Assistant Treasurer, Minister for Technology and Minister for the Aviation Industry, Gordon Rich-Phillips addressed attendees of the Intermedium AIIA Briefing on 19 June 2014 regarding the 2014-15 Victorian Budget.
The Minister’s emphasis was on the vision and direction the Government has for Victoria and the way the 2014-15 Budget supports it.
He emphasised four key objectives for his government:
- Stabilising and growing the surplus so as to put the budget into a sustainable position;
- Driving productivity in the Victorian, and correspondingly, the national economy;
- Expanding international market opportunities for Victorian goods and services; and
- Working with industries in transition.
Budget Stabilisation and International Market Opportunities
A sustainable surplus position is a key focus for the Victorian Government. According to Minister Rich-Phillips, “this year’s budget will bring us the dividends on the hard work undertaken over the last three years. We have forecast a Budget surplus of $1.3 billion for the 2014-15 financial year” he told the audience.
The Minister emphasised that Victoria had retained its Triple A credit rating as a direct result of its fiscal management and that this rating was a unique selling point for international and interstate investment in Victoria. His Government is “very committed to attracting investment”, he stated.
Rich-Phillips also cited successful asset recycling initiatives, including the sale of Rural Finance Corporation, ($400 million) and the 40 year lease of the Port of Melbourne. This asset recycling had the bonus of qualifying Victoria for the Commonwealth’s 15% incentive, netting a further $60 million to invest in infrastructure.
Productivity growth through infrastructure investment
“We recognise the value of infrastructure in delivering productivity,” said the Minister.
He stated that as a result of asset recycling and the now healthy surplus, a total of $27 billion has been committed to infrastructure development in this Budget. The Victorian Government is now able to embark on its “absolutely transformational, largest ever infrastructure program” which includes major freeway and rail works.
ICT to generate productivity growth for Government
ICT, as a driver of efficiency and productivity in the public sector, becomes increasingly important in a constrained funding environment, Rich-Phillips said. Of the Victorian Government’s $50 billion spend, $38 billion is on wages and ICT accounts for $1.5 billion - “a substantial component”.
“We recognise productivity growth must be one of our key Budget imperatives, but we also recognise that applies equally in the public sector as it does in the private sector,” Mr Rich-Phillips said.
“One of the areas we turn to in growing productivity is the use of technology and we see great opportunities for technology within Government”, he said.
“We are operating, as we have for the past three years, in a resource constrained environment”, said Mr Rich-Phillips. He noted that commitments in recurrent expenditure still need to be “as efficient and effective as possible”.
“We need to harvest the benefits the technology sector can deliver for Victoria in terms of increased productivity and increased efficiency for Government”, he added.
The 2014-15 update to Victoria’s ICT strategy “expands upon and enhances our focus on new technology, in line with the changing expectations of users of government services, the bulk of whom own a smart device”, said the Minister. He added that he looked to the ICT industry to help “meet that expectation, that challenge”.
The Minister spoke of the $6 million allocation in the 2014-15 budget for the CenITex transformation, saying: “we look forward to working with the industry over the coming months and years as we undertake that transformation”.
“We need to look at what opportunities exist in Government for services such as Cloud, what that can mean for service delivery, for procurement within Government, and for getting better value for money for services into Government”.
Rich-Phillips looked to out-sourced arrangements to help Government “deliver better value for money”, and noted that the Victorian Government was creating new “opportunities for the ICT industry through that new service provision model”.
Government ICT as an Open Marketplace
Rich-Phillips reflected on the achievements of Victoria’s first Whole-of-Government ICT Strategy, which recognised that “we need to take a different approach to how we use ICT in this State, how we undertake projects and how we procure ICT services”.
The Minister noted the outcomes of the eServices register, which launched on 1 July 2013, replacing the previous ‘closed’ procurement panel. He stated that it was “a great marketplace for the ICT industry but also a great opportunity for the state of Victoria to ensure we can get good, competitive, innovative solutions; to ensure we get value for money”.
“We now have more than 950 companies on that eServices register available to do business with the Government and we’ve seen more than 900 individual procurements take place through that eservices register.”
QUESTIONS FROM THE AUDIENCE
Following his address, the Minister took questions from the floor.
Building ICT “smarts” into planned infrastructure projects
Several major road and rail projects announced in the 2014-15 Budget have a goal of increasing productivity through reduced congestion.
Rich-Phillips highlighted the role that technology can play to mitigate congestion and referenced the report released last week by the Victorian Auditor-General on the use of technology in managing traffic congestion.
With a population growing by 150,000 per year in Melbourne, Rich-Phillips noted “there are limits to the physical capacity of infrastructure and so technology has to play an important role in how existing and future infrastructure is used.”
Lessons learned from Myki
in Rich-Phillips’ view, the history of Myki (the Victorian ticketing system), was significantly linked to the fact that the previous Government had wanted to own the ticketing system’s intellectual property so that it could be customised as the Government saw fit.
The Minister said that the Myki implementation experience was a driver for the Government’s ICT Strategy, which has as “one of its key tenets of the principle of buying commercial-off-the-shelf” (COTS).
“It seems crazy to want to own the intellectual property when commercial ticketing systems which meet Government requirements have been successfully implemented around the world”.
Departments are not unique when it comes ICT requirements
According to Rich-Phillips, significant cultural change is required across the Public Sector to help stakeholders understand that their requirements are not unique. The Minister saw this change as occurring through an on-going process of education and discussion.
Rich-Phillips said that in his capacity as Assistant Treasurer, he sits on the Budget Committee of Cabinet and that “almost without exception, every Department which comes forward wanting their new project has a reason why their requirements are unique”.
He spoke of the imperative “for agencies and departments to recognise that they are not unique, that what they need in enterprise software is not unique to government and not unique to their institution”.
In line with this, Rich-Phillips stated that “one of the key tenets of the ICT Strategy is requiring agencies to look at what already exists elsewhere in government”.
With around 700 individual agencies in the Victoria Government, he saw a fair chance that whatever platform an agency is looking for already exists elsewhere in Government.
The Minister also emphasised the need to change business processes, not ICT solutions: “More often than not, agencies don’t need solutions which are tailored, but need to look at their business processes and how they can be changed to fit a standardised platform which is used everywhere else.”