Analyst firm Gartner expects government IT spending to increase by 8.4 per cent this year, down from 9.4 in 2022, reaching almost $17 billion.
As in 2022, spending on software shows the largest growth at 14 per cent, although that is down from 19.1 per cent in 2022.
Gartner surveyed government chief information officers, and found that 57 per cent of them plan to increase funding for application modernisation, up from 42 per cent last year.
Spending growth in data centre systems is also expected to slow to 6.6 per cent this year, down from 2022's 13.1 per cent figure.
Devices, IT and telecom services show moderate increases however.
Australia's overall growth rate for government spending this is somewhat higher than the global forecast of 7.6 per cent, for a total of US$589.8 billion.
Gartner analyst Dean Lacheca said that in Australia, government will increasingly look to digital investments, particularly automation, to drive efficiency and improve service delivery.
Lacheca noted government is responding to economic disruption and inflation pressures across Australia that increase prices, and stall wages with austerity measures at federal and state levels.
He pointed to the Victorian government announcing it would cut up to 4000 public servant jobs, and the federal government reducing its reliance on external IT contractors.
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