Canberra squeezes Microsoft

FEDERAL Finance Minister Lindsay Tanner is considering broadening the review of Microsoft licensing contracts to include other tiers of government.

Centrelink, Medicare, the Australian Taxation Office and the Immigration Department are among nine key agencies to come under the microscope of British efficiency expert Peter Gershon, who has reviewed the commonwealth`s $16 billion technology and communications budget.

More than 800 agencies operate in the public sector.

Late last month Sir Peter submitted his report to the federal Government on reforming ICT purchasing. It recommends administrative and cultural changes over two to three years to reduce the spending.

A company Mr Tanner had his eye on before the arrival of Sir Peter was Microsoft. Its federal government contracts could be worth as much as $100 million.

The software giant supplies desktop operating systems, Microsoft Office productivity tools and other applications.

Defence is representing federal Government departments and agencies in a bid to extract a better deal from Microsoft.

"All I will say is that I expect an outcome from these negotiations before Christmas and that my department is working hard with Defence, the biggest purchaser of Microsoft licences in government in Australia, to get a fair result for taxpayers," Mr Tanner said. "In addition, it may be that the deal with Microsoft will include other tiers of government, thus benefiting taxpayers even more."

He declined to elaborate, saying: "Negotiations with Microsoft are under way and I would not want to comment on that now."

A scoping study on the government`s telecommunications requirements has just kicked off, he said. "It would be premature for me to speculate on what conclusions that study will reach and what we may decide to do in response."

Any changes would affect Telstra most. AGIMO is part of the Department of Finance and Deregulation.

Mr Tanner said it was overseeing co-ordinated procurement arrangements in several areas, including Microsoft software, telecommunications and desktop computers.

A scoping study on desktops has commenced, and Mr Tanner said a centralised approach to procurement was the key to cost savings.

The Gershon report had raised the fact that the ATO paid an average of $950 for a PC per employee while other government agencies had spent between $2000 and $3000 for similar equipment.

"I am sure that we can do better if we aggregate the government`s purchasing power in this area.

"The tax office is a standout performer and we hope to leverage its expertise in the same way that Defence`s expertise in dealing with Microsoft is being leveraged," Mr Tanner said.

The Government was considering all aspects of Sir Peter`s report and there was no freeze on IT procurement while the review was ongoing, he said.