Ahead of the election, with promises for nationwide broadband networks and digital revolutions in schools, the ICT industry could hope the government was on their side. But now the glamour of a sparkling new government has worn off, how ICT-friendly is the Rudd government really?
When you change the government, you change the country
"When you change the government, you change the country," offered former Prime Minister Paul Keating upon his defeat by the Howard-led coalition in the 1996 election. Has the last six months and the Lodge's latest change of inhabitants meant a change in the ICT landscape?
The 'yes, but' budget
Under the inaugural Labor budget, the previous government's Commercial Ready grants got the chop, saving AU$707 million, while AU$251 million will be spent on the innovation and productivity Enterprise Connect program, while AU$240 million is targeted at a green Clean Business initiative over four years.
The small to mid business sector was targeted through a Small Business Advisory Committee to monitor regulatory proposals that may affect SMEs, as well as AU$42 million over four years to start up 36 Business Enterprise Centres. Meanwhile, AU$326 million over four years is to be thrown at the brain drain, financing 1000 Future Fellowships in an attempt to keep mid-career researchers in Australia.
The budget also funded the government's pre-election commitments in the areas of broadband and the National Secondary School Computer Fund.
The billion dollar National Secondary School Computer Fund promised new computers and better internet access for all schools across Australia while a 50 per cent rebate on domestic IT purchases tackled the question of affordable computers in homes, both in an attempt to improve Australian computer literacy.
The second big pitch to be confirmed in the budget was the AU$4.7 billion targeted at creating a national high-speed broadband fibre-to-the-node network, covering 98 per cent of the Australian population.
Federal Finance, Innovation and Communications Ministers Lindsey Tanner, Kim Carr and Stephen Conroy have been doing their best to present the 2008 budget as a win for innovation, technology and communications infrastructure, and so far it seems to be working.
Overall, the industry was fairly positive in its response to some of the new initiatives, however, the ICT sector would like to see still more strategic direction backed by spending. The Australian Computer Society welcomed the new investments but called for better long term thinking.
It would be a mistake to repeat the kind of forced march to outsourcing we saw under the previous government.
Steve Hodgkinson, Ovum research director
"There are some significant wins for the technology sector within the budget and the ACS is a strong supporter of the government's investment in broadband. However, the government, as part of its current investment strategy, also needs to recognise the ICT sector as a major area of future growth, and a powerful industry that is a powerful economic sector in its own right. The challenge for the ICT sector right now is more about focus than funding," said ACS national president, Kumar Parakala, in his budget response.
Uncertainty reigns in the form of Gershon, Cutler
However, Rudd's big ticket spending increases are being balanced by planned cuts in government procurement spending, as well as questions surrounding the future funding of research centre NICTA.
"Gershon's approach in the UK was largely consultative, and provided procedural roadmaps, which dealt with the rationalisation of staff, and asking departments to take responsibility with achieving higher levels of efficiency in terms of the deployment of ICT," said IBRS analyst Guy Cranswick. "Fundamentally it's a review that delivers costs savings while improving front-line capability, mostly through back office consolidation, staff cuts, bringing more services online, and moving people into more productive roles."
Recalling the previous government's disastrous experiment with IT outsourcing, Steve Hodgkinson, research director for the public sector at research group Ovum, predicts the current government will...
...only achieve the desired cost savings, if their approach doesn't cause a departmental backlash.
"It would be a mistake to repeat the kind of forced march to outsourcing we saw under the previous government," Hodgkinson says. "Clearly there are opportunities for cost savings, and better support to be provided through government agencies, however, it needs to be delivered in a measured kind of way if it is going to get the support of departmental secretaries."
Talking up his approach, Carr told ZDNet.com.au that the innovation review demonstrated the new government's commitment to the ICT sector, and its role within the economy.
"Innovation is key to the growth of ICT companies and ICT innovation is key to the growth of the wider economy," Carr said. "The National Innovation Review is designed to provide a roadmap for innovation and its many elements including ICT."
But, it seems, ICT innovation is in limbo with NICTA left hanging precariously between Carr's Department of Innovation, and Stephen Conroy's Department of Broadband, Communications and the Digital Economy. While its funding has been assured up to 2012, its trans-departmental management will leave it at the mercy of turf warfare between the different departments, according to Liberal ICT spokesperson Senator Eric Abetz.
"The government is in a bit of a muddle with NICTA," Abetz told ZDNet.com.au. "They've split it up across Senator Carr and Senator Conroy — they don't like each other, they don't trust each other, and whoever made the decision to NICTA hanging like that must have a sense of humour."
Whoever made the decision to NICTA hanging like that must have a sense of humour.
Senator Eric Abetz, Liberal ICT spokesperson
While the ICT sector is nervously awaiting the outcomes of both reviews, and getting a little impatient to see pre-election promises delivered upon, the early signs appear promising.
Although the opposition has launched an attack claiming schools have not been provided with necessary infrastructure to support new PCs, the first machines have been delivered to needy high schools, and the states have busied themselves in integrating the program into their tender processes.
The ICT sector, despite having espoused similar concerns as the opposition, is largely in support of the program.
"We are applauding this kind of big thinking and are pleased to see the projects are going ahead," offered Ian Birks, CEO of the Australian Information Industry Association. "The education revolution is not just about getting the PCs into schools, it's also about supporting teachers and providing the extra infrastructure as well, and we'd like to see more movement on that front as well."
Conroy has also been quick off the mark. Within days of taking office, he reaffirmed the new government's commitment to the construction of the network, initially announcing the tender process would be completed by June 2008.
I can't see them achieving a competitive telecommun- ications market without confronting Telstra.
Paul Budde, MD of telecommunications research group BuddeComm
"The sounds the Rudd government has been making are all very interesting, but good and decisive action is needed," said Paul Budde, MD of telecommunications research group BuddeComm. "We should start to see clear policy direction: it doesn't need to be rushed, but we need to see the project is walking forward."
Budde also suggests that the government remains in a honeymoon phase in terms of its relationship with Telstra, and that at some stage it will be forced to confront the telecommunications behemoth.
"Telstra are quiet at the moment which is an indication they are happy," Budde says. "But unless the government comes out with strong policies to support competition, Telstra will maintain its position of dominance in the market, and I can't see them achieving a competitive telecommunications market without confronting Telstra."
The opposition has had ample opportunity to attack the government on the basis of poor planning, mismanagement and inexperience.
"There's been a lot of talk and a lot of hype but not much otherwise," Abetz said. "Senator Conroy is finding it's very easy to attack the government from opposition, but being in government is a lot harder."
The verdict? Wait and see
With the investment in broadband and digital education on one side, and the economic conservatism on the other, the Gershon and Cutler reviews could tip the balance in any direction.
"A lot of what we're seeing at the moment is symbolic, and it's indicating a general direction, but we'd like to see more action on the ground, and more actual investment so the benefits of ICT can be realised throughout the economy," concludes the AIIA's Birks.