The decision to strip out over $400 million from an ICT investment fund will cause a deterioration of government services, with the blame to rest on the shoulders of the ICT industry, according to an analyst.
The reduction in the funding pool for ICT projects also means agencies will be forced to play “catch up” instead of deploying innovative new technologies to deliver new and improved government services, according to Longhaus director Peter Carr.
The Gillard Labor government recently announced it would slash almost half of a $1 billion ICT investment fund, established after British expert Peter Gershon reviewed public sector ICT efficiency.
The Gershon review recommended a number of measures to cut ICT costs across the government, with over half of these savings to be diverted to an ICT reinvestment fund.
The Prime Minister recently promised that if Labor is elected the fund would be stripped of $447.5m to help return the federal budget to surplus.
Mr Carr said the reduced technology funding could cause an increase in the breakdown of agency services - such as the recent Defence payroll scandal, and the late payments made by the Tax Office.
“You can't strip out that much money and not reinvest it and not think that the right levels of maintenance are being done on existing systems,” Mr Carr said. “There will definitely be an increased likelihood of project failure.”
The IT industry will cop the blame, he said.
“What tends to happen is when government services fail, the finger gets pointed at systems behind,” Mr Carr said. “Who shoulders the blame when government services go awry? Especially when we're talking about the delivery of social welfare payments to single mothers.
“The IT industry will take the blame for poor policy decision.”
Under the changes, agencies will be forced to compete for funding for the projects but Labor upheld a promise to use the remainder of the fund - around $557m – for 44 projects across 20 agencies.
However, Mr Carr said these projects were planned years ago in response to old problems, and don't address the current agency needs and demands.
“The important thing we're still talking about projects have been in planning for couple of years and aren't necessarily about the latest and greatest and innovation.
“The government is playing catch up, in a couple of years there will need to be a large injection of capital.”
An AGIMO spokesman could not comment on the claims because the government is in caretaker mode.