By Julian Bajkowski

Federal Communications Minister Stephen Conroy has revealed that future federal government technology procurement has been put on the Cabinet table for discussion under the forthcoming Digital White Paper, opening the door to a fundamental shake-up of the $5 billion-a-year market.

The move to potentially rope-in government IT spending into the new policy document puts a serious question mark over the long-term future of the Australian Government Information Management Office that now sits under the Department of Finance and Deregulation.

Asked whether the remit of the Digital White Paper would take in government technology procurement, Senator Conroy confirmed that high-level talks were underway.

“We are still in the discussion phase with the Cabinet, so as soon as Cabinet has made a decision, we’ll let you know,” Senator Conroy told Government News.

A fundamental handicap of AGIMO is that because it does not sit within a policy portfolio where it can drive leadership on technology issues, the agency has come to be regarded as a cost cutting and spending control watchdog with little vision outside immediate Budget imperatives.

Formed by the splitting of the National Office of the Information Economy in 2004, AGIMO’s functions had previously been housed in the Communications portfolio rather Finance.

Two successive reviews of AGIMO’s structure functions by former Secretary of the Department of Communications Helen Williams and former e-health Ian Reinecke have raised questions over its effectiveness and preponderance of committees.

A further compounding factor in AGIMO’s limited popularity has been the widely unpopular Gershon Review.

While the expert driven strategy managed to strip around $2 billion in short term and recurrent costs across federal ICT expenditure, it is regarded within industry as a missed opportunity to reshape government technology procurement strategy.

Gershon’s conservative and limited scope has been sorely tested by rapidly shifting market dynamics, especially the rise of cloud and mobile computing that offer substantial cost savings and productivity over traditional infrastructure.

The adoption of cloud computing remains a conspicuous challenge for the federal government, not least because comparable economies including the UK and the US are both using the technology to drive reforms in public sector spending, administration and service delivery.

While AGIMO has now finally set up a multi-use list to allow agencies to buy data centre capacity as a service, this remains a long way from the savings of around 20 per cent achieved by the use of cloud computing that cited by both business and governments overseas. 

Speaking at the opening of private infrastructure provider Equinix’s new SY3data centre in Sydney on Thursday, Senator Conroy cited IT cost savings of 25 per cent in the private sector — but carefully avoided any comparison to what government might save.

Even so, the rub for the public service and especially AGIMO is that politicians and increasingly department heads will question policy settings that mean government technology remains far more expensive and less flexible than that used by industry and other jurisdictions.

 “The cloud has the potential to transform how we do business whether that is in government, the private sector or the not for profit sector,” Senator Conroy said before again expounding the synergies between the National Broadband Network and cloud computing.

“In the Asia Pacific cloud traffic… is forecast to grow 48 percent by 2016,” Senator Conroy said. “It makes the government’s investment in the NBN so critical. If Australia is going to compete in the Asian century the NBN is quite simply essential infrastructure.”

Senator Conroy went on to congratulate cloud computing provider and online mega-merchant Amazon for setting up a presence in Australia. It is understood that the company draws at least in part on the Equinix’s facilities, thus at least in part satisfying regulatory demands around data sovereignty.

He also made it clear that he expects full participation from industry in the development of a Cloud Computing Strategy within the Digital White Paper, which been subsumed an earlier Cyber White Paper being drafted by Paper Prime Minister and Cabinet.

However Senator Conroy is yet to provide details or dates around when the new Digital White Paper will be completed.

“We’ve only just started the early stages of it, it was only announced a very short time ago and we are just in the early stages, so I don’t have the full timeline on that,” Senator Conroy told Government News, saying he was “not going to put any predictions at this stage whatsoever.”