ACS Heritage Project: Chapter 42

Preamble

The Australian Computer Society (ACS) was formed 50 years ago, when the various state computer societies joined forces.

To mark the occasion, the ACS has produced a heritage project to honour the many individuals who have contributed to the growth of the ICT profession in Australia.

At the heart of the project is a history of computing in Australia. It is not just a history of the ACS, but the history of a profession.

Australia has the longest computing history of any country, excepting the US and the UK, and CSIRAC in the Museum of Victoria is the oldest computer still in existence.

Chapter 42: From offsets to Partnerships for Development

The Hawke Labour Government, elected in 1983, set out to reform the Australian economy. It formed a Department of Industry, Technology and Commerce (DITAC) under Senator John Button, to undertake a complete overhaul of industry assistance in Australia.

In 1984, the Government set up an inquiry into industry assistance in Australia, which became known as the Inglis Review. It found that it was difficult to precisely qualify the costs and benefits of the existing Australian Industry Participation program, known as the offsets program (see Chapter 41), although it was able to identify transaction costs to the Government and noted that price premiums may have been factored into purchases.

The Inglis Review concluded there were net benefits from the program, including enhanced access to international markets and technologies.

But the offsets program still received a lot criticism.

In March 1987, the Parliamentary Joint Committee of Public Accounts and Audit found that the offsets program was poorly administered and “open to abuse, lacked accountability and, worst of all, failed to achieve its primary purpose, the transfer of technology.”

After the Inglis Review the Government introduced two new initiatives: a Defence Offsets Program and a Civil Offsets Program. In September 1987, after 18 months of consultation with businesses and unions, Senator Button also announced a new Information Industries Strategy (IIS).

“The IIS is designed to rectify Australia’s growing trade deficit in the information industry sector by encouraging firms to link into world markets through alliances with foreign companies and to develop specialised products which are internationally competitive in terms of quality, design, delivery and price.

“Like other industry plans, the IIS has specific initiatives aimed at product R&D, increased exports, and skills formation and development. An Information Industries Board has been established to advise the industry Minister and monitor the effectiveness of the strategy.”

A significant result of the IIS was a new Partnership for Development Agreements scheme, aimed primarily at information technology industries. It was introduced in September 1988, and had the effect of replacing the Civil Offsets Program that was abolished in 1991.

It was hoped that the new scheme would boost Australian manufacturing by waiving offsets requirements for transnational companies that entered into joint ventures with Australian companies. Businesses that signed Partnership for Development Agreements committed to investing 5% of their total annual turnover in Australia towards developing export-oriented products.

A number of major international computer suppliers signed Partnership for Development Agreements. The first was Honeywell Bull, in November 1987, closely followed by eight more – Apollo, Apple, Cincom, DEC, Hewlett-Packard, IBM, Unisys and Wang – in the first 18 months alone.

The Federal Opposition criticised the interventionist program, which quietly died after the election of a Coalition Government in 1996.

While the Government fostered the Australian computer industry through policies designed to help multinationals work with local industries, several Australian hardware companies were going it alone, attempting to establish their own homegrown computer manufacturing industry. One of these was Hartley Computer (see Chapter 34).

There were many other brave attempts, but all eventually failed. Some achieved initial success but ended up succumbing to the commoditisation of hardware, which made it difficult to compete against the low costs of mass-produced microcomputers coming out of Asia.

Additionally, very few electronic components were easy to manufacture in Australia, and Australian labour costs could not compete against those of its neighbours in Asia.

Most of the microcomputers built in Australia in the 1990s and 2000s were merely assembled from imported components. This was comparatively easy once the PC-compatible standard had settled in for the long haul and individual components had been commoditised. Any PC enthusiast or backyard reseller could bolt together a machine, often at a lower price than a fully assembled product bearing a major brand name.

Despite decades of government support, the best efforts from some remarkable entrepreneurs were not enough to build an enduring computer hardware manufacturing industry in Australia. Ambitious individuals such as David Hartley, David Webster, Damien Dunlop and Owen Hill tried their best, and there was some success with machines like the Dulmont Magnum, but none were able to truly get a homegrown industry off the ground.

We look at some of these efforts in the next Chapter.

Veteran ICT journalist Graeme Philipson has written ‘A Vision Splendid: The History of Computing in Australia’.

It is available as a PDF download here.