Chapter 2 explores the IOF as a strong example of a whole-of-government approach to managing digital and ICT investments to deliver value, maximize impact, and mitigate risks. It will demonstrate the IOF’s linkages to the OECD Digital Government Investment Framework’s approach to strategic planning, coherent implementation, comprehensive oversight, and benefits realisation across Australia’s budget cycle. It will present the IOF’s overall strengths in having robust processes, policies, and tools to support agencies, and in being a mechanism for policy implementation. Finally, it will explore the IOF’s opportunities to improve its integration and overall user experience, as well as to further elevate the tole of the DTA as a strategic partner for digital transformation.
Digital Government in Australia
Abstract
The COVID-19 pandemic accelerated digital transformation in public administrations across the world, but there is little sign that this rate of transformation is set to slow. In fact, government spending on digital and ICT is set to grow annually by 8.4% between 2024-2027 (Gartner, 2024[1]) – especially as public administrations try to find efficiencies amidst fiscal pressures, work to meet users’ needs and expectations of digital services, and as governments grapple to get ahead of a rapidly-evolving technological environment, particularly with broader adoption of AI (OECD, 2024[2]; OECD, forthcoming[3]).
Under these conditions, it is increasingly critical for governments to have a cohesive approach to managing their digital government investments across the public sector by aligning them with national strategies and broader policy goals. The OECD Digital Government Investment Framework guides strategic planning, implementation, and oversight, ensuring investments deliver value, maximize impact, and mitigate risks. This approach supports evidence-based decisions, transforming public services through shared digital solutions and coordinated AI deployment. By taking this approach, governments can align projects with strategic objectives and policies, assess and mitigate risk, ensure the successful delivery of initiatives, and deliver a better return-on-investment (OECD, forthcoming[3]).
As a strong example of government effort to set an integrated whole-of-government investment model, the Australian Government’s Digital and ICT Oversight Framework (IOF) provides countries with a valuable model from which to learn. The strength of the IOF has been its whole-of-government approach to managing investments end-to-end, including with robust processes, policies, and tools to support agencies across the investment lifecycle, and as a mechanism for policy implementation and benefits realisation. The DTA’s location within the Australian Government’s Finance portfolio, has enabled DTA advice to be more closely integrated into the advice of central agencies, and their role in supporting key government decision making processes. However, as the DTA looks to further develop the IOF, there is an opportunity to improve agency buy-in and further mature the framework by improving its user experience, with better integration, data flows and relationship management. This could help to elevate the role of DTA as a strategic partner for digital and ICT with more active engagement involvement in determining the feasibility of digital and ICT proposals, fostering innovation, and providing diverse funding options to take the pressure off the rigid budget process.
To guide Members, the OECD has developed the Digital Government Investment Framework for more strategic and effective investments in digital transformation across public sectors. The framework presents an end-to-end and whole-of-government approach based on three pillars: strategic planning, coherent implementation, and comprehensive oversight.
While these three pillars align to the general phases of an investment, it is important to note that they are linked and should be considered more of a cycle – better planning leads to better delivery, and comprehensive monitoring should be feeding back to decision-making on in-flight and future investments.
However, there are also several core elements that serve as the building block within each of the three pillars, which together help to ensure governments deliver value, maximise impact and mitigate risks as part of a coordinated approach. Figure 2.1 below provides an overview of the three pillars with the building blocks that sit under each of them to form an integrated, whole-of-government framework.
Wrapping around the three pillars of the framework is also the conception of ‘benefits realisation’, which highlights the importance of having a focus across the project lifecycle on how to define, deliver, monitor and evaluate the intended benefits – or outcomes – of a digital government investment.
Source: (OECD, forthcoming[3])
Pillar 1: Strategic Planning
The Strategic Planning pillar is focused on strengthening the governance of digital government by establishing a clear leadership, effective policy levers and coordination mechanisms to steer the public sector digital transformation. Through strategic alignment and coordination between key stakeholders, governments can improve the planning of digital government investments. This pillar includes efforts towards better:
Co-ordination and alignment: for the effective coordination of investments in alignment with strategic and policy objectives, which benefits from clear leadership and defined responsibilities.
Risk management: to identify and mitigate risks in a timely manner, based on a comprehensive framework that considers delivery, compliance, security, and social and environmental impact.
Value proposition: in the development of business cases or proposals using a structured and standardised method to estimate the costs, benefits and potential risks.
Pillar 2: Coherent Implementation
The Coherent Implementation pillar is focused on the development of digital investments in a way that allows governments to build coherence and agility in the use of digital technologies in the public sector. Governments can leverage the use of shared tools and methodologies to secure benefits realisation. This pillar includes efforts towards better:
Approval and funding: to assess whether a proposal is feasible and ready to be implemented, prioritise projects based on strategic objectives and delivery confidence, and to allocate funding.
Project management: to provide standardised tools and methodologies to support the agile and effective delivery of investments in digital transformation of the public sector.
Public procurement and GovTech collaborations: with different procurement approaches to promote strategic partnerships with external actors to support successful project delivery.
Pillar 3: Comprehensive Oversight
The Comprehensive Oversight pillar is focused on the governance required to foster accountability and drive performance, enabling countries to track the investments portfolio, encourage projects to be managed properly, and ensure these investments yield the intended benefits. This pillar includes efforts towards better:
Monitoring and accountability: to track and monitor the progress of investments to foster accountability and enable the early identification of risks in the delivery of projects.
Policy evaluation: to evaluate the ex-post effect of investments, including return-on-investment, contribution to policy objectives, and realising the intended benefits of the investment.
User satisfaction measurement: to measure to what extent investments are contributing to improve the experience of users with public services and meet user expectations.
When implemented as part of an integrated investment framework, these elements can support governments in making more impactful investments in their digital future.
The IOF provides a way for the DTA to support the Australian Government in managing its digital transformation – from planning through to implementation and the realisation of expected benefits (DTA, 2025[4]). Launched officially in 2021, the IOF represents a framework for managing digital and ICT investments across their lifecycle.
The six ‘states’ of the IOF for an end-to-end framework across the project lifecycle
Source: Provided by the Digital Transformation Agency, 2024.
The IOF is structured across six functions – referred to by the Australian Government as ‘states’ – that cover the entire lifecycle of these investments, including the (DTA, 2025[4]):
Strategic Planning state: that identifies the long-term investment horizon in engagement with agencies, which is used to plan and identify gaps and opportunities.
Prioritisation state: that is used to score and rank proposals against six criteria based on alignment with Government and strategic objectives and impactful investment.
Contestability state: that is used to consult with agencies to ensure that their proposals are robust and align to the set of policies and standards for digital and ICT projects.
Assurance state: that is focused on successful delivery, with several oversight and escalation measures tailored to the size and priority of the investment.
Sourcing state: to ensure value-for-money through several dynamic purchasing and framework agreements for digital and ICT products and services.
Operations state: data collection on digital and ICT investments to inform decision-making and ensure effective monitoring of these investments across the public administration.
While agencies do often interact with the states of the IOF sequentially as part of the budget process, they are not necessarily linear. Agencies may move back-and-forth between states or engage with the DTA at different stages of the investment lifecycle (e.g. for larger, multi-year digital transformations where future funding is sought for new projects as each, smaller digital project is completed).
The DTA manages the IOF within its mandate for digital and ICT investments, which includes its responsibilities to (Australian Government, 2021[5]):
provide strategic and policy leadership on whole of government and shared ICT investments and digital service delivery.
develop, deliver and monitor whole of government strategies, policies and standards for digital and ICT investments, including ICT procurement.
manage strategic coordination and oversight functions for digital and ICT investments across the project life cycle, including providing advice on whole of government reuse opportunities.
manage whole of government digital procurement to simplify processes for government agencies, reduce costs and generate reuse opportunities.
provide advice to the Minister on these investment proposals.
In these ways, the DTA’s role is to ensure the Australian Government's digital investments are strategic, efficient, and aligned with strategic objectives. As the coordinating body at the national level for digital government, it oversees the planning, implementation, and management of government digital initiatives, fostering collaboration among agencies for a more cohesive digital transformation. This has been complemented by the DTA’s position within the Department of Finance portfolio, which has imbedded the agency more closely into the operations of central government agencies and their advice to Cabinet on the investment proposals going to Cabinet for consideration in the budget process. Further, the IOF has received bipartisan political support for the role that DTA plays in providing strategic investment advice to Government, which demonstrates its value and has helped to embed the IOF into the budget process.
The DTA also develops and enforces standards for digital services, prioritising user experience, cost efficiency, and risk minimisation. It advises the government on long-term investments, offering critical guidance on planning and resource allocation. Through oversight and performance measurement, the DTA is focused on ensuring projects deliver value and align with national digital policies. By embracing new technologies like AI, it enhances productivity and modernises operations, making services accessible, efficient, and citizen-focused. Agencies must also consult the DTA during proposal development to ensure compliance and readiness before government review.
Within the context of the OECD’s framework, it is possible to see how the DTA has aligned tools and processes to create a forward-looking and end-to-end governance model to better manage Australia’s digital government investments (see Figure 2.3). Under the Strategic Planning pillar, the Strategic Planning and Prioritisation states ensure alignment with the Government’s strategic objectives, as well as the processes for agencies to work with the DTA to assess the risk and articulate the value proposition of their investment proposals. Under the Coherent Implementation pillar, Contestability supports robust processes around the approval and funding of digital projects, while Sourcing provides the public procurement mechanisms to help deliver them. Then under the Comprehensive Oversight pillar, the Assurance and Operations states provide the monitoring, accountability, and evaluation required to ensure the successful delivery of digital projects. Finally, the Benefits Management Policy (see Box 2.1) provides the policy guidance required across the IOF to ensure that digital investments deliver the intended benefits and outcomes for which they were approved and funded.
How the states of the IOF map to the pillars of the OECD’s framework for integrated investments management
Source: Author’s own design.
The Australian Government undergoes an annual budget process to allocate public resources to its policy priorities. The process starts with Portfolio Ministers preparing their annual Portfolio Budget Submissions with the assistance of their responsible agencies, including to draft and cost the specific policy proposals that make up the submission, which is done in consultation with the Department of the Prime Minister and Cabinet, the Department of Finance, the Department of the Treasury, and the DTA in the case of digital and ICT proposals. These proposals are then submitted to the Cabinet for consideration and decision-making by its Expenditure Revue Committee (ERC) – composed of the Prime Minister, Treasurer, Minister of Finance, among other selected portfolio ministers. Once the ERC has made its decisions and the broader Cabinet has given its endorsement, the proposals become budget measures that are then submitted to Parliament in May of each year (Parliamentary Budget Office, 2023[6]).
Within six months, the Government prepares a Mid-Year Economic and Fiscal Outlook (MYEFO) to provide an updated Budget position based on its actual expenditure against what had been estimated, as well as any changes to economic conditions. At this stage, Portfolio Ministers can also propose new or amended policy proposals following the same process – but only where the proposal is urgent and unavoidable, i.e. where they cannot wait for the next annual budget process (Department of Finance, 2024[7]).
Source: (Department of Finance, 2024[7])
Within this budget process, agencies will need to engage the DTA on any investment proposal being considered that is either for a digital or ICT solution, or broader policy proposal with a component of digital or ICT investment. This is done through the IOF, which sees agencies interact with the DTA during:
Strategic Planning state (pre-budget phase): to develop their investment plans for stronger horizon planning for new digital and ICT solutions or to update or replace existing systems.
Prioritisation state (pre-budget phase): to work with the DTA and an external ‘Moderation group’ to determine the priority of their proposals in the investment pipeline, based on alignment with the missions of the Data and Digital Government Strategy and readiness of the agencies to deliver.
Contestability state (budget phase): to ensure that proposals being submitted to Cabinet are robust via the Digital Capability Assessment Process (see Box 5.2) and ICT Investment Approval Process (see Box 5.3) for investments above the cost and risk thresholds.
Assurance state (implementation phase): to implement a system of assurance with the DTA to ensure that digital and ICT projects have the right governance and oversight for successful delivery. The DTA will also work with agencies to identify and remediate issues in the delivery of projects.
Sourcing state (implementation phase): to use the whole-of-government procurement arrangements to achieve value-for-money outcomes for their digital and ICT investments.
Operations state (end-to-end): to report data regularly back to the DTA to inform analysis of key trends, challenges and opportunities across the IOF to support better decision-making.
In addition to supporting agencies with the development of their proposals and assuring the successful delivery of their resulting projects, there are also now strong linkages with the Government during the budget process across the states of the IOF, particularly with the:
Integrated Digital Investment Plan, as part of Prioritisation, to identify the pipeline of proposed longer-term digital and ICT investments across the public administration.
Digital Investment Overview, also as part of Prioritisation, to provide view for ERC of proposals by portfolio with scores based on strategic alignment and delivery readiness.
advice to ERC, as part of Contestability, on the strength of digital and ICT investment proposals, including their compliance with digital and ICT policies and standards.
reporting on the state of the digital and ICT investment portfolio as part of Assurance, including for projects at risk or requiring remediation.
As in many countries, the strategic importance of Australia’s digital and ICT investment portfolio is therefore clear. Since its official launch in 2021, there have been over 300 digital and ICT proposals that have been assessed under the IOF – with 90 proposals alone coming forth under the 2023-24 Federal Budget for a combined value of over AUD 2 billion (DTA, 2023[8]). Leveraging this information, the DTA plays a central role in providing strategic advice to Government and agencies on the investment required to modernise systems, drive efficiencies, and to transform the way government delivers services.
However, it should be noted that the IOF only applies when agencies are seeking new funding from the Government for the digital or ICT proposals. It therefore does not currently cover any digital or ICT projects undertaken by agencies through their annual allocations for operational expenditure, unless it would require an agreement from ERC and Cabinet.
The DTA and the Department of Defence are also applying the IOF in a way that avoids duplicating Defence’s established, comparable and effective strategic planning and decision-making process under the Defence Integrated Investment Program (IIP) or the application of standards and policies compromising warfighting or coalition requirements. The Office of National Intelligence is also tailoring the IOF by using existing policies and governance processes in place in the National Intelligence Community to lead the provision of advice to the Australian Government for Top Secret digital and ICT-enabled proposals across the life cycle, including assurance, for Top Secret proposals seeking funding outside Defence’s process.
By engaging in the IOF in these ways, the DTA and agencies work together to create an end-to-end framework providing a way for the DTA to support the Government to manage its digital and ICT-enabled investments across their lifecycle - from early planning through to project delivery and realisation of planned benefits.
An effective management of digital government investments is an essential enabler for digital government policymaking. The OECD Digital Government Index (DGI) assesses the efforts made by governments to establish the foundations necessary for a digital transformation of the public sector that is coherent and human-centred, including capabilities to manage investments in digital government (OECD, 2024[9]). The DGI includes 20 metrics that consider various policy levers, processes and practices across the investment lifecycle that were considered by OECD member and partner countries as key indicators of maturity in managing digital government investments, when working with the OECD to develop the DGI.
In the 2023 iteration of the DGI, the Australian Government scored 67% for its overall approach to managing digital government investments, compared to the OECD average of 52%. However, the Australian Government scores consistently higher than the OECD average on 15 out of the total 20 metrics, with only the metrics related to having a GovTech function not providing any scores towards its overall total. The OECD therefore considers the Australian Government to perform as a leader amongst the OECD on the topic of digital government investments.
The overall DGI results are shown according to the pillars of the OECD Digital Government Investment Framework below in Figure 2.5 below, with more detailed figures in the sections that follow.
The key metrics of the 2023 DGI for digital government investments, Australia vs. the OECD average
Source: Based on findings from the 2023 DGI from data collected between January 2020 to October 2022
While Australia is relatively strong on the topic of digital investment, the 2023 DGI highlighted that are opportunities for the Government to further mature its approach, including by:
assessing environmental impacts of digital and ICT investments at the value proposition stage.
considering environmental impacts in the risk assessments of digital and ICT investments.
using more innovative procurement approaches (e.g. GovTech or design contests)
developing a dedicated function for GovTech collaborations with other sectors.
publishing publicly-available data on the progress of digital and ICT projects.
evaluating the environmental impact specific to digital and ICT investments.
However, it should be noted that the 2023 DGI was based on data collected between January 2020 to October 2022 and does not account for measures taken since that period. For examples, the DTA has already made progress on these area by publishing publicly-available data on the progress of digital and ICT projects in the form of the Major Digital Projects Report in 2025 (Australian Government, 2025[10]).
While the DGI measures the maturity of certain practices across the investment lifecycle, the integration between these practices is not reflected in Australia’s scores. The strength of the IOF is therefore in having a genuine whole-of-government approach to managing investments end-to-end, including with robust processes, policies, and tools to support agencies across the investment lifecycle, and as a mechanism for policy implementation and benefits realisation.
Whole-of-government approach to managing investments
As discussed in the previous section, the IOF is a strong example of a whole-of-government approach to managing digital or ICT investments end-to-end across their lifecycle. Aligning to the 3 pillars of the OECD’s Digital Government Investment Framework (see Figure 2.3), the states of the IOF cover the strategic planning, coherent implementation, and monitoring and oversight required to ensure benefits realisation. By having these touchpoints with agencies and their investments throughout their lifecycle, DTA supports the Australian Government in a strategic way to ensure that key digital and ICT investments deliver intended benefits and value-for-money in alignment with its policy objectives.
Robust processes, policies, and tools across the investment lifecycle
The DTA has developed robust processes, policies, and tools to support agencies through the IOF. With touchpoints across the investment lifecycle, they help agencies to understand strategic and policy requirements, develop and deliver on robust investment proposals, and ensure that projects are delivered in a way that is cost-effective and impactful. These are described by the OECD as the IOF Toolkit:
Mechanism for policy implementation and benefits realisation
The OECD Digital Government Investment Framework highlights the role that an end-to-end approach can have in successful policy implementation and benefits realisation. By taking an end-to-end approach to strategically planning, implementing, and overseeing digital government investments, governments can leverage these processes to consider, align, and implement key policy and strategic objectives. This can be done both as hard policy measures that mandate that compliance or alignment be demonstrated as part of funding decisions, but also through softer policy levers – like standards and guidance – to give agencies a framework to guide their thinking and help them understand how to align. In the same way, this oversight over the investment lifecycle ensures that investments deliver the intended benefits and outcomes for which they were originally approved and funded to deliver.
To achieve this, the DTA uses the IOF to ensure that agencies are aligning with the Data and Digital Government Strategy (see Box 3.1) the Australian Government Architecture (see Box 3.2), and the digital and ICT policies and standards (see Box 5.1) to maximise the impact of investments – with alignment considered in each of the Strategic Planning, Prioritisation, Contestability, and Assurance states to maintain touchpoints throughout the investment lifecycle.
Additionally, the DTA’s Benefits Management Policy (see Box 2.1) outlines how benefits should be managed across the government's digital and ICT portfolio, providing a consistent approach to achieve successful outcomes. This policy outlines how benefits management be approached across 5 key phases: Identify, where agencies determine potential benefits; Analyse, which involves assessing the feasibility and value of these benefits; Plan, where detailed strategies for achieving benefits are developed; Monitor and Realise, focusing on tracking progress and ensuring benefits are delivered; and Review, which involves evaluating the outcomes and lessons learned to improve future benefits management. However, while the lifecycle is represented as sequential, the DTA also advises that many activities are repeated throughout the lifecycle – reflecting its iterative nature (DTA, 2024[11]). These phases are mapped out against the phases of Budget cycle and the IOF in Figure 2.6:
Source: (DTA, 2024[11])
The DTA’s BMP was developed to ensure effective management of benefits from digital and ICT-enabled investments. It outlines how benefits should be managed across the government's digital and ICT portfolio, providing a consistent approach to achieve successful outcomes.
The policy
The BMP has 8 policy statements that outline effective benefits management practices, which are based on the expertise and research of internationally recognised leaders, as well as contributions from Australian federal, state, and territory government agencies, and the DTA. They include:
Benefits are aligned to strategic objectives.
Agencies that deliver projects adopt a benefits-led culture and approach to change.
Benefit dependencies are explicitly understood and recorded.
Benefits are measurable and evidence based.
Benefits are integrated into a project’s governance approach.
Benefits are integrated into performance management.
Benefits are owned by business units and not by the project.
Benefits management activities are integrated into project management activities.
The standard
Building on these policy statements, there are 4 defined criteria that are used primarily in the Contestability state of the IOF for agencies to demonstrate that they have sound benefits management approaches in place and can clearly articulate expected benefits of an investment proposal, including:
Criterion 1: The proposal has documented benefit dependencies and how individual benefits contribute towards strategic objectives.
Criterion 2: The proposal has identified specific and measurable benefits and documented baseline and target measures.
Criterion 3: The proposal details fit for purpose governance arrangements that incorporate benefits management.
Criterion 4: The proposal is supported by a suitable Benefits Realisation Plan.
The guidance
To support the BMP’s implementation, it is also accompanied by guidance to help agencies comply with the policy. This includes helping to understand the key concepts of the BMP, how to align processes to the policy requirements, how to apply best practices to achieve successful outcomes, and to monitor and report on benefits to ensure that they are realised as intended in the planning stages of a proposal.
The process
Finally, the BMP outlines 5 key phases: Identify, where agencies determine potential benefits; Analyse, which involves assessing the feasibility and value of these benefits; Plan, where detailed strategies for achieving benefits are developed; Monitor and Realise, focusing on tracking progress and ensuring benefits are delivered; and Review, which involves evaluating the outcomes and lessons learned to improve future benefits management.
Source: (DTA, 2024[11])
As the DTA looks to further develop the IOF, there is an opportunity to improve agency buy-in and further mature the framework by improving its user experience, with better integration, data flows, and relationship management. This could help to elevate the role of the DTA as a strategic partner for digital and ICT with more active engagement involvement in determining the feasibility of digital and ICT proposals, fostering innovation, and providing diverse funding options to help de-risk the delivery of digital and ICT projects.
Improving UX through greater integration, data flows, and relationship management
While it is a strong model for managing investments, both external and internal stakeholders raised that there could be improvements to the UX of the IOF through greater integration, data flows, and relationship management. Part of the challenge that the IOF faces is that its iterative development has meant that processes, templates, tools and policies have often been developed separate from each other – with the different states of the IOF becoming siloes due to limited capacity, missing links in the workflows, and manual data entry. Stakeholders raised that this created friction points for both the internal and external user of the IOF, with the use of PDF forms, the same information being asked repeatedly, and a limited view of the interactions an agency has with the DTA across the touchpoints of the IOF. The DTA is working to address this through the development of the Integrated Data Platform (IDP), which is a case management solution that aims to provide a ‘single view of the customer’ with integrated data and a record of communications, so that different teams are sharing and working off the same information (see Box 8.2). The DTA should therefore continue these efforts towards a more integrated and user-friendly IOF.
However, while the IDP will make significant progress, it is unlikely that the platform will solve the problem entirely and there could be benefit in also investing in the human element of the IOF. Stakeholders raised that there could be additional efforts to improve communication with agencies with more formalised and strategic communication plans that consider the size, complexity, and risk profile of the agency or portfolio. Additionally, some internal stakeholders suggested that one option could be to restructure the teams supporting the IOF to have a horizontal approach (having teams with representation across the IOF states) focussed on particular portfolios.
Another option would be to instead have relationship managers assigned to specific portfolios that could work with teams across the IOF for proactive engagement and a more seamless experience, whose role would be to execute on the communications and engagements strategies with the portfolios and shepherding them through the IOF, with the subject matter expertise to be retained within each of the states of the IOF to perform each of the assessments or functions required at each state to enable capacity within the teams to address the requirements in each state. This could potentially as part of the Operations role in enabling the function of the IOF.
Further elevating the role of DTA as strategic partner for digital transformation
While the IOF is well-established and integrated into the standard budget process, internal stakeholders highlighted an opportunity to elevate the role of DTA as a more strategic partner for digital and ICT investments – becoming more active in determining the feasibility of proposals, fostering innovation, and providing diverse funding options to take the pressure off the rigid budget process. These stakeholders have raised that there could be more done to determine the feasibility of projects in Prioritisation (see Chapter 4); different pathways for urgent, unforeseen, and internally-funded projects in Contestability (see Chapter 5); more active and early assessment of the feasibility of projects in Assurance (see Chapter 6); as well as the opportunity identified through the 2023 OECD DGI that GovTech could be a useful tool for piloting and iterating digital or ICT projects at the Sourcing state (see Chapter 7). However, while they saw value in this, some external stakeholders also raised that there would be benefit in DTA first optimising what it currently delivers through the IOF before further expanding its role.
To support an elevated role, there could also be an opportunity for the Australian Government to provide more diverse funding options as an alternative to the existing budget process, which could also help to de-risk the delivery of digital and ICT projects with more agile delivery and closer oversight. The funds could also help to reduce the peak periods and resource constraints that the DTA faces in the pre-budget cycle. Having more diverse funding mechanisms available could help to address the number of funding proposals that are ‘rushed through’ the process to make it in a budget cycle and instead encourage agencies to work together more collaboratively with the DTA on closer alignment with the DDGS and the AGA, as well as stronger practices regarding the design, delivery, and assurance of digital and ICT projects. Further, external stakeholders also raised a need to have greater consideration on how to alleviate funding pressures posed by needing to sustain legacy systems while also working to upgrade or replace them.
Therefore, similar to other digital agencies in the OECD (see Box 2.2), one option could be for the DTA to administer these funds as a way to foster innovation, strengthen strategic oversight, improve delivery confidence, and reduce the size of individual digital and ICT investments. The funds could be established with additional funding allocated to the DTA based on the idea that it would deliver a more cost-effective investment portfolio, or also explore what other OECD member countries are working on in terms of a fee model or returning an efficiency dividend back into consolidated revenue.
Alternatively, the funds could be administered elsewhere within the Australian Government, with the DTA instead providing advice to the Government in the Prioritisation and Contestability states, and the evaluation of the resulting pilots in the Assurance state. This would align the pilots to the existing treatment of funding proposals that go through the IOF and enable the DTA to maintain more of an oversight role, if it is determined that should be a more appropriate role for the DTA to play through the process.
Generally, in addition to encouraging more projects, the countries in Box 2.2 noted that their funds help to foster more innovative and agile projects and strengthen oversight over digital and ICT investments.
Denmark’s co-financing to explore potential uses of technology
Between 2020 and 2024, the Danish Government allocated around DKK 290 million (EUR 40 million) to two different funds providing grants to public sector innovation projects. The first (around DKK 190 million) focused on pilots of AI solutions to solve societal problems, with a focus on upholding the security and ethical use of citizen data. The second fund is dedicated to proposals for scaling the use of new technologies – including AI – to reduce CO2 emissions or mitigate the consequences of climate change and other societal challenges. Agencies apply directly to access these funds. Applications are then evaluated jointly by the Agency for Digital Government, Danish Regions (association of the five regions), and Local Government Denmark (association of the 98 municipalities) to determine their strength against the intent of the funds.
France’s co-financing to accelerate the digital transformation of public sector
France also has two co-financing funds that are used to accelerate the digital transformation of public sector. The first (FTAP) is available to fund both large-scale investments (above EUR 9 million) and medium-scale investments through open or thematic fund application. However, it staggers the funding to ensure agile and iterative delivery of projects with 6-monthly checkpoints with the agency that administers the fund. The second fund (FAST) is instead available to intrapreneurs within the French public administration that have an innovative pilot that is ready to be scaled. In addition to providing half the funding, both funds require agencies to quantify the expected impact or efficiency gain of the projects, with a percentage of this to be returned to the budget. The funds also enable stronger oversight over the delivery of these projects to ensure they realise their intended benefits.
Norway’s co-financing of small-to-medium-sized digitalisation initiatives
Norway has also developed funding mechanisms to support digital government investments. The Co-Financing Scheme for new, small-to-medium-sized digitalisation initiatives was established in 2016 under Digdir with an estimate budget of NOK 140 million (EUR 12 million). This mechanism was designed to fund investments between NOK 10-100 million (EUR 800k – 8.5 million) with a maximum contribution period of three years. Public sector institutions benefiting from this instrument are required to contribute a minimum of 50% of the investment funding. Project are selected according to a separate procedure based on considering both quantifiable and non-quantifiable impacts. This impact is quantified as a net financial benefit – 50% of which agencies agree to return to the budget.
Sweden’s fee and reimbursement model for digital public infrastructure
In Sweden, the Agency for Digital Government (DIGG) works under the Ministry of Finance to co-ordinate the digitalisation of the public administration and manage its digital public infrastructure (DPI), like digital identity and digital post. To fund these DPIs, it has established a fee and reimbursement system whereby public sector actors pay transaction fees to use the solutions. The fees are then used to pay the service providers and to cover the costs for DIGG in managing the solutions. Providers then receive a fixed basic payment, and a variable payment based on the number of transactions (paid once a provider reaches a threshold of transactions). This model aims provide enough funding to attract suppliers for greater competition, while also ensuring that it remains cost-effective for all parties.
Source: (DIGG, 2025[12]; Digitaliseringsministeriet, 2022[13]; Digitaliseringsministeriet, 2025[14]; DITP, 2024[15]; beta.gouv.fr, 2024[16]; Digdir, 2024[17])
References
[10] Australian Government (2025), Major Digital Projects Report, https://www.digital.gov.au/sites/default/files/documents/2025-03/2025%20Major%20Digital%20Projects%20Report.pdf.
[5] Australian Government (2021), C2021G00267 - Order to identify the Minister responsible for the Digital Transformation Agency, and to Specify Functions for the Digital Transformation Agency, https://www.legislation.gov.au/C2021G00267/latest/text.
[16] beta.gouv.fr (2024), Le Fonds d’accélération des Startups d’État et de Territoire (FAST), https://beta.gouv.fr/fast/s%C3%A9lection.
[7] Department of Finance (2024), The Budget Process, https://www.finance.gov.au/government/federal-budget/budget-process.
[17] Digdir (2024), Medfinansieringsordninga, https://www.digdir.no/finansiering/medfinansieringsordninga/1964.
[12] DIGG (2025), Fees and reimbursements in authorisation systems, electronic identification and digital mail, https://www.digg.se/digitala-tjanster/auktorisationssystem/avgifter-och-ersattning-inom-auktorisationssystem-elektronisk-identifiering-och-digital-post.
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[2] OECD (2024), “Governing with Artificial Intelligence: Are governments ready?”, OECD Artificial Intelligence Papers, No. 20, OECD Publishing, Paris, https://doi.org/10.1787/26324bc2-en.
[3] OECD (forthcoming), OECD Digital Government Investment Framework.
[6] Parliamentary Budget Office (2023), Factsheet: Overview of the Budget Process, https://www.pbo.gov.au/sites/default/files/2023-03/PBO%20Fact%20sheet%20-%20Overview%20of%20the%20Budget%20Process.pdf.