Where Victoria’s latest IT blowouts are biting the budget hardest

Fresh IT project cost blowouts are expected to top $100 million across state government agencies, from the courts and police to water companies and the workers’ compensation scheme.

The overruns and delays are detailed in an update of the government’s projects, which reveals one of the largest budget misses came from the Magistrates’ Court’s overhaul of its case management system. The project’s final bill is now expected to be almost $129 million against an original costing of about $89 million – and is two years behind schedule.

Victorian Treasurer Tim Pallas is due to hand down his tenth budget on Tuesday, May 7. Credit: Joe Armao

WorkSafe Victoria expected to spend just over $1 million on a new analytics hub and have it up and running two years ago. Now the pricetag is put at $32 million, with the agency hoping to have it in place by June.

The new blowouts come just weeks before Treasurer Tim Pallas is due to hand down his 10th budget, which he has warned will be tight due to rising costs, soft economic conditions and the state’s massive debt burden.

The cost issues emerged in the latest update of the state government’s ICT dashboard, a quarterly tracker designed to increase transparency for information, technology and communications projects worth $1 million or more.

The dashboard lists $3 billion worth of public spending across more than 300 projects from 180 government departments and agencies.

The website uses a traffic light system to determine whether a project is green, amber or red. Green means a project is on time and on budget, amber means some issues exist and red means major issues have been identified.

The new Magistrates’ Court case management system has maintained its red status in the latest update. Late last year, hackers gained access to a part of the Victorian court system archive, including some recorded committal hearings in the Magistrates’ Court.

The WorkSafe analytics hub is listed as amber. The new cost blowout and delay has coincided with government reforms to rein in spending for the “broken” workers’ compensation scheme.

An overhaul of Greater Western Water’s billing system is also listed as amber. The billing and collection project was initially estimated to cost $39.97 million, but has been revised up to $87.96 million. The new system is expected to be in place by July 1 this year – a delay of 12 months. Greater Western Water services City of Melbourne and Yarra residents, as well as people in the western suburbs and Macedon Ranges.

Coalition finance spokeswoman Jess Wilson said IT cost blowouts and delays were “draining funding away” from health, education and community infrastructure.“Labor cannot manage money, cannot manage projects and Victorian taxpayers are paying the price,” Wilson said.

“Not only do these botched projects add to Victoria’s record debt, they impact government agencies’ ability to deliver services in an efficient manner to Victorians across the state.”

But a Victorian government spokesperson said the vast majority of IT projects were on time and on budget. They pointed out that only 11 projects were currently listed as red – a decrease from the previous quarter.

“Ninety-six per cent of projects are proceeding without any serious issues,” they said.

Pallas has previously warned that this year’s budget will be “very, very tight”. The state’s net debt is expected to reach $177.8 billion by 2027.

It’s not just IT projects that are incurring higher-than-expected costs. Infrastructure bills have also soared off the back of hiked material and labour fees. Last month, The Age revealed that eight level crossings that Labor promised to remove by 2027 at the 2022 state election would be delayed.

At the same time, social service groups have urged Pallas to fund additional cost-of-living relief. The Age last week reported that Victoria has recorded the biggest jump in financial distress of any state over the past 18 months.

The state budget is set to be unveiled on Tuesday, May 7.

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