E-health, Myki the big Vic budget winners

As the Victorian Government looks to cut spending and produce a surplus, the majority of tech funding in the Victorian Budget, released yesterday, targets e-health investments and the state's troubled transport smart card Myki.

Victorian Premier Ted Ballieu said yesterday that the Budget "delivers the right economic strategy to put Victoria's finances onto a stronger foundation for the future, while managing the tight financial constraints imposed by international economic uncertainty, a weaker national economy and consequent declines in state revenue".

The government has allocated $100 million over the next four financial years to the Victorian Innovation, E-Health and Communications Technology Fund. This will support health IT projects, including system and software upgrades and installations, according to budget documents. The Coalition-led government has also dedicated $8.3 million per annum in funding over the next two years as part of the state's contribution to National E-Health Transition Authority's (NEHTA) core operations.

In addition to the $42.8 million spent on the Victorian integrated ticketing service, Myki, this financial year, the Victorian Government will spend a further $54.7 million in the 2012-13 financial year, and $9 million the following year. The government said that the transition to a ticketless transport system is progressing, following the independent review of the Myki project last year. The project has, however, been re-scoped, with V/Line intercity services and V/Line coach services removed from the project, and the Victorian Government re-negotiating its deal with contractor NTT Data. The government has provided $35 million this financial year to keep Metcard running while Myki's kinks are straightened out.

The Coalition has also dedicated $24.8 million over the next four years for manufacturing technology to "support individual manufacturers or networks of businesses seeking to introduce leading-edge technology with high-growth potential". The government will put up $8.8 million over the next four years for improved fire-mapping systems, while $20.4 million has been provided to the Emergency Services Telecommunications Authority to improve the computer-aided dispatch system.

Ovum research director Steve Hodgkinson said this Budget is better than the Ballieu government's "IT shocker" first Budget, but is still slim pickings for the IT sector.

"Overall, the government has spread $4.1 billion of investment across hundreds of new policy and service-delivery initiatives, some of which will no doubt pull through some IT projects, but this is in exchange for savings expectations of $1 billion — to be achieved by cuts to other programs and productivity improvements," he said. "The IT investment agenda for the next few years will thus, very much be driven by the need to extend the life of existing assets and systems, while finding ways to fund productivity-boosting IT investments from within existing department and agency appropriations."

He said that agencies under budgetary pressures will now more actively consider shifting to cloud services.

"Some useful proof points for the value of cloud computing services as an alternative to traditional IT are now emerging from the agency woodwork. So, we expect to see more active consideration of cloud services as the word gets out that they actually can be better, faster and less expensive — as well as less risky."

There was no mention in the budget documents of the fate of the Victorian Government's whole-of-government IT agency CenITex. It was reported last week that the Victorian Government is set to remove the agency's board, amid claims that 46 per cent of the $377 million worth of contracts, signed since 2008, went to highly paid contractors, while there was little improvement in the IT services that CenITex provided to the 36,800 public servants. ZDNet Australia contacted the Department of Treasury and Finance to confirm this report, but did not receive a response.

The small amount of funding that the Victorian Government has provided to NEHTA will likely be added to by the other states. However, given that funding will be required to undertake the large amount of work still left to do on the Personally Controlled Electronic Health Record scheme (PCEHR), being rolled out from 1 July this year, all eyes will be on the Federal Budget on Tuesday, 8 May. The initial $466.6 million budget investment in e-health is due to run out this year. Neither the Department of Health and Ageing nor NEHTA would comment on what funding they expect in the Budget for e-health, when contacted by ZDNet Australia.