The post-election landscape is likely to be a little less crowded if Labor is elected on 24 November. The ALP has announced its intention to make cuts in the Public Service that would result in job-losses. If Labor follows through on this, it will inevitably have implications for the Federal ICT market.
Echoing comments made earlier in the year by Lindsay Tanner (Shadow Minister for Finance), Kevin Rudd described the APS as "bloated" and said that one of the first actions of a new Labor Government would be the establishment of a razor gang to cut Government expenditure and waste.
Repeating the action of the Coalition Government when it came to power in 1996-97, Mr Rudd said the razor gang would look at the totality of Government spending and determine how much could be cut from administration. Several agencies have already been identified by the ALP, and are expected to be a special focus of the razor gang.
In Intermedium's pre-election briefings, Head of Consulting, Kevin Noonan listed the agencies are likely to suffer cut-backs under a Labor Government, perhaps the most obvious of which is Department of Workplace Relations. However, Kevin also identified others that are likely to receive additional resources, including those involved in health and education/skills.
One of the drivers for growth in the Federal Government ICT market has been the dramatic increase in APS staff numbers under the Howard Government. More staff means more PCs, mobile phones, email services, and newly equipped offices. A cutback in APS numbers may lead to reduced demand in this area, but experience shows that these trends are usually cyclical. A Labor Government may start by cutting jobs, but if history is any guide, this situation won't last long!