OVUM評論：Australian Federal Budget 2010 – detailed analysis reveals IT opportunities

Positive news on the Australian economy

In the aftermath of the global financial crisis, nations around the world are now laser focused on the problem of sovereign debt. This debt has become a fundamental problem, constraining national economies and hampering the ability to deliver new services to citizens. In such an environment, capital-intensive technology can sometimes become a casualty for short-term cost cutting.

According to the government’s budget papers, the Australian economy has emerged from the global financial crisis in relatively good shape:

  • In the coming financial year, the government will be running a cash deficit of about 2.9% of gross domestic product (GDP). In three years’ time, the government expects to return to budget surplus. This will be three years earlier than previously reported.
  • While Australia’s debt level is currently high by Australian standards, it is expected to peak at less than one-tenth of the average debt of other major advanced economies (measured as a percentage of GDP).
  • Unemployment is relatively low at 5.25% and is projected to hover around the 5% mark through to 2013–14.

The speed of economic recovery will be a challenge in coming years. The government will need to maintain ongoing economic growth while keeping an eye on interest rates and inflation.

The financial outlook gives the government some elbow room to deliver measured reforms while continuing to reduce debt levels. From an IT perspective, this means that while cost savings will be a primary driver, it is unlikely to be the only driver in a future government policy mix.

The budget contains significant areas of IT spend, but generally in smaller tranches

Ovum has developed presentation material that provides a more detailed analysis of IT initiatives contained in the budget. Some highlights include:

Health: This is a major area of focus for the Australian government, particularly the proposed National Health and Hospitals Network. Funding ($466.7 million) has also been allocated to provide personally controlled electronic health records. While the funding is clearly in the right direction, it is likely to be too little to make a significant impact. A great deal of additional funding is likely to be required in further budgets to finish the job. E-health has always been a frustratingly difficult area for successive governments to make any real progress in Australia. A large funding increase is not necessarily going to solve the problem. A smaller, targeted tranche might build valuable momentum. The final funding requirement is unclear, but is likely to be many times the committed amount. The spotlight is really now on e-health to show it can deliver some clear successes with the money available.

Reinvestment of Gershon savings: The government’s earlier Gershon Review recommended that 50% of business-as-usual savings should be reinvested in strategic areas of IT. The budget reports three such initiatives:

  • $11.9 million over three years for initial data center funding.
  • $100.8 million over six years for improved passport systems. Of this amount, $40 million will come from the Gershon reinvestment fund.
  • An undisclosed amount to the Department of Finance to deliver an improved central budget management system.

Security and enforcement: National Security received significant funding for enhanced intelligence gathering, biometrics, and border control. Funds are spread over a number of agencies including Foreign Affairs and Trade, the Australian Federal Police, the Australian Security and Intelligence Organization, the Attorney General’s Department, the Australian Customs and Border Protection Service, the Australian Crime Commission, and the Australian Secret Intelligence Service.

National Broadband Network: The National Broadband Network received a number of tranches of additional funding to support implementation, oversee construction, and further develop the regulatory framework. The government will also provide $16 million over two years for a national information campaign focused on raising public awareness.

Central security vetting: While tiny in its dollar allocation, this initiative is likely to draw loud cheers of support from a long-suffering IT industry. Currently, vendors need to get a separate security clearance for work with different government agencies. A central security-vetting process will save time and money for vendors and will assist in resourcing areas of chronic IT skills shortages.