The good, the bad and the obsolete: technology in the federal budget

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The government has looked to old-fashioned cuts and efficiency dividends rather than innovative use of technology to achieve savings in the federal budget.

But there’s some hope of more work for information and communication technology (ICT) folk, as reforms bed down and business confidence improves.

Kevin Noonan, public sector research director at Ovum.Credit: Stefan Postles

Kevin Noonan, a government specialist at technology research agency Ovum said he was disappointed the budget failed to include some of the positive ideas from the recent Commission of Audit, including the appointment of a chief digital officer.

“This role would have seen the government focus on achieving government outcomes by doing government business in a more efficient way,” Mr Noonan said.

“The Commission of Audit showed vision on how IT could be used to save money.”

Government-wide efficiency drives and the merging and rationalisation of agencies would also encourage departments to use systems more strategically, he said.

Speculation about a mega shared service department has come to naught but there are plans to save $2.4 million by merging the back office functions of the National Portrait gallery with those of several other agencies.

“Much of the merging of agencies is a good thing – there’s a great deal of duplication in smaller bodies, consolidation of some back end functions is to be applauded,” Mr Noonan said.

Small to medium ICT firms looking to crack the public sector supplier market would also be heartened to see $2.8 million allocated to a program to help them do so, he added.

Meanwhile, the grand dame of public sector systems, Centrelink’s 31-year old Model 204 Data Base Management System, looks set to clunk on for yet another year.

In April, Treasurer Joe Hockey flagged the need to replace the aging mainframe infrastructure, a project he warned would come with a billion dollar price tag, but no funds were earmarked for doing so in the budget.

Equivalent in size and transaction processing capacity to the systems which power the country’s biggest banks, Model 204 pre-dates the PC era and manages payments to around 7 million Australians.

The recent Commission of Audit endorsed an upgrade and put the price tag as high as $1.5 billion.

IBRS analyst Alan Hansell said the treasurer’s ‘thought bubbles’ about replacing the system would have to be put on hold while programming changes stemming from the budget were bedded down.

“He will soon learn that replacing Model 204 while fine-tuning the welfare system is impractical,” Mr Hansell said.

Given the catastrophic fallout that can accompany bungled systems projects, replacing Model 204 would be a brave act, he added.

“I think the government will decide to leave it alone as it is a case of ‘if it is not broken, do not fix it’.”

While the budget signaled upheaval for the public sector and a liberal dose of pain for some sections of the community, foot soldiers in the ICT sector may not come off too badly, market watchers said.

Peter Acheson, the CEO of Peoplebank, Australia’s largest ICT recruitment firm, expected additional jobs for contractors in Canberra to emerge in the wake of agency restructuring.

IT workers have suffered quiet times and stagnating salaries in recent years, with off-shoring, corporate cutbacks and postponing of major projects resulting in the loss of many roles across the sector.

The government’s commitments to building infrastructure – roads, rail and airports – would also lead to flow-on ICT work, Mr Acheson predicted.

Businesses would be feeling relatively comfortable post-budget and were unlikely to take the red pen to any upcoming ICT initiatives, the executive general manager of the Clarius recruitment group, Paul Barbaro, agreed.

“With several key initiatives being introduced – tax rate cuts, incentives to employ mature age workers, infrastructure projects – I believe that business will not act quickly to reduce prospective projects,” he said.

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