Industry slams Gillard raid on Gershon funds

James Riley
Thursday, 05 August 2010 18:53

IT Policy - Government Tech Policy

The technology sector's peak industry lobby has slammed the Gillard Government decision to raid $450 million in funding that had been quarantined for use in innovative new ICT projects.

Australian Information Industry Association chief executive Ian Birks said the off-the-cuff reversal of a Cabinet-level decision had left many of its member angry.

He said the decision would impact local technology firms who would have received funding for innovative public sector projects through the so-called Gershon dividend.

Half of the $1 billion in savings achieved by government ICT departments over four years through Gershon-inspired initiatives had been put into a special "reinvestment fund" for use in innovative new public sector technology projects.

But Finance Minister Lindsay Tanner and Financial Services Minister Chris Bowen announced this week that the special fund would now be used to fund general government spending - allowing that $447 million to be used to fund election promises.

"The Gillard Labor Government will also remove funding currently quarantined under the Gershon reforms for Information and Communications Technology (ICT) spending across Government, saving $447.5 million over four years," the Ministers said in a statement.

"Departments will now have to bid in the budget process for additional resources to fund ICT spending to ensure it is properly scrutinised against other Government priorities," they said.

Mr Birks said the industry had been supportive of the Gershon Review process, but complained that the technology "dividend" was a key plank of those recommendations.

"It's very disappointing from the AIIA's perspective. I think its likely to make many of our members from the ICT industry very very angry," Birks told iTWire.

"It is a reversal of a prior commitment at a Cabinet level to fund innovation in our sector, so it is pretty disappointing to see that taken away," he said.

"We will be in there talking to the new government - whoever they are - about that Gershon funding and the need for government to invest in ICT. We certainly aren't giving up on it."

He said members were also disappointed the decision had been announced without any consultation.