Fair go on Gershon, Gillard

Summary:I am disgusted by Labor's announcement that it will make IT departments bid against non IT projects for the money they had taken out of their budgets in savings.

I am disgusted by Labor's announcement that it will make IT departments bid against non-IT projects for money that these departments had taken out of their budgets in savings.

The IT departments had ring-fenced a portion of their budget, on the understanding that the government would give them a rebate equal to half the amount saved. Now Labor has gone back on its word, leaving the IT departments to shoulder, elbow and jostle for the cash.

Yes, they were savings, and governments can do with them what they like, but a promise is a promise. You can't just break your word like that.

It also puts enormous pressure on the departments to meet savings targets.

Before, it was, "well if you save less, you won't get any for shiny new projects". Now it's "unless you get these savings, the nation will be going into deficit because we've already earmarked the funds for this hospital or that fibre connection".

That worries me.

Longhaus managing director Peter Carr thinks that counting on future savings is like a public company basing dividends on future share price rises.

He also doesn't think that the $460 million IT departments have already saved have been true savings, but instead, just departments putting spending off — and being rewarded for doing so by getting half of their projects funded with the return funds.

If this is true, in a couple of years there will be a sudden implosion when we're going to need a massive spend to make up for lost time. Where are we going to get the money from?

This could be the death knell of Gershon.

As Carr says, it's "cost cutting in an industry they've already gouged".

Fair go, Gillard. Fair go.

Topics: Government, Government : AU

About

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t... Full Bio

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