A panel of Canberra’s most senior bureaucrats are weighing an investment vehicle modelled on the New South Wales government’s Digital Restart Fund to support federal digital projects outside of the ordinary budgetary cycle.
Ahead of the upcoming Budget, the secretaries sub-committee overseeing digital and data across the federal government are contemplating a digital-specific fund proposed by the Digital Transformation Agency to help reform the technology funding model.
Tentatively named the ‘Digital Readiness Fund’, the fund would go some way to addressing long-held concerns with the budget process, which technology leaders have lamented as being designed for owning assets rather than consuming them as services.
It would likely seek to do this by funding projects in increments outside of the annual budget cycle, much like state government in NSW, Western Australia and South Australia have done, in the hope of better supporting agile delivery.
Such a digital-specific fund has been on the cards at a federal level since at least 2018 – well before the NSW government revealed plans for the Digital Restart Fund (DRF), which it subsequently funded to the tune of $2.2 billion over five years.
In 2019, former Employment minister Stuart Robert floated a shakeup the technology funding model investment to allow agencies to “try things… before significant amounts of money and reputation capital are sunk into projects” and asked the DTA and Finance to progress the reforms.
But there was little movement after, with the DTA’s focus shifting significantly in there intervening years, including onto a digital review recommended by the 2019 root-and-branch Thodey review of the public services.
Now, it appears the government is poised to reconsider the concept, with the Secretaries Digital and Data Committee (SDDC) anticipating a discussion about digital and ICT funding reforms at its first meeting following the Budget “subject to [the] outcome of digital readiness fund”, according to publicly released FOI documents.
The SDDC is attended by public service heavyweights, including secretaries from the Prime Minister’s department, Finance, Home Affairs, Industry and Social Services, as well as handful of other digital and cyber security experts.
Lucy Poole, the DTA’s digital strategy, architecture and discovery division general manager told InnovationAus.com that the concept of a digital-specific fund had been proposed to “address the specific needs of digital proposals”.
Ms Poole said this could include “encouraging user centred design and proof-of-concepts and providing iterative funds for agile delivery”. She said the agency has an “ongoing interest in the work that has been carried out in other jurisdictions like the NSW DRF”.
But she stressed that while the concept was being considered, the DTA has “not kicked off any development activities for such a fund at this point” and it would ultimately be a decision for government.
“If the matter was to progress, the establishment of a new fund would be subject to a decision of government and the details of the fund would be classified until publicly announced,” Ms Poole told InnovationAus.com.
Earlier this year, the panel of experts that audited myGov recommended the creation of a ‘myGov Development Fund’ to “support the connection of new services and the uplift of existing services to compliance with the Australian Government Architecture”.
The panel said that the fund should be modelled on the DRF, which “allows for the funding process to take place outside the annual budget cycle, with investment decision considered four times per year”, and could be funded from the Budget and/or through a levy on departments and agencies.
“Compared to the existing Two-Pass Business Case process, this better supports agile delivery: agencies can seek smaller increments of money through a lean business case and assurance process, and easily come back to government to seek further investment with a working prototype,” it said.
In addition to reforming the funding process, NSW’s DRF has allowed the government to introduce new requirements on agencies, such as requiring that projects a reviewed by both the information and privacy commissioners.
Last week, independent costings ahead of the state election revealed that the NSW Coalition planned to pay for the technology underpinning its election policies through a re-prioritisation of the DRF.
Less than $150 million remains in the DRF for new projects after NSW Treasury denied a request by outgoing Minister for Customer Service and Digital Government Victor Dominello to have the fund topped up. The incoming NSW Labor government has made no pledge to keep or add to the fund.
Federal finance minister Katy Gallagher has previously flagged that significant new funding will be needed to complete even the existing large digital projects and has reiterated the government’s goal of becoming a top three digital governments globally by 2025.
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