Australia will set up a A$500 million (US$374 million) fund for public sector productivity and innovation, it announced yesterday in its 2016 Budget.

The fund will support efficiency initiatives in the government, such as automation of public services and business re-engineering.

It will be financed from reductions in agency costs and re-investment of these savings.

Australia will increase focus on innovation, modernisation of public services, and efficiency gains from digital transformation, 2016 budget papers said. “The Government will be an exemplar in how it invests in and uses technology and data to better deliver quality services faster and at a lower cost,” it added.

The Australian Taxation Office, for instance, is projected to save A$21.8 million (US$16.3 million) over the next four years by promoting digital services, reducing the number of standalone service centres, and opening more processes for scrutiny.

Separately, the Digital Transformation Office (DTO) – set up by Prime Minister Malcolm Turnbull – has been given A$18.8 million (US$14 million) over five years to build a digital marketplace to simplify government procurement. The service will make it easier for SMEs and startups to deliver digital services to government.

“Large scale ICT projects will be broken into individual components to allow more innovative solutions,” the budget papers added.

The government also announced a joint taskforce to improve its myGov service – a single sign-in to access a range of government services, including tax, social security and health.

The service has been plagued by errors since its launch in 2013, with users complaining of outages and being locked out of their accounts.

The joint team will include the DTO, Department of Human Services, Department of the Treasury and Department of the Prime Minister and Cabinet.

The team will get A$5.4 million (US$4 million) to identify future improvements to the service. They will look at the technology supporting myGov, its delivery and management, user frustrations, and whether it is consistent with the government’s Digital Service Standard.