Tuesday, 15 March 2005 18:30

News Roundup Extra 15 Mar 2005


Government industry group attracts no investors, yet
A high-level group has met only twice and attracted no funds in the two years since it was set up to drive multinational investment in the Australian technology sector, reports The AustralianIT (15 Mar.). 
The Australian says Multinationals Promoting Local Investment, Export Opportunities and Research Strengths (MultiPLIERS) was set up in early 2003 by then IT Minister Richard Alston, but only half of the more than 30 foreign technology companies invited to join MultiPLIERS had nominated an "Investment Ambassador" - as each committed to do a year ago.
The group has not organised any promotion of Australian investment opportunities.

According to the paper, the scheme was designed to attract voluntary investment from foreign firms in local industry at a time when the government's industry development policy - which required multinationals to make investments in return for participation in government contracts - was being scaled back.

The MultiPLIERS group has not met since March last year, says the paper and
IT Minister Helen Coonan hopes to chair a meeting some time in May, but no date has been set, The Australian reports.

The Australian Information Industry Association (AIIA) strategy and policy general manager James McAdam defended the record of MultiPLIERS, saying there had been a lot of background activity aimed at future successes.

MultiPLIERS members had identified seven potential investment opportunities at a meeting in March last year, he said.  He would not specify the nature of the opportunities, citing commercial confidentality, but said the companies involved were in negotiation with Invest Australia about potential investments, The Australian reports.

The paper reports, however, that local technology companies say the program is another example of government "pandering" to multinationals.

One local company spokesman told The Australian that local companies don't get access to federal ministers like that (the multinationals), and certainly don't get access to government contracts in the way that multinationals do.

Coonan ignores ACS for telework committee
The Australian Computer Society has been overlooked by IT Minister Helen Coonan for the government's key Telework Advisory Committee, even though the ACS has targeted work-life issues as a major policy area this year, reports The AustralianIT (15 Mar.). 
The Australian claims in its report that the society's first foray into social policy - in which the ACS proposes a model to fund one-year paid maternity and paternity leave - received a lukewarm response from Senator Coonan's office, which suggested the ACS was straying from its core area of concern - technology professional standards.

The Australian Telework Advisory Committee will investigate the use of technology to allow staff to work from home, promoting better work-family balance among Australians, says the Australian.

The paper reports that ACS president Edward Mandla unveiled the society's policy proposals on work-life balance yesterday. The policy proposes that the Government commit as much as $575 million for funding paid parental leave of up to a year, and a further $771 million towards tax deductions for working parents, says The Australian.

Mr Mandla told The Australian that a main aim of the policy was to make work more attractive to young professionals.

The Australian reports: "With a skills shortage looming because of diminishing student enrolment in technology disciplines and low participation of women in the tech workforce, the industry must improve its reputation and practices if it is to attract people to meet future demand," the ACS policy states.

Diminished Australian presence at CeBIT
It has fallen on Victoria's shoulders to fly the Australian flag at CeBIT 2005, the world's largest annual IT trade fair, in Hanover, Germany, reports The Australian (15 Mar.). 
The paper reports that Australia's national stand at the fair, accommodating eight companies, could almost be labelled St Kilda Road North, as it relies totally on Victorian exhibitors.

It marks a strong contrast, says the paper, in sheer numbers and national spread, with the heady days of the mid-1990s when, with federal government support, companies from around the nation established a prominent presence at CeBIT, culminating in 1995, when Australia enjoyed Partner Country status and our exhibitors numbered in the dozens.

Australian company numbers at CeBIT have fluctuated since then, but this year it seems that the Victorian Government has stepped in where Canberra once held sway to re-establish the country's CeBIT credentials, says The Australian.

The paper says much of the presence is spearheaded by Multimedia Victoria, which has provided the lobbying and financial and logistics support to send most of this year's Australian exhibitors to Hanover.

Outside the national stand, only four other companies - the likes of Zensonic, Calidad Distributors, PegCRM and Grabba International - have chosen to come to CeBIT independently, says the paper.

The Australian reports that Australian Information Industry Association chief executive Rob Durie said Australia faced a challenge to rebuild its CeBIT presence -  "the issues that need to be looked at are the size of Australian companies that would get most out of a presence, and the diversity of them - how we get a good fit of exhibitors," he said


NICTA directors get $1.3m
The Federal Government's $380 million "beacon for Australian innovation", National ICT Australia, paid out $1.3 million in directors' fees to its 11 board members in its first year of operation, reports The AustralianIT (15 Mar.). 
NICTA's 2003 annual report shows four directors received more than $100,000, including one who received more than $430,000. Some of the fees include salaries for work at NICTA, and the payments are also for work done during 2002, says The Australian.

NICTA is an independent company that also receives funding from several state governments and six universities.

The Australian says the revelations come at a difficult time for the IT research flagship, just a fortnight after the announcement by inaugural chief executive Mel Slater that he would resign after less than two years at the helm.

Dr Slater said NICTA was "well on track" with its work, and urged Australia to "be patient" as its IT industry developed, but critics have warned the organisation is yet to deliver on its promises, says The Australian.


Mincom reduces loss
Queensland software developer Mincom has credited tighter cost controls and stronger software licence sales for digging it out of a hole to deliver a greatly reduced loss for the first half to 31 December. 
The AustralianIT reports (15 Mar.) that Australia's largest software developer filed an after-tax $904,000 loss on revenue of $78.4 million, up from a $5.3 million loss on revenue of $69.7 million the previous year.
"This profit is a direct result of a concerted effort to grow our software licence sales, along with tighter control over expenses," chief executive Richard Mathews said, reports the paper.

Gross margins grew from 4 per cent to 46 per cent, says the paper.

Warning: Offshore dangers for Australian companies
Government departments seeking to use offshore technology service providers from cheap labour markets such as India would enter a "legal minefield" a parliamentary research brief finds. 
The AustralianIT reports (15 Mar.) that the situation for government bodies is far more complex than for private sector users, the Parliamentary Library research paper says. Departments and agencies are just as eager as the private sector to squeeze costs but they face more complex legal requirements.

According to The Australian, the paper, published yesterday, warns agencies investigating offshoring opportunities to be aware of legal requirements under the Privacy Act and the Financial Management and Accountability Act.

"The offshoring risk to Australian businesses is lost profits and reputations where things go wrong," the paper says.

The report also warns of the need for government agencies to be conscious of intellectual property issues, which are more complex in international law, says the paper.

The Australian says that the paper says that it is right to assume that cheap offshore markets will lure many Australian companies, but it is not yet clear that the offshoring phenomenon will result in large-scale job losses in Australia.

Offshoring may reduce IT costs, the research paper says, but there are compelling reasons for companies and government departments to keep their IT operations onshore - Australia currently has a highly skilled workforce, a stable political system and a sound regulatory environment, the report concludes, reports The Australian.


Software developers doing well in defence bids

Software developers are the winners in a tussle between South Australia and Victoria over a $6 billion warships contract, says The AustralianIT (15 Mar.). 
The Australian says the SA Government has pumped $8 million into a special software engineering centre in Adelaide. The Centre for Excellence in Defence Industry Systems Capability may bring the famed Carnegie Mellon Software Engineering Institute to the state.

The paper says that part of a $100 million plan to double the state's $1 billion defence industry over the next decade, the centre is designed to improve the system development standards in defence contracting.

SA and Victoria are fighting over the rights to build three air-warfare destroyers for the navy, with both states trying to cement their credentials in the defence sector, says the paper.

The Australian says the centre - a joint venture between the SA Government, the University of South Australia and the Defence Science and Technology Organisation - will employ about 30 staff when it begins operating this year. Students from the university will be involved.

Sony legal action on PlayStation modifications

Sony Computer Entertainment Australia is planning a new legal bid to outlaw PlayStation modification chips following recent changes to federal copyright laws. 
The AustralianIT reports (15 Mart.) that the devices override copy control mechanisms Sony builds into its consoles to block the use of pirated games and DVDs encoded for players built to operate in other regions.
Launching the Gran Turismo 4 game in Sydney last week, SCEA managing director Michael Ephraim said the company had instructed its lawyers to prepare a new court challenge to the legality of the devices, says the paper.

The paper reports that SCEA has engaged in a long series of legal manoeuvres to outlaw the chips since 2002 when it took legal action against backyard mod chip supplier, Eddy Stevens, in the Federal Court.


Siemens slashing marketing
Siemens Australia is preparing to slash its $2 million marketing budget as part of a global cost-cutting exercise to save its mobile business. 
The AustralianIT reports (15 Mar.) that the company's German parent announced that it would cut $670 million worth of spending from its mobile phones division last week, after it recorded an operating loss of $238 million in the quarter to December 2004.

Siemens Australia said local staff would not be cut, but its marketing expenditure would be reviewed, says The Australian.

The German electronics giant employs about 3250 staff across its Australian and New Zealand operations.

Siemens Australia said it would have to consider whether it would continue to conduct above-the-line advertising campaigns, reports The Austalian.

The spokesman said the company had not discussed closing its Australian operation, the paper reports.


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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