Budget 2005 - winners and losers
- 11 May, 2005 08:28
In what is likely to be his last Budget between the Prime Minister's office or the back bench, Treasurer Peter Costello has bet the farm on a series of across-the-board tax cuts, backed by an ambitious series of welfare reforms where big picture IT simply does not figure - at least not for this year. IT Minister Helen Coonan's portfolio is marginally poorer, while security agencies including the Department of Immigration and Attorney have walked away with significant funding boosts for biometrics, identity management and data-drilling.
Meanwhile, the much-vaunted prospect of the new Department of Human Services becoming a super-department to rule Australia's two largest transactional shops, Centrelink (welfare benefits) and the Health Insurance Commission (Medicare and the Pharmaceutical Benefits Scheme) has been put on hold for another year - along with the prospect of a unified Human Services smartcard to interoperate between the agencies.
While Human Services collected some $1.4 billion in appropriations, these are almost entirely derived from moving funding from its agencies into the department's coffers: a sure sign the government expects any integration costs to be met from savings from within the agencies.
In a move that smacks of a last-minute budgetary sacrifice, Human Services did not even issue its own ministerial media pack on its intended future. Rather, the task of integrating Australia's two largest government IT shops will take at least another year to scope and be paid for solely by savings rather than any new funding.
Similarly, Costello's ambitious welfare reform program is also likely to have prompted caution for any IT consolidation at a time when the government can least afford to experiment with the performance of its bedded down cheque-cutting hardware.
But as with any budget, there are always winners and losers.
Loser: Super of the Future Fund eats Telstra whole
Treasurer Peter Costello's tenth Federal Budget has locked in the government's vision of the future as one where IT costs continue to fall for the duration of the current term, with the entire proceeds of Telstra's sale now being unequivocally sunk into paying out unfunded commonwealth superannuation liability.
After returning a massive $21 billion worth of personal income tax cuts, Costello has also pledged to sink the entire projected $36 billion dollars to be raised from the sale of Telstra into a new untouchable "future fund".
The fund is designed to partially deflate the ballooning spectre of the government's own unfunded superannuation liability, accumulated by successive regimes after they repeatedly pushed its superannuation bills under the rug. Treasury does not have an exact figure for the bill, but it is rapidly approaching hundreds of billions of dollars as Australia's workforce ages and retires.
Telstra proceeds will now be invested in a "locked away" investment fund intended to appreciate to pay off government liabilities.
"The object [of the Telstra sale] will be to have the full proceeds go into the future fund. If you sell off Telstra, and you spend the money, you have no asset and you have sold the family silver," Costello explained.
He added the future fund will prevented from being used "to be directly engaged in projects" such as funding infrastructure.
Loser: Coonan and IT research left empty-handed
Having been charged with selling-off Telstra and placating National Party senators with itchy feet, Senator Helen Coonan's portfolio, Department of Communications IT and the Arts (DCITA) could have been forgiven for expecting a few crumbs from this year's budget. However, Coonan has walked away almost completely empty-handed, if not slightly cut on the ICT front.
While no major cuts stand out or have been highlighted in DCITA budget statements, there is no new money, with a $50 million for Metropolitan Broadband Blackspots Program being funded out of last year's Budget.
Meanwhile, DCITA policy outputs in the form of research and development projects, administered by the Department of Employment Science and Training, have taken visible hits: BITS (Building information Technology Strengths) Incubator program takes $2 million dollar haircut from $12.6 million to $10.6 million this year while BITS Advanced Networks funding reduces from $8 million to $7 million for the same period.
Other funding decreases included the Information Technology Online (ITOL) scheme down $1.1 million from $3 million last year. The good news is orchestras get a marginal funding increase.
Winner: Biometrics bandwagon reaps $182 million
If last year's budget went all out to bolster the IT budgets of Australia's security and intelligence agencies, this year's funding has gone hell for leather on biometrics, backed by a massive commitment to data-drilling that will leave no government mainframe or database unturned.
Major biometrics projects such as the Department of Foreign Affairs and Trade's (DFAT) biometric ePassport rollout and Customs' troubled facial recognition border clearance system SmartGate will progress full steam ahead.
The full-scale rollout of biometric passports has received $67.53 million over four years, while the less scalable SmartGate facial recognition kiosks get $74 .6 million to enable Customs to "automate border processing using ePassports" through the gradual phasing-in of "self-processing" and "automated processing" at major airports.
Meanwhile, the Department of Immigration Multicultural and Indigenous Affairs (DIMIA) will get $42.87 million to implement "biometric technology for border security and identity verification". However, the funding increases do not specify what systems DIMIA will spend the money on, suggesting the department is in for a substantial IT and processing systems overhaul.
The Office of the Privacy Commissioner will also receive a modest $740,000 over four years to "conduct privacy audits and to assist the three agencies in addressing privacy issues" that arise from their biometrics.
This puts this Budget's total spend on biometrics at $182 million - an almost identical figure for the cost of Customs' massive Integrated Cargo System after it went into cash-burn.
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Winner: Identity management crisis gets $5.9 million development framework
Clearly spooked by the fact DIMIA can incarcerate and deport Australian citizens through a lack of identity verification, the Attorney General's Department has stepped in with $5.9 million over two years to develop "a national identity security framework that is strong, consistent and interoperable".
Insiders say the scheme aims to kill DIMIA incompetence and ID fraud with the same stone. Two pilot projects launched with DIMIA and DFAT to create a dedicated and secure "online document verification service to check key documents" to be presented for identification purposes to DIMIA and DFAT. Attorney general Phillip Ruddock has given assurances the new service will not create a master database, and will issue only a "simple yes or no answer" to document authenticity enquiries and "will not issue an identifying number nor store personal details on a database".
Rather, the money will be spent on middleware.
Even so, the scope of the pilot project is breathtaking with the Tax Office, DIMIA, DFAT, Privacy Commissioner, Centrelink, Austroads (a new federal body to coordinate state roads and traffic authorities), the Health Insurance Commission, Australian Electoral Commission and all state Registries of Births, Deaths and Marriages all roped into the new project.
Meanwhile, a second project will test the integrity 25,000 Tax Office-held identities against data held by all of the above agencies "to identify false identities" and "identify key data matching elements that can be used to improve the accuracy of information held on a government database[s]". Similarly, 50,000 passport holders' details will also be crosschecked by DFAT
The pilots will also be backed by a $12 million fund for DIMIA for document examiners and document detection equipment.
Winner: $43.9 million for Immigration MAL wares
Not content with jumping on the biometrics bandwagon, DIMIA has also managed to extract almost $44 million "for enhancements to the Movement Alert List", better known as MAL.
MAL, which is an alert-driven database feeding off passenger manifests processed by Customs, will get an overhaul of its IT processing grunt, a dedicated 24x7 monitoring centre and new, dedicated, secure communications links between DIMIA offices and intelligence and security in Australia and overseas.
Winner: $68.9 million tsunami warning system
IT will undoubtedly figure prominently as Geoscience Australia and the Bureau of Meteorology combine their efforts to roll out a range of sensors and data collection and fusion capabilities for a tsunami warning system.
To be coordinated by a National Tsunami Warning Centre, the project will undoubtedly see some of the allocated $68.9 million funding invested in substantial high-end processing power and rapid communications channels to keep Australia's shores safe.
Winner: $69.7 million for ASIO and friends
With identity management at the forefront of security-related IT spending, Australia's domestic spooks have also weighed-in with a generous $9.6 million allocation over four years to monitor Australia's borders by drilling Customs' and Immigration's IT systems. While there is predictably little detail, the ASIO money will be used for "better IT systems and communications links with DIMIA".
Similarly, a significant portion of a $48.1 million funding increase will go towards enabling "further enhancement of ASIO's analytical and technical capability", which translates to more bodies to man more technology to bug and crack the likes of encrypted VoIP, e-mail and 3G phone systems. ASIO's call centre will also get further funding to the tune of $12 million, while previous funding of $36 million for the Australian Transaction Reports and Analysis Centre's (AUSTRAC) eLearning application to help the financial sector dob in money launderers will remain in place.
Loser: OneTel
If the backers of failed telco OneTel thought they could tactically "price out" the legal costs of the Australian Securities and Investment Commission (ASIC), they have another think coming. After burning $3.2 million last year, ASIC is getting another $4 million this year to bring the perpetrators to justice under the Corporations Act.
Winner: Australian Bureau of Statistics scores $76.2 million for data
Perhaps feeling a little guilty over a chronic funding of data collection, the government has managed to see its way clear of $76.2 million over four years to help the ABS expand the range of and quality of data it collects and publishes. That means more storage, more processing power and lashings of integration work. It also includes a $9.1 million as well as a commitment to the controversial eCensus project to allow Australians to submit their 2006 Census information online, something the ABS hopes will reduce costs over time.
