A lot of attention has been paid to the PwC scandal and the way business is done at the “big end of town” in Australia. To be sure, cutting 4 per cent of a once-bustling workforce of 8000 and being forced to sell off one’s profitable government consultancy for $1 will create shocker headlines.

But there’s another side to the story that hasn’t gotten much attention: the chilling effect on government spending decisions that is now directly affecting small to medium-sized businesses and the government’s ability to deliver services both short- and near-term. One of the natural consequences of the scandal has been a widespread re-evaluation of consultancy spending across government. That’s understandable, since the PwC scandal revealed the kinds of outsized risks that can arise when things get too cosy. But in another sense, it has precipitated an indiscriminate “big chill,” particularly on IT procurement.

From where I and many of my colleagues in tech sit, this big chill stretches down to the much smaller project budgets where the vast majority of technology work for government happens. In particular, newly-introduced procurement requirements at a range of government agencies have set unrealistically low — and alarming — triggers for budget review and approval, with small, but no less essential, activities being delayed or even cancelled outright.

This is not only a challenge for small to medium-sized tech enterprises who, like so much of the backbone of Australian business, do most of the heavy lifting in their industry.

It is an impairment to government itself, and potentially even a risk to our cybersecurity resilience.

Here’s why: most IT projects aren’t multimillion-dollar paydays for multinational global consulting firms. Rather, they are modest parts of a larger technology picture, an evolution not a revolution in a government’s technology journey. We’re talking about the technological equivalent of the cogs and wheels that keeps things going and growing.

Seen from a systems perspective, the current slowdown spells bad news for the services we Australians depend upon. While scrutiny is good, over scrutiny isn’t, especially when what you are scrutinising is more like blood flowing through the veins of an organisation reliant on smoothly-running IT implementations and operations.

Given the current health of the IT industry in the broader market, many SMEs slowed or shut out of government work won’t be too badly impacted – there’s a lot happening in the private sector. But government employees trying to accomplish digital transformation will suffer, not to mention everyday Australians.

Take one example, our national health care system. The current dogfight between states and territories, and the federal government over the program’s financial burden obscures a deeper issue: namely the skill shortages within the system, as well as spotty access to services, especially in rural areas. Post-Covid, we know we need to double down on virtual health solutions and telemedicine – and customise our AI solutions to meet this moment.

But don’t take my word for it. As our own CSIRO declared, “AI requires local customisation to support local practices, and to reflect diverse populations or health service differences … Without some degree of algorithmic sovereignty – the capability to produce or modify AI in Australia – the nation is exposed to new risks and the benefits of the technology will be limited.”

Addressing and integrating such projects necessitates a big-picture outlook and the budget outlay to match. Without such tools, doctors and nurses experience greater burnout, and the health of our communities falls further and further behind. In the years 2020-21 alone, more than a third of Australians sought emergency care from hospitals in cases that could have been handled by a GP. Neglecting to pay the costs for these upgrades upfront merely allows them to accrue with interest in the form of degraded services and poorer health outcomes, particularly for Aboriginal and rural populations. Conversely, these investments amortise profoundly well, unlocking the door to personalised health care and preventive outcomes that reserve emergency rooms for actual health emergencies.

It has been said that betrayal is the only truth that sticks, but the PwC scandal has fostered the arrival of a worrisome reality distortion field in Australia.

The government has already flagged the need to spend $3.7bn over the next four years in IT projects intended to enhance both our digital capabilities, resilience and security – an effort meant to help our country meet the challenges of the 21st century with the technological tools of this century.

Given those priorities, it makes little sense to cut out the very people and businesses who are best positioned to deliver those outcomes. Simply put, let’s not let Australia 2.0 be deferred because we’re too worried about the possibility of a PwC 2.0.

Grant Wild is the managing director of Wild Tech, and an expert in government and private sector IT.