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Intermedium: How will this year's NSW Budget measure up?

by Paris Cowan •
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New South Wales’ 2010-11 budget is due for release on 8 June at 12:15 pm, and the ICT industry will be keenly waiting to see what opportunities it may contain following sizeable technology allocations in 2009-10.

The 2009-10 Budget contained around $1.11 billion in total ICT capital expenditure, according to Intermedium’sanalysis.  The biggest individual winners were Education and Training, which captured over $212 million, and Transport and Infrastructure, which received $168 million for their technology initiatives.  The bulk of ICT capital expenditure in 2009-10 went towards the provision of IT services, with over half of all the budgetary allocations falling into this category.

Judy Hurditch, Director of Intermedium says that using technology to facilitate greater efficiency within government administration is likely to be reflected in Tuesday’s budget papers.

“This government is keen to find administrative savings wherever it can, and pump them back into the frontline – teachers, doctors, nurses and police.  Any new ICT projects are likely to be all about finding efficiencies that drive down costs,” she says.

The most recent major initiative aimed at consolidating and reducing operating costs were the departmental amalgamations that resulted in 13 super departments in July last year. (This is now 12, following the subsequent split of Police and Emergency Services).

“At the whole of government level, there is likely to be a focus around the ICT support of more effective shared service arrangements for the super departments.   I wouldn’t be surprised to learn of measures to rationalise the instances of ERP platforms.”

 “This year, I expect to see the budget statements framed at the super department level and that in itself may make for a very different budget format,” says Hurditch.

“There will be plenty of analysis to do in terms of working out whether these super departments are able to deliver on the efficiencies the amalgamations were expected to yield, given that many of them have done very little in the way of substantial integration as yet,” she adds.

The NSW Review of ICT costs, being conducted by the NSW Treasury is another savings measure that Hurditch expects to see referred to in the budget.

The Government’s Better Services and Value initiative, announced in last year’s Budget and of which the ICT Review was an initial project, requires NSW departmental CEOs and CFOs to produce a 1% efficiency dividend through a rationalisation of their ICT expenditure.  It is understood that the Super Departments have been struggling to find the efficiencies the dividend requires.   

“Although it has not been publically stated, in line with the approach taken by the Gershon Review of ICT costs undertaken by the Federal Government  through calendar 2008, we can expect to learn of reinvestments of at least some of the Business as Usual savings the NSW ICT Cost Review uncovers,” Hurditch says.

Last years’ biggest single ICT allocation went to the Department of Education and Training’s Digital Education Revolution. The initiative was worth $82.6 million in 2009-10 and $211 million overall, made up of Commonwealth funding for the provision of laptops to all public school students in years 9 to 12.

The energy sector also came out ahead in terms of ICT funding, with Energy Australia, Country Energy and Integral Energy receiving a combined total of nearly $200 million for upgrades to business operating and network management infrastructure.

“It will be interesting to see if there will be any ICT projects to match the scale of these in Tuesday’s budget,” says Hurditch. “If there are, I would expect them to be coming from NSW Health, which is always a big beneficiary, especially in light of the changes coming from Federal Government initiatives.”

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  • NSW
  • Budget 2010-11
  • NSW Treasury