Australian government allays NICTA funding fears

The rumours of NICTA's death were greatly exaggerated, with the Australian government extending its funding for 2015-16.
Written by Josh Taylor, Contributor

While the Australian government has today announced a number of new savings measures in order to address the falling government revenue, National ICT Australia (NICTA) has had a funding extension, after there were fears that the government's IT research organisation would close down.

In the May federal Budget, the government did not disclose funding for the agency in the 2013-14 and 2014-15 financial years, leading to some reports in the media that funding had been cut. The Department of Broadband, Communications and the Digital Economy confirmed to ZDNet at the time, however, that funding had already been allocated for those financial years, and future funding would be considered in the context of next year's Budget.

In new Treasurer Chris Bowen's economic note released today, the agency is set to receive AU$21 million from the Department of Broadband, Communications and the Digital Economy, and AU$12.8 million from the Department of Innovation, Industry, Science and Research in 2015-16 to extend the agency's funding for that year.

AU$700,000 has also been allocated in the current financial year to fund the Townsville telehealth trial.

Bowen stated today that Australia's terms of trade have been revised down significantly as a result of falling commodity prices, leading a reduction in nominal GDP to 3.75 percent this financial year, compared to the 20-year average of 6.5 percent. Tax receipts have been revised down by AU$33 billion over the forward estimates.

The deficit in 2013-14 is now expected to be AU$30.1 billion, but the government is still aiming for an AU$4 billion surplus in 2016-17.

In addition to a bank deposit levy and an increase in the tax on tobacco, a big portion of the government's savings will come from an increase in the public service efficiency dividend, which will likely hit IT staff across every department. It is being raised from 1.25 percent per annum to 2.25 percent per annum for three years from 2014-15. Bowen said he doesn't believe that this would necessarily mean redundancies across government.

"While decisions on how the efficiency dividend is applied are properly a matter for heads of departments and agencies, we have a strong expectation that agencies will first look at non‑staffing activities before considering staff reductions," he said.

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