The 2021 Federal Budget includes a big focus on the digital sector – to the tune of a $1.2 billion plan.
The Digital Economy Strategy will see a further $800 million added to measures put forth in the 2020 Budget, aiming to make the country one of the world’s leading digital economies.
The package will provide businesses with tax incentives around tech, enabling companies to say up to date with evolving technologies by depreciating intangible assets such as software, designs, copyrights and patents. The tax treatment change-up will be driven by $170 million.
There are a number of tech areas set to benefit from the strategy, including artificial intelligence ($124.1 million of the plan), cyber security ($50 million), quantum computing, drones, and blockchain, with an aim to encourage investment, and build digital skills ($100 million).
The $124.1 million toward AI is under half of what was requested by ICT industry peak body, Australian Information Industry Association (AIIA), last month.
“Today’s investment of $124.1 million for AI shows the Federal Government’s continued commitment to ensuring Australia becomes a leading digital economy. However, in April we demonstrated that to fully fund a National AI Strategy, $250 million was needed,” said AIIA CEO Ron Gauci.
“While investment in R&D is important, more needs to be done to ensure that there is significant investment in the commercialisation of AI here in Australia to deliver jobs and economic growth. Without it we will continue to fall behind the rest of the world.”
Electronic invoicing is also on the agenda. $276 million will be used to increase the use of e-billing by Australia’s small and medium-sized businesses.
Regarding the difference in financial allocation between cybersecurity and e-invoicing, Ian Yip, CEO of cybersecurity company Avertro, said the following:
“While I applaud the investment into cybersecurity within the budget, the fact that more than five times the amount has been allocated to electronic invoicing for small and medium businesses speaks to how underinvested we are as a national ecosystem to cyber safety, outside of the government’s own departments.”
Business = Digital Business
“We must keep our foot on the digital accelerator to secure our economic recovery from COVID-19,” Prime Minister Scott Morrison is expected to say in his address to the Australia-Israel Chamber of Commerce.
“Every business in Australia is now a digital business.
“The tradesman or woman who seeks work through AirTasker. The landscaper who finds most of their new business through search engine placement and social media. The farmer who keeps track of their herd with electronic tags or drones.
“The local Thai restaurant that sells through UberEats, MenuLog, Deliveroo, or any one of half a dozen different food apps. The gym where members book their classes through an app.”
ALSO READ – Why government must increase digital focus in small business sector
Keeping talent onshore
While the plan does include $100 million to boost digital skills, there remains a call from the tech industry for the Government to place a much bigger spotlight on the skills shortage as demand rises for talent and higher salaries. The deficiency has led to companies outsourcing tech work overseas.
“It’s neither enough nor feasible to compete purely on salaries any more, and we’ve consequently had to thoroughly review and expand how we attract talent into the business, including offering equity plans,” said Dionne Niven, Chief People Officer at hotel guest acquisition platform SiteMinder.
“However, this isn’t possible for all tech employers, nor is it a sustainable way to grow our local tech companies. If the government continues to leave tech companies to deal with the talent shortage themselves, Australia will undoubtedly be left behind in the global race to innovate.”
Said Ben Bromhead, Chief Technology Officer at Canberra-based open source tech company Instaclustr:
“Funding is a catalyst for innovation as it enables large-scale fundamental research and development, as exemplified by the amazing work coming out for the CSIRO [Commonwealth Scientific and Industrial Research Organisation, an Australian Government agency responsible for scientific research]. However, we also need to ensure that there are measures in place to foster and protect ideas to prevent them being monopolised by larger, existing players in the market, like removing non-compete clauses. We also want to create an environment that incentivises Australian capital to take risks and encourages Australian talent to stay in the country through employee-centric incentives such as implementing laws around employee stock options.
“The pandemic has already created an opportunity where people can reside in Australia and work globally, so let’s build a culture and set of rules where everyone can truly have a go at innovation. And that starts with significant funding from the public purse.”
ALSO READ – Report unveils low fintech adoption in Australia: A ‘huge missed opportunity’ for APAC businesses
Overhauling Government portal websites
A major focus of the digital economy strategy is overhauling Federal Government’s myGov and My Health Record websites. Over $500 million of the package will go to further streamlining the portals and providing simpler ways for the public to manage payments and claims, as well as accessing services.
$200.1 million will go to improving myGov and $301.8 million will head to My Health Record, the latter of which has 23 million users currently registered and will assist in the rollout of COVID-19 vaccinations.
Keep up to date with Dynamic Business on LinkedIn, Twitter, Facebook and Instagram.
