Stan Beer
Monday, 24 November 2008 12:55
IT Policy -
Government Tech Policy
Page 1 of 2
The IT contracting and recruitment industries, as well IT vendors,already reeling from the economic downturn, have been dealt a devastating body blow by the Federal Government's decision to implement in full the recommendations of the recent Gershon Review. Contractor numbers will shrink by half and Government ICT spending will be slashed by more than half a billion over the next three years.
The review of Government ICT spending by Sir
Peter Gershon, a former Chief Executive of the UK Treasury’s Office of
Government Commerce, was released in mid-October to a highly nervous
reception from the contracting and recruitment industries.
Two of the central tenets of the review was a drastic cut in IT
spending and dramatic rationalisation of human resources within a very
short period. Implementation of the recommendations will result in a
cut of ICT contractor numbers in Canberra by half and slashing of $540
million of the Federal Giovernment ICT budget over the next three years.
The Rudd Government will argue that its razor gang approach will see
leaner, more efficient Government agencies, with higher numbers of
permanent skilled ICT staff and considerable savings for the taxpayer.
In practice, however, recruiters believe the Government will have a
difficult time finding the necessary numbers of skilled ICT permanents
to live and work in Canberra. Meanwhile ICT suppliers of products and
services to the Government sector, already feeling the pinch, will see
Federal agency budgets almost immediately slashed by 15%.
The result is likely to be a marked slowdown and with a good chance of
a contraction in the Australian ICT industry over the next two years.
In a chilling message that will provide no comfort for Australian ICT
industry players, Lindsay Tanner, Minister for Finance and
Deregulation, said:
“The goal is to return efficiencies to the Budget and to reduce
expenditure on ICT business-as-usual while freeing up money for service
delivery capability.”
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