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Trends in Federal ICT Spending During an Election

by Staff Writers •
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At Federal election briefings in Canberra and Sydney last week, Intermedium presented data from previous elections that provides a valuable clue as to how the market will perform during the next 6-9 months.

Intermedium compared the number of ICT contracts signed during the 2004-05 financial year (by month), with the average in a non-election year. There was a slight downturn prior to the 9 October 2004 election, followed by slower than average procurement activity during the following 5 months.

What can we expect from this election?

With the "phony election" in full swing for several months now, Intermedium expects the data to show a slowdown in contracts reported prior to this election. Although some procurement activity will continue during the "caretaker" period, purchasing for all but essential products and services will be severely curtailed.

Most agencies will be adopting a conservative approach to their purchasing in anticipation of significant post-election changes, irrespective of which party takes power. And with a close election anticipated, it will be far from business as usual for most agencies after the election, whatever the result.

If a Coalition government is returned, there is likely to be a significant reshuffle of ministries, and possibly a reorganisation of agencies. A returned Howard government will also take some time to implement major new promises that are likely to be made during the election as both parties jockey to be seen as forward looking and visionary.

A Labor government will also take some time to settle in, and while some changes will be made quickly, the raft of changes and new policy initiatives will take time to implement.

Intermedium expects a more significant slowdown in ICT procurement prior to the election than has been evident in recent polls. This is likely to continue for 6-9 months after the election, depending on which party wins government, and by how much. However, we expect that the ICT market will rebound strongly next financial year, the result of spending deferred because of the election, and major new projects required to implement new policy initiatives announced by both parties.

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Jurisdiction
  • Federal
Sector
  • Policy
Tags
  • Coalition government
  • Federal ICT Spending
  • ICT Contracts
  • labor government
  • Procurement