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Australian government IT spending to grow this year

Australian government sector IT spend is on track to grow 6.2% this year to $13.26 billion as government organisations continue to embrace remote work and connected public services, according to an IT service management company.

Spending is tracking to increase across all categories, with the biggest growth expected to be seen in software, which is set to experience another year of double-digit growth. The IT service management company predicts spending will increase by 10.5% to $3.39 billion, which compares to a 14.1% growth in 2020.

Meanwhile, data centre spending is expected to rebound from a 5% decline in 2020 to grow 7.4% to $426 million in 2021. Telecom services spending is likewise expected to recover from a 2.4% decline in 2020 to grow 7.1% to $741 million this year.

The remote work boom will meanwhile see device spending grow 4.3% to $563 million, with IT services spending up 5.7% to $5.58 billion and internal services spending up 1.8% to $2.56 billion.

The firm’s VP for Executive Programs stated that public health and safety measures, including vaccinating citizens, are the top concern for public sector organisations in Australia, pushing them to continue to accelerate their digital transformation. Most technologies spend is now linked to digital programs, for example, cybersecurity and digital identity programs.

“We’re seeing the public sector changing IT operating models and innovating at a quicker pace by adopting commercially available technology solutions and software — particularly software as a service. Government budgets will continue to address the recovery and growth needs of communities and businesses in 2021. In addition, investments to address digital equity and access to remote government services will be prioritised,” he said.

OpenGov Asia recently reported that COVID-19 is proving to have some benefit for Australian businesses, according to findings from an international research company.  Ecommerce is now a bright spot in the Australian economy and a lifeline for consumers who are working and sheltering at home. Businesses that quickly transitioned to the new normal to survive are now debating if these are not short-term adjustments wondering how long this change will last and if further investments are essential for long-term e-commerce sustainability and growth.

All the signs point to a long-term change in consumer behaviour and the need to step up e-commerce functionality. Findings indicate that the e-commerce market in Australia has been on a steep growth curve during the past few years and has received an additional boost from the COVID-19.  The pandemic is expected to ramp up e-commerce sales in the country at a compound annual growth rate (CAGR) of 10.3% between 2020 and 2024.

Experts argue that the pandemic has altered consumer buying behaviour and are increasingly shifting from offline to online channels. The crisis opened the e-commerce market to a whole new set of consumers, who were not using online channels.

OpenGov Asia also reported that The federal government has expanded the scope of Australia’s fledgeling permanent migration scheme for highly-skilled technologists after tripling the program’s intake for this financial year. The change is contained in a new direction for the two feeder visas used for the ‘Global Talent Independent’ (GTI) program – subclass 858 and subclass 124 – issued last month.

The direction (direction 89) will be replacing an earlier one outlining the target sectors for the GTI program when it was first launched in November 2019 to attract tech talent from across the globe. New target sectors of note are education, tourism and the “circular economy”, while the remaining seven areas are largely an expansion of the original seven.

The remaining seven sectors are resources; agri-food and agtech; energy; health industries; defence, advanced manufacturing and space; digitech; and financial services and fintech. They are broadly similar to the former fields, with ‘Digitech seemingly covering what was previous ‘quantum information, advanced digital, data science and ICT, as well as cybersecurity.

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