Budget Review 2015–16 Index

Matthew James and Jonathan Chowns

Digital Transformation Agenda

A new announcement in the Budget was the creation of a Digital Transformation Agenda, designed to ‘drive innovation’ and make it easier for individuals and businesses to access government services. To support the implementation of this Agenda, the government is providing $254.7 million over four years from 2015–16 onwards.[1] This includes the already announced Digital Transformation Office (DTO) to be located within the Communications portfolio. At the same time, other portfolios will make contributions of $120 million over five years from 2014–15 onwards, through the transfer of their digital delivery services and functions to the new centralised office.

The main portfolios likely to be affected by this measure appear to be Social Services, Human Services and the Australian Taxation Office. The scheme includes projects to streamline government grants administration through adopting standard business processes and a common platform; provide a trusted digital identity verification framework (for secure authentication) with simple client access; and implement a whole-of-government digital mailbox system for individuals and businesses to use.

Australia has a history of changing bureaucratic arrangements for digital engagement policies. The Australian Government Information Management Office (AGIMO) (now absorbed within the Department of Finance), and before then the National Office for the Information Economy (NOIE), were examples of such changes. Then, on 23 January 2015, the new DTO was announced jointly by the Prime Minister and the Minister for Communications:

The DTO will operate more like a start-up than a traditional government agency, focusing on end-user needs in developing digital services... One of the DTO’s first tasks will be to ensure people no longer have to complete separate log on processes for each government service. Instead, people should have a ‘digital identity’, which they can use to log in to each of their services across the government. The DTO will also work closely with State and Territory Governments to identify opportunities for collaboration, including ways to make better use of myGov.[2]

The myGov authentication service website already exists on its own to link a range of Australian Government services with one username and password, all in one place.[3] However, it operates under the Human Services portfolio and it is not yet clear how myGov will sit with DTO-provided services. The new DTO will aim to take an across-agency or whole-of-government approach to investing in common platforms that can be used by every agency. According to James Riley in the Business Spectator, Australia’s Digital Transformation Office is modelled on the UK’s Government Digital Service, which has been operating for three years and apparently providing productivity gains in government service delivery.[4]

Australia’s DTO website sets out some details of the initial, developmental (alpha) version of the new digital service standard.[5] The DTO digital service standard webpage states that ‘The Digital Service Standard has been adapted from the UK Government’s Digital by Default Service Standard under the Open Government Licence v2.0.’[6]

Under the DTO Digital Transformation Plan:

All agencies with services in the scope of the Standard will require a Digital Transformation Plan, by September 2015, setting out how and when the service will adopt the Standard.[7]

National Broadband Network (NBN)

The NBN is treated as an investment in the Commonwealth accounts, and Commonwealth funding of it is contributed by equity injections to NBN Co, the entity established to design, build and operate the NBN. The funding provided is thus not treated as expenditure. The following table sets out the Commonwealth’s equity contributions as set out in the 2014–15 Budget, the Mid-Year Economic And Fiscal Outlook (MYEFO) and the current Budget:

Financial Year
Budget 2014–15[8] $B
MYEFO 2014–15[9] $B
Budget 2015–16[10] $B

Including the equity contributions made under the previous Government from 2010–2013 and the contributions made in 2013–14, total equity contributions remain capped at $29.5 billion as the Government has said.[11] The government has promised to fund the broadband rollout project with equity injections until the cash flows are sufficient to allow it to utilize private sector funds.[12]

The Budget Paper No. 1 in Statement 6: ‘The Australian Government's major assets and liabilities’, says:

On 14 December 2015 [sic; actually 14 December 2014[13]], the Government announced that is [it] has successfully renegotiated the Definitive Agreements with Telstra and Optus. These agreements secure access to existing fixed‑line infrastructure that could be used to rollout the NBN faster and at lower cost. In the 2015‑16 Budget, $2.6 billion in equity payments for NBN Co have been brought forward to 2015‑16 and 2016‑17 from 2017‑18. This is to reflect the launch and scale of new network technologies. The Government's equity contributions are capped at $29.5 billion.[14]

As the table above shows, equity funding in 2014–15 has been reduced from $5.2 billion to $4.9 billion and moved out to the following two years. The Budget papers also show that, in 2016–17, funding is scheduled to increase from $6.9 billion to $8.3 billion. The budget papers state that by 28 February 2015, NBN Co’s ‘termination liabilities’ reached $7.3 billion. These liabilities are the funds that would be needed to meet the direct costs of NBN Co if the broadband rollout were terminated. Under the equity funding agreement with NBN Co, the Commonwealth guarantees these contingent liabilities.[15]

[1].         The budget figures have been taken from the following document unless otherwise sourced: Australian Government, Budget measures: budget paper no. 2: 2015–16, pp. 67–69.

[2].         T Abbott (Prime Minister) and M Turnbull (Minister for Communications), Establishment of a Digital Transformation Office, media release, 23 January 2015.

[3].         Australian Government, ‘About myGov’, myGov website.

[4].         J Riley, ‘The Coalition's digital agenda: Long on opportunity but short on detail’, Business (Technology) Spectator weblog, 2 April 2015.

[5].          Australian Government, ‘Introducing the Digital Transformation Office’, DTO interim website.

[6].          Australian Government, ‘Digital Service Standard’, DTO interim website.

[7].          Australian Government, ‘Digital Transformation Plan’, DTO interim website.

[8]           Australian Government, Budget Paper No. 1: Budget Strategy and Outlook 2014–15, pp. 3–29.

[9]           Australian Government, Mid-Year Economic and Fiscal Outlook 2014–15, p. 56.

[10]        Australian Government, Budget Paper No. 1: Budget Strategy and Outlook 2015–16, pp. 3–25.

[11]        M Turnbull (Minister for Communications), Strategic Review of National Broadband Network, media release, 12 December 2013.

[12].       B Dalzell, ‘National Broadband Network—funding, implementation and regulation’, Budget Review 2011–12, Research paper series, 2010–11, Parliamentary Library, Canberra, 2010.

[13]        M Turnbull (Minister for Communications), NBN Co and Telstra sign revised Definitive Agreements, media release, 14 December 2014.

[14].       Australian Government, Budget Paper No. 1: Budget Strategy and Outlook 2015–16, pp. 6-22–6-23.

[15].       Australian Government, Budget Paper No. 1: Budget Strategy and Outlook 2015–16, p. 8–9.


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