By Kevin Noonan, Research Director at Ovum

Federal public servants will be among the biggest losers from the federal mini-budget announced by Treasurer Wayne Swan.

Accompanying his announcement of the Mid-Year Economic and Fiscal Outlook this morning, the treasurer outlined a number of spending cuts which he believes will keep the budget heading toward a wafer thin surplus in 2012-13.

Along with a number of program cuts, the treasurer announced a big increase in the Government’s Efficiency Dividend. This is effectively an across-the-board cut to headline budgets in most government agencies.

Government IT will not be able to escape the cuts. This is likely to drive another a lean year for IT vendors.

Government IT has already suffered a double hit from Labor since it took office, first from the Gershon savings cutting deep into IT running costs, and second through the trickle down of overall budget cuts.

The big test for Agency Heads in 2012-13 is whether they will chance their arm at real productivity improvements enabled by technology, or whether they will just implement yet another round of slashing running costs.