Digital Transformation Minister Angus Taylor says the Government will spend nearly $10 billion on IT this financial year.

Public service and military IT spending has erupted from $6.7 billion in the 2014-2015 financial year to $9.3 billion in 2015-2016, with another $300 million growth forecast this year.

Mr Taylor says it is a correction after years of neglect and under-spending on IT infrastructure under former governments.

“That re-investment program began when we got into government in 2014, the work began, and now it's starting to hit,” he told Fairfax.

“Everyone understands that the business of good government these days requires good IT, good data and good processes.

“We in the government have come to that conclusion and the truth is that future governments will get as much if not more of the payback than us but it's the right thing to do for Australia.

“Too many governments have put this off, we can't keep putting it off.”

Mr Taylor accepts that several giant government IT projects have been bungled – the failed Census, IT paralysis at the Tax Office, and the Centrelink ‘robodebt’ debacle in particular – but says recent reforms will change that.

“There are always teething issues with big projects and the key for us is to break these big projects into smaller pieces, become more agile, broaden the vendor base and we'll get better results that way,” he said.

“What we do need is the right oversight and that is what we've been doing with the evolution of the Digital Transformation Agency.

“You can't have this increase in spending without really effective central oversight and approvals with a technology bent, not just a financial bent.

“There should be skepticism about big-spending IT projects and we should be tough about getting the best bang for our buck and we are toughening up those processes.”

As Mr Taylor said, the Government has pledged to work with smaller local IT firms, moving away from the group of multi-national giant IT contractors like Hewlett Packard.

The Canberra Business Chamber lobby says the city has about 1000 ICT businesses, employing about 8000 workers, all looking for work.

“We've been hearing for years how hard it is doing business with the federal government from our local providers,” chief executive Robyn Hendry told reporters.

“Local ICT businesses have been ‘locked out’ of the procurement process.

“We think some of the areas the government is seeking is a particular strength in our market, particularly cyber-security.

“While cyber-security firms in Melbourne and Brisbane have scale, there is a cluster of providers in Canberra, which have specialised cyber-security knowledge combined with an understanding of government policy development, giving them an advantage.”

Labor digital economy spokesperson Ed Husic says the government has done little to avoid making the same old expensive mistakes. 

“Ignoring the digital debris piling up as a result of repeated IT stuff ups, the Turnbull Government has doubled down and added $3 billion to its IT upgrade spend,” Mr Husic said.