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Three simple ways to avoid more IT failures like Centrelink and the census

9 January 2017
Tony Healy

Centrelink’s software problems, like those of Queensland Health, the Census and Victoria Police before them, arise from pathologies created by the powerful labour hire and outsourcing industries.

Centrelink’s software invents second employers and additional income. Queensland Health bungled the pay of nurses and doctors and also sent them nasty legal letters. Queensland lost a staggering $1bn through that disaster. The census website system fell over.

These would be extraordinary mistakes even for a small business, and yet they’re being made by government departments with hundreds of millions of dollars to spend. How does this happen? 


The answer is to be found in the arrangements the labour hire and outsourcing industries have created for themselves. Almost all software development by government is now performed by programmers hired through labour hire firms or outsourcers.

Labour hire firms hide the payments from the other party in the relationship. This allows them to charge high rates to government departments and attribute the rates to skill shortages. Meanwhile they pay the programmer only a relatively small amount, pocketing a small fortune for nothing.

Software is a growing, important field without clear administrative checks. Government needs to take drastic steps to keep up, and especially to ensure taxpayers’ money is not wasted.