The announced public sector staffing cuts will also hurt IT, both in terms of reduced IT staff numbers and in reduced IT demand.
With the government exempting teachers, nurses, police, and funding for new initiatives, the axe must fall disproportionately on back room staff and administrative work that tends to be more IT intensive.
However it is not all bad news.
Earlier budget announcements still have to run their course, and this means significant funding still flowing to IT in 2012-13.
There is also an Australia-wide trend to focus more on productivity and innovation as a source of savings rather than the blunt instrument of simply “doing more with less”.
This creates a number of opportunities as agencies look to IT for new ideas and thought leadership.
In the past, New South Wales has had a patchy IT history, better known for project failures than successes.
Over the last year the government has invested significant effort in engaging with industry, streamlining procurement policy and setting short term targets.
The coming year will be a pivotal period. It’s time to start delivering and to make sure the allocated money is spent wisely. In the coming financial year, the government will have a low tolerance for failure.
Still more needs to be done in coming years. Current NSW spending announcements tend to be more focused on corporate systems and underlying infrastructure.
This approach lags some governments in our region where there is a growing focus on productivity driven services.
It’s about rethinking government rather than just doing the same old stuff more cheaply.