Global IT group IBM will defend itself from the state government's attempt to withhold payments following the Queensland Health payroll fiasco.

The Bligh government yesterday disclosed it will dig deeper into the problem by issuing IBM with a show-cause notice, prompting the IT group to explain why contract to toll out the new pay system should not be ripped up.

Premier Anna Bligh's move came after the auditor-general released a report on the introduction of the SAP payroll system, which has neglected to correct the payroll of thousands of health workers since it started its operations in March.

Deputy Premier and Health Minister Paul Lucas said the government would withhold several million dollars in payments until they receive a response from IBM.

IBM was the project manager, designer, and implementor of the technology. The company was also responsible for choosing the payroll software for Queensland Health.

The IT company brushed off claims from Ms. Bligh that it breached its duty of care and its contract with the state government.

“IBM has relentlessly and consistently delivered above and beyond the scope of the contract to assist Queensland Health identify and address concerns with its payroll process,” an IBM spokesperson said in a statement.

“Our commitment to supporting the Queensland Government in its mission to provide quality services to employees remains unchanged.”

In a report released by Auditor-general Glenn Poole, the IT company initially estimated the cost to replace Queensland Health's old and outdated payroll system at $6 million.

Queensland Health also confirmed yesterday two senior health officers were terminated over the payroll issue.

Opposition leader John-Paul Langbroek criticized the government's handling on the problem and called on Mr. Lucas to take responsibility for the payroll system fiasco.

Ibm