THE State Government will outsource most of its IT functions after an alarming report warned it would cost up to $7 billion to repair outmoded systems at the mercy of hackers.

The report to Cabinet also identified massive waste with costs on some projects blowing out by more than 20 per cent.

Eight multimillion-dollar payroll systems will be rolled into one and some Queensland Government employees may be seconded to the private IT firms that win public tenders.

IT Minister Ros Bates said the system was a neglected "old clunker'' largely beyond repair.

"The estimated cost of repairs and upgrades to outmoded systems was estimated to be somewhere between $3.5 billion and $7 billion,'' she said.

"We don't have the money to do that. We will be going to the market seeking innovative solutions. Software, hardware and people may be outsourced.''

The changeover would take up to five years and it was too early to talk about the impact on jobs, Ms Bates said.

She said Suncorp had successfully outsourced its payroll system for 17,000 staff.

"They didn't try to build it, own it, run it, maintain it, patch it or upgrade it because they recognised it was not core business and there were better and smarter ways to do it.''

Ms Bates said the Queensland Government was currently spending $1.6 billion a year on ICT (information and communication technologies).

Some systems were at the point of collapse.

"Ninety per cent of what we are currently operating with will need replacing within five years,'' she said.

Ms Bates said modern thinking was that ICT didn't have to be owned by government but could be purchased like electricity or water.

"It is not something we can do overnight. It's a big ship and it is going to take some time to turn around,'' she said.

"There will be not one, but many submissions taken to Cabinet.''

Ms Bates is the first minister in Queensland to be given whole-of-government responsibility over IT.

She said previous governments had been blind to the problem because there was no one person with overarching responsibility for IT.

Late last year, The Sunday Mail revealed taxpayers were paying $15 million a year for lines and sockets in government departments for phones that did not exist.

And vital police, health and child safety records are vulnerable to hackers and viruses because software running 200,000 State Government computers has reached its use-by date.

At least 17 of 20 government departments face disruption from April 8, 2014, when Microsoft support for Windows XP expires.

Lead time to replace systems was two to five years, Ms Bates said.

"The average age of (state government) systems is 10 years,'' she said. "We effectively own an old and ageing ICT fleet.''



desmond.houghton@ news.com.au