IMF criticises UK economic strategy; Australia’s Digital Transformation Agency in trouble: policy & delivery news in brief

By on 29/09/2022 | Updated on 29/09/2022
UK chancellor Kwasi Kwarteng. Photo by Kyle Heller / No 10 Downing Street via Flickr

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IMF urges UK government to reconsider economic strategy

The International Monetary Fund has taken the unusual decision to openly criticise the UK economic policy introduced by new prime minister Liz Truss and chancellor Kwasi Kwarteng, after it alarmed investors and sent the pound to an all-time low.

Truss, the Conservative Party leader who became PM on 6 September, campaigned for the role on a plan for tax cuts and deregulation in a bid to encourage economic growth after years of stagnation.

Among the tax changes in Kwarteng’s plan was the removal of 45p top tax rate for high earners. Other measures in the statement included help for citizens and business owners with their energy bills, which are set to hit record high. Overall, the package requires an additional £72bn (US$77.2bn) in government debt issuance in this financial year alone.

“Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” an IMF spokesperson said. “We are closely monitoring recent economic developments in the UK and are engaged with the authorities.”

The IMF has concerns about the plan’s potential to worsen inequality and said a fiscal update due from Kwarteng on 23 November would provide an “early opportunity for the UK government to consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high-income earners”.

Following the financial unrest sparked by news of the government’s plans – which saw investor confidence freefall, causing the pound to drop to US$1.0327 on Monday – the Bank of England promised a “significant” response to stabilise the economy, and said it would not hesitate to raise interest rates if necessary.  

The government is under significant pressure from economists, executives and investors to scrap the plans but said it is “confident” its economic strategy will work.

Read more: UK cabinet secretary accused of ‘failing to stand up for the values of the civil service’ as PM removes Treasury chief

Damning audit of Australia’s Digital Transformation Agency casts doubt over its future

A report by the Australian National Audit Office (ANAO) has found that procurements by the country’s Digital Transformation Agency (DTA) have been a failure, adding ammunition to calls for the flailing agency to be wound down.

The report, which was released last week, found that all of the nine ICT-related services procurements it examined had been ineffective. The sample did not include whole-of-government IT purchasing arrangements.

The ANAO said that while the DTA had established a procurement framework, its implementation and oversight had been “weak”, “its approach fell short on ethical requirements”, and that it had not followed its own internal policies and procedures.  

Its recommendations included the DTA reviewing its risk-management framework; updating guidance around potential fraud risks; reviewing its approach-to-market, tender-evaluation and contract-management processes; improving management and internal payment controls; and improving the education and training opportunities available to staff.  

The boutique technology agency founded by former prime minister Malcolm Turnbull was supposed to transform the public sector by breaking the highly restrictive government procurement process blamed for stifling innovation and favouring big incumbent suppliers. However, it has seen a string of senior resignations and faced repeated questions over its effectiveness.

Following the publication of the report, the DTA’s new chief executive Chris Fechner promised improvements. “The DTA accepts all identified opportunities for improvement and agrees with each of the eight relevant recommendations proposed in the review,” he said, adding that the agency had “already set to work” on addressing them.

Finance and public service minister Katy Gallagher described the ANAO’s findings as “very concerning”.

“I take these matters very seriously and will closely monitor the way the DTA addresses these audit recommendations to ensure that the processes and behaviours that have been highlighted in this report are cleaned up and won’t happen again,” she told The Mandarin.  

Read more: Surprise resignation of Australia’s digital chief, Paul Shetler

Indian government must address ethics of artificial intelligence in education ‘as utmost priority’

The United Nations education agency has called on the Indian government to take a host of actions to boost public trust and understanding in the use of artificial intelligence in education.

In its annual report on the state of education in the world’s largest democracy, The United Nations Educational, Scientific and Cultural Organization (UNESCO) focused on the potential role for AI in schools. India’s 2020 National Education Policy has called for increased technical knowledge at all levels of education, including the integration of AI to promote quality and skill-based education.

UNESCO said that the use of AI had “endured various misconceptions”, and highlighted that AI could have a number of positive uses in the Indian education system. These included using intelligent tutoring systems to conduct assessments, track learning progress and provide regular individual feedback, and the development of smart schools and universities to deliver quality content to remote locations using AI techniques like facial and speech recognition alongside augmented and virtual reality.

Read more: India launches one-stop AI portal

However, its recommendations called for an increased focus on improving trust in artificial intelligence. In particular, the review called on the government to “consider the ethics of artificial intelligence in education as an utmost priority” as well as rapidly providing “an overall regulatory framework for artificial intelligence in education”.

Other recommendations in the report included a need to improve public trust in artificial intelligence, with options including more work by government to expand AI literacy efforts, and attempting to correct algorithmic biases and the resulting discrimination.

The recommendations come as the Indian government aims to improve its digitisation in a host of areas through its Digital India programme, which is intended to transform the country into a digitally empowered society and knowledge economy.

Read more: Artificial intelligence in the public sector: an engine for innovation in government… if we get it right

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About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

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