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Productivity improvement limited by budget constraints

by Staff Writers •
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A report on productivity in Australian government shows ICT is seen as a high priority for achieving future productivity growth across the public sector. However, it also shows that investment in ICT is limited by budget constraints. 

Telstra commissioned the independent survey of 200 Australian government executives across Federal, state and local government organisations in April 2009.

Released on 5 August, the aim of The Government Productivity Report was “to discover how government organisations approach productivity and efficiency, and to investigate the link between information and communications technology (ICT) and its role in improving efficiency and performance.”

Findings from the research include:

  • Improving productivity is a major priority for government – followed by service delivery, cost cutting, risk management and attracting staff;
  • While most (84%) of government decision makers ranked improving productivity as a priority, only 40% had clear productivity improvement targets or a means to measure productivity;
  • Productivity tends to be seen as a whole-of-organisation responsibility rather than the responsibility of an individual or group;
  • ICT is seen as a critical driver of productivity, and more than half said investment in ICT had significantly improved productivity in the past 12 months;
  • Most expected to see further productivity gains in the next 12 months, with broadband seen as a major diver of productivity improvement.  Consolidation of data storage was also seen as a driver of greater productivity;
  • Respondents were keen to adopt new technology, but indicated cost was a major barrier to investment;
  • ICT was seen as the highest priority for achieving future productivity growth, with 58% seeing investment in ICT as a priority.

Federal Government agencies may be able to access funds for reinvestment resulting from business-as-usual (BAU) savings arising following the Gershon review.  In the 2009-10 financial year, expected savings of more than $109 million will generate funds totaling $54.6 million that will be available for reinvestment.  Investment projects can include ways of increasing efficiency and productivity within the ICT BAU area of agencies.

However, as the Telstra study shows and as was highlighted in the Gershon Report there remains an obvious gap in measuring project outcomes in terms of productivity and efficiency outcomes.

Establishing baselines and performance improvements along with service delivery and quality need to be a key priority if government agencies are to see the sorts of productivity gains that ICT has been demonstrated to yield in the commercial world. 

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