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New financial year could be twice as good for Victorian ICT

by David Shi and Paris Cowan •
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2012-13 promises to be a much better year for the Victorian ICT industry than 2011-12, with Budget Papers revealing that more than $450 million in ICT funding has been earmarked for expenditure in the financial year, which represents close to a 100 per cent increase on last year’s spending allocation of $224 million.

The value of brand new ICT funding will also beat the tally of new initiatives in 2011-12, which came in at $137 million according to Intermedium’s Budget IT tool.

Despite improvements, however, the Baillieu Government’s second Budget has not brought Victorian ICT funding into line with its most comparable state, NSW. In 2011-12, the NSW Budget tagged $943 million to be spent on ICT within the financial year, and included $662 million in brand new initiatives. The State’s 2012-13 Budget will be handed down on 12 June this year.

The increase can mostly be attributed to funding for the State’s troubled electronic ticketing project, Myki, which was still under review when Victoria’s last Budget came out and as a result did not have any firm values listed against it.

This year it has emerged as the Budget’s biggest ICT item with a $182 million injection. This brings the cost of the project to a total of $588 million, with an additional $22.5 million in funding to be allocated in future budgets.

The additional funding follows an extensive independent review of the smartcard system, conducted by the Department of Treasury and Finance soon after the election of the Baillieu Government, which found that the cost for a complete dismantling of the Myki system would be greater than completing the Myki roll-out.

For Victoria’s rail operator, VicTrack, $38.3 million will be spent on the metropolitan train safety communications system and another $2.4 million will go towards a Network communications and optimisation program.

Other areas of the transport sector have also benefitted from the budget. The $159 million VicRoads registration and licensing system will receive $55.7 million of its funding during the coming financial year.

The National E-Health Transition program was also another major winner in this Budget, with the Victorian Innovation, E-Health and Communications Technology Fund receiving $100 million over four years. Another $16.6 million will also be spent over two years on core operations for the National eHealth Transition Authority.

The Royal Children’s Hospital will also receive a $24 million ICT investment over the next four years.

Victorian manufacturing is also set for a boost, with a $7.5 million budget allocation over four years to support business-to-business networks to assist the transfer of knowledge, information and technology.

The Department of Justice’s emergency services communications asset enhancement project will receive $5.2 million in 2012-13, towards its estimated total cost of $8.5 million, and the Department of Primary Industries’ Natural Disaster Emergencies System will receive another $1.3 million.

Two major projects from the Department of Treasury and Finance have also benefited, with the State revenue management system receiving $2.6 million and an extra $4 million going towards the Efficient Technology Services project.

ICT has bucked the trend of dropping expenditures over the Victorian Budget as a whole.

“Due to external economic shocks, Victoria’s revenue forecasts over the next four years will be $8.3 billion lower than was forecast in late 2010. This is a bigger financial hit than that which occurred during the 2008 global financial crisis,” said Premier Ted Baillieu.

The Victorian Government is looking to find $1 billion in Budget savings over the next four years, which will be far less threatening that the massive savings drives in other jurisdictions, such as NSW ($8 billion over four years) and Federal (4 per cent efficiency dividend in 2012-13).

A comprehensive analysis of the Victorian 2012-13 State Budget will soon be available with the release of Intermedium’sBudget IT tool in coming weeks. In 2012-13 Budget IT for all jurisdictions will be launched in a new user-friendly online format.


Related Articles:

ICT out of the limelight but still crucial in Baillieu’s first budget

VIC Budget: $400 millon to finish Victorian ICT projects

Nine Victorian whole-of-government ICT contracts expiring in 2012

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