STORY:
Australian Y2K bug survey results announced

Australian business is finally realizing that the year 2000 problem, or millennium bug, will affect their operations, but nine out of 10 companies are not yet ready for the turn of the century. The Sydney Morning Herald quotes the National Australia Bank quarterly business survey as saying 87 per cent of companies expect that the millennium bug will affect their business.

According to the survey, the finance sector is the industry most affected, with 94 per cent of participants reporting exposure to Y2K. Property (94 per cent), personal (93 per cent), recreation (92 per cent), services and transport and storage and communication (91 per cent) companies are also highly exposed. Food retailers and builders are the most casual about Y2K.

Eleven per cent of construction companies and 14 per cent of food retailers are yet to develop any action plan to cope with the bug, the survey shows. Overall, only 3 per cent of all affected companies have still to develop an action plan, though just 8 per cent claim to be fully compliant.

The Herald reports the Federal Government, regulators and peak bodies have all urged companies to take steps to ensure business systems are ready for the change of dates. About $10 billion will be spent on the problem during 1999, according to an Australian Bureau of Statistics survey.

While larger companies are taking remedial action, smaller businesses are at most risk of experiencing disruption. The extent of the problem has made Y2K an economic issue.

Warburg Dillon Read chief economist Mr Mark Ryder tells the Sydney Morning Herald the amount of money invested in remedial action had helped boost overall capital expenditure, a major driver of economic growth. "It translates into a not insignificant influence on business investment. The year 2000 is not just GST and Olympics but the millennium bug as well.

"But when Y2K spending runs out, well, that's another thing that will support the underlying trend of weakness in business investment," Mr Ryder said. The Herald says the Australian Prudential Regulation Authority has estimated that the banking sector will spend about $1 billion on solving the problem.

DATE: 1/22/99

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