As reported in Australian IT, the Finance Minister, Lindsay Tanner has accused Federal agencies of double-dipping on their ICT budgets. Immediately after the election, he announced that the issue of double-dipping would be part of the Government’s overhaul of Federal Government IT spending, highlighting the fact that agencies receive funding for new ICT projects at the same time as receiving payments to cover ongoing depreciation of ICT equipment.
The Minister used the example of the Australian Securities and Investment Commission (ASIC) that obtained additional funding for an IT upgrade at the same time that it budgeted for significant depreciation on existing equipment.
In its Federal Budget Portfolio Statement in May 2007, ASIC announced that it had received additional capital funding in the 2006-07 to “fund enhanced information technology security”.
ASIC was allocated an additional $56 million in the Budget to upgrade its IT and in November 2007 issued an RFT for Computer Forensic Services.
The new Rudd Government has since promised to cut $111 million from ASIC's budget, but a recent AFR article reported that neither the Minister, nor the agency would comment on speculation that proposed budget cuts to ASIC would go ahead, effectively putting the upgrade plans in doubt.
The issue of depreciation and its impact on funding for all Federal agencies is under consideration as part of the Government’s overhaul of IT procurement.
Earlier this month, Mr Tanner announced an overhaul the way the Federal Government purchased IT. This included a move to centralise control of its ICT procurement with the express aim of reducing expenditure. This overhaul is expected to include cuts to IT spending in the forthcoming Federal budget, as well as a detailed review of IT spending and procurement.
In line with Intermedium’s prediction that the new Rudd Government would be laser-focused on successfully implementing election policies, Mr Tanner has said that new projects that were not election commitments would be unlikely to receive funding in the forthcoming budget.