Productivity Commission criticises NZ Government cloud programme

In a report on productivity in the services sector, New Zealand's Productivity Commission says the Government cloud computing programme is "highly risk averse" and may send a poor signal to private firms.
Written by Rob O'Neill, Contributor

New Zealand's Productivity Commission has taken a swipe at the Government's cloud computing programme, saying it may be slowing cloud adoption.

The Commission released its final report into productivity in the services sector today, dealing in part with issues of ICT adoption, skills and cloud computing.

The report says because the Government cloud programme is based on published rules and guidance it is highly risk averse and may send a poor signal to private firms.

Restrictions on data flows, it says, will have a disproportionately negative effect on small countries, such as New Zealand, which lack the scale to support a range of sophisticated, home-grown, digital services.

"The Government should assess how it can support and facilitate a balanced approach to adoption," the Commission says. "Legal or privacy issues associated with cloud computing should be dealt with through international negotiations.

"Resolving such issues will help New Zealand firms make more productive use of cloud computing services."

The report urges the Ministry of Foreign Affairs and Trade and other government agencies to prioritise negotiations on the "free flow of data" and other internet issues.

In particular, New Zealand policy should support efficient use of Australian infrastructure as it will take even longer ofr such infrastructure to arrive in New Zealand.

Firms that are small users of ICT should benefit disproportionately from the improved scalability offered by cloud computing, it says. Yet surveys suggest that small firms in New Zealand are slow adopters of cloud computing.

The Government's requirements for cloud computing require that all cloud computing decisions need to be made in the context of a mandatory system-wide ICT assurance process developed by the Government CIO.

However, the Commission's report says it is not clear whether the Government’s cloud computing policy does a good job of supporting an "informed and balanced response to cloud computing technology". Small agencies or private businesses would be presented with a "one-sided and misleading picture". 

"The Government should review the visibility of its cloud computing programme and assess how it can
provide sound, constructive support to agencies, in line with the GCIO’s leadership role," it says.

Balanced guidance on the opportunities and risks associated with cloud computing and on lessons learned should be made available online.

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