Digital Priorities for Government & Industry Leaders under a new parliamentary term
The return of the Albanese government with an increased parliamentary majority signals both continuity and acceleration in Australia's digital transformation agenda. For those working within or alongside government - whether as Senior Executives or external specialists - this new term brings both opportunities and evolving expectations that will reshape how digital initiatives are delivered across federal agencies.
This strengthened mandate comes at a critical juncture for government technology. The lessons from major digital initiatives during the first term, alongside global advances in areas like artificial intelligence and cybersecurity, are driving a more sophisticated approach to technology deployment and capability building. Budget allocations reflect continued commitment to digital transformation, but with increasing emphasis on sustainable skill development and whole-of-government solutions.
In this article, we explore what these shifts mean for both sides of the public-private partnership that drives government innovation. We examine the changing landscape of digital priorities, procurement considerations, and the increasingly important dynamic of knowledge transfer between specialised contractors and the public service. For managers in Government Departments and IT specialists alike, understanding these evolving expectations will be essential for navigating successful outcomes in this new term of government.
Photo by Gerda
Digital Transformation Priorities
The Albanese government's strengthened mandate appears to be accelerating several digital transformation priorities that were initiated during their first term. The Australian Government’s digital transformation priorities for 2025 focus on delivering simple, secure, and connected public services through world-class data and digital capabilities. Some key areas of focus include:
Modernising Public Services: Enhancing digital platforms to improve accessibility and efficiency for citizens and businesses.
Cybersecurity & Data Protection: Strengthening security measures to safeguard sensitive government and citizen data.
Artificial Intelligence & Automation: Exploring AI-driven solutions to streamline government operations and service delivery.
Digital Identity & Verification: Expanding the use of Digital ID to simplify interactions with government agencies.
Major Digital Projects: Overseeing 110+ digital initiatives aimed at improving public sector efficiency and transparency.
Open Data & Analytics: Leveraging data-driven insights to enhance policy-making and service delivery.
The Digital Transformation Agency (DTA) plays a central role in guiding these efforts, ensuring that technology investments align with the government’s broader strategic goals. Contractors should anticipate opportunities in all these areas, particularly those requiring specialised expertise in secure-by-design implementations, identity management, and responsible AI deployment.
Skills and Resource Focus
The shift of expertise from specialised contractors to the Australian Public Service (APS)is a key priority in the government's digital transformation agenda. The Albanese government’s second term places renewed emphasis on building sustainable digital capability within the APS, ensuring agencies have the skills and resources necessary to deliver modern public services.
While the government remains committed to reducing reliance on private consultants, it acknowledges the importance of targeted external expertise to support highly specialised projects. This approach balances the immediate need for specialist skills with the long-term goal of strengthening in-house capability, ensuring the APS is well-equipped for future digital challenges.
A successful knowledge transfer roadmap will likely require:
Structured knowledge transfer requirements: Future contracts may increasingly specify formal knowledge transfer mechanisms, with contractors expected to document processes, conduct training sessions, and mentor public service staff. This represents both a challenge and an opportunity for consultants who can position themselves as capability builders rather than just service providers.
Embedded teams and collaborative models: Rather than separate contractor and APS workforces, we're seeing more integrated team structures where contractors work alongside public servants, facilitating organic knowledge transfer. Consultants who can demonstrate successful collaboration models will be well-positioned.
Phased capability building: Realistic roadmaps must acknowledge that capability building is a multi-year effort. Smart agencies are developing staged approaches where contractors initially lead complex initiatives while progressively transferring responsibility as internal capabilities mature.
Centres of Excellence: Some agencies are establishing internal centres of excellence in key domains (cloud, data, AI), staffed by a mix of experienced public servants and contractors, creating knowledge hubs that can serve multiple projects.
Retention challenges: Knowledge transfer efforts are complicated by competition for digital talent. Government salary bands often can't match private sector offers, creating retention challenges that extend the timeline for capability building and require creative approaches to career development and work arrangements.
Consultants who can articulate how they contribute to long-term capability building - rather than just delivering immediate outcomes - are likely to find favour in this environment. This may require rethinking business models that have historically relied on maintaining dependency relationships with government clients.
What this means for Managers within Federal Government Departments
APS managers face a shifting landscape that requires new competencies beyond traditional public service management. Procurement literacy is becoming an essential skill as managers must navigate complex IT acquisition processes while adhering to government procurement policies that emphasise value for money, Australian industry participation and proper risk management. Budget constraints continue to create tension between the need for specialised external resources and fiscal responsibility. Many departments face limitations on contractor headcount or total expenditure, requiring creative approaches to resource planning and allocation. This may include blended teams or strategic use of shorter engagements focused on knowledge transfer rather than long-term dependency.
Equally important is developing sufficient technical literacy to effectively leverage whole-of-government platforms rather than pursuing siloed solutions. The DTA's platform strategy offers opportunities to accelerate digital initiatives while reducing costs, but only if managers understand what capabilities exist and how they can be applied to agency-specific challenges.
Managers will need to invest time in understanding these platforms and their governance frameworks to avoid duplication of effort. Similarly, AI governance and implementation frameworks are rapidly evolving, and forward-thinking managers should educate themselves on both the potential applications and ethical considerations of AI in their domain. This knowledge will position them to identify high-value use cases for early trials rather than pursuing AI projects primarily for their novelty. The most successful APS managers will become "translators" who can bridge policy objectives with technical possibilities, working effectively with both internal teams and external specialists.
What this means for External Specialists
The era of remote specialists delivering solutions with minimal interaction with APS staff is likely waning. External consultants and contractors should expect increased requirements for on-site presence, co-location with government teams, and active participation in knowledge sharing activities. Framework contracts may increasingly include explicit knowledge transfer clauses requiring documentation, training development, and mentoring of APS staff. Specialists who view this as an imposition rather than an opportunity may find themselves at a competitive disadvantage compared to those who embrace a capability-building mindset.
This shift creates both challenges and opportunities for specialists. On one hand, they must balance protecting their intellectual property and competitive advantage with meeting client expectations for knowledge transfer. On the other hand, those who can position themselves as true capability partners rather than just service providers may build deeper, more sustainable client relationships. Successful specialists will develop explicit methodologies for knowledge transfer that go beyond simple "shadowing" to include structured learning pathways, well-documented procedures, and measurable capability improvement targets. They may need to develop new skills themselves – particularly in coaching, mentoring, and training – to fulfil these expectations effectively. The most valuable external specialists will be those who can demonstrate not just technical excellence but also the ability to elevate the capabilities of the teams they work with, creating lasting impact beyond their direct deliverables.
These evolving expectations also suggest that specialists should consider which aspects of their expertise represent their true competitive advantage versus which elements can be shared more openly. By focusing their distinctive value on leading-edge capabilities while helping build government capacity in more established domains, specialists can continue to differentiate themselves while supporting government's capability objectives.
Conclusion
As the Albanese government embarks on its second term with an expanded mandate, the digital transformation agenda is evolving to emphasise sustainable capability building within the APS while still leveraging specialised expertise from external contractors. The government's strategic focus on modernising public services, strengthening cybersecurity, and harnessing AI-driven efficiencies presents both opportunities and challenges for federal departments and industry specialists alike.
For APS managers, success will depend on developing procurement literacy, navigating budget constraints, and embracing whole-of-government digital platforms to maximise efficiency. Meanwhile, external specialists will need to adjust to new expectations - collaborating more closely with public servants, engaging in structured knowledge transfer, and redefining their role as capability builders rather than long-term service providers.
Ultimately, the future of digital transformation in the public sector will hinge on effective partnerships, strategic resource planning, and the ability to balance innovation with sustainable skill development. Those who adapt to these shifting dynamics will be well-positioned to drive impactful digital initiatives in this next phase of government reform.
Ready to navigate the evolving digital priorities and position your organisation for success? Reach out to Arteri to co-design strategies that build capability, foster innovation, and drive impactful transformation. Contact us.