On 1 July 2021, a local council department entered into a contract with Computer Co Pty Ltd for the provision of services by Diane Walker, a computer analyst, who is nominated in the contract. The contract specifies that Diane is required to develop computer programs for use in the departments financial centre in accordance with functional specifications provided by the department.

The contract specifies a fixed amount by way of payment to Computer Co for the development of the programs, which is required to be produced within 15 months of commencement of the contract. The contract is for the performance of a specific task that produces an outcome or result, with Diane maintaining a high level of discretion and flexibility as to how the work ought to be carried out. Final payment is not made until the work is performed, although instalments are payable upon the achievement of particular milestones.

Discuss whether or not the personal services income (PSI) legislation applies to the arrangement.