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Australian govt IT spending to plummet compared to global average

Australian govt IT spending to plummet compared to global average

Expected to decline by 7.6 per cent in 2020

Credit: Dreamstime

Australian government services are forecast to cut back on IT spending in 2020 at a rate of more than 12 times the global average.

In Australia, spending on IT by the government is predicted to decline by 7.6 per cent year-on-year, to $7.7 billion, according to research firm Gartner.

This is opposed to global government IT spending, which is estimated to drop just 0.6 per cent year-on-year, to US$438 billion.

Irma Fabular, senior research director at Gartner, said the global priority in IT spending would be directed towards public health and wellness, including telecommuting. 

Spending on measures towards community and national resilience through improving disease and other threat surveillance systems were also predicted to be a focus.

In addition, Gartner research indicated other global focus areas include digital government services, data and analytics, cybersecurity, citizen engagement and experience and building health system resilience to prepare for future pandemics.

Cyber security has proven to be a significant touch point for the Australian federal government in the long term, with Prime Minister Scott Morrison increasing the country’s cyber security spending commitment to $1.66 billion over the next 10 years.

This follows on from a previous announcement of $1.35 billion to hire 500 cyber security experts and improve the Australian Signals Directorate’s cyber security capabilities

While government IT spending for these areas is likely to be bolstered, it is predicted to come at a cost to projects.

“Important but less urgent IT projects, such as enterprise resource planning (ERP) and robotics process automation (RPA), will be delayed to make room for immediate and critical spending in digital workplace support, public health response and economic growth,” Fabular said.

“Adoption of cloud services will continue to accelerate while spending on in-house servers and storage will continue to decline.”

Out of all the sections within Australian government IT spending, the device market is estimated to take the biggest hit, dropping 20.5 per cent, to $279 million.

Spending on data centres, telecommunications services, internal services and IT services are also forecast to decline by 18.1 per cent, 12.1 per cent, 9.2 per cent and 9.1 per cent, respectively.

Software is the only government IT spending area expected to grow in the country with 1.9 per cent anticipated, to $1.9 billion.

Not all aspects of the Australian government are shying away from IT spending however, as the value of deals through its digital marketplace, the Digital Transformation Agency (DTA), doubled since the start of the coronavirus pandemic.

Meanwhile, global government IT spending is forecast to see declines on devices, data centres, telecom services and internal services by 8.3 per cent, 7.2 per cent, 2.4 per cent and 0.9 per cent, respectively.

On the global scale, spending on software is anticipated to grow by 4.4 per cent and the IT services market is predicted to remain steady.

Despite the declines, there is growth on the horizon for both Australia and worldwide, with a 2021 forecast for growth of 5.8 per cent for Australia, to $8.1 billion, and 3.3 per cent for global spending, to US$452.3 billion.

North America is predicted to be the largest global regional government IT spender this year, at US$191 billion. 

Western Europe is forecast to follow at US$94 billion, and then Greater China at US$39 billion.

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