Over 90 attendees at Intermedium’s Federal Budget briefing in Canberra last Wednesday heard Intermedium forecast that ICT spending would remain flat over 2008-09 due to the impact of the “one-off” 2% efficiency dividend, agency transition delays, the impact of the Gershon and Mortimer (Defence procurement) reviews and future “stage 2” cuts to come.
Head of Consulting Kevin Noonan, and Head of Research, Tim Conway suggested this is despite an anticipated increase in ICT processing activity, and associated spending arising from the “administrative churn” introduced by the Rudd Government’s changes to various welfare and other benefit eligibility criteria.
This Budget is about meeting the Government’s election commitments and income tax cuts, while preserving its surplus through measures to reduce outlays by applying “means tests” or other qualification criteria. This “administrative churn” increases the Government’s administrative workload, and will result in increased ICT spending in the affected agencies.
Just one day after the briefing (in last Thursday’s Australian Financial Review) Finance Minister Linday Tanner confirmed Intermedium’s forecast of increased ICT processing and associated costs.
Other highlights of Intermedium’s briefing included:
- Staffing cutbacks across agencies of around 3,200, which will probably be achieved through voluntary redundancies (Immigration and a number of other agencies have subsequently announced VR programs)
- Associated reductions in the contractor workforce
- Likely cuts to discretionary expenditure, including commodity ICT items
- Slight growth in key agencies such as Defence, Centrelink and Immigration
Contact Intermedium if you'd like a copy of Intermedium's White Paper on the implications of the 2008-09 Federal Budget on government ICT or an in-house briefing on the same topic. Contact us.