Where did IT fit into the 2018 Federal Budget?

Every year the budget announcement is used to bandy around large numbers that are intended to create political mileage, but what is in it for the IT industry?

Of course, the Budget is an important open governmental function which serves to lay bare the national ledger and increasingly the cost of IT is a line item that attracts attention.

My problem with a lot of the conversation about IT in the budget is the re-use of vendor-promised hype phrases like “efficiency gains”, “cost reductions”, “automation”, “ROI” and “integration” which are then used to manifest savings in forward estimates of the cost of IT.

There is too much investment in consultants from large accounting or IT services organisations to come up with promises of a future utopia where IT systems make everything quick and easy once the huge initial investment is made.

Anyone who has worked on large Governments IT projects knows that it never pans out that way. There are too many impediments and complexities that emerge along the way to ever reach the nirvana and a seemingly endless need to bring in more contractors to keep defined objectives in sight.

It makes so much more sense to create a national workforce of locally educated, trained-on-the-job IT professionals who can conceive, develop, and execute strategy that delivers quality IT services to Government agencies.

Much like the public service used to be before capitalism started running out of organic growth opportunities and had to start getting its hands on the public purse thereby ushering in an era of privatisation, downsizing and other accountants-led change.

Not only would this larger body of Government employed IT professionals provide a valuable resource to the delivery of public services in the digital age, but with stable employment they provide a steady revenue stream through income tax.

They also stimulate economic growth through spending the wages they earn. And, that’s not to mention that their superannuation contributions will lessen the future aged care bills because they will be self-funded retirees.

IT services to Government operations need to be integrated with coal-face service delivery staff not consultants, third-party resources and auditors that come and go on short-term project-based time-lines that inevitably cost more than anticipated.

The issue of highly paid consultancies who charge like wounded bulls, run the work through offshore resources or low-paid onshore resources, and are never held accountable for the results is today’s IT project reality and it is a sad state of affairs.

In this year’s budget, the big number proffered about IT was “2.4 billion for tech infrastructure” while there was a concerted effort to save money by reining in and rationalising the cost of R&D rebates in the “innovation sector” which has grown to over $3 billion.

These are large numbers but is it enough for an economy the size of Australia? Particularly when you consider how much money is being rampantly wasted on a second-rate NBN?

While discussing the NBN - which in my opinion is the biggest tech issue that should have been addressed in the budget - even outgoing CEO, Bill Morrow is now starting to point out that the NBN is a mess, yet there's no additional money in the budget to address short-falls and that is a concern. 

While there are many areas of the budget where money is promised that are complete wastes of taxpayer money (school chaplaincy for example), while we receive a delayed, second-rate NBN that will be technically obsolete the second it is delivered.

Faster and cheaper we were told but they can't claim faster by any definition anymore when significant proportions of users can't get speeds above 50Mbps or even 25Mbps under the FttN deployment, and HFC based deployments are delayed by as much as two years.

While all of this was going on, Malcolm Turnbull - our Prime Minister - managed to get an HFC-based service delivered to his personal residence while the rest of us waited for HFC to be taken out of its holding pattern.

Without services being switched on, the costs continue to balloon out and they will blow out even further as obsolete sections of the network need to be replaced in the near future. Have we not learned from Telstra?

But I digress. When the $2.4 billion allocated to tech in this year’s budget is broken down, the biggest ticket items were for the next stage of the Department of Human Services payment infrastructure upgrade ($316.2 million), a transformation project at the Department of Veteran Affairs ($111.9 million) and a modernisation of Medicare Payments ($106.8 million).

Health innovation received $100 million and $92.4 million has been allocated to an “accelerated implementation” of the GovPass project. I am worried that the money being thrown at eHealth initiatives is being poorly spent, and decisions on patient data are being made that don't reflect the sanctity of patient privacy rights nor the needs of the individuals whose records are being kept.

Again, my fear is that the large majority of this spend is with vendors and their implementation partners who can fatten their wallets with high margin profits using low-cost overseas workers either off-shore or imported under skilled worker visas.

This investment should be complemented by investment in developing internal competencies that can be utilised for the same - if not better - result.

I’ll admit that the privatisation of public assets and Government functionality is a personal bug-bear. However, if we really want a viable, sustainable, and innovative IT industry in this country, it must start with an administrative commitment to a large, permanent, secure, and fairly-remunerated local public service workforce. The grass roots of the industry, for want of a better analogy.

A recent article featured on the iTNews website brought the true cost of Government IT outsourcing into focus and included the voiced concerns of some leading experts on the subject.

In this article, which is fire-walled by a free subscription registration, we hear that “the Community and Public Services Union (CPSU) and the Australian Council of Trade Unions have urged the government to reduce its reliance on external vendors and contractors for IT, and invest in staff and systems to support digital government service delivery instead”.

In an employment environment where staff numbers are capped, the over-use of outsourcing has hamstrung internal capability to complete projects thereby forcing high expenditure on consultants and thereby further reducing internal IT skills development.

CPSU’s policy and research officer Osmond Chiu told an enquiry in March that nearly one-third of the 14,000-plus public service IT staff were contractors.

“Since 2011-12, there has been a significant shift away from permanent APS staff and towards the use of contractors,” he said. “The proportion of external full-time equivalent ICT staff grew from 23 percent to 30 per cent, while the proportion of internal full-time equivalents decreased from 77 per cent to 70 per cent.”

He also made the point that those contractors cost an average $214,000 per annum as opposed to internal IT personnel earning an average of $132,000.

Meanwhile, a former CEO of the Digital Transformation Agency, Paul Shetler commented in the same article that; “Outsourcing makes the government seem smaller, but it is expensive and it contributes further to de-skilling the public service”.

As far as R&D rebates are concerned, we hear continuous empty rhetoric about being an “Innovation Nation” supporting start-ups and creating an environment where a “Smart Economy” can prosper. The reality is different.

How much money was really put into Turnbull's "Ideas Boom"? Are we genuinely supporting tech innovation and start-ups in Australia, or still heading down the same path that's always seen good ideas head offshore?

Perhaps, the greatest local tech innovation success of recent times has been the rise of software company, Atlassian who continue to move a growing component of their work overseas, where they receive significantly better incentives to innovate and invest?

So, in summary, from where I am sitting, there was a not a lot to be excited about in this year’s Federal budget if you are an IT professional. Indeed, quite the opposite. There is an underlining concept of throwing money at projects which inevitably leads to it landing in the laps of big corporate interests.

It is my opinion that the nation would be far better served if the same resources were allocated to ensuring our tertiary education institutions were teaching the types of skills in demand and that the nation would then utilise the resultant graduates as a conduit to better digital services for all.