Will IT suffer more from government spending cuts?

Peter Dinham
Tuesday, 29 November 2011 16:29

IT Policy - Government Tech Policy

As the federal government announces spending cuts in its mini-budget, will the public servants who implement government policy chance their arm at real productivity improvements enabled by technology, asks one analyst firm, or will they will just implement yet another round of slashing running costs?

Commenting on today's mini-budget announcement by the federal treasurer, Wayne Swann, analyst firm Ovum says government IT will not be able to escape the cuts, and that this is likely to drive another a lean year for IT vendors.

Accompanying today's announcement of the mid-year Economic and fiscal outlook, the treasurer outlined a number of spending cuts which he believes will keep the budget heading toward a wafer thin surplus in 2012-13.

According to ovum, government IT has already suffered a double hit from Labor since it took office, first from the Gershon savings cutting deep into IT running costs, and second through the trickle down of overall budget cuts.

'The big test for Agency Heads in 2012-13 is whether they will chance their arm at real productivity improvements enabled by technology, or whether they will just implement yet another round of slashing running costs,' questions Kevin Noonan, research director at Ovum.

Noonan says that, along with a number of program cuts, the treasurer announced a big increase in the Government's Efficiency Dividend, which he says is effectively an across the board cut to headline budgets in most government agencies.