Government stimulus made little impact on IT spending: Gartner

IT spending lacked gov't stimulus kicker

Any stimulus by the Rudd Government has had little impact on IT spending in Australian markets, according to new research by Gartner.

The government has parted with $52 billion in economic stimulus since the global financial crisis kicked in late last year. Another $31 billion was allocated to support car manufacturers and non-bank financial institutions.

The research firm prepared a report looking at how the stimulus packages by governments in Australia and the rest of Asia Pacific have affected IT spending, and despite the stimulus failing to make a dent in IT spending overall, the education sector was the biggest winner down under.

One of the key features of the government’s stimulus is the $14 billion spend in the education sector, says Gartner analyst Derry Finkledey.

“A lot of the spending was spending that’s been planned, sitting in the pipeline and now brought forward because the economy needs it now,” said Finkledey.

“These sorts of measures create stability in the sector and therefore there is no onus to immediately cut budgets.”

According to the report, the Australian government’s initiatives are unique to the region, due to their focus on directly stimulating consumer demand, with the implication that there is less government control over the flow of the money.

Driven by the recent Gershon review, the government is more focused on reducing IT operational spending, and saving costs.

Finkledey adds that most of the government stimulus packages around the world have rightly been focused on the broader areas.

“IT is very important, but it’s only one industry among many, and there are many that constitute a much greater proportion of GDP – so governments have to take those factors into account when they make decisions,” said Finkledey.

Companies are looking hard at where spending can be improved to drive greater efficiency, and Finkledey says this is likely to drive interest in areas like SaaS, whereby companies can variablise costs to run up or down with their business.

“In the last recession companies immediately cut budgets, cut headcounts and put IT projects on hold, but companies are taking a different approach this time and positioning themselves for growth.”

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