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Dec 8, 2011

Queensland Government blows $46 million in another IT bungle.

$46 million written off is not a loss because it is the government’s money:
Mayor Quimby ICT Minister Finn.

In an optimistic and upbeat assessment of the ultimate healing power of the GFC titled “Creative Destruction is a sign of Progress,” Luke Johnson says:

Importantly, capital is being allocated more sensibly. In the boom times money was squandered – now lenders and investors are deploying it much more wisely. I am convinced lessons have been learnt. There should be improved returns and less waste, and more worthwhile use of resources generally.

Government and industry are demanding better value: both public and private sectors are obliged to become more efficient and productive. This must be a good thing. Similarly, more attention is being paid to a proper connection between effort and reward. This is a healthy realignment. …
This is not the case in Queensland where the government seems to toss unlimited amounts of money at IT projects, which are a disaster on every occasion. They seem to always end up with the Z Team carrying out these projects and mismanaging them themselves.

Fresh from bungling the Health Department pay system at a cost of $219 million and rising with tens of millions more being pumped into it to try to correct it, they have decided to institute a new email system. Well may you ask, “What could go wrong with that?” Well for a start, after spending $46 million on it, most government departments have rejected it. It currently has 2,000 users, which equates to $23,000 in investment for each one:
Mr Finn, (Minister for Information and Communication Technology) hit back, insisting the system was under budget although behind schedule. "This project is progressing on budget and within scope by any objective measure it is a success," he said.

Earlier, The Courier-Mail reported that a much-hyped email system which cost taxpayers $46 million had been rejected by most State Government departments.

Trumpeted as a revolutionary way to centralise systems allowing workers to more easily move between agencies, the email platform was rejected as too costly by some of the departments it was specifically designed for. So far only 2000 users have signed up, at an estimated cost of $23,000 each – the price of a small car.

A Public Works Department spokesman insisted the Identity, Directory and Email Services program was set for wider installation by 2013 but sources said the Education, Communities and Community Safety departments had already opted out. The state's largest agency, Queensland Health, is not included in the project scope and is unlikely to sign up.

The system has also been plagued by delays and is already two years behind schedule. It is budgeted to cost $252 million over the next decade, with hopes $123 million would be recouped in efficiency savings.
Curiously ICT Minister Mr. Finn has claimed that the writing off of a Treasury loan of $46 million is not a loss because it is the government’s money. It seems that he didn’t get the job on the strength of his economic credentials:
It is budgeted to cost $252 million over the next decade, with hopes $123 million would be recouped in efficiency savings.

But already a $46 million treasury loan, spent setting up the system, has been wiped to reduce charges and encourage hesitant agencies to join. About 81,000 users are needed for the system to break even.

ICT Minister Simon Finn said the wiped loan was not a loss because "it's all the Government's money." An industry source said: "They will never save one dollar on this project, ever.”

LNP leader Campbell Newman slammed the email program as a poorly handled waste of money. He promised more accountability for IT projects if the LNP won government. "You betcha," he said this morning, promising robust business cases and better oversight for all major projects.

He condemned ICT Minister Simon Finn's flippant dismissal of the decision to write off a $46 million loan to build the system. "Minister, by wasting this money, you're wasting the people's money ... and that's why people are paying higher water and power prices and rego bills.

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