ABC News24 – Capital Hill

Senator the Hon Mathias Cormann
Minister for Finance






Intra Government Communications Network, tax reform, emissions reduction targets

PRESENTER: The Federal Government has abandoned the idea of selling a dark fibre communications network used by its departments to send sensitive information. The Intra Government Communications Network, or ICON, includes more than 800 kilometres of high speed cable linking about 400 buildings across Canberra. The Finance Minister Mathias Cormann announced the decision this morning and he has explained it to our reporter Dan Conifer.

DAN CONIFER: Mathias Cormann thanks very much for joining us on Capital Hill. Why have you decided not to sell this system?

MATHIAS CORMANN: Over the past year or so, a scoping study has assessed whether there was an opportunity here to manage the Intra Government Communications Network more efficiently and more cost effectively in private hands, given that there is a private sector market in this space. However, having assessed comprehensively all of the current arrangements and all of the opportunities the judgement that we have made is that we are currently getting value for money. The scoping study did identify some opportunities for further improvements in the way this network is managed and we will be implementing those. But, this is a very popular, good value for money arrangement that has of course started some 25 years ago with a five kilometre cable, which has grown into a network across the ACT of 150,000 kilometres of fibre network cable. It is managed by the Department of Finance and having considered this very carefully, we have come to the view that it is in the public interest for this arrangement to continue.

DAN CONIFER: You mentioned a study found that it was value for money, can you just break that down for us? Just how much value are departments and is the government getting at the moment?

MATHIAS CORMANN: The background to all of this is that in our judgement, from time to time, it is important to take a step back and assess what is being done when it comes to the administration of Government services. In particular, in the services where there is a deep and strong private sector market, to see whether there is opportunity for the private sector to provide the same service, to a better quality and at a lower cost. In this study, the conclusion is that no, we are actually getting good value for a very high quality product.

DAN CONIFER: Did security concerns play into this decision?

MATHIAS CORMANN: Clearly, given the nature of the network, given this is an Intra Government Communications Network which includes 88 odd agencies, including agencies like the Department of Foreign Affairs and Trade and others, these are necessarily considerations that are part of any assessment of this nature, yes.

DAN CONIFER: The scoping study found that 17 of 34 agencies aren't using encryption over the network. How quickly do they need to change that and start using encryption?

MATHIAS CORMANN: So far 17 out of 34 are using encryption through their protected networks. This will ultimately be expanded to all of those that are using ICON for the purposes of protected networks. This is work in progress. Obviously there is continuous development as I have indicated right at the outset. This started with a five kilometre bit of cable rolled out by the Department of Foreign Affairs and Trade back in 1991 and it has grown into a very substantial network across the ACT. There is always the need to review and assess whether things are being done to the appropriate standard. That was part of the reason why we conducted this scoping study, to really comprehensively and methodically review current arrangements, make sure they are still fit for purpose, that they are still dealing with all of the requirements in the most cost effective way. The judgement that we have made is that we can make some improvements, which we will progress, but that we should be doing it in relation to this asset in-house, in-Government, rather than to be contracting it out to the private sector at this point.

DAN CONIFER: Have you or will you set a deadline for them to start using encryption?

MATHIAS CORMANN: These are things we are working our way through now, as we work through our implementation plans. We are now commencing implementation of the recommendations. There is a work plan in place and these sorts of things are going to be subject to some further consultation with relevant departments that are affected by this.

DAN CONIFER: We've been told that agency heads are concerned that anybody with a pair of bolt cutter could get in and access these pits around Canberra. Firstly, is that true and secondly, what's being done to fix that?

MATHIAS CORMANN: I don’t think that that’s true. Clearly the scoping study did identify a few areas for improvement and in the next few months, the Government will be focusing on progressing improvements as appropriate.

DAN CONIFER: Your colleague the Treasurer Scott Morrison has given a speech this morning and gave the strongest indication yet that the government will target superannuation tax concessions. Is that going to happen?

MATHIAS CORMANN: The Treasurer gave a speech in Brisbane earlier today to the Association of Superannuation Funds across Australia and the Treasurer’s comments were very clear. We are currently assessing opportunities to improve the tax system as a whole. Our objective is to have a more growth friendly tax system. A tax system that helps to encourage people to work more, save more and invest more. We are currently leaving everything on the table. Early next year there will be a draft set of proposals on how we think the tax system can be improved and all will be revealed at that point.

DAN CONIFER: Just lastly Minister, the Opposition Leader hasn’t announced Labor's emission reduction target but says that it will aim to cut emissions by 45% on 2005 levels by 2030. That’s going to be the party’s baseline in talks with industry and unions and other groups - just your reaction to that figure?

MATHIAS CORMANN: I don’t really know what Bill Shorten has announced today. He clearly was quite desperate to have a headline out there in the media today so he could justify being away from Parliament next week. He was clearly not very keen to be in Parliament this final week of the Parliamentary sitting year. If the 45 per cent target that he put into the newspapers today was indeed adopted as a target - which so far it hasn’t - it would be very bad for growth and jobs. We know that after having already announced three tax increases this year, that Bill Shorten is desperately keen to bring back Labor’s discredited carbon tax, which of course would be a tax on growth and jobs. The Coalition has adopted an appropriately ambitious and fair, but achievable and responsible target which we are taking to Paris. A 26 to 28 per cent reduction in emissions on 2005 levels, which will see per capita emissions half, which will see the emissions intensity per unit of GDP reduce by two thirds. We are making an effort that is consistent with relevant other countries around the world and we have a plan to achieve the targets that we’ve said. Bill Shorten’s contribution today is just an attempt – a transparent attempt - at a headline, but there is actually no policy substance behind it. There’s no plan on how to achieve it and if he were to indeed adopt that target, it would hurt the economy and cost jobs and it would increase the cost of living for families and pensioners across Australia.


Senator the Hon Mathias Cormann, Minister for Finance, Perth