Legacy ‘tech debt’ is strangling govt digital budgets

Simon Bush

Citizens rightly expect governments to deliver seamless services, with digital the preferred mode for ease of accessibility and convenience. This is the case whether its for digital drivers’ licenses, Medicare refunds, signing documents electronically, telehealth services or submitting tax payments online.

Federal digital identity legislation has been released in September, and when passed – hopefully next year – we will see an increased ability for the citizen to engage with more government and private sector services online, enabled by the ability to prove one’s digital identity in a secure and safe manner.

We know that citizens want and expect this investment and capability from our governments: the NSW Digital Driver’s license going digital quickly achieved 80 per cent adoption rate and over 10 million Australian’s are using MyGovID.

However, all these modern digital capabilities are at risk. There is a looming crisis for governments to meet citizen expectations that many do not comprehend or understand and that is around the systemic lack of investment in government IT systems that is called legacy ‘tech debt’.

Tech debt involves the ongoing reliance on old and increasingly unsupported legacy IT systems.

Simon Bush
Australian Information Industry Association chief executive Simon Bush

Now you may expect the chief executive of the AIIA to say this simply to lobby for more funds for the industry as a whole. But there is an entire business ecosystem that supports this legacy technology. McKinsey estimates that around 40 per cent of tech budgets go to maintaining legacy systems, a number that is increasing.

I suggest for our government the cost to maintain would be a lot larger due to ongoing underinvestment over decades, with a case in point the federal government’s welfare payment system being run on 40-year-old code on a Model 204 database that is heavily customised.

The Department of Human Services tried to replace and update this system and it failed. It and only recently cancelled the modernisation program and has written off the project. There are examples like this across almost every large and small federal agency.

COVID demonstrated if there was any doubt the importance of modernised government digital capability, systems and platforms when the Australian government was almost alone in being able to – at speed – hand payments to those in the workforce (via employers) under the Job Keeper payment. This kept our society and the economy stable during what was a crisis.

This was only possible due to the significant investment in the Single Touch Payroll system by the ATO.

The AIIA in policy white papers has made the point that major government tech platforms should be seen as critical assets.

David Thodey in his MyGov review came to the same conclusion when he said that it is “critical digital infrastructure, with the capacity to deliver world leading government services to Australians” and needs further investment.

Technology One chief executive Edward Chung recently has called out that all governments need to understand the extent and costs of their tech legacy debt. He is correct, and the understanding of this across the various governments in Australia is mixed.

For example, in Queensland during COVID when every other government was investing and spending on digital government systems and programs, it perversely decided to pull back.

The Queensland digital driver’ licence pilot was funded out of existing budgets in the Department of Transport by brave officials who decided to ensure that Queenslanders didn’t get left behind.

This important project should of course not have been left to a department to self-fund.

People to this day in the Queensland government still talk about the HR payroll IT failure from a decade ago as to why IT projects should not be funded!

Queensland, however, is not an outlier. Every state and the federal government have massive tech legacy debts that needs to be mapped, understood and government then needs to prioritize funding.

Politicians are eager to fund physical infrastructure and move into massive budget deficits to do so, but I believe digital infrastructure is more critical to the future productivity of the country and to meet the changing expectations of citizens.

With no ribbon cutting on a digital investment, I fear the tech legacy debt of Australia’s governments will deepen.

Simon Bush, CEO, Australian Information Industry Association (AIIA)

Do you know more? Contact James Riley via Email.

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