Vic government funding cut leads to NICTA redundancies

Following Victorian government cuts to NICTA's funding, a number of jobs have been axed from the research organisation's Victorian labs.

National ICT Australia (NICTA) has started making job cuts at its Victoria Research Laboratory, following the Victorian government's decision to reduce the funding for the lab.

NICTA confirmed a tip published in Friday's edition of the Crikey newsletter that almost half of the jobs are now set to go from the agency's Victorian lab.

"I can confirm that NICTA is in the middle of a restructure at our Victorian Lab. Once we have finished our consultations with staff, we will be in a position to communicate in more detail. Consultations commenced a couple of weeks ago," a spokesperson told ZDNet.

NICTA relies on funding from not only the federal government, but also state and territory governments and universities across Australia to fund its research activities. The former Victorian Labor government announced four years' worth of AU$33 million funding for the Victorian Research Laboratory in 2010 to expand research into IT and communications, and support university students in the state studying IT with scholarships. The funding was said at the time to make the lab "Victoria's largest ICT research facility".

According to a communication sent to NICTA staff by CEO Hugh Durrant-Whyte on January 22, NICTA was informed by the now-Coalition Victorian government of the plan to scale back funding for the agency in mid January.

"On Wednesday, 15 January, we received a communication from the Victorian state government indicating that they would substantially reduce their funding contribution to NICTA VRL for the next two years. While this is not good news, there has been a growing expectation that something like this may happen, due in part to the economic outlook and priorities for the Victorian state government," Durrant-Whyte told staff.

"Consequently, we will be restructuring and refocusing NICTA's activities in Victoria. In future, NICTA VRL will need to be approximately half the current size, and will have a profile focused significantly more on external engagements with industry in Victoria and internationally.

"NICTA will work with the Victorian government on specific projects of interest. I regret to say that there will need to be a significant number of redundancies at VRL as part of this reduction in size and the refocusing of activities. We will work with everyone concerned to make this as painless as possible."

The agency has yet to work out the exact number of jobs that will go, with staff still being informed of the planned restructure.

Victorian Technology Minister Gordon Rich-Phillips said that the decision to reduce funding to NICTA was due to the organisation's increased focus on work in New South Wales.

"Since 2004 the Victorian Government has provided funding of more than AU$40m to [NICTA]. NICTA is headquartered in New South Wales, and over that period NICTA’s activities have become increasingly Sydney-focused. New South Wales leverages AU$5 for each AU$1 it invested in NICTA, compared to Victoria leveraging only AU$1.50 for each AU$1 invested," he said in a statement provided to ZDNet.

"It is important that investments in research programs by the Victorian Government deliver benefits in Victoria. The Victorian Government will continue to fund NICTA at a reduced level over the next two years, and has not ruled out considering new funding arrangements with NICTA if they deliver benefits to Victoria."

He said that Victoria's decision to reduce funding followed an earlier decision by the Queensland government to withdraw from NICTA completely.

According to NICTA's 2012 report to government, of the 583 staff working in NICTA, 198 were based in Victoria.

An email from a Melbourne University staffer to Durrant-Whyte sent today, and seen by ZDNet alleged that the CEO's announcement contained misleading statements and that the planned redundancies, estimated to be around 60 according to the email, were being concealed by NICTA.

The Victorian government isn't the only government currently pulling funding from the agency. Prior to the 2013 election, then-Treasurer Chris Bowen announced in August that the IT research agency started by the last Coalition government in 2002 would be given a boost in funding for 2015 and 2016 by AU$42 million . But less than 48 hours before Australians went to the polls, the Coalition announced amongst a number of cost cuts that it would not match Labor's funding.