has put off making a more substantial recommendation until the release of subsequent reports.

Nicholls has also reiterated his pledge that no assets will be privatised without the achievement of an electoral mandate beforehand, meaning that any changes will not go ahead until after the next Queensland election.

The Report adds to an already tumultuous period for ICT within the Queensland Government. Intermedium reported recently that Minister for Science, Information Technology, Innovation and the Arts Ros Bates has formally put an end to the implementation of the state-wide ICT Strategy. Bates has also launched a comprehensive review into ICT management and spending across the public sector.

Related Articles:

Minister closes down Queensland Government ICT Strategy

End of an era for whole-of-government IT Services Panels?

Will IT projects fall foul of Queensland’s tough September Budget?

Jurisdiction
  • QLD
Category
  • IT Services
Sector
  • Finance & Services
  • Policy
  • Treasury
Tags
  • CITEC
  • CorpTech
  • Costello Report
  • Peter Costello
  • Queensland Commission of Audit
  • Queensland Shared Services
  • Ros Bates
  • Shared Service Agency