The Federal Government's plans to conduct an independent review into its ICT procurement and management policies to curb spending is raising questions about the long-term impact to local suppliers.
Last week, the Minister for Finance and Deregulation, Lindsay Tanner, appointed former UK Government Treasury Office CEO, Sir Peter Gershon, to head up an independent review of the Australian Government's ICT management. The move comes a couple of months after Tanner announced plans to slash the Federal Government's $16 billion ICT procurement bill by taking a more centralised approach to spending.
It is one part of a broad plan to improve efficiencies in government spending and shave $4 billion or more off the budget.
In a statement, Tanner said the ICT review aims to identify ways the Federal Government can strengthen whole-of-government management of technology and drive better cost efficiency and services.
"The review will also examine the way in which agencies manage ICT investments, including maintenance, intra-agency links, development and staffing," the minister stated. Gershon is expected to submit his review in September.
According to Intermedium head of consulting, Kevin Noonan, Federal Government spending has slowed since the introduction of the new Labor Government in November and project cuts are already being made. He predicted more cuts will come with the budget in May.
To date, stage one cuts have been across overall government expenditure, not just ICT. They included the cancellation of the National ID card, defence spending cutbacks and discretionary spending cuts, Noonan said.
"A lot of these government programs didn't have a direct effect on ICT purchases but they have a knock-on effect," he said. "The government is continuing to look for additional savings and we will see further savings made in the upcoming budget.