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Soft landing for ICT under Abbott: IBRS

Soft landing for ICT under Abbott: IBRS

Sclerotic senate and deteriorating terms of trade to stymie confidence

Analysts have predicted a soft landing for the ICT industry under a Tony Abbott-led government with a sclerotic senate and deteriorating terms of trade set to stymie business confidence.

However, the incoming government’s strong focus on innovation, the release of its national Cloud strategy, and the more recent New South Wales government Cloud strategy, leaves room for optimism.

IBRS analyst Guy Cranswick said overall business confidence was going to get “softer” before it got better and pointed to weakening terms of trade, a number of government reviews, an “interesting” senate delaying legislation and the possibility of a double dissolution as drivers.

“They are going to review everything,” he said. “In terms of overall business confidence I would say that things are going to get softer before they get better and we will see interest rates come down some more.”

Cranswick said this suggested it would not be easy for business which would lead into business confidence, which correlates with strength of sales and revenue.

“What we will see for us in the IT industry is that while we won’t take the brunt of it, we may find it’s just a little bit soft,” he said. “We are open for business because we are going to remove some of the rules and restrictions, but that doesn't mean the government can summon up good trading terms."

He said the Senate could also prove difficult for Abbott with the new house, to sit from July next year, no more keen to deal with the government’s bigger policies, such as the carbon tax, than the current house.

“That could also have an effect on this confidence index as things get stymied and delayed and there has also been some commentary about a double dissolution,” he said.

Ovum research director, Asia-Pacific, Kevin Noonan, said the Coalition’s Policy for e-Government and the digital Economy provided a good assessment of key issues and challenges for government ICT.

“However, the view from opposition can be quite different from the tough grind in government,” he said.

“Technology leadership will need a long-term methodical approach to dealing with reform, and strong advocates in Government.

“The first big test will be in the naming of the new ministerial line-up and consequential changes to administrative arrangements.”

He said the incoming government's Cloud strategy would boost momentum for the take up of Cloud services.

“Some agencies might have hoped that a change of government could provide one last chance to resist the growing momentum for Cloud services,” he said.

“Of course, this has not been the case. The Coalition has quickly realised the value of Cloud, both as an internal driver of productivity and agility, and also as a driver of national competitiveness in the wider industry.”

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Tags ICTovumIBRSkevin noonanTony AbbottFederal ElectionGuy Cranswicknational cloud strategy

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