The Gillard Government has slashed its Information and Communication Technology (ICT) spending commitment by $447.5 million for the coming four years quietly announcing plans to abandon the reinvestment component of the Gershon reforms. A number of planned federal government ICT projects now look to be under threat.
The announcement was made on Saturday 31 July on the ALP website in its Updated Net Budget Impact of Election Policies. It was jointly issued by Chris Bowen, Lindsay Tanner and Wayne Swan who said:
“The Gillard Labor Government will also remove funding currently quarantined under the Gershon reforms for Information and Communications Technology (ICT) spending across Government, saving $447.5 million over four years.”
The Gershon reforms were targeted to achieve $1 billion in ICT BAU budget savings, of which half was to be reinvested in programs to further improve ICT efficiency in the Federal Government.
The 2010-11 Federal Budget had included the first tranche of ICT projects to be funded from the Business-as-Usual Reinvestment Fund and on 18 May, Finance and Deregulation Minister, Lindsay Tanner announced that a total of 44 projects worth $230 million would be funded from the reinvestment fund. The status of these projects is now unclear.
Following the ALP website announcement, the Prime Minister submitted a Costing Request to the Department of Finance and Deregulation on 2 August (a non-mandatory procedure under the Charter of Budget Honesty proceedings before an election).
The request, ‘Gov23 -Remove funding quarantined under the Gershon reforms for ICT spending across government’,indicates that the election platform cuts are slated to commence in this financial year and the Government expects to achieve the following savings through this measure:
- 2010-11: $39.7 million
- 2011-12: $117.7 million
- 2012-13: $113.5 million
- 2013-14: $176.5 million
The request also indicates that the Secretaries’ ICT Governance Board formed to oversee the implementation of the ICT Reform Agenda will be retained, and costs associated with the committee will be met by Departments.
The ICT projects that were to have been funded through the Gershon reinvestment will now have to find alternative sources of budget funding or they will be unable to go ahead.
Departments intending to still proceed with any of these projects will have no option but to rebid them in a future budget funding round, with redeveloped business cases which can show how there will be offsetting savings for the cost of the projects.
The $447.5 million of the Gershon savings that had been earmarked for reinvestment will instead be used to return the budget to surplus.