Preview: Few pockets of light in another thrifty budget

Exceptions to the rule

It won't all be bad news for the ICT sector.

The mainland rollout of National Broadband Network (NBN) services in first release sites would likely be matched by funding promises in areas that support the Government's "Digital Productivity" goals.

Specifically, funding will be directed to areas of Government service delivery that rely on, or support, its case for building a taxpayer-funded NBN.

Ian Birks, outgoing chief executive of vendor-funded industry group AIIA told iTnews he has lobbied the Government to make "no cuts to ICT spending", but admits he is "only partially hopeful that will be the case".

According to Birks, low ICT spending will hurt already declining levels of public sector productivity.

Any investment in programs to take advantage of the NBN would be welcomed, he said.

"What the Federal Government is not doing is investing in transformative new uses of ICT to improve productivity - at least not at the levels we'd like to see," Birks said.

"Tightening the screws is expected. But innovative use of ICT is the key to productivity in Government service delivery. That's being ignored. There always seems to be some reason given why such calls are ignored. It's always a 'tough year'."

Human Services reform

The other likely winner of ICT funding is the Department of Human Services as it continues efforts to consolidate the channels through which citizens consume services from Centrelink, Medicare, the Child Support Agency and others.

Announced in 2009, the Service Delivery Reform program aims to encourage more Australians to interact with the Government using online channels rather than physical branches.

The Department planned to consolidate the IT infrastructure, call centres and other supporting infrastructure of all Human Services agencies during 2010.

In the 2010/11 budget, Centrelink was given $14.7 million for a virtualisation project and $8 million for a shared services project. In November 2010, the department absorbed the enterprise IT functions of the Department of Veteran's Affairs.

Sources told iTnews significant work lies ahead in completing the Service Delivery Reform program - likely to be one of few areas of ICT spending announced tomorrow.

Birks' wishlist

Birks said the AIIA had lobbied for several initiatives to prop up the IT industry.

The first would be measures to take advantage of the investment in the National Broadband Network.

"Even though it is a tight budget, an elaboration of how Government services will be funded to take advantage of this new broadband capacity would be welcome," he said.

The AIIA has also pushed for tax reforms around employee share options to encourage a start-up culture in Australia.

Employee share option plans - popular among new media companies - are currently taxed in Australia regardless of whether an employee exercises their value.

"This is the opposite of what happens in other countries such as US and UK where you pay tax on when you exercise the option and realise the benefit," Birks said.

Birks also hoped the Government could offer tax incentives for those organisations adopting technologies that deliver smaller carbon footprints.

Finally, he hoped for a more aggressive government investment in cloud computing.

"We believe the Government's approach to cloud computing to date has been too conservative compared with other countries," he said.