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Budget promises fail to follow through

Budget promises fail to follow through

No immediate lift in business is expected by Queensland's reseller community despite the $37.4 million earmarked for IT initiatives in the State's new Budget.

The money represents nearly four times the level of support found in last year's Budget. But if the government is trying to send a message to departmental purchasing officers, it hasn't been received yet.

Resellers in general have faced disappointing demand from the State's public sector this year.

"The tap hasn't just been turned off, it's been thrown away," said Corey Tai, managing director of PC wholesaler and distributor PC&IT.

Government departments tightened purse strings in the final (calendar) months of 1996 and haven't loosened them appreciably in 1997, he said.

In fact, sales activity this calendar year is probably down 20 per cent to 30 per cent compared to the same period last year, he estimated.

Dealers welcomed the budget IT increase in principle, but many are pessimistic about how long it will take for budget commitments to translate into sales.

The bulk of the money is aimed at improving Queensland's digital communications infrastructure and services, especially in regional and rural areas. Some $23 million will go to bring 1000 education and health locations across the State into the digital network. Another $11.7 million will be ploughed into integrated electronic delivery of government services to community and business users.

The government has yet to fill in the details but much of those funds appear destined to be absorbed at the network transport layer.

"My guess is that very little will be spent on putting PCs into regional government offices," said Techmart managing director Ray Shaw.

"Frankly, it doesn't look like a great boon for PC hardware . . . there just isn't enough money there to make an impact."

More promising for dealers facing slack government activity is a perceptible pickup in private sector demand.

"Our belief is that May and June will be very buoyant months thanks to private sector spending while government spending is almost non-existent," Shaw said.

Wholesale PC manufacturer and distributor Source Technology has put in a record second quarter on the heels of a very quiet first quarter, said managing director Jim Duncan.

Its Queensland growth, almost entirely fuelled by corporate sales, is prompting Source Technology to expand operations by opening a factory in Melbourne on July 1.

"I welcome the budgeted increase in IT expenditure," Duncan said.

"It is a good sign that they are looking forward. We have a strong reseller presence in regional Queensland and we expect to see benefits flow to our company.

"The government has pursued a very cautious approach to expenditure for the past year and it is now lower than ever. However I believe they are working to change that and expect to see an increase in their IT purchasing in the next six months."


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