From a social media perspective, the last few days have proved an interesting time to be in Australia.

Most visibly, the Prime Minister’s Office and a host of goverment departments have been exposed as having their fingers all over Wikipedia. While the great majority of the edits are trivial, and some just plain silly, others appear to show staffers editing entries/stories potentially damaging to the government. And the Department of Defence has made over 5000 amends, including to pages on the 9/11 Truth Movement, among others.

Needlesstosay, this political gift to the opposition during the country’s federal election campaign was hardly palmed away, though opposition leader Kevin Rudd had to admit that his own team also had its paws in the cookie jar.

In another development, the Sydney Morning Herald ran a juicy storyline dangled by internet security outfit SurfControl claiming that the estimated cost to Australian business of employees using Facebook is in the region of AU$5bn.

Ouch, if accurate. But does it matter?

The answer, surely, is yes, though the important costs are not time-related but principally about reputation.

After all, birthdays are routinely celebrated and bosses disparaged both inside the office (the so-called ‘water cooler effect’) and outside it. Online social networks are merely another channel for sharing this information, albeit faster and more broadly.

So should organisations encourage, limit or ban employee access to Facebook and other social networks? Should staff be allowed to edit Wikipedia?

I’m not convinced they have a choice.

Goldman Sachs (not a client of ours, to the best of my knowledge) is one of a number of firms that have reputedly banned their employees from accessing Facebook. But a quick search reveals nearly 3,000 GS staff on its network page (ie. using their GS email addresses to enter the platform) and over 100 groups, including its New York and London offices.

Governments and companies have to accept that the lines between people’s professional and personal lives is going to get even more blurred, and that information will continue to become ever more free.

So what can they do?

For one, companies must look to engage their people much more deeply than ever before, and win their trust and loyalty (hint: social media provides them a new and powerful tool to help do this).

Second, accept that your staff will go and play with Facebook, Twitter and Wikipedia. Why shouldn’t they ask people for tips on the best delicatassen on the local newspaper discussion board, or respond to a post on an obscure blog that is plainly incorrect?

But also make sure that they clearly understand the consequences of their actions. Revealing confidential information, something about their boss or someone in the industry that could be construed as libellous, or making clearly non-factual updates to Wikipedia about their employer or its competitors, is potentially damaging to the company’s reputation.

More fundamentally, it may be time to have a good think about your company culture. Getting people aligned behind your brand and its values has been shown to increase performance. And it also improves reputation, the ultimate bottom line.

Tomorrow I fly to spend a week in Australia talking social media with a bunch of local companies.

I can’t wait - its been a long while since I’ve been down under, where in a misspent youth I spent a few months picking fruit and hitch-hiking goggle-eyed through its huge expanses of open space. Email had yet to go anywhere near mainstream and the web didn’t exist so the only way to contact home was via cheap, dog-eared postcards or short, expensive phone calls, preferably of the collect variety.

Clearly, much has changed on the communications front, though not as much as web 2.0-ers might wish. A debate on why blogging has failed to ignite in Australia is swirling, with the finger pointed at everything from the lack of a nationwide high speed broadband network and a risk-averse business culture to an outdoors lifestyle.

On the surface, few organisations appear to be using social media. (An exception is local telecoms company Telstra, which has been deloying blogs and other social media in a very public grassroots-oriented campaign aimed at building support for its plans to lay down those much needed fibre-optics.)

But all is not gloom. As in many countries, social networks are driving traffic, with Facebook surging (even if MySpace and Bebo are static) and according to the 2007 Future of Media Report (pdf), Australian YouTube usage increased some 239% in the year to May 2007.

Like elsewhere in Asia, companies seem to be grappling with questions like where to start and how to measure success. It’s going to be fascinating finding out more about their issues and concerns in their own backyard.