In earlier editions of the medium, we reported that, based on budget papers, the NSW Government will spend as much as $1.5 billion on ICT products and services during the 2008-09 financial year.
Intermedium identified ICT capital projects for the NSW public sector worth almost $600 million. This includes the general government sector and public sector trading enterprises. Intermedium's budget modeling suggests there is an additional $800 million of ICT spending in the NSW budget, contained in operating expense allocations.
However, closer examination of the budget shows there is little funding ICT projects to commence in this financial year (as opposed to projects already underway and receiving this year’s component of their multi-year project funding).
With the NSW Government’s overarching objective to obtain goods and services at the lowest possible cost, there will be pressure on ICT suppliers to offer very competitive pricing. In the budget itself, there is relatively little by way of ICT capital expenditure, and an extremely small amount of new addressable CAPEX. As a result, agencies will remain heavily dependant on achieving efficiencies in OPEX for any growth in ICT expenditure.
Intermedium’s analysis of the 2008-09 NSW State budget ICT Implications of the 2008-09 NSW Budget provides an overview of the backdrop to the budget, including the economic environment, stage in the election cycle, political constraints, and key drivers.
It also provides an outline of capital expense by ICT product/service category, and by agency/trading enterprise, and details of all ICT projects that receive funding and are due to commence in 2008-09.
The report also shows the operating expense (OPEX) allocation for agencies, with the percentage increase or decrease relative to the previous year. The size of the OPEX is a major indicator of the likely ICT spending capacity of each agency, and the level of its OPEX budget allocation a key indicator of capacity to purchase consumable items, and services such as contractors, training and support.