Strong Budget for ICT after years of funding neglect

After a meagre budget for the IT sector in 2014, this year's federal government Budget includes significant commitments to strategic ICT investments.

The government has earmarked funds for major ICT initiatives including a $254.7 million investment in its Digital Transformation Agenda.

Of this, $96.4 million will be used to establish a Digital Transformation Office to ensure that new and redesigned government services are simpler to use and can be completed entirely online.

The first phase of the Agenda will also involve spending $159.3 million on implementing a digital service standard, designing more myGov services and simplifying the grants administration process across government.

A trusted digital identity framework will be developed at the cost of $33.3 million, while $7.1 million will be put towards developing a whole-of-government digital mailbox solution.

The government has also allocated funds to address significant ICT project problem areas, including $485.1 million to fix the troubled personally controlled electronic health record (PCEHR) system - now renamed MyHealth - and $234.7 million for an urgently needed business transformation at the ABS.

Another major project will involve developing a welfare system replacement for the Department of Human Services' 30-year-old legacy system. The Budget allocates $60.5 million for this task.

In a welcome clarification for the telecom sector, the government has also finally revealed the size of its planned commitment towards the costs of implementing a mandatory metadata retention scheme. The Budget allocates a total of $153.8 million towards implementing the scheme.

Of this total, $131 million will be spent on helping defray the cost to the nation’s telecom operators of meeting the new data retention requirements. An additional $10.6 million over four years will go to the Office of the Australian Information Commissioner, Attorney-General’s Department and Human Rights Commissioner, $6.7 million will go to the Commonwealth Ombudsman and $4.2 million towards the Privacy Commissioner.

In March, the telecom sector called on the government to make clear its planned financial commitment to the scheme. Compliance costs for the industry are expected to exceed $300 million, suggesting that telecom operators will bear the brunt of the costs. The data retention bill passed parliament at the end of that month.

Other substantial IT initiatives earmarked in the Budget include $130.9 million to help the Tax Office upgrade MyTax to support more complex tax returns, $17.6 million for a new data centre for the AFP, $33.7 million for a new national gateway for providing career support and $10 million to develop in-house analytical, economics and research capabilities for the Department of Health.

As part of the planned $35 billion in spending on defence, national security and law enforcement, $295.8 million will be spent on improving the national security capabilities of ASIS and $164.8 million has been allocated for enhancing border protection services.

Ovum Lead Analyst for Government IT Kevin Noonan said the 2015 Budget contains no shortage of good news for the IT sector after years of funding neglect.

“The most important news is not just about the money. This Budget contains a welcome focus on strategic IT investment. Gone are the days of short-sighted commodity cost-cutting,” he said.

“Following the hefty cuts to public service numbers in 2014, government staff headcount remains largely comparable to previous years. Headcount is an important indicator for IT activity as it is the primary driver for laptops, desktop support and personal productivity tools. For vendors of such tools, 2015 should be a much more predictable year.”

Image courtesy of Simon Yeo under CC