Previously confidential documents now released under Freedom of Information (FoI) prove conclusively that Treasurer Foley’s claims of annual $30 million savings from his Future ICT contracts were untrue.
Liberal Member of the Legislative Council Rob Lucas said today that Future ICT is a series of contracts replacing the former Government’s single EDS contract. At the 2006 election and in subsequent budgets, Mr Foley has claimed this new deal was saving taxpayers $30 million per year.
In a file note dated 23 August 2007 (attached), Chief Information Officer for the Health Department, Mr David Johnston, concluded there were no actual savings for Health and that in fact, ‘the total cost to Health of Future ICT was $51.4 million over five years.’
“The net Health position as a result of Future ICT is now estimated at:
Item 2006-07 2007-08 2008-09 2009-10 2010-11
Cost increase $8.6m $7.7m $5.2m $5.1m $5.2m
Savings allocated $- $4.7m $4.8m $5.0m $5.1m
TOTAL $8.6m $12.4m $10.0m $10.1m $10.3m
TOTAL COST TO HEALTH OF FUTURE ICT = $51.4 million over five years.”
“Put simply, Health is saying that Mr Foley’s claims that Health will save about $5 million per year under Future ICT are untrue. In fact, Health say Future ICT will mean annual cost increases of $5-8 million! Instead of supposedly saving $20 million over five years, Health is saying that Future ICT is costing them an extra $51.4 million over five years,” Mr Lucas said.
“Given that Mr Foley is cutting Health’s budget to retrieve the supposed $5 million per year in savings, it means Health has to cut $51.4 million (over five years) in spending from other parts of the Health portfolio as a result of the Government’s Future ICT contracts.”
Another Health document signed by A/g Executive Director for Health System Management, Mr Geoff Tattersall, indicates a significant part of the cost pressures were increased Microsoft Licensing costs of about $5 million per year under Future ICT. Mr Tattersall indicates the increased costs resulted because the Government had agreed to an annual charge being imposed on each PC (more than 10,000), whereas previously a charge was only incurred when a PC was being replaced.
Mr Lucas said that other documents highlighted that many PCs in use in Health have no use for many Microsoft licensed functions because they were specifically used for clinical purposes.
“Mr Foley and Treasury really need to explain why they would enter into a new contract like this which increases costs dramatically and unnecessarily for Departments like Health.
“The Auditor General has already indicated he is conducting an inquiry into the Government’s Future ICT process. The Auditor General should review these documents and report to Parliament whether the Government’s claims of annual savings of $30 million per year are true or not.”