Victorian Government IT Projects: A Billion-Dollar Blowout and Years of Delays
Victorian taxpayers are footing a significant bill for government IT projects, with a decade of analysis revealing cost overruns exceeding a staggering $1.25 billion and delays stretching for years. An in-depth examination of information, communications, and technology (ICT) project data, encompassing 1,035 completed and 211 ongoing initiatives, indicates that approximately 40 per cent of these projects have surpassed their initial budgets. Furthermore, a concerning 61 per cent have experienced delays or are projected to finish later than originally scheduled.
These revelations emerge from quarterly data tracking project progress, released by the state government since 2016. This latest analysis paints a starker picture than a previous assessment by the Victorian Auditor-General’s Office (VAGO) in 2015, which reported around 35 per cent of IT projects exceeding their budgets and nearly half running late. The current dataset focuses on projects with a delivery cost of at least $1 million, involving 180 government departments and agencies, and covers the period up to the end of the 2024-25 financial year.
A Deep Dive into Cost Overruns and Delays
The cumulative cost overruns amount to at least $1.26 billion, with completed projects contributing $795 million and those currently in development adding another $470 million.
The most substantial financial blowouts are linked to ambitious infrastructure upgrades. Victoria’s ticketless public transport system, designed to replace the existing myki system, is a prime example. This project is now expected to be completed mid-next year, with its cost exceeding the initial budget by a significant $137 million – a 25 per cent increase.
Another project highlighting substantial overruns is an initiative by the Department of Families, Fairness and Housing. This data-sharing project, aimed at enhancing family violence risk assessment and management, was delivered in 2022 and ended up costing more than 12 times its original budget, escalating from $7.1 million to $91.4 million.
Time is Money: The Impact of Project Delays
Beyond financial overruns, delays are a pervasive issue. Projects that have already been completed experienced an average delay of 10 months. For projects still underway, the situation is even more pronounced, with current initiatives running more than 14 months behind schedule.
While the COVID-19 pandemic has been cited as a contributing factor, its impact appears to be a fraction of the overall problem. Projects explicitly mentioning the pandemic reported overruns totalling $51.8 million, representing about 4 per cent of the total blowout.
Expert Concerns: Accountability and Value for Money
Experts are voicing significant concerns about the consistent pattern of cost blowouts and delays. Richard Fulford, a senior lecturer at Edith Cowan University specialising in project costings, described the figures as “alarming.” He noted that while budget increases are not uncommon in ICT projects, the magnitude seen in Victorian government initiatives is particularly worrying.
Professor Mark Gregory from RMIT University’s School of Engineering suggests that the data points towards a lack of accountability within government departments. He stated, “If you’ve got a project that’s listed and it’s ongoing for years, you’ve got something which sets off every alarm bell.”
The “Traffic Light” System: A Flawed Indicator?
A key feature of the project tracking dashboard is a “traffic-light” rating system, self-reported by the departments managing the projects. This system rates projects from green (on-track) to red (off-track) each quarter. However, the latest reporting period saw a record 28 projects marked as “red,” the highest number of “off-track” projects since the dashboard’s inception.
Despite the clear indications of delays and cost increases, questions are being raised about the consistency and reliability of these ratings. Dr. Fulford pointed to the Department of Justice and Community Safety’s (DJCS) Road Safety Camera Program. This project experienced a three-year delay and a budget increase, yet was rated “green” around the time of the budget revisions, with no clear explanation for the scope changes.
Similarly, another DJCS project, the Better Technology Tools Enabling Responsibility (BTTER) program, aimed at automating processes, has been running six years late with its budget nearly tripling to $54 million. This project was also consistently reported as “green” without adequate justification for the soaring costs.
Even the new ticketless public transport project, despite facing reported disputes with contractors and significant budget and timeline increases, has maintained a “green” rating since its commencement.
A botched Greater Western Water billing project, which impacted thousands of customers and, according to the agency’s annual report, “did not work as it should,” was also completed with a “green” rating, although it had previously been marked “red.” Dr. Fulford questioned the logic behind such ratings: “It’s very difficult to determine how a project would receive a red or amber status if projects can be many years late and 100 per cent over budget.”
Departments have offered explanations for these discrepancies, citing COVID-related delays, the addition of new initiatives, and the scaling of projects to broader rollouts. However, critics argue these explanations do not fully address the core issues of transparency and accountability.
Beyond the Initial Spend: Unmonitored Operational Costs
Dr. Fulford also highlighted a critical limitation of the dashboard: its focus on initial setup costs rather than ongoing operational expenses. He noted that VAGO’s 2015 report indicated that setup costs represented only 24 per cent of the total IT budget, with the remaining 76 per cent dedicated to day-to-day operations. This means the dashboard is only monitoring “the tip of the iceberg,” leaving the majority of expenditure unmonitored and uncontrolled.
A History of Scrutiny: The VAGO Reviews
The current dashboard was established following a critical VAGO report in 2015, which found that the Victorian public sector had a poor track record in managing ICT projects. The report concluded that agencies were unable to assure Parliament and the public that their ICT investments were delivering sufficient public value for the significant expenditure. VAGO recommended a public-facing reporting mechanism, which was subsequently implemented.
A VAGO review of the dashboard in 2018 acknowledged improved transparency but suggested further enhancements, including the inclusion of expected project benefits and a reduction in inaccuracies. However, Dr. Fulford maintains that the dashboard still falls short of its objectives, failing to provide sufficient detail on project benefits and, consequently, whether the costs are truly justified.
The “Benefit Categories” listed on the dashboard, such as “Cost Avoidance,” “Cost Reduction,” “Efficiency/Productivity,” “Compliance,” and “Risk Reduction,” are considered too vague by experts. “It’s not possible to determine if we’re receiving value for money as the benefits identified are very vague,” Dr. Fulford stated, emphasizing the need for more detailed information and processes to ensure benefits are actually being realised.
Professor Gregory further pointed out the absence of crucial information, such as the names of the contractors involved in projects experiencing blowouts. This lack of detail, he argued, fosters an environment where time and cost overruns become an accepted norm.
Towards Greater Transparency: Expert Recommendations
The Department of Government Services, which manages the dashboard, acknowledges that cost and timeframe increases often reflect the scaling of projects from initial phases to full implementation rather than inherent project failures.
The Victorian Auditor-General’s Office is reportedly preparing its 2026-27 annual plan, which includes two proposed ICT-related audits for the next financial year: one for the Court Services Victoria (CSV) case management system and another for a Department of Justice and Community Safety (DJCS) fines management system. The CSV project is currently valued at $135 million, significantly exceeding its budget, and has consistently received red or amber ratings since 2021. The fines management system project, delivered in 2020, experienced “red” ratings throughout most of its development, with noted issues regarding vendor performance.
Dr. Fulford suggests that the problems with ICT projects are largely structural, proposing that a centralised body overseeing IT project management, rather than individual departments, could lead to better outcomes. “You’ve got no centralised control, everybody’s doing their own thing in their own way,” he remarked.
Professor Gregory echoed the call for greater transparency, advocating for the inclusion of contractor information on the dashboard and regular external audits of IT projects. He also stressed the importance of thorough initial planning to minimise scope changes during development, suggesting that significant alterations should trigger a re-tendering process. “The worst thing you can do in a software project is shift the goal posts,” he warned. Ultimately, he believes, increased transparency and a focus on effective project management will lead to better outcomes for the public.
