NSW Coalition taps digital fund for election pledges

The New South Wales Coalition will siphon money from the state’s already diminished Digital Restart Fund to pay for the technology underpinning its election policies if re-elected on the weekend.

Neither the Coalition nor Labor have committed to replenishing the flagship digital investment fund, which has been a significant source of funding for government technology in the state since mid-2020.

An assessment of Coalition policies undertaken by the independent Parliamentary Budget Office (PBO) reveals that the party will reprioritise funding from the Digital Restart Fund (DRF) to invest in technology platforms for at least two policies.

Programs include the Rentstart Bond Loan scheme, which will be expanded to provide more interest-free rental bond loans to victims of domestic violence. The expansion involves building a new system called HOMES at a cost of $1 million.

A $3 million Service NSW platform that will serve as an “option for local councils to use to obtain more inputs from communities on where and how local infrastructure contributions… are to be spent” is also expected to be funded.

According to the PBO, technology costs for the HOMES system will be “re-prioritised from existing DRF allocation”, while the Service NSW platform “assumes that the cost… can be funded through a reprioritisation of activities being funded out of the DRF”.

The re-prioritisation comes as DRF funding continues to dwindle after Treasury bushed off calls from the outgoing Minister for Digital and Customer Service Victor Dominello for the fund to be topped up.

Labour market constraints were highlighted as the principal reason behind the decision, with Treasury arguing that a pause would allow the government to “catch up” with projects already funded.

As revealed by InnovationAus.com last month, there is less than $150 million remaining in the DRF for new projects, with the funding – which is expected to last until the end of next financial year – likely to dry up this year without additional investment at the upcoming state Budget.

The Coalition last allocated funding to the fund in 2021, when it provided an additional $500 million to build on top of the $1.6 billion investment in its 2020 pandemic-orientated Budget and $100 million in 2019.

After a spokesperson for outgoing Mr Dominello referred questions about the reprioritisation of funds from the DRF to his department, the Department of Customer Service (DCS) told InnovationAus.com it was allowable under the legislation.

“The DRF Act, Section 9(a) states the fund may be used to fund all or part of the cost of a project which promotes the purpose of the Fund and is approved by the minister on the recommendation of the secretary of the DCS,” a DCS spokesperson said.

“As per the legislation, all DRF projects including where funds are re-prioritised must proceed through the existing DRF governance arrangements and responsible minister, currently Minister for Customer Service and Digital Government, for approval.”

With a very different balance sheet to 2020, the campaigns run by the Coalition and Labor have been largely devoid of major technology pledges, even as potentially contentious projects like digital identity – that Labor intends to run with if elected – hum away in the background.

In its pre-election platform statement this month, the Australian Information Industry Association (AIIA) called on both parties to allocate $1.6 billion over four years to a new Digital Maturity Fund that would replace the DRF.

AIIA chief Simon Bush wants the fund to move away from “being used for business as usual” by investing in emerging technology areas like artificial intelligence and machine learning, as well as continuing to invest in whole of government platforms.

Do you know more? Contact James Riley via Email.

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