Scraping the bottom of the savings barrel

Scraping the bottom of the savings barrel

Summary: As the government looks mournfully at what it's pulling in through taxes, but still wants to hit its goal to achieve surplus by 2012-2013, IT vendors will have to pull in their belts, according to Ovum.

SHARE:

As the government looks mournfully at what it's pulling in through taxes, but still wants to hit its goal to achieve surplus by 2012-2013, IT vendors will have to pull in their belts, according to Ovum.

"Along with a number of program cuts, the treasurer announced a big increase in the government's efficiency dividend. This is effectively across the board cut to headline budgets in most government agencies," Ovum research director Kevin Noonan said.

"Government IT will not be able to escape the cuts. This is likely to drive another lean year for IT vendors."

And this will follow with some lean years for companies selling to government, which were affected by the Gershon review and then the blow that IT savings that were intended to be spent on IT projects, were to be put into a general project pot.

I personally worry that government IT is stretched to breaking point, and that some time in the future we will have to pay for our stinginess with interest.

A small point of hope is that technology could be used to spearhead productivity increases, and Noonan asks himself in his post whether this is likely to happen. I tend to think not; the low-hanging technology fruit has already been grabbed. New projects would have to be wide reaching, and thus have the chance of failure, like the Victorian IT projects detailed by the ombudsman just recently.

So, IT vendors. Are you ready for another slim government year? Where are you going to make up the shortfall? Or do you think technology will yet again be the white knight, which gets invested in to produce efficiency gains?

Topics: Government, Government AU

Suzanne Tindal

About Suzanne Tindal

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 the site.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

3 comments
Log in or register to join the discussion
  • Suzzane,

    I was criticised when, on numerous occasions, I mentioned the NBN capex will reach $50 billion. Guess what, a confidential report to Labor by their
    own corporate advisers, Greenhill Caliburn, reveals that capital spending on the National Broadband Network will top $50 billion by 2028.

    No wonder they are scraping the bottom of the barrel. unfortunately. To no avail.
    Vasso Massonic
  • Sorry, Suzanne. crook spell check!
    Vasso Massonic
  • You forgot this bit from, guess who VassMass...

    "...report obtained by the Australian newspaper..." sigh! Who would ever have thunk it eh?

    And would that be the same Greenhill Caliburn who when they in Feb of this year gave the NBN the thumbs up, you all disregarded as inconsequential? Here...

    http://www.minister.dbcde.gov.au/media/media_releases/2011/132

    Keep the forecasts coming VassMass, after all you've been spot on (ahem) so far, suggesting TLS shares have been a good investment, NWAT is the best site on the web and Telstra are infallibly perfectly perfect.

    http://www.afr.com/p/national/nbn_cost_blowout_claim_rejected_mQvRlXAlih5dVSGtAIpXtJ

    http://www.businessspectator.com.au/bs.nsf/Article/Govt-NBN-Co-refute-NBN-cost-analysis-report-pd20111129-P2T63?OpenDocument&src=hp18
    Beta-9f71a